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From activist investor pressure to massive layoffs of the so-called Salesforce "family," Salesforce has not been having the greatest time lately. Consequently, many people were skeptical that it could pull off a strong fourth quarter. But despite all of its turmoil, Salesforce finished the fiscal year quite strong.
Salesforce reported revenues of $8.38 billion, up 14% from this time last year. They anticipate better growth for this coming year than previously expected, in addition to a better operating profit – whereas Salesforce originally intended to reach an adjusted operating profit margin of 25% by 2026, they announced that the company now intends to reach a 27% operating margin in this current fiscal year.
These surprisingly pleasant numbers could make it a bit more difficult for activist investors to force their agenda upon Salesforce. Recently, Elliott Management, one of the five activist investors active within Salesforce, announced a list of possible candidates for the new board of directors – a bad fourth quarter would have made pushback on this issue from Salesforce much more difficult.
Speaking of activist investors, there’s another actor working within Salesforce to bring "creative direction" to the company. His name is Matthew McConaughey. Last Tuesday, The Wall Street Journal reported that Salesforce was reportedly paying the actor $10 million a year to serve as a "creative advisor and TV pitchman." Meanwhile, the company is in the process of laying off about 10% of its workforce, with rumors of even more layoffs ahead. While the exact terms of the contract remain unclear, The Journal has also reported that both McConaughey and the musician will.i.am have been involved in high-level strategy sessions at the company.
Salesforce has long used star power to elevate its brand – literally, in McConaughey's case; he was paid $5 million to ascend in a hot air balloon in Salesforce's Super Bowl ad last year. The brand has frequently used its association with McConaughey and other high-profile figures, such as Apple CEO Tim Cook and former president Barack Obama, to grow the public’s familiarity with the brand. So if you see Natalie Portman, Brad Pitt, or even Snoop Dogg doing ads for Salesforce in the near future, don’t be surprised.
