Cloud software giant Salesforce saw a 6% surge in its shares during after-hours trading after releasing quarterly results and guidance that exceeded market expectations. Here’s a breakdown of the company’s performance:
Earnings: Adjusted earnings per share came in at $2.12, surpassing the $1.90 per share expected by analysts.
Revenue: Salesforce generated $8.60 billion in revenue, slightly above the $8.53 billion anticipated by analysts.
In the fiscal second quarter, Salesforce’s revenue grew by 11% compared to the previous year. Net income rose significantly to $1.27 billion, or $1.28 per share, from $68 million, or 7 cents per share, in the same quarter the previous year.
However, the uncertain economic climate continues to impact Salesforce’s growth, with Chief Financial Officer Amy Weaver mentioning softness in the U.S. market and industries such as technology, retail, and consumer goods. Weaver highlighted extended sales cycles, additional approval layers for deals, and deal compression in various business segments due to cautious clients since July 2022.
For the upcoming quarter, Salesforce forecasts adjusted earnings per share of $2.05 to $2.06 on revenue ranging from $8.7 billion to $8.72 billion. This outlook exceeds analysts’ predictions of $1.83 per share in earnings and $8.66 billion in revenue.
CEO Marc Benioff emphasized the company’s growth in all product categories and its leadership in the AI era, anticipating expansion through artificial intelligence.
Salesforce has raised its full-year forecast, expecting adjusted earnings per share between $8.04 and $8.06 on revenue of $34.7 billion to $34.8 billion, reflecting an 11% revenue growth. This outlook is higher than the previous guidance of $7.41 to $7.43 in adjusted earnings per share and $34.5 billion to $34.7 billion in revenue, indicating 10% revenue growth.
Salesforce’s AI enhancements, including the AI Cloud for marketing and data analysis, are expected to contribute to the company’s growth, but these initiatives are not predicted to significantly impact the full-year guidance.
This year, Salesforce shares have risen by 62%, outperforming the broader S&P 500 index, which has gained approximately 18% over the same period.
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