Salesforce's Ace Quarter Analysts Surprised But 2027 Outlook Soft

• Salesforce surpasses earnings and revenue expectations, reporting its fastest growth in two years.
• Aggressive share buyback plan of $50 billion signals confidence in undervalued stock.
• Fiscal 2027 revenue guidance trails analyst projections, sparking investor caution.
• Strategic investments, particularly in Anthropic, drive significant gains.

Earnings Smash, Revenue Shines

Alright folks, Novak Djokovic here, stepping off the court and onto the financial scene. Salesforce just dropped its Q4 report, and let me tell you, it’s a smash. Like a forehand winner down the line, they aced the earnings per share, hitting $3.81 adjusted against an expected $3.04. Revenue? A solid $11.20 billion versus the anticipated $11.18 billion. Remember, it's about adapting, adjusting, and executing – just like on the court. The company's revenue grew 12% year over year - the fastest in two years.

Buybacks and Baller Moves

Now, what’s a good earnings report without a little swagger? Marc Benioff, the CEO, is throwing down $50 billion for share buybacks, claiming the stock is undervalued. That's like me saying, "I'm still hungry for Grand Slams." Confidence is key, whether you're on Centre Court or Wall Street. Speaking of strategic moves, Salesforce finalized its Informatica acquisition and plans to snag marketing firm Qualified. Smart plays. And speaking of good strategic moves, you should read Ford's Earnings Report Unveils Strategic Shifts too.

The AI Ace Up Their Sleeve

AI is the name of the game, and Salesforce is in it to win it. They launched an AI-enabled Slackbot, Agentforce AI tech, and are making some serious coin from their Anthropic investment – a cool $811 million gain. It's like having that extra bit of spin on your serve that no one can return. Adaptation is vital. The company now sees $63 billion in fiscal 2030 revenue, up from a target of over $60 billion presented in October.

A Shadow of Doubt on Future Forecasts

But hold on, not everything is sunshine and rainbows. The fiscal 2027 revenue guidance, while still projecting growth, is a bit lower than what the analysts were hoping for. The forecast calls for $13.11 to $13.19 in adjusted earnings per share on $45.8 billion to $46.2 billion in revenue, which implies 10% to 11% growth. It's like a slight wobble in my backhand – still solid, but could be better. Investors are getting jittery about how AI might impact growth for these big software companies, so this forecast has some investors concerned.

Under-Leveraged But Ready To Pounce

Benioff mentioned they’re "very under-leveraged" on their balance sheet. This could mean they’re gearing up for more acquisitions or strategic investments down the line. It's like conserving energy in the early rounds of a tournament – waiting for the right moment to unleash. Five customers of ServiceNow moved to Salesforce's competing product for information technology service management during the quarter, Benioff said on the TBPN podcast on Wednesday.

Cramer's Cautionary Note

Even Jim Cramer is chiming in, noting that investors are paying less for software earnings these days. It's a reminder that the market is a fickle beast, and past performance doesn't guarantee future success. Just like in tennis, you have to stay hungry, stay focused, and keep evolving. Just like I do!