Since Salesforce co-CEOs Marc Benioff and Bret Taylor have fallen into the habit over the past few earnings calls of fixating on a single hyperbolic adjective to define the quarter, we have to wonder which they’ll deploy on Salesforce’s fiscal-Q2 call on August 24: will it be “amazing” or “incredible” or something else?
Or will the inexorable macroeconomic forces of runaway inflation and resultant cutbacks force Benioff and Taylor to trim their descriptive sails back to something less-frothy, perhaps along the lines of “excellent” or “very strong” or even a restrained “boffo”?
Whatever rhetorical flourishes Benioff and Taylor choose to deploy, Salesforce’s consistently superb performance over the past few years has conditioned us to simply expect revenue growth of 20% to 25%, even as its quarterly sales have climbed to well over $7 billion.
But will these forthcoming results for the quarter ended July 31 be different? Will the sky-is-falling fear-porn pumped out incessantly by the mainstream media contribute to the almost-unthinkable: that Salesforce’s growth rate will slip below 20%?
Or will Benioff and Taylor and their superb leadership team once again defy the laws of gravity and find a way during very challenging times to deliver growth rates that companies of Salesforce’s size in other industries can only dream about? After all, that’s exactly what Salesforce did two years ago when the pandemic rocked the business world. In the course of that remarkable achievement, Benioff described how Salesforce truly transformed itself into a totally different company: how it created products, how it went to market, how it hired, whom it hired, where it hired, and how it evaluated the performances of its people.
I also think that the financial discipline instilled over the past 15 months by President and CFO Amy Weaver will have insulated Salesforce from much of the upheaval ravaging the business world today. I’m not saying Salesforce will be immune to those forces — no company has been or will be — but its new mindset and operating model will tamp down the negative impacts.
In an environment like today’s, businesses and business leaders need to be smarter, faster, and completely attuned to their customers’ rapid shifts and fluctuations. That’s a capability Salesforce has been focusing upon for the past few years with Customer 360, its industry clouds, and the acceleration of its platform services.
Because of that revitalized operating model and go-to-market structure, plus the attendant enhancements across its vast product lineup, I’m projecting that Salesforce will report a fiscal-Q2 revenue increase of 22% to $7.73 billion when it releases its results on August 24.
No doubt, the “experts” will howl that a growth rate of 22% is down from Q1’s 24%, and will tut-tut over whether the end of enterprise software is at hand.
So, I suggest we all ignore that special brand of piffle and instead train our ears on what type of adjective Benioff and Taylor latch onto to describe the quarter: I’ll bet you a nickel it’s “outstanding.”
