Salesforce, a software company based in San Francisco, is set to report its fourth-quarter earnings results on Wednesday. The main focus of the earnings call will be the company's response to activist investors who have taken stakes in the company in recent months, and the pressure on CEO Marc Benioff to boost profits after a period of fast hiring and acquisitions.
Investors are expected to be laser-focused on Benioff's comments and plans for reducing costs and resuscitating growth, as the company is projected to post its slowest-ever quarterly revenue growth. The full-year operating margin forecast will be the main attraction of the earnings call, as investors want to see how quickly the company can pare back spending and improve margins.
Salesforce is taking steps to reduce costs, including paring back its real estate by closing at least a dozen offices inherited from its megadeals for Tableau and Slack. The company has also swapped board directors, axed 8,000 workers, and lost numerous top executives, including co-CEO Bret Taylor. These disruptions are expected to weigh on revenue and employee morale in the near term.
Despite the recent disruptions, the earnings report could be an inflection point toward better margins and growth re-acceleration once macroeconomic and restructuring issues ease. Analysts at Goldman Sachs Group Inc. believe that the report could mark a turning point for the company, as it continues to navigate a tumultuous period.
