Marc Benioff (billionaire, co-founder, and chief executive officer at Salesforce.com Inc.) pauses during a panel discussion on Tuesday, January 21, 2020, in Davos, Switzerland. From Jan. 21-24, 50th Annual Meeting of the World Economic Forum will be held in Davos, Switzerland. It brings together world leaders, influential executives and bankers as well as policy makers. Photographer: Jason Alden/Bloomberg via Getty Images
After Salesforce reported earnings for fiscal second quarter and forward guidance that were higher than analysts' expectations, Salesforce shares rose by as much as 3.3% in extended trading Wednesday.
Here's what the company did:
Adjusted earnings: $1.48 per Share vs. 92cs per Share as analysts expected, according to Refinitiv.
Adjusted: $1.48 per share vs. 92cs per share as analysts expected, according to Refinitiv. Refinitiv estimates revenue at $6.34 billion compared to $6.24 billion expected by analysts.
The company released a statement saying that revenue increased by 23% in the quarter ended July 31. Revenue grew 23% in the previous quarter.
Salesforce's Platform and Other division, which includes MuleSoft integration software and Tableau software-analytics, generated $1.88 billion, an increase of 24%.
The Service Cloud segment saw $1.60 billion in revenues, which represents a 23% increase.
Salesforce's core Sales Cloud product which salespeople use for business opportunities had $1.48 Billion in revenue, an increase of 15%.
Salesforce acquired Slack, a team communication app company, for $27.7 million in the third quarter. Salesforce also announced plans to target investment banks via its Financial Services Cloud and said that it would release Work.com software to support employee wellness.
Salesforce stated that it expects 91c to 92c in adjusted fiscal third quarter earnings per share for $6.78 billion to 6.79 billion in revenue. Refinitiv polled analysts and expected 82 cents for adjusted earnings per share, and $6.66 billion revenue.
Salesforce has raised its revenue and earnings guidance for the entire 2022 fiscal year.
It now expects to earn $4.36 to $4.38 per share in adjusted earnings and to generate $26.2 billion to $26.3 million in revenue. Refinitiv polled analysts and found that consensus was for $3.82 adjusted earnings per share, $26.01 billion revenue, and $3.82 adjusted earnings per share. Salesforce predicted $30 million less revenue than the actual figure, but Slack contributed $530 million. Slack's revenue increased by 39% in the quarter on a standalone basis, according to Amy Weaver (Salesforce's finance chief), on a conference phone call with analysts.
Salesforce uses Slack more often
Gavin Patterson (Salesforce's chief revenue officer) said, "We are starting to sell through Slack." Salesforce on Salesforce is often the best platform for sales presentations, so Slack on Slack can be a compelling way to show how we use the product.
The company forecast that its operating margin for fiscal year would be 1.8%. This is higher than the 1.4% guidance in the quarter before.
Salesforce shares have risen 17% over the past 24 hours, while the S&P 500 index rose almost 20% in the same time period.
This is breaking news. Keep checking back for more updates.
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