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https://killexams.com/exam_list/SalesForceKillexams : Microsoft, Salesforce Join Startups With Products to Track EmissionsNo result found, try new keyword!A rush of regulation and investor pressure is forcing companies to do a better job of tallying up the environmental impact of their operations and the products they sell. That’s stirring demand for ...Fri, 09 Dec 2022 01:00:00 -0600entext/htmlhttps://www.bloomberg.com/tosv2.html?vid=&uuid=e54c8caf-77e8-11ed-8652-6341466c4c4a&url=L25ld3MvYXJ0aWNsZXMvMjAyMi0xMi0wOS9taWNyb3NvZnQtc2FsZXNmb3JjZS1qb2luLXN0YXJ0dXBzLXdpdGgtcHJvZHVjdHMtdG8tdHJhY2stZW1pc3Npb25zKillexams : Copado launches DevOps marketplace
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Thu, 08 Dec 2022 19:38:00 -0600en-UStext/htmlhttps://www.enterprisetimes.co.uk/2022/12/09/copado-launches-devops-marketplace/Killexams : Kurt Geiger sizes up MuleSoft APIs to deliver a perfect fit for partners
The retail industry has been experiencing a huge amount of turmoil over the last few years, with high street stores closing in their thousands and consumers cutting back on spending.
British shoe designer Kurt Geiger, which operates over 70 stores and 530 concessions worldwide, was already in the process of re-defining where and how it distributed goods as the pandemic hit.
This included re-evaluating its concession and wholesale partners, particularly in the UK, depending on the direction of their business strategies. Gareth Rees-John, Chief Digital Officer at Kurt Geiger, says:
There's been a huge amount of downward pressure on the retail industry over the last few years. Some of our partners had responded in ways that perhaps were not fully aligned to our brand strategy. We very much didn't want to get into a pricing war, a Black Friday frenzy with different partners and different code usage that was going on.
Pre-pandemic, Kurt Geiger had been distributing goods via partners in two main ways. The first was wholesale, where the retailer buys the stock up front and commits to a sell through. This is a well-tested method for the brand, particularly for new markets and dealing with large-scale partners such as US partners Nordstrom and Dillard, where it’s still in place to great effect.
Then there was the concession model, where the third-party distributor would hold the stock, but Kurt Geiger would retain ownership of it. This latter model brought challenges, as Rees-John explains:
One of the problems was we had all these pots of stock in different places. If you are distributing through multiple partners, you'd have stock in multiple places all upon your own ownership still. When you didn't really know exactly what was going to sell where the fastest, we came across all sorts of availability issues and sell-through problems.
The shoe maker decided to shift to dropshipping. With the dropship model, instead of a third-party partner like Farfetch or John Lewis dispatching the stock from their own warehouse to their customer, Kurt Geiger distributes products directly from its own warehouse to the partner’s customer. Or as Rees-John puts it:
They retain the customer relationship. We just do the shipping of our products to them directly.
If the shoe fits
Kurt Geiger needed technology that would enable dropshipping, letting the business plug in its stock from a single warehouse or multiple warehouses, and then distribute it across a variety of different platforms. The objective was to gain better control over the stock and more efficiency in moving goods.
One of the firm’s biggest costs is its stock inventory and therefore maximizing sell-through rates, particularly at full price, is fundamental to success. Rees-John explains:
From an EBITDA point of view, it clearly makes sense, and also from a brand values point of view - first price, right price - and getting the value/cost equation right.
The company originally looked at whether it could shift to dropshipping using its current technology stack, but that would prove tricky as it had multiple integration points and different pieces of information that would need to be linked up from its own business to its partner network.
Kurt Geiger was already a fair way along its digital transformation across the organization at this point, and had gone down the path of micro-services as it built a fully composable architecture for its current direct-to-consumer (D2C) sites. Rees-John recalls:
We were moving - as most businesses are trying to - rapidly from a monolithic structure that we have with Magento [Adobe Commerce] to a micro-service and composable layered solution, where we built a lot of microservices for our front-end web platforms, including a GraphQL front end and a React website that was interchangeable and giving us real speed and agility in our engineering.
The firm wanted to mirror this approach for its partner business, and sought a product that would wrap its order management systems services in an API technology on one efficient platform. It carried out a full RFI process to evaluate emerging vendors and the main players with a proven track record in delivering for similar businesses, along with talking to peers and looking at research, and MuleSoft came out top across all those areas.
Once the shoe designer had started engaging with MuleSoft on how it could get the order management services wrapped in APIs on their platform, the process was extremely quick. Building the first APIs happened in a matter of weeks, says Rees-John:
From signing the contract and agreeing this was the way forward we wanted to move, to getting our first dropship out with MuleSoft was a matter of about 12 weeks. The idea of utilizing APIs wasn't new to us, but the ease of how the MuleSoft platform allowed us to do it was surprising.
MuleSoft initially trained Kurt Geiger’s in-house engineers on using its platform, and the 30-strong team got to grips with the tech rapidly. The team built the APIs hand in hand with MuleSoft the first time to understand how to use the platform, according to Rees-John:
It wasn't a lift and shift and let somebody else do this for us, it was very much a self-serve operation and an upskilling of the in-house team. We don't like black box technology. We like to understand what we're trying to implement and therefore it gives us a greater understanding and frankly it's a lot more engaging for our engineering team.
Using the MuleSoft tech, Kurt Geiger created reusable APIs that connected its order management system with partner systems and reduced onboarding time for dropship partners from eight months to just 12 weeks. This was a world away from the firm’s previous tech platform, based on multiple integration technologies with different user interfaces, which was slow, prone to errors, and required a vast amount of monitoring and engineering resource. Rees-John says:
Like many businesses, we've built multiple services based out of our Magento feeds and our order management system, which was in Manhattan, and our ERP at the back end in Retail Express. We were customizing many different sources of information through that order management system and then customizing those further every time we wanted to integrate to a new partner. This was laborious and messy to try and keep a tab on changes, and when things broke, there were many points of failure we had to look at.
With the new MuleSoft tech in place, sell-through rates have improved. Having stock in one stock pot means that the firm can maximize availability for partners and distribute stock more effectively. According to Rees-John:
We can switch on and off pots of stock for different partners. We own a stock inventory pot at our end. There’s also the ability for the D2C platforms to be the first and last place things are sold. We can choose to only sell through our direct channels or we can change catalog depending on differing customer behavior based on these patterns.
Previously, Kurt Geiger didn’t have this level of control over its stock and instead had to guess consumer patterns up front at the start of the season, he adds:
You set off with the greatest intentions with a partner, but things happen. Some are much more successful than they thought they were going to be for that season, others less so. If your stock’s caught up in that situation, then you're never going to get the full sell-through from it.
The availability improvements garnered by switching from a concession to dropship model have led to a dramatic increase in generated revenue. The business is selling through more goods as availability is better for that particular consumer set.
Time saved in the engineering team has also led to a big cost saving, as the engineers aren't having to maintain old integration points, and partners are moved through the system quickly. Rees-John concludes:
We talk about 12 weeks, but it’s really the partners that tend to slow us down now more than anything else. The biggest time spent is actually in the QA and the testing, which is making sure that the finance and the stock flows are correct at the end of it.
Where a partner has got a very simple API solution at their end with a very fast platform, we have delivered all the tech changes within a matter of weeks. If we were just doing it, we could probably get a dropship up in six weeks.
Thu, 01 Dec 2022 20:37:00 -0600BRAINSUMentext/htmlhttps://diginomica.com/kurt-geiger-sizes-mulesoft-apis-deliver-perfect-fit-partnersKillexams : Copado Launches DevOps Exchange, the First DevOps Marketplace for Enterprise SaaS Solutions
With dozens of pre-built solutions available today, Copado's DevOps Exchange is a one-stop shop for customers to accelerate their digital transformation journey
CHICAGO, Dec. 8, 2022 /PRNewswire/ -- Copado, the global leader in low-code DevOps, today launched the DevOps Exchange, the first DevOps marketplace for enterprise SaaS solutions. The pre-built solutions from Copado, its partners and the Copado community extend and enhance the features of Copado's DevOps platform for Salesforce. With more than 40 initial listings, the Copado DevOps Exchange is a one-stop shop for customers to accelerate their digital transformation journey.
Enterprise application teams need a variety of technologies to deliver their portfolio. Over the next three years, companies are looking to reduce complexity and consolidate their DevOps activities by adopting a single, extendable platform. With the Copado DevOps Exchange, organizations can build on Copado and expand with pre-built solutions that enable automation across the software delivery lifecycle.
"Just as AppExchange became the leading marketplace for Salesforce apps, Copado is advancing the DevOps market for enterprise SaaS by offering an extensible platform supported by solutions from our partners and community members," said David Brooks, Senior Vice President of Product Strategy at Copado. "With the solutions found in the Copado DevOps Exchange, development teams can deliver continuous innovation with speed and quality even for the most complex enterprise IT environments where an end-to-end business process spans multiple clouds. The Copado DevOps Exchange can unlock an organization's potential to automate anything in the software delivery lifecycle. The possibilities are endless."
Leveraging the expertise of a global DevOps network, organizations can implement plug-and-play, pre-built, self-service solutions for complex challenges that have been solved and shared by highly skilled DevOps experts. The numerous integrations, data templates, and add-ons currently listed and in process on the Copado DevOps Exchange provide innovative solutions for specific needs, industries and markets.
"The main driver for us to work with Copado was that it allowed us to achieve mouse-click deployments," said Simon Whight, Platform Technical Architect, Zen Internet. "If anything requires a command line interface, I prefer it to sync with Copado to keep the technology barrier accessible at an admin level. With Copado's DevOps Exchange, I'm excited to have access to a one-stop shop to find complementary DevOps products that are compatible with the Copado platform."
The Copado DevOps Exchange includes solutions developed by community members, Copado partners, and Copado Labs. Copado Labs is a team of highly-skilled developers and architects who are constantly expanding Copado's platform by publishing high-value solutions like the Copado Monitoring Center so customers get alerted when unauthorized metadata changes happen in their pipeline and can expedite problem resolution.
Among partner solutions, DigitSec is offering a solution to run automated security scans to deliver DevSecOps into the Salesforce delivery process.
"We are very honored to be listed on the Copado DevOps Exchange," said Adrian Szwarcburg, Senior Vice President Business Development & Partnerships at DigitSec. "Together with Copado, we can empower Salesforce teams to secure their software development lifecycle with features designed to accelerate the adoption of DevSecOps in the CI/CD pipeline."
Copado is redefining how to achieve success with enterprise SaaS and low-code platforms with its customer-centric approach to delivering faster, higher quality releases and improving trust across digital transformation projects. A commissioned study conducted by Forrester Consulting on behalf of Copado found that customers using Copado delivered 20x shorter lead times, 10x faster recovery times, 4x reduction in change fail rate and 5-7% higher productivity. Further, organizations using Copado's DevOps platform can achieve $4.5 million in value and an ROI of 307% over three years with payback in less than 6 months.
Copado is the leading DevOps and testing solution for low-code SaaS platforms that run the world's largest digital transformations. Backed by Insight Partners, Salesforce Ventures and SoftBank Vision Fund, Copado accelerates enterprise SaaS deployments by automating the end-to-end software delivery process to maximize customers' return on their cloud investment. More than 1,200 companies rely on Copado to drive digital transformation with speed, quality and value including Boston Scientific, Coca-Cola, Fair Trade, Linde, MassMutual, Schneider Electric and Shell. Copado processes over 50 million DevOps transactions per month and is rated with a 100% score on the Salesforce AppExchange. More information can be found at: http://www.copado.com.
Wed, 07 Dec 2022 23:30:00 -0600text/htmlhttps://www.benzinga.com/pressreleases/22/12/n30007700/copado-launches-devops-exchange-the-first-devops-marketplace-for-enterprise-saas-solutionsKillexams : What the heck happened to Salesforce?
CNN11/29/2022Paul R. La Monica
Tech stocks have taken a nasty tumble this year, but some are doing even worse than others. Exhibit A: software giant Salesforce.
Shares of Salesforce (CRM) have plunged about 40% so far in 2022. That makes it the second-worst performer in the Dow, trailing only chip leader Intel (INTC). Salesforce (CRM) has lagged the performance of top cloud software rivals such as Microsoft (MSFT), Germany’s SAP (SAP) and Oracle (ORCL).
Salesforce isn’t really doing all that badly. In fact, the company reported sales growth of 22% from a year ago back in August, but it also cut its revenue and profit forecasts at the time.
Salesforce said it now expects earnings per share of about $1.20 to $1.21 for this quarter and sales of $7.82 billion to $7.83 billion. Analysts had been expecting earnings of $1.29 a share and revenue of nearly $8.1 billion.
So is Salesforce, led by co-CEOs Marc Benioff and Bret Taylor, due for a comeback in 2023? Or will the company remain in Wall Street’s penalty box as it absorbs and integrates a series of expensive acquisitions over the past few years?
Salesforce has spent nearly $50 billion since 2018 to buy application software company MuleSoft, data visualization software leader Tableau and workplace productivity suite Slack. The Slack deal cost Salesforce about $28 billion.
Investors will get an update on how all these deals are panning out when Salesforce reports its latest earnings after the closing bell Wednesday. Analysts are predicting that sales will be up 14% from a year ago but profits will fall slightly.
Salesforce president and chief financial officer Amy Weaver conceded during an analyst meeting in September that “we have seen increased risks and uncertainties” in exact months. But she stressed that demand for the company’s software remains strong.
A majority of Wall Street analysts remain bullish on Salesforce. According to data from Refinitiv, 40 of the 50 analysts that cover the company have a “buy” rating on the stock. (The remaining 10 have a “hold.” There are no “sell” recommendations.)
And the consensus price target for the stock is nearly $216 a share, 40% higher than current levels.
Still, analysts are likely to have questions about what’s next for Slack under Salesforce’s ownership. Microsoft has stepped up its own competitive efforts versus Slack with its Teams product.
“Microsoft Teams continues to be the gorilla in the room, indicating that existing customers of Salesforce have been less responsive to picking up Slack,” said Daniel Morgan, senior portfolio manager with Synovus Trust Company, in a report. “Mounting competition from Teams and increasing pricing pressure create some headwinds.”
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Tue, 29 Nov 2022 02:24:00 -0600en-UStext/htmlhttps://www.msn.com/en-us/money/companies/what-the-heck-happened-to-salesforce/ar-AA14Hz7gKillexams : Salesforce Solution Architect at Tata Consultancy Services
Location : JHB
Technical Skill Set :
Sales and Service Clouds Experience
Preferably experienced on Salesforce Commerce Cloud
Skills and Qualification Requirements:
Salesforce Sales Cloud Certified
Certified Salesforce Administrator
Good understanding of SFDC functionality with an emphasis on Telecom related objects in the Sales Cloud
Good understanding of salesforce data structures, objects, SOQL, data access tools like developer workbench, data loader etc.
Prior experience in software project implementations related to Salesforce within a complex heterogeneous environment.
Roles and Responsibilities :
Provide guidance and strategy on Salesforce solutions for both product layout for multilayer product sets/bundles/features as well as promos.
Provide guidance on best practices and domain expertise.
Experience with product configuration, authoring plans, Define Rules, distinguish rules between child products and offers.
Provide guidance on best practices and domain expertise.
Be recognized as a functional expert in Salesforce Marketing, Sales and Service domains.
Assess business process needs and identify technical capabilities needed.
Guide technical team to deliver a flexible and scalable solution.
Communicate with senior management across product management, sales operations, pricing operations, legal, and order management functions.
Assist technical leads in perform hands-on solution design, solution architecture, architecture roadmaps, prototyping, proof-of-concepts, and development tasks as required in support of current and new projects.
Participate in pre-sales activities and internal initiatives as required
Privacy Notice: [URL Removed]
Desired Work Experience:
5 to 10 years Technical / Business Architecture
About The Employer:
About Tata Consultancy Services Tata Consultancy Services (TCS) is an IT services, consulting and business solutions organization that has been partnering with many of the world’s largest businesses in their transformation journeys for over 50 years. TCS offers a consulting-led, cognitive powered, integrated portfolio of business, technology and engineering services and solutions. This is delivered through its unique Location Independent Agile™ delivery model, recognized as a benchmark of excellence in software development. A part of the Tata group, India’s largest multinational business group, TCS has over 616,171 of the world’s best-trained consultants with 157 nationalities in 53 countries. For more information, visit [URL Removed] and follow TCS news at @TCS_News.
“Our sales performance process drives accountability,” according to Salesforce. “Unfortunately, that can lead to some leaving the business, and we support them through their transition.”
Salesforce has more than 70,000 employees. CNBC reported that Salesforce let fewer than 1,000 employees go Monday due to lighter demand for the company’s products – which include Slack, Tableau and MuleSoft.
Although possibly unconnected to the Salesforce layoffs, subsidiary Tableau parted ways with channel chief Julie Bennani last month as Tableau, MuleSoft and Salesforce join their partner programs together.
The reported layoffs come less than a month after Salesforce allegedly cut dozens of recruiting contractors and froze hiring. In October, activist investment firm Starboard Value bought a stake in Salesforce.
Earlier this year, Salesforce lowered its guidance for the amount of revenue it expects to see for the fiscal year, ending Jan. 31, 2023. It was the second haircut to guidance this year from Salesforce.
Salesforce is expected to report its next quarterly earnings this month.
Some have taken to LinkedIn to try to use the big tech layoffs to boost their own employee base, including a recruiter with tech giant IBM, gaming and financial technology company Everi’s data science director, an executive with customer experience vendor Braze and an account manager with residential solar battery storage provider Sunnova.
Wade Tyler Millward is an associate editor covering cloud computing and the channel partner programs of Microsoft, IBM, Red Hat, Oracle, Salesforce, Citrix and other cloud vendors. He can be reached at email@example.com.
Tue, 08 Nov 2022 03:41:00 -0600entext/htmlhttps://www.crn.com/news/cloud/salesforce-to-lay-off-hundredsKillexams : Salesforce cut hundreds of employees Monday
Salesforce on Tuesday confirmed that it cut some employees this week after the enterprise software maker saw demand lighten in some countries and industries.
Protocol reported earlier on the cuts, saying they could affect up to 2,500 employees. One person familiar with the matter said Salesforce let go of fewer than 1,000 people Monday. At the end of January it employed 73,541 people. In August Salesforce said in a filing that headcount rose 36% in the past year "to meet the higher demand for services from our customers."
Marlena Sloss | Bloomberg | Getty Images
"Our sales performance process drives accountability. Unfortunately, that can lead to some leaving the business, and we support them through their transition," a Salesforce spokesperson told CNBC in a statement.
Several technology companies, Salesforce included, have announced plans to add employees at a slower rate than before this year to weather rougher business conditions as prices and interest rates move higher. Some of them have also gone a step beyond that and removed some existing employees, as experts debate the timing of a possible economic recession.
In August Salesforce issued full-year earnings and revenue guidance that came in below expectations, sending the stock down 3% the next day. Amy Weaver, Salesforce's finance chief, told analysts that demand slowed down among small and medium-sized businesses, particularly in North America and Europe, and in communications, consumer goods, media and retail. Marc Benioff, Salesforce's co-founder and co-CEO, said he expects longer sales cycles and greater scrutiny of corporate purchases to persist.
Tue, 08 Nov 2022 09:38:00 -0600entext/htmlhttps://www.cnbc.com/2022/11/08/salesforce-cut-hundreds-of-employees-on-monday.htmlKillexams : Salesforce: Buy Cautiously
The year so far has been tough for investors as all markets have been falling so far this year. We are dealing with high inflation, rate hikes by the central banks, and a serious threat of a recession in the near term. It is therefore no surprise that markets are down by double digits. But where most investors might be down over 10% this year, it is not all just negative. The current market does offer us some very interesting buying opportunities as some companies keep growing earnings and pop up as very resilient. But even these companies are down significantly. The best thing we investors can do now is to identify the stocks that are undervalued as a result of the downturn (and of course don’t panic sell your existing holdings).
Technology stocks have been the winners over the last couple of years, or actually, for the last decade or so. Covid gave another boost to growth stocks as technology services became increasingly important as people were forced to stay at home and work from home. As a result, a lot of these technology companies were massively overvalued at the end of 2021, even though a lot of these companies were not even profitable. But the environment has changed drastically, and people are not willing to pay for unprofitable companies in the way they were a little over a year ago.
One of the companies that has been growing at a rapid pace is CRM software company Salesforce (NYSE:CRM). The big difference for Salesforce, of course, is that this company is profitable. Salesforce is down over 40% this year, despite the exact rally. As a result, the stock price has only increased by 40% over the last 5 years. Meanwhile, revenue has grown from around $7 billion in FY16 to approximately $22 billion in FY22, meaning revenues have more than tripled over the last 5 years.
It is the drop in share price so far this year that caused me to start following Salesforce. I think it is a very interesting business and I like software companies in general. Generally, these companies have very high margins and are believed to be more recession and inflation-resistant. I cannot imagine businesses cutting on their CRM systems as these might even increase in importance when times get tough.
I currently do not own any shares in Salesforce. The company has always been a bit too expensive for my taste, while profits were almost non-existent. Now, as I mentioned earlier, the drop in share price so far this year for a quality business like Salesforce did attract my interest. For that reason, I will try to find out within this article whether Salesforce is a buy at current prices. This is my initial thesis on Salesforce and so I will do a company deep-dive.
Salesforce is an American cloud-based software company with its headquarters in San Francisco, California. Salesforce provides CRM software and applications with a focus on sales, customer service, marketing automation, and analytics. Salesforce made its IPO in 2004 and has grown to a market cap of $154 billion today. Salesforce is one of the largest cloud-based companies on the planet.
Customer 360 is the CRM software Salesforce offers to its customers and has been the #1 CRM system in the world for many years now.
Nowadays, more than 150,000 companies use Salesforce’s CRM platform and use it to grow their business and increase customer relations. What CRM does is help companies understand their customers’ needs and solve problems more effectively through an all-in-one platform that includes all information you need to serve your customers in the best way possible.
You can imagine from the introduction above that Salesforce still has a load of growth prospects. Their dominant position in CRM offers them the ability to expand their platform and upsell their customers or expand into other industries and services while using their huge existing client base to sell these products. In September Salesforce held its annual investor day and this gave us some new insights into the future potential for Salesforce.
Salesforce expects its total addressable market [TAM] to continue to grow at a 13% CAGR until 2026 and to reach a massive $290 billion.
One key point regarding Salesforce’s customer 360 is the change in the cloud environment. An increasing number of businesses use multiple cloud vendors. More cloud vendors mean more annual recurring revenue [ARR] for Salesforce. Salesforce provided a nice overview of the difference in ARR per number of cloud providers and this shows the massive potential as more and more businesses shift towards multiple cloud vendors as the cloud grows in importance.
This is reflected in Salesforce’s financial results as 20% of customers use more than 4 cloud vendors, but these customers account for 85% of ARR. Salesforce believes it can use its land-and-expand strategy to boost ARR growth over the longer term as it plans to upsell to existing customers.
Salesforce also still sees a lot of growth potential through geographic expansion. According to Salesforce, there is still a large part of its TAM untapped, and it sees potential to drive new market opportunities. Salesforce has seen its ARR grow at a 21% CAGR in North America over the last three years, while ARR from international markets has grown at a 27% CAGR. Despite this strong growth, Salesforce remains to believe it has plenty of room to expand at a similar pace over the next couple of years. ARR is the best kind of revenue for Salesforce as it is a predictable revenue stream and less sensitive to economic problems and a potential recession. The majority of revenue is subscription revenue and therefore recurring annually.
According to Salesforce, they should be able to grow their revenue to a massive $50 billion by 2026, growing revenue at a 17% CAGR and doubling revenue compared to last year. Salesforce currently projects $31 billion in revenue for FY23. I feel like the goals Salesforce is aiming for might be a bit too high. If we take into consideration the possibility of a potential recession, it seems unlikely that Salesforce is going to double its revenue by FY26. Yet, I would not say it is impossible as I feel like Salesforce has a relatively stable business that should not be hurt as much as many others.
In addition to significantly increasing revenue by FY26, Salesforce also wants to increase its margins. It believes it can do this by benefitting from its land-and-expand strategy, product innovation, an increase in brand awareness through networking, and system automation. This all should lead to a 25%+ non-GAAP operating margin by FY26.
Salesforce has been a great player regarding business innovation over the years and it is not planning on stopping now. Salesforce plans on bringing a whole bunch of innovations in 2023 which should boost platform attractiveness and upsell opportunities to increase ARR.
In addition to business growth, Salesforce confirmed it will stay active in M&A when they believe it will be a significant addition to its product portfolio. Also, Salesforce announced its first-ever share repurchase program. Management authorized a $10 billion share repurchase program. This is very good news for investors, although I am not sure whether I would rather see Salesforce invest this money into the business. Yet, it does confirm that management believes the stock is currently undervalued.
Of course, I already shared the outlook Salesforce presented regarding market growth by using their TAM. According to Allied Market Research, the CRM market is expected to grow at an 11.1% CAGR from 2020 to 2027 and will reach a market size of close to $100 billion. Since CRM is the main business for Salesforce and they are the largest player by a fair margin, as is shown by the graph below, I expect them to profit from this industry growth. Salesforce even grew its market share over the last 5 years to a massive 23.8% in FY21. This shows us Salesforce is in a great position to benefit from market growth. Now, how is this strength reflected in their exact financial results?
On August 24th Salesforce presented its second-quarter results. Revenue came in at $7.72 billion, showing 22% YoY growth and 26% on constant currency. Subscription revenues for the quarter were $7.14 billion and grew 21% YoY. Non-GAAP EPS was $1.19, while GAAP EPS was significantly lower at just $0.07. Management stated the following:
Our results demonstrate the strength and diversity of our product portfolio across regions, industries and segments. In this more measured buying environment, our Customer 360 portfolio is even more strategic and relevant as our customers focus on productivity, efficiency and time to value.
Management confirmed what I said earlier and that is that its Customer 360 platform will be of increasing importance to businesses as it increases efficiency and productivity in times when this is crucial. This is also part of the reason I do expect Salesforce to remain relatively stable in revenue, even if we see a severe slowdown.
The operating margin for the second quarter came in at 19.9% non-GAAP and GAAP margin of only 2.5%. In addition, operating cash flow came in at $330 million, which is a 14% decrease YoY and free cash flow was just $130 million, 24% lower YoY. This might also immediately bring on a big problem with Salesforce, its profitability. Yes, there is a profit, but cash flows are low for a business earning over $30 billion in revenue annually and existing for over 20 years.
Growth for the quarter remained very strong on the top line, but the bottom line saw a significant decrease, which was disappointing. If we look at the revenue split by region, we see that the strongest growth was visible in the EMEA region, which grew by 23% YoY and 35% YoY on constant currency. APAC saw 17% growth and 31% constant currency. Growth in the Americas was a solid 22%. This does show that growth for the international markets is growing faster, most likely because of a lower penetration of the market in these regions.
The outlook for the third quarter is also not the most positive one. Salesforce will report its third-quarter results later this week on November 30th. For this quarter Salesforce expects revenue between $7.82 - $7.83 billion, representing just 14% growth YoY and a serious slowdown compared to previous quarters. Non-GAAP EPS is expected to be between $1.20 and $1.21.
As a result, Salesforce now expects FY23 revenue (current fiscal quarter) of $31 billion on the top end, up 17% YoY. FY23 margin is expected to be 20.4% on a non-GAAP basis.
Balance sheet and valuation
Salesforce does have a solid balance sheet with total cash of $13.5 billion at the end of its 2Q23. This was an increase of 40% YoY. Total debt was $14.3 billion, meaning Salesforce has a negative net debt position of about $800 million. I really like the cash position of Salesforce as it does deliver the company a lot of opportunities regarding M&A, but also investing in business opportunities. I am less of a fan of the debt position, but as this is almost fully covered by its cash, this should not be a problem for now. Salesforce is not generating loads of free cash flow at the moment, so debt should not go much higher for my taste. The 40% YoY increase in its total cash position is positive as it shows the business is fully capable of generating free cash flow.
Salesforce is currently valued at a forward P/E of 31.25 and is therefore 44% undervalued compared to its 5-year average, yet it is also not particularly growing at the same rate as it did the last 5 years. Salesforce receives a C- from Seeking Alpha for its valuation as the stock is still not cheap compared to its (slowing) growth rates.
Current analyst estimates are projecting 17% growth for the current fiscal year, in line with management expectations. For FY23 (or fiscal FY24 for Salesforce) analysts project 14.4% revenue growth and 16% for the two years after that. That would mean Salesforce would reach close to $48 billion in revenue by FY26, not reaching management's current goal of $50 billion. I am personally very curious to see whether Salesforce will be able to manage to grow the business by 14% over the next fiscal year. This will highly depend on the severity of a potential recession. I think analysts' estimates for revenue to come in around $48 billion by 2026 seem fair. Bottom line growth is expected to grow at a faster pace closer to 20% per year until 2026.
All in all, I still think Salesforce is richly valued, but the significant decline so far this year has made the stock a lot less expensive. If Salesforce would manage to grow its top line by over 14% next year, which I doubt, I think the stock is fairly valued at prices around $150/160 per share. I do want to add to this that if growth would come in closer to 10% or lower next year, there is still significant room for downside to around $120 per share. Personally, when comparing the growth outlook and current price, I would be comfortable with opening a small position or slowly adding to an existing position.
We have discussed the upside potential for Salesforce so far, but now it is time to turn to a bit more of a negative view and look at the risks of an investment in Salesforce. Of course, one of the main risks for a growth stock with a higher valuation in the current environment is the risk of more downside. Salesforce is, as discussed above, still not cheap and if the economy would make a turn for the worse, there would still possibly be significantly more downside for Salesforce through valuation contractions. Later this week Salesforce will report its 3Q23 earnings and it will be crucial for Salesforce to report solid numbers. The outlook is already guiding for slowing growth. Also, this quarter will deliver us a better look at how resilient the business and growth are. In the case of a disappointing quarter, this could have a significant impact on the fiscal 2024 expectations as well.
On November 8th, CNBC reported that Salesforce reportedly laid off hundreds of employees, and job cuts could jump as high as 2500. So far, according to CNBC, less than 1000 workers lost their jobs. Salesforce did not respond to the matter so far but will probably deliver us some information about it when they report their earnings next week. It could already point to lower expectations for growth by management and the need to save costs. Laying off personnel is never a good sign, but it could be a good move by management to increase its top line in the case of a slowdown. It is something to keep an eye on next week.
Finally, I want to point out that cash flows remain to be low, except for the fourth and first quarters. This does not leave much room for mistakes for Salesforce. I prefer companies with more of a solid bottom line, but I expect Salesforce to significantly increase their bottom line over the next years as less money will be needed for R&D.
Salesforce is a great company, with strong management, a dominant market position, strong growth ahead, and a solid balance sheet. The main issue for Salesforce remains its valuation as this creates the most risk for a lower share price. A lot will depend on what Salesforce will report later this week when they report their 3Q23 earnings. Despite all near-term weaknesses and uncertainties, I do think the long-term thesis for Salesforce is strong and the current share price is not a bad one to start a position in this dominant enterprise software company. Long-term growth will be supported by growth in cloud computing, CRM industry growth, and business expansion.
I feel like the company is a hard one to judge. I think the company is right in between a buy and a hold. Yet, as I do believe in the long-term potential of the business and the valuation has come down significantly to more acceptable prices, I rate the company a buy at current prices and under current growth assumptions.
I will keep a close eye on earnings later this week and will update the thesis if necessary. For now, I rate Salesforce a buy on a strong growth outlook driven by industry growth and business expansion. I recommend being careful with buying this stock and adding or buying small bits split over time as near-term problems might cause the share price to trade lower.
Sun, 20 Nov 2022 17:43:00 -0600entext/htmlhttps://seekingalpha.com/article/4559394-salesforce-stock-buy-cautiouslyKillexams : Salesforce stock falls over 5% on earnings and sudden departure of co-CEO Bret Taylor
Salesforce cofounder and co-CEO Marc Benioff speaks during the grand opening of the Salesforce Tower, the tallest building in San Francisco, Calif., Tuesday, May 22, 2018.
Salesforce stock fell over 6% in extended trading.
Here's how the company did versus Refinitiv consensus estimates for the quarter ending in October:
EPS: $1.40, adjusted, versus $1.21 expected by analysts
Revenue: $7.84 billion versus $7.82 billion expected by analysts
Salesforce said it expected between $7.9 billion to $8.03 billion in revenue in the company's fourth fiscal quarter, lower at the midpoint than analyst expectations of $8.02 billion in sales in the fourth quarter. The company also said it would take a $900 million hit in sales because of foreign currency effects.
Salesforce's total revenue increased 14% year-over-year. Last quarter, Salesforce trimmed its year-end estimates for both revenue and earnings, citing a weaker economic cycle. It reaffirmed those estimates on Wednesday.
Salesforce said that its operating cash flow came in at $313 million for the quarter, which was a decrease of 23% year-over-year.
Subscription and support revenue, which includes the company's flagship Sales Cloud software and comprises the majority of the company's sales, came in at $7.23 billion, which was up 13% year-over-year.
The Platform and Other category that includes Slack reported $1.51 billion in sales, an 18% increase year-over-year.
Salesforce spent $1.7 billion on share repurchases during the quarter, the company said.