It would be an understatement to say that Salesforce has been having a rough ride of late — from activist pressure to executive departures and layoffs — it seems like everyone was piling onto a company that was already struggling as profits declined.

It needed a strong quarter, and all indications were they wouldn’t get it. Against all odds, though, the CRM leader defied the street with a strong report.

Today after the bell, Salesforce reported its fiscal fourth-quarter earnings, including revenue that topped expectations and guidance that came in ahead of street estimates.

The street had expected Salesforce to report revenues of $7.99 billion in its most recent quarter; it reported top line of $8.38 billion, up 14% compared to the year-ago period, and three points better in constant currency terms.

In terms of the future, investors had forecast that Salesforce would generate revenues of $8.05 billion in its present quarter (Q1F24), and $34.03 billion for its new fiscal year; instead, Salesforce expects revenue between $8.16 billion and $8.18 billion in its current quarter, and revenues of $34.5 billion to $34.7 billion for the full fiscal year.

TechCrunch noted earlier this week that the way for Salesforce to get out of its jam would be to beat growth estimates and improve profitability. The company certainly managed the former. The company is forecasting stronger profits as well. Salesforce reported GAAP and non-GAAP operating margins of 3.3% and 22.5%, respectively. In its newly started fiscal year, the company expects GAAP and non-GAAP operating margins of around 10.8% and 27.0%, respectively.

Salesforce crushed expectations and doubts concerning its recent growth, forecast better-than-anticipated growth for the year, and told investors to expect an overall stronger operating profit result for its new fiscal year.

This could take some wind out of the sails of Salesforce’s critics. The company’s many detractors of late were lining up to find fault with its spending, especially compared to others in the industry, and these operating numbers in particular could help Salesforce executives as they continue to negotiate with a legion of activist firms.

It’s worth noting that just this morning, Elliott Management, one of the five activists working inside Salesforce at the moment, announced a slate of candidates for the board of directors, a move that usually means it wants to force its agenda onto a company. A bad report would have made that job a lot easier.

Investing critics of the company might also have wanted to see, say, a greater level of anticipated shareholder return. That can come in various forms, including dividends, share buybacks and other efforts. Salesforce has historically opted for share buybacks, given its strong cash generation. After noting in its report that it returned 57.5% of the $4 billion it spent on buybacks last fiscal year in its trailing quarter, the company also announced that it is increasing the size of its buyback to $20 billion in total.

Naturally you could argue that Salesforce is amping up its share repurchases to dampen external criticism and appease the activists who are looking for a better return; true, but even if so it has a similar effect. It will repurchase the shares and has the cashflow to do so. It’s hard to argue about intent when the expected result is likely in line with what external investors wanted.

Salesforce will retain critics concerning its cost structure and the fact that its expected growth in its current fiscal year is just 10%. But compared to where the company was earlier this week, its earnings report has proven a good sheaf of its critics wrong, and perhaps bought it more time to make the case that it really does know what it is doing.

Salesforce strikes back by Ron Miller originally published on TechCrunch