Shares of Salesforce (NYSE: CRM) have broken out in after-hours trading in response to a new press release from the company.
The San-Francisco based software provider reported it’s fiscal second-quarter earnings today, showing off figures that were well above what even optimistic investors had expected.
For the quarter ending on July 31st, Salesforce reported revenue of $4 billion, up 22 percent from the previous year and edging out forecasts that predicted revenues of $3.95 billion.
Non-GAAP profits were up to 66 cents per share, well above the 46 cents that the company had previously told investors to expect. Salesforce also raised its guidance, expecting total revenue of between $16.75 to $16.9 billion, around half a billion dollars higher than previous estimates.
“Following an outstanding quarter, we’re raising our FY20 revenue guidance to $16.9 billion at the high-end of the range. With our Customer 360 vision, Einstein AI and the millions of Trailblazers innovating on our platform, Salesforce has never been better positioned for the future,” said Marc Benioff, Chairman & co-CEO, Salesforce. “An enormous wave of digital transformation is sweeping across every industry, and major brands, like FedEx, AXA and Unicredit, turned to Salesforce in the quarter to propel their growth,” added Keith Block, co-CEO, Salesforce. “The trust our customers have in us to drive their digital transformations is reflected in our strong quarterly results across our clouds and regions.”
This news is important in that it’s the first earnings report seen since Salesforce’s $15.3 billion acquisition of Tableau Software, the largest deal the company has ever done. This acquisition is a part of a larger strategy from Salesforce which focuses on aggressively expanding into other areas besides cloud-technology.
The Tableau deal, for example, gives Salesforce an opening into the area of data visualization tools and that market. Back in 2018, the company spent $6.5 billion to buyout MuleSoft, which gave Salesforce access to the data integration field, which is more of a back-end technology rather than a front-end service.
Overall, Salesforce expects its annual sales to reach between $26 billion and $28 billion by fiscal 2023 as growth prospects remain very optimistic for the company.
Salesforce was up around 7 percent in after-hours trading at the time of writing, although the price could shoot up even more on Friday morning when the trading day resumes. Over the past few months shares have fallen a little, declining from around $160 in March to around $145 as of August.
The vast majority of analysts are bullish on the stock, with the average consensus price target for Salesforce coming in at $182 per share. At this point, it seems quite likely that the stock will reach that level within a year or two by the latest, barring any major downturns in the markets.
Salesforce Company Profile
Salesforce.com provides enterprise cloud computing solutions, including Sales Cloud, the company’s main customer relationship management software-as-a-service product. Salesforce.com also offers Service Cloud for customer support, Marketing Cloud for digital marketing campaigns, Commerce Cloud as an e-commerce engine, the Salesforce Platform, which allows enterprises to build applications, and other solutions, such as MuleSoft for data integration. – Warrior Trading News
