A $20 billion buyback could do a lot to create accretive value to shareholders, if it's not wiped out by a whole bunch of equity grants to employees. They tend to be very generous in this area. They've historically been incredibly generous for employees that they've acquired through acquisitions and employees that they've hired organically. Let's say it should be a positive because it depends on what Salesforce does with its historical practices around equity compensation for employees. Tim Beyers: It should be a positive, let's say that. I'm assuming you put that in the positive category. But first, since you are talking about the share buybacks, part of the news here is Salesforce doubling their share buyback program that they announced last August, from 10 billion to 20 billion. That would be a good thing.Ĭhris Hill: It would be a good thing. Why is the stock up? It does feel like, hey, maybe we're seeing a slightly more disciplined Salesforce. But I would say, Chris, a little bit of encouraging signs in terms of expense management, as well as a better-than-expected revenue number. We have to wait to see how much they're actually going to get religion around that. There could be some timing in effect here, they did buy back some shares. Now there's a lot of accounting that can go into, I'm not saying that Salesforce is, oh boy, now they're getting some religion and they're buying back stock and actually reducing their share count. I think the thing that really stood out for me, Chris, this is for the quarter on a year-over-year basis, 984 million diluted shares outstanding versus 986 million, so down 2 million. Yes, material, but not big jumps the way we're used to seeing it. Total operating expenses for the quarter about $5.9 billion, that was up from $5.5 billion. This is not the spend freely Salesforce that we are used to seeing. $2.1 billion in the current quarter, year-ago quarter, $2 billion. But I'll just give you a couple of things here. For example, in this particular quarter, granted, there's still a lot of cost in the Salesforce business. I think there is a bit of acknowledgment from management, particularly Marc Benioff, that yes, we have to be better at controlling cost, because they have activist investors breathing down their neck, and so you did see that. I think there's some real cognitive relief that, OK, great, the revenue was up materially. Sometimes we call these things relief rallies, Chris. Tim Beyers: Well, I'm feeling better for a couple of reasons. You're a shareholder, how are you feeling and what stood out in the report? It's been a pretty eventful few months for Salesforce.
Obviously, Salesforce has been in the news lately, because of layoffs, because of the latest co-CEO to leave. But I was particularly struck by the revenue number up 14% compared to a year ago. The revenue numbers stands out to me as, and I'm not a shareholder. Chris Hill: You know what else is caffeinated? Salesforce shares today up more than 12%, because Salesforce beat expectations across the board.
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