Salesforce will report its Q3 results on November 30 after the close.
His checks on the quarter were generally positive, with some weak spots around lengthening sales cycles and isolated deal slippage seen in the U.S. and Europe.
He believes Industry Cloud deal activity was generally vigorous, Tableau and MuleSoft better than expected, and the more significant deal pipeline was solid heading into the next 3 to 6 months.
That said, the softer macro is clearly at play as several deals he tracked took longer to get done but ultimately closed before the end of the quarter on the sales and marketing front.
He believes overall CRM should be able at least hit and slightly exceed Street estimates for the quarter.
As multi-cloud adoption has been a priority for the company, customers with 4+ clouds represent roughly 20% of total customers, driving roughly ~85% of total ARR. He expects this number to grow as the company continues to push its multi-cloud offering.
With 12 industry clouds and 30% higher ASPs, Salesforce is tailoring its expansion to nearly every industry on the corporate level.
Currently, 64% of ARR is based in the Americas, with roughly 36% coming from its international base. He expects this mix to become more diversified over the next few years as the company continues to expand globally in 2023 and beyond.
In this period of softer growth ahead during this dark economic storm, he believes that software stalwarts will likely become much more aggressive on the M&A front.
He also notes that the Slack deal is gaining traction within the CRM ecosystem, resulting in cross-selling opportunities.
Price Action: CRM shares traded higher by 0.64% at $150.21 on the last check Wednesday.
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