The 2023 Retail Technology Buyers Guides

Salesforce shares rise on revenue beat and increased forecast

KEY POINTS
  • Salesforce releases its first earnings report since its $15.3 billion acquisition of Tableau Software, the company’s largest deal ever.
  • Prior to the announcement, Salesforce was expecting revenue for the current fiscal year of over $16 billion, a number it expected to reach $26 billion to $28 billion by fiscal 2023.
  • Between Tableau and MuleSoft, Salesforce has been growing into new areas beyond cloud applications.
Salesforce reports EPS and revenue above estimates, shares pop after hours

Salesforce shares climbed about 7% in extended trading on Thursday after the software company reported better-than-expected quarterly revenue and raised its forecast for the year.

Here are the key numbers for the second quarter of fiscal 2020:

  • Earnings: 66 cents per share, excluding certain items, vs. 47 cents per share as expected by analysts, according to Refinitiv.
  • Revenue: $4 billion, vs. $3.95 billion as expected by analysts, according to Refinitiv.

Revenue climbed 22% from a year earlier, the company said in a statement. Sales Cloud, the company’s biggest product, generated $1.13 billion in revenue, up 13%, and Service Cloud, the second-largest division, grew 22% to $1.09 billion.

While Salesforce is still generating organic growth as more large businesses move their applications to the cloud, the company has also been on a spending spree to move into new areas and open the door to new expansion opportunities. Earlier this month, Salesforce closed the $15.3 billion acquisition of Tableau, by far its biggest deal ever, pushing into data visualization tools.

That follows last year’s $6.5 billion purchase of MuleSoft, which put Salesforce into the business of data integration, more of a back-end technology.

Digital wave and values-based business are driving Salesforce’s growth, CEO says

Salesforce raised its revenue forecast for the year to between $16.75 billion and $16.9 billion, from its previous guidance of up to $16.25 billion. On the earnings call, Chief Financial Officer Mark Hawkins said that includes $550 million to $600 million from the acquisition of Tableau, $200 million from the purchase of Salesforce.org earlier this year and $25 million from ClickSoftware, which Salesforce bought for $1.35 billion this month.

For the fiscal third quarter, the company said it expects revenue of $4.44 billion to $4.45 billion, representing 31% growth from a year earlier.

In last quarter’s earnings call co-CEO Marc Benioff said Salesforce would reach $26 billion to $28 billion in annual sales by fiscal 2023. That was a week before the announcement of the Tableau purchase, in which Salesforce snapped up a company that was producing about $1.3 billion in annualized revenue.

Salesforce shares jumped as high as $158.50 after the report. The stock rose 0.6% in regular trading to close at $148.24 and is up a little over 1% in the past year.

This article originally appeared on CNBC.com
Total
0
Shares
Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Previous Article

CCA reveals ‘Best Customer Journey Experience’ finalists

Next Article

Bpm’online recognized as the Best CRM Solution for Enterprises in MarTech Breakthrough Awards

Related Posts
ethical AI

Subscribe to TheCustomer Report

Customer Enlightenment Delivered Daily.

    Get the latest insights, tips, and technologies to help you build and protect your customer estate.