Salesforce reported earnings and revenue that topped analysts’ estimates but gave a disappointing forecast for fiscal 2023. The stock slid 7% in extended trading on Wednesday.

The enterprise software maker said its board approved a $10 billion stock buyback program, a first for the company. But Marc Benioff, Salesforce’s co-founder and co-CEO, told analysts on a conference call that the move won’t prevent it from making more acquisitions.

Here’s how the company did:

• Earnings: $1.19 per share, adjusted, vs. $1.02 per share, expected by analysts, according to Refinitiv.
• Revenue: $7.72 billion vs. $7.69 billion, expected by analysts, according to Refinitiv.

Revenue rose 22% in the quarter ended July 31 from the year-earlier period, according to a statement. Net income of $68 million was down from $535 million in the year-earlier quarter, when the company notched a big gain on investments.

For the fiscal third quarter, Salesforce called for adjusted earnings of $1.20 to $1.21 per share on $7.82 billion to $7.83 billion in revenue. Analysts polled by Refinitiv had been looking for $1.29 in adjusted earnings per share on $8.07 billion in revenue. The revenue guidance would have been $250 million higher were it not for the impact of exchange rates, Salesforce said.

Salesforce reduced its fiscal 2023 guidance for both earnings and revenue. It now expects $4.71 to $4.73 in earnings per share and $30.9 billion to $31 billion in revenue, including $800 million in negative foreign-exchange impact, compared with a prior forecast for earnings of $4.74 to $4.76 per share and $31.7 billion to 31.8 billion in revenue. Analysts surveyed by Refinitiv had been expecting $4.75 in adjusted earnings per share and revenue of $31.73 billion.

The company has endured weaker economic cycles before, Benioff said.

“Sales cycles can get stretched, deals are inspected by higher levels of management and all of this we began to start to see in July,” Benioff said. “Nearly everyone I’ve talked to is taking a more measured approach to their business. We expect these trends to continue in the near term, and we’ve reflected this in our guidance.”

The slowdown was not across the board, however.

Demand was slower from small and medium-sized businesses, particularly in North America and Europe, and specifically in retail, consumer goods, communications and media, Amy Weaver, Salesforce’s finance chief, said on the call.

“From a product perspective, commerce and marketing saw more pronounced decelerations, while sales and service remained strong,” Weaver said. Even with weakness in revenue, Salesforce reiterated its guidance for an adjusted operating margin of 20.4% for the 2023 fiscal year.

The company’s service subscription and support revenue totaled $1.83 billion in the quarter, up 14% year over year. Revenue in the sales category, which includes Salesforce’s longstanding Sales Cloud software for managing business opportunities, increased by almost 15% to $1.7 billion. The company’s Platform and Other category that includes Slack did $1.48 billion in revenue, up 53%.

In the latest quarter, Salesforce announced the availability of new marketing and commerce tools, and it acquired Troops.ai, a startup that developed a Slack chatbot that salespeople can use to update customer-relationship management software. Salesforce, which closed the nearly $28 billion Slack acquisition last year, said it would increase the price of the chat offering for the first time since the app launched in 2014. The company reiterated its expectations for $1.5 billion in Slack revenue during the full fiscal year.

Before the decline in extended trading, Salesforce shares were down about 29% year to date, compared with a nearly 13% decline for the S&P 500.

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