Salesforce (NYSE: CRM) recently announced its fiscal fourth-quarter results that continued to surpass market expectations. Despite margin headwinds due to currency pressures and integration of its acquisitions, the company continues to expand across all financial metrics.

Salesforce’s Financials

Salesforce’s revenues for the fourth quarter grew 26% to $7.33 billion, above analyst estimates of $7.23 billion. Adjusted earnings of $0.84 per share were also better than the market’s forecast of $0.73 per share.

By segment, Subscription and support revenues grew 25% to $5.48 billion, and Professional services and other revenues grew 44% to $1.84 billion.

Revenues for the full fiscal year grew 25% to $26.49 billion with Subscription and support revenues growing 23% to $24.66 billion and Professional services and other revenues increasing 44% to $1.84 billion. Adjusted earnings were $4.78 per share.

For the first quarter, Salesforce forecast revenues of $7.37-$7.38 billion and an EPS of $0.93-$0.94. The market was looking for $7.24 billion and an EPS of $0.98. Salesforce expects to end the current fiscal year with revenues of $32-$32.1 billion and an EPS of $4.26-$4.64. The market was looking for revenues of $31.75 billion and an EPS of $4.68.

Salesforce’s Growth Focus

Recently, Salesforce announced new integrations, allowing retailers to create shopping experiences that best suit customer needs and meet their expectations. The integrations include PayPal at Checkout for Salesforce Payments, allowing brands that use Salesforce Payments to add PayPal to their checkout experience with a click-based configuration, reducing checkout friction, and driving sales. Last quarter, PayPal also expanded their use of Slack, using new capabilities like Slack Huddles for real-time audio calls, and Slack chatbots to respond to employee questions, log IT tickets, and other services.

Salesforce also announced Salesforce Commerce for B2B Wholesale Retail, its digital portal for wholesale apparel and fashion companies, that supports preseason ordering, in-season re-supply, and fully automated interactions across self-service and sales teams. It also announced the launch of Safety Cloud, which expands on Salesforce’s event and workplace experience. In addition to expanding on existing health and safety innovations that were announced in December, the service helps businesses and communities to better manage testing, health, and entry protocols and create safer in-person experiences at events and in the workplace.

For the time being, Salesforce is not looking for additional strategic acquisitions and is instead focusing on getting Slack well integrated from a technology and go-to-market perspective. Salesforce had acquired Slack in 2020 for $27.7 billion. The analysts have been monitoring the acquisition given that Slack reported margin headwinds of 140 bps in FY22, and is expected to report headwinds of 100-125 bps in FY23. Despite the pressure, Salesforce managed to expand its operating margins by 100 bps in FY22 and expects an additional 130 bps of expansion in FY23. I still believe that Salesforce can help realize Slack’s PaaS potential.

Salesforce has also managed to improve Mulesoft’s performance. Mulesoft’s revenue growth had slowed down to 16% in the third quarter. It increased to 24% in the fourth quarter but remained lower than the 39% reported in Q2. The management re-organized the business recently and expects the division to be in a better position to scale long term.

Salesforce’s stock is trading at $196.23 with a market capitalization of $193.3 billion. It had touched a 52-week high of $311.75 in November last year and fell to a 52-week low of $184.44 in February.