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Salesforce ends 2022 in an unusually turbulent position TechCrunch

Salesforce ends 2022 in an unusually turbulent position TechCrunch

Salesforce ends 2022 in an unusually turbulent position TechCrunch

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When Salesforce announced on its last earnings call that it wouldn’t provide a revenue forecast for next year, that came as a bit of a shock, especially from the world’s most successful SaaS company.

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With revenue of more than $7.8 billion for the quarter and a goal of reaching $50 billion by its 2026 fiscal year, the company isn’t faring too badly. Yet when you combine the lack of forecasts with the recent exodus of executives, it begins to paint a picture of unusual instability at the CRM giant.

Let’s first look at that prediction – or lack thereof. It appears the economy has become so uncertain that Salesforce has dropped a forecast for its fiscal year 2024 altogether (the three months ending October 31, 2022 included the company’s third quarter of fiscal year 2023). We use the word unprecedented a lot these days, but it’s pretty unusual for a company like Salesforce to tell investors they’re basing it on a forecast, and this is the first time the CRM giant has done so.

Here’s what Salesforce CFO Amy Weaver told investors on the conference call:

Before I wrap up, I’d like to share some thoughts on FY24. As mentioned, we are experiencing a very unpredictable macroeconomic environment as our clients strive to ensure their businesses are also healthy over the long term. Added to this dynamic is an unprecedented currency market. Therefore, at this time, we believe it would be premature to provide revenue forecasts for the next fiscal year.

That would be enough to raise eyebrows for anyone who has followed this company. But consider that Salesforce simultaneously dropped the bombshell that co-CEO Bret Taylor plans to quit.

The reason for the exit, apparently, was that Taylor was tired of big business life and wanted to get back to his roots as a business builder — back to basics, in other words. But maybe that wasn’t the whole story. The Wall Street Journal reported on tensions between the two executives and that the resignation may not have been as far from left field as we have been led to believe. (You can tear your jaws out; this isn’t the first time a company has tried to portray bad news as neutral.)

There were other shoes left to drop off. The smaller of the two clogs was Tableau CEO Mark Nelson announcing his departure. (Salesforce acquired Tableau in 2019). The most dramatic news soon followed: Slack co-founder and CEO Stewart Butterfield told his flock that he wanted to spend less time running a business and more time gardening and tending to her child.

Slack quickly announced that Lidiane Jones, who had served as Salesforce’s General Manager of Commerce Cloud, Marketing Cloud and Experience Cloud (yes, that’s a lot of clouds), would be replacing Butterfield.

Let’s not forget that even before all of this, Salesforce had to deal with activist investor Starboard Value in the neck, never a comfortable position. (The company highlighted its cost-cutting efforts in its last quarterly call, it’s worth noting.)

On paper, that sounds like a lot of disturbing news in a short time. But what does this mean for the company’s underlying financial stability? As part of our year-end roundup at TechCrunch+, we decided to take a look under the hood and see what’s going on. Is this a short-term problem in a bad year for all SaaS companies, or a series of moves that could point to something more worrisome at Salesforce?

inside the numbers

We have three goals: First, to look at Salesforce’s recent quarterly performance to see what we can infer about its health. Second, ask if other companies are posting similar results and forecasts. And, third, ask if there’s a lesson here for us tech watchers, especially when it comes to startups.

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