Good news, startups: Q3 software results are changing the tech narrative

Earlier this week, quarterly results of public cybersecurity companies have us scratching our heads as to why there isn’t more venture capital investment flocking to security startups. In an environment where profits are hard to drive, stand-out technology sectors should surely sail on the wind if there is a lot of proven demand?


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This morning, I want to broaden our perspective and use a handful of recent quarterly results from a very diverse group of companies to state that things are not. actually bad for technology companies. New data from Salesforce, Zuora, Okta, Nutanix and Snowflake make it clear that many tech sectors are doing better than many people expected.

Understandably, that drives up share prices for some key startup peers, and results in better vibes for tech valuations in general. Let’s talk turkey:

Salesforce

Salesforce reported revenue of $8.72 billion in the third quarter of fiscal 2024in accordance with analysts’ expectations. That works out to an 11% profit for the SaaS giant, which isn’t a surprising number, especially since the company expects to generate revenue of $9.18 billion to $9.23 billion in the current quarter, which is operating at an increase. by about 10%.

Why is Salesforce stock up more than 9% this morning? It beat profit expectations for Q3, forecast Q4 revenue more in line with estimates, and raised its profit forecast for the full fiscal year.

Salesforce may not be the growth juggernaut it once was, but it’s a cash-generating machine that’s pouring in excess capital to buy back its stock, and investors are digging the profit growth.

Zuora

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