Salesforce announced this week that its revenue grew 11% year over year in the 2024 second fiscal quarter ended July 31, 2023. It also focused on its artificial intelligence tool development, specifically addressing generative AI tools.

Salesforce revenue drivers

Salesforce revenue grew to $8.60 billion for the quarter. Furthermore, Salesforce subscription and support revenue grew 12% year over year to $8.01 billion. Professional services and “other revenues” increased 3% to $600 million, Salesforce said.

Chairman and CEO Marc Benioff said Salesforce artificial intelligence data and its customer relationship management (CRM) system “propelled us to become the third largest enterprise software company by revenue in the world.”

In the Asia Pacific region, Salesforce revenue grew 20%. in Europe, the Middle East and Africa, Salesforce revenue grew 13%. Meanwhile, in the Americas, Salesforce revenue grew 10%.

Salesforce embracing generative AI

“We are at the dawn of an AI revolution,” Benioff said. He added that every CEO he has “met with this year across every industry believes that AI is essential to improving both their top and bottom line.”

He also said Salesforce has “published some of the first papers on prompt engineering and the beginnings of generative AI.”

Expanding on that, Benioff said Salesforce sees the development of ethical AI through its $500 million generative AI fund.

“We are very thirsty to make sure that Salesforce is the number one AI CRM,” Benioff said.

New technology, new hires?

Salesforce recently added new applications to its suite. The new apps are designed to support sales, customer service and marketing, using artificial intelligence and integration with Salesforce’s technology customer relationship management to drive a personalized customer experience, Salesforce said.

Included in Salesforce’s new Commerce Cloud embedded apps and integrations:

• Reorder Portal
• Order Support
• Pay Now

Salesforce announced the suite of new artificial intelligence features in June. They will cost roughly $7,200 per user each year. Salesforce followed in July with the first price increase in seven years.

Benioff said new product features, including those powered by artificial intelligence, will be demonstrated at the company’s annual conference in September. The event, called Dreamforce, is held in the company’s hometown of San Francisco.

After announcing large job cuts earlier this year, Salesforce has approved a budget for new hiring, particularly in research and development areas like artificial intelligence, said Mike Spencer, executive vice president of investor relations. Even with those additional employees, the company’s headcount will be 10% lower at the end of the fiscal year, he said. That’s due to continuing trims and performance-based reductions such as one in Ireland earlier this month that are separate from the major workforce cuts announced in January, Spencer said.

Salesforce had 70,456 full-time employees at the end of the fiscal second quarter on July 31, a 10% decline from a year earlier, according to a statement from Benioff.

Salesforce earnings

For the fiscal 2024 second quarter ended July 31, 2023, Salesforce reported:

• Revenue grew to $8.60 billion. That’s up 11% year over year from $7.72 billion in the comparable 2022 period.
• Subscriptions and support accounted for more than $8.00 billion.
• Gross profit was $6.49 billion, up from $5.59 billion in the year-ago period.

For the six months ended July 31, 2023, Salesforce reported:

• Revenue grew to $16.85 billion from $15.13 billion in the year-ago period.
• Subscriptions and support accounted for $15.65 billion.
• Gross profit was $12.61 billion, up from $10.96 billion in the year-ago period.

Percentage changes may not align exactly with dollar figures due to rounding. Check back for more earnings reports.

Bloomberg News contributed to this report.

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