Mulesoft, Tableau uptake fuels Salesforce growth spurt

Despite a tumultuous couple of months, strong user uptake of Tableau business intelligence and MuleSoft data automation and integration software fueled a surprising 14% year-over-year jump in revenue for Salesforce’s fourth quarter.

Posting revenue of $8.38 billion after stock market trading closed on Wednesday, the company beat the expectations of analysts, whose average forecast for the quarter was $7.99 billion, according to data from Yahoo Finance. Concerns about the company’s ability to absorb various acquisitions it has made over the last few years without losing focus on product development and sales, and recent layoffs in the wake of a hiring binge during the pandemic, have raised questions about the company’s ability to grow.   

The better-than-expected results caused the company’s share price to rise by 12% in afternoon trading Thursday.

Speaking to analysts on a conference call after the results were announced, CEO Marc Benioff praised the company’s subsidiaries for helping to drive growth, noting that MuleSoft was included in seven of the company’s top 10 deals in the quarter, while Tableau was included in every top 10 deal, according to a Seeking Alpha transcript.

Mulesoft, Tableau outperform company expectations

Mulesoft and Tableau outperformed the company’s own expectations, said company CFO Amy Weaver, also speaking on the call.

Benioff also told analysts that customer revenue attrition was at its lowest level in the company’s history, ending the quarter below 7.5%.

Fourth-quarter subscription and support revenue was up 14% year on year to $7.8 billion, while professional services and other revenue totaled $600 million, an increase of 19%. The results helped boost Salesforce’s total revenue for financial year 2023 to $31.4 billion, a year-on-year increase of 18%.

Despite the revenue gains, Salesforce posted a fourth-quarter loss of $98 million, compared with a loss of $28 million in the same quarter last year, due mainly to restructuring costs that included layoff-related expenses.

The previous 90 days haven’t been smooth sailing for Salesforce. During the quarter, the company cut around 10% of its workforce, shut numerous offices, and co-CEO Bret Taylor and Slack CEO Stuart Butterfield both announced in the same week that they would be stepping away  from the company.

Like many other tech companies, Salesforce blamed the need for layoffs on a hiring spree during the pandemic — when the need to go remote spurred corporate demand for cloud services and collaboration software — that was followed by weakening demand last year as a result of macroeconomic issues including inflation and supply chain disruptions.

Salesforce touts soon-to-be-launched EinsteinGPT

Looking ahead, Benioff said that Salesforce’s upcoming EinsteinGPT offering will soon integrate with all Salesforce cloud products, including those from its Tableau, MuleSoft and Slack subsidiaries. He added that EinsteinGPT, which Salesforce is set to unveil next week, will complement the company’s Einstein AI technology, which offers predictive analytics and allows for voice control of software, and which has already been incorporated into products including Tableau.  

The growth of AI as well as the internet of things (IoT) presents an opportunity for other Salesforce products, Benioff said.

“We‘ve always been influenced by the world of AI and IoT and seeing our customers try to add in all of their intelligent devices onto our platform so they can have better relationships with their customers who are connected to them in these incredible new ways,” he said.

Benioff’s comments come in the same week that Zoom announced it would be expanding AI capabilities throughout its product portfolio and Microsoft officially made Bing Chat available to preview users in Windows 11.

Artificial Intelligence, Business Intelligence and Analytics Software, Technology Industry