Salesforce Stock (CRM) Dips After Q1 Earnings, Revenue Miss

Revenue Growth Slows, EPS Beats Estimates

Salesforce (CRM) reported its fiscal Q1 2023 earnings on May 25, 2023, after the bell. The results came in mixed, with revenue growth slowing down but earnings per share (EPS) beating estimates.

Revenue for the quarter came in at $8.1 billion, up 24% year-over-year but below the consensus estimate of $8.21 billion. Subscription and support revenue, which accounts for the majority of Salesforce's revenue, grew 23% to $7.2 billion. Professional services and other revenue increased 36% to $909 million.

EPS for the quarter was $1.04, beating the consensus estimate of $0.95. This was primarily driven by lower-than-expected operating expenses, which declined 1% year-over-year to $5.5 billion.

Salesforce CEO Marc Benioff attributed the revenue miss to the macroeconomic headwinds that are impacting businesses globally. He also mentioned that the company is facing some headwinds in its sales execution. However, Benioff remained optimistic about the long-term growth prospects of Salesforce.

Despite the mixed earnings report, Salesforce shares initially rose in after-hours trading. However, the stock has since reversed its gains and is currently trading down about 1% in pre-market trading.

Conclusion

Salesforce's Q1 earnings report was a mixed bag. While the company beat EPS estimates, revenue growth slowed down. The stock's reaction to the earnings report is likely due to concerns about the company's ability to maintain its high growth rates in a challenging economic environment. Investors will be watching closely to see how Salesforce performs in the coming quarters and whether it can meet its long-term growth targets.