Salesforce shares surged by 3% in extended trading after publishing fiscal second-quarter earnings and forward guidance that beat analysts’ estimates.
The enterprise software maker reported earnings of $1.48 per share, adjusted. According to Refinitiv, analysts had expected earnings of 92 cents per share.
Meanwhile, Salesforce reported revenue of $6.34 billion while $6.24 billion revenue was anticipated.
The company’s revenue rose 23% year over year in the quarter, which ended July 31. In the first quarter of the year, revenue increased 23%.
Remarkably, its Platform and Other units, including the MuleSoft integration software and Tableau data-analytics software, delivered $1.88 billion in revenue, up 24%.
Meanwhile, the Service Cloud segment recorded $1.60 billion in revenue, representing around 23% growth.
Salesforce’s core Sales Cloud product had $1.48 billion in revenue, which is up 15%.
Significantly, the company has reopened about half of its offices so far after closing them last year because of the COVID-19 pandemic.
Salesforce Raised Its Earnings and Revenue Guidance for The Following Year
In the quarter, Salesforce acquired Slack for $27.7 billion, a team communication app company. Also, in the quarter, Salesforce stated plans for tools targeting investment banks through its Financial Services Cloud. Additionally, the firm announced it would release Work.com software for employee wellness.
Salesforce announced it anticipates 91 to 92 cents in adjusted fiscal Q3 earnings per share on $6.78 billion to $6.79 billion in revenue. According to Refinitiv, analysts forecast 82 cents in adjusted earnings per share, while $6.66 billion in revenue.
Moreover, the firm raised its earnings and revenue guidance for the full 2022 fiscal year.
Salesforce now expects $4.36 to $4.38 in adjusted earnings per share. Meanwhile, it anticipates $26.2 billion to $26.3 billion in revenue. Meanwhile, analysts forecast $3.82 in adjusted earnings per share, while $26.01 billion in revenue.
Notably, the revenue figure includes $530 million from Slack, which is $30 million more than Salesforce had projected one quarter earlier. Furthermore, according to Salesforce’s finance chief, Amy Weaver, Slack’s revenue increased by 39% on a standalone basis in the quarter. Moreover, it’s essential to mention that Salesforce is increasingly using Slack.
Salesforce anticipated that its operating margin for the fiscal year would be 1.8%, higher than the 1.4% guidance from the first quarter of the year.
Remarkably, the company’s shares have surged by 17% since the start of 2021. Meanwhile, the S&P 500 index has grown about 20% over the same period.