29 February 2024
If you are covering Salesforce’s latest results, please see the following comment from Ben Barringer, technology analyst at Quilter Cheviot:
"Salesforce has reported a strong quarter, with revenue up by 11% and exceeding expectations by 1%. This growth is largely driven by the company's focus on artificial intelligence (AI), underpinned by the foundational principle that good AI stems from well-organised data. Notably, their data business has seen the fastest growth, surging by 21%.
"A recent incident involving Air Canada, where there was a complaint against its chatbot’s advice saw the judge ultimately rule that Air Canada was liable for the poor advice. This shines a spotlight on how important it is for companies to adopt AI technologies that are well-implemented and effective, which can only happen if they are based on good data a central tenant of Salesforce’s strategy.
"The company has demonstrated robust margin improvement, with a 2.2 percentage point increase to 31%. Looking ahead, it has provided guidance for 2024/2025, projecting growth rates of 8-9%, which may be on the conservative side. In other good news, Salesforce joins the ranks for some other tech companies like Meta and is now offering dividends.
"For AI to be successful there is a need for a key product, access to extensive customer data, and skilled data scientists to convert this data into valuable products and services. This approach is foundational to Salesforce's strategy and its current and future success in the tech industry."
