Salesforce Inc. gave a surprisingly upbeat forecast for the coming year and plans to step up stock buybacks, potentially easing the pressure it faces from a cadre of activist investors.

Operating margin will be about 27 per cent in fiscal 2024, which runs through next January, the software giant said in a statement Wednesday. This exceeds an average analyst estimate of 22.4 per cent, according to data compiled by Bloomberg. Salesforce also said it increased its share repurchase program to US$20 billion.

The shares gained more than 14 per cent in late trading after closing at US$167.35 in New York. 

The outlook suggests that profitability is now a top priority for the cloud applications pioneer, which spent years more focused on growth. Shareholders have pushed the company to cut costs following a half-decade of aggressive hiring and large acquisitions.

At least five activist investors, including Elliott Capital Management and Starboard Value, have disclosed stakes in the San Francisco-based company in recent months. In September, before the emergence of activists, Salesforce said that margins would hit 25 per cent by 2026.

It’s been a tumultuous few months for Salesforce: The company has swapped board directors, axed 8,000 workers and lost numerous top executives. In addition, many corporations have begun to scrutinize their spending on cloud applications and infrastructure in recent quarters. Analysts expect these disruptions to cause dramatic revenue deceleration.

“It’s a new day at Salesforce,” Chief Financial Officer Amy Weaver said in the statement. “I am excited for the opportunity in front of us as we continue to drive profitable growth.”

The stock had already climbed 26 per cent this year through the close, more than double the rally of the tech-heavy Nasdaq 100. Activist involvement in the company has likely been the primary driver of the recent share gains, Guggenheim Securities analyst John DiFucci said in a note ahead of earnings.

In the fiscal fourth quarter, revenue increased 14 per cent to US$8.38 billion, beating projections of 9.2 per cent growth. Excluding some items, profit was US$1.68 a share, compared with analysts’ average estimate of US$1.36.

The current remaining performance obligation — or contracted sales that have yet to close, which is a measure of near-term demand — grew 11 per cent to US$48.6 billion in the quarter. Salesforce said sales for the fiscal first quarter, which ends April 30, will grow to about US$8.2 billion and adjusted profit will be at least US$1.60 a share — both ahead of estimates.

Earlier Wednesday, news broke that Elliott Capital Management had nominated directors to Salesforce’s board. In addition to Elliott — which has a multibillion dollar stake — Starboard, ValueAct, Jeff Ubben’s Inclusive Capital Partners and Dan Loeb’s Third Point have disclosed positions in the company in recent months. In January, Salesforce appointed three new directors, including ValueAct CEO Mason Morfit.