Salesforce's Q3 results, as published yesterday, are fairly reassuring, even though they will not dispel longer-term concerns.
9 month revenue reached $30.2bn, vs. $27bn a year ago at the same time; while operating profit reached $17.1bn, vs. $16.1bn a year ago.
The gain is entirely redirected toward share buybacks, which also rose by $1bn, compared with a year ago at the same time.
This allocation of resources makes perfect sense. As noted in our previous earnings commentary, the valuation of the group led by Marc Benioff has moved to its lowest multiples.
While Salesforce remains a cash machine in all respects, investors continue to see it as a potential underperformer in the artificial intelligence era. The reverse is also possible, one might note; but it is now needs to be proved.
Moreover, it is hard not to worry about a sustained slowdown in growth. Since last year, it has moved into single-digit territory - 8.6% in 2025 - after flirting with 30% five years ago. A multiple adjustment is therefore certainly legitimate.
However, comparison is not necessarily fair. Salesforce has doubled in size meanwhile, while its operating profit has been multiplied by sixteen times. The group has thus shown the market that its formerly very narrow margins could rise: the corollary, perhaps, is slower business expansion.
