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Cloud enterprise software firm Salesforce.com reported better than expected first quarter earnings after the market Tuesday. $CRM also raised guidance. Salesforce again saw growth from it's $6.5 billion acquisition of MuleSoft.

Salesforce

CRM cloud software has been one of the fastest growing tech spaces and Salesforce continues to add tier one customers. Their major competitor is Oracle $ORCL.

salesforce.com, inc. NYSE: CRM  Reported Earnings After Close Tuesday

$0.83 Beat $0.61 EPS And $3.74B Beat $3.68 billion Forecast in Revenue

Earnings

Salesforce's (CRM) reported first-quarter fiscal 2019 earnings were 93 cents per share, excluding certain items, vs. 61 cents per share as expected by analysts, according to Refinitiv. Revenue was $3.74 billion, vs. $3.68 billion as expected by analysts, according to Refinitiv. There was strong growth across all service segments, the customer relationship management (CRM) giant continues to report double-digit growth, continuing momentum from the last quarter.

Growing Cloud Adoption Salesforce’s varied cloud offerings are helping it expand clientele. The rapid adoption of the SaaS-based Salesforce platform has demonstrated solid demand for the company’s cloud-based solutions. The question is going forward in this less confident environment of higher rates.

Continued adoption of Heroku and the Lightning is helping Salesforce Platform revenues. The company is actively leveraging its Sales Cloud and Marketing Cloud, and Service Cloud and Einstein to strengthen customer-centric growth across its portfolio of brand

Sales Cloud service is the company’s largest contributor of subscription and support revenues, surpassed the $1 billion mark in quarterly revenues for the first time in the fiscal second quarter.

salesforce.com, inc. NYSE: CRM

Market Reaction - After hours $153.44 +2.63 (+1.74%)

Highlights

  • Salesforce announced new business from investment bank Evercore, which said it will use the software to help bankers expand their client relationships.
  • Salesforce also rolled out artificial intelligence enhancements in the period and announced its combination with Salesforce.org, the company’s philanthropic arm.
  • Salesforce previously said it was expecting that deal to contribute around $150 to $200 million in revenue for its 2020 fiscal year.

Wedbush Securities analysts led by Steve Koenig wrote in a note last week that negativity around Salesforce, following weak guidance provided in the last earnings report, seemed overblown. Their channel checks suggested the core Sales Cloud product for managing sales leads had not seen a slowdown and that major deals were in the pipeline. However, the company appears to have lost some business to Microsoft among small and medium-sized companies, said the Wedbush analysts, who recommend buying the stock. Still, global technology integrators have said they’re not seeing Microsoft “gaining ground competitively,” the Wedbush report said.

Executives will discuss the results with analysts on a conference call at 5 p.m. Eastern time.

Outlook

Looking ahead into the second quarter revenue seen with a 20% jump to $3.94 billion and adjusted earnings of $0.66 per share compared to $0.71 per share in the prior year.

For the full-year Salesforce has forecasted top line to be between $15.95-16.05 billion and profit of $2.74-2.76 per share. The street estimates sales of $16.1 billion and earnings of $2.69 per share.

 With more companies starting to glean insights from their huge repository of data stored across various platforms and formats, the data integration capability of MuleSoft is going to be a game-changer for Salesforce in the upcoming years which would further improve profitability. The CRM firm has been augmenting its AI-based Einstein platform to help its clients make informed decisions using the AI platform which improves the overall customer experience.

 

Source: Saleforce.com, AlphaStreet

From The TradersCommunity Research Desk

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