Shares in Salesforce Inc. surged in late trading after the cloud-based software company beat estimates in its latest earnings report, upped its forecast and announced a new $20 billion stock buyback program.

For its fourth quarter ended Jan. 31, Salesforce reported earnings before costs such as stock compensation of $1.68 a share, up from 84 cents in the same quarter of last year, on revenue of $8.38 billion, up 14% year-over-year. Analysts had been expecting adjusted earnings per share of $1.36 on revenue of $7.99 billion.

Subscription revenue in the quarter rose 14%, to $7.79 billion. Professional services and others revenues rose 19%, to $600 million. Adjusted operating margin was 29.2%, cash flow generated from operations was $2.79 billion, up 41%, and remaining performance obligations at the end of the quarter sat at $48.6 billion, up 11%.

For its full fiscal year 2023, Salesforce reported adjusted earnings per share of $5.24 on revenue of $31.35 billion.

“For the full year, we delivered $31.4 billion in revenue, up 18% year-over-year, or 22% in constant currency, one of the best performances of any enterprise software company our size,” Marc Benioff, chairman and chief executive officer of Salesforce, said in a statement. “We closed FY23 with operating cash flow reaching $7.1 billion, up 19% year-over-year, the highest cash flow in our company’s history and one of the highest cash flows of any enterprise software company our size.”

Along with its earnings, Salesforce announced a new $20 billion stock repurchase program. The program was initially launched in 2022 with a $10 billion commitment, but Salesforce has seemingly upped the ante amid the emergence of activist investors, most notably Elliott Management Corp.

Elliott Management was reported to have made a multibillion-dollar investment in Salesforce in January. The firm is known for pushing for executive and company changes in any company it invests in and has previously targeted companies such as Twitter Inc., PayPal Holdings Inc., AT&T Inc. and Pinterest Inc.

In its first move as an investor, Elliott Management is reported to have nominated a slate of directors for the Salesforce board, with Jesse Cohn, who runs the activist practice at Elliott, believed to be among them. Nominations for the Salesforce board close on March 14.

The brewing back-room drama also comes after Salesforce announced in January that it was laying off about 1o% of its workforce. Benioff said in a memo at the time that the cuts were the result of “customers… taking a more measured approach” to spending, which is a polite way of saying broader macroeconomic issues in the global economy have started to bite.

For its first fiscal quarter of 2024, Salesforce expects adjusted earnings of $1.60 to $1.61 a share on revenue of $8.16 billion and $8.18 billion. Analysts had expected $1.32 and $8.05 billion. Salesforce also surprised with a full-year EPS outlook of $7.12 to $7.15 on revenue of $34.5 billion to $34.7 billion, higher than an expected $5.84 and $34.03 billion.

In a broader market that has seen some companies struggle over reporting season amid a slowing global economy, Salesforce stands out, and investors noticed, sending shares in the company up over 15% after the bell.

Photo: Salesforce