Marc Benioff, billionaire and co-founder and Chief Executive Officer of Salesforce.com Inc., pauses during a panel discussion on the opening day of the World Economic Forum (WEF) in Davos, Switzerland on Tuesday, January 21, 2020. World leaders, influential executives , Bankers and political decision-makers will take part in the 50th annual conference of the World Economic Forum in Davos from January 21st to 24th. Photographer: Jason Alden / Bloomberg via Getty Images
Jason Alden | Bloomberg | Getty Images
Salesforce shares rose up to 3% in expanded trading on Wednesday after the enterprise software maker announced second-quarter results and forward guidance that beat analysts’ estimates.
This is how the company did it:
- Merits: $ 1.48 per share, adjusted, up from 92 cents per share analyst expects, Refinitiv said.
- Revenue: $ 6.34 billion versus $ 6.24 billion as analysts expected, Refinitiv said.
Revenue rose 23% year over year for the quarter that ended July 31, the company said in a statement. In the previous quarter, sales rose by 23%.
Salesforce’s Platform and Other division, which includes MuleSoft integration software and Tableau data analytics software, generated sales of $ 1.88 billion, an increase of 24%.
The Service Cloud segment generated revenue of $ 1.60 billion, which corresponds to a growth of approximately 23%.
Salesforce’s core Sales Cloud product, which enables sales reps to keep track of business opportunities, had revenue of $ 1.48 billion, up 15%.
Salesforce has so far reopened about half of its offices after closing last year due to the coronavirus pandemic.
“I don’t think the Delta variant will be important for our business,” said CEO Marc Benioff during a conference call with analysts. “If anything, it just speeds it up. And Delta isn’t the last of these things we’ll see. We now see a constant parade of these variants. I don’t know how many letters there are in the Greek alphabet, but Delta is not the last letter. So we know that. If you didn’t read what happened to Lambda here in Europe two weeks ago, you should probably do it. But with all of these things we want – life has to go on. And that’s it.”
In the quarter, Salesforce completed its $ 27.7 billion acquisition of the team communication apps company Slack. Also in the quarter, Salesforce announced plans for tools targeting investment banks through its Financial Services Cloud and announced it would release Work.com employee wellbeing software.
Speaking of the forecast, Salesforce said adjusted earnings per share for the third quarter of fiscal year are 91 to 92 cents on revenue of $ 6.78 to $ 6.79 billion. Analysts polled by Refinitiv were looking for adjusted earnings per share of 82 cents and sales of $ 6.66 billion.
Salesforce has raised its profit and revenue forecast for the full fiscal year 2022.
Adjusted earnings per share are now $ 4.36-4.38 and revenue is $ 26.2-26.3 billion. The consensus among analysts surveyed by Refinitiv was $ 3.82 in adjusted earnings per share and $ 26.01 billion in revenue. The sales figures include $ 530 million from Slack, which is $ 30 million more than Salesforce forecast a quarter earlier. Slack revenue rose 39% on a stand-alone basis for the quarter, said Amy Weaver, Salesforce chief financial officer.
Salesforce is increasingly using Slack.
“We’re starting to sell through Slack,” said Gavin Patterson, Salesforce chief revenue officer. “The top performing presentations sales teams give are often Salesforce on Salesforce, so Slack on Slack is a very compelling way to explain how we use the product.”
The company forecast that its operating margin for the fiscal year would be 1.8%, above its 1.4% forecast made in the previous quarter.
Regardless of the post-close shift, Salesforce stocks are up 17% since early 2021, while the S&P 500 index is up nearly 20% over the same period.
SEE: Marc Benioff: We are in the process of overtaking SAP as the largest company for enterprise software