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

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

$0.75 Beat $0.66 EPS And $3.74B Beat $3.68 billion Forecast in Revenue

Earnings

Salesforce reported fiscal third quarter earnings per share of 75 cents, excluding certain items, vs. 66 cents, as expected by Refinitiv. Revenue was $4.5 billion vs. $4.45 billion, as expected by Refinitiv.

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 $160.00 −1.57 (-0.97%)

Highlights

  • Sales Cloud business, which provides customer relationship management tools to salespeople, revenue increased 15% to $1.17 billion.
  • Subscription and support revenues rose 34% year-over-year, while professional services and other revenues advanced 22%.
  • At $12.8 billion, Current Remaining Performance Obligation was up 28% year-over-year.

Salesforce Q3 2020 earnings infographic

Acquisitions

In August, Salesforce completed the $15.3 billion purchase of data analytics company Tableau, its biggest deal ever. That came just over a year after the $6.5 billion acquisition of MuleSoft, whose software connects data that’s stored in different silos. Also this year, Salesforce spent $1.35 billion on ClickSoftware, which provides software to field service management workers.

Marc Benioff, Salesforce’s co-founder and co-CEO, said at Dreamforce that balancing organic and inorganic growth is “a dance.” “It’s the pacing,” Benioff said. “You have to acquire, then you have to ingest it. It takes a while to bring these things in, to integrate them, to get the momentum, to get the velocity.”

He pointed to MuleSoft as a deal where there were a lot of questions, but now people get it. That integration process has just started with Tableau. “We’re just kind of get ting who are you, what’s your name, because I’m Marc, nice to meet you,” he said.

Outlook

For the full fiscal year, Salesforce now expects revenue of $16.99 billion to $17 billion, compared with the $16.9 billion average analyst estimate, according to Refinitiv. At last month’s Dreamforce conference, Chief Financial Officer Mark Hawkins said Salesforce will double in size by fiscal 2024, reaching revenue that year of $34 billion to $35 billion.

 

Source: Saleforce.com, AlphaStreet

From The TradersCommunity Research Desk

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