The results and guidance of Salesforce exceeded what analysts had anticipated, prompting the stock to soar in after-hours trading.
Shares of Salesforce surged 6% during post-market trading Wednesday after the cloud software firm reported quarterly revenue and guidance that exceeded analysts’ expectations. The company reported revenue of $8.60 billion compared to analysts’ estimates of $8.53 billion, while adjusted earnings per share came in at $2.12 versus the anticipated $1.90, according to Refinitiv. Salesforce's revenue for the second quarter increased by 11% from the prior year, and net income rose to $1.27 billion, or $1.28 per share, from $68 million, or 7 cents per share, a year earlier. CEO Marc Benioff pointed to the implementation of AI technology to the Sales Cloud and Service Cloud applications, both of which cost an additional $50 per user per month. The firm also announced its AI Cloud that will include features for marketing and data analysis. CFO Amy Weaver acknowledged the weak U.S. economy's pressure on the company’s growth, noting elongated sales cycles, additional approval layers, and decreased spending in subscription and professional services sectors. Salesforce also raised their outlook for the full year, now expecting adjusted earnings of $8.04 to $8.06 per share on $34.7 billion to $34.8 billion in revenue, representing a 11% rise. These figures exceed analysts' estimates of $7.45 per share and $34.65 billion, respectively. The company's stock is up 62% in 2021, much higher than the 18% gain of the S&P 500 index.
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