Salesforce Reports Strong Q2, but Shares Fall on Weaker Guidance

Salesforce.com, Inc. (NYSE: CRM) reported its second quarter financial results and topped analysts’ estimates. Despite reporting stronger than expected quarterly earnings, shares fell after the Company provided a weaker guidance.  Salesforce’s shares were trading 2% lower after the opening bell on Thursday.  For the second quarter, Salesforce reported revenue of USD 3.28 Billion, increasing 27% year over year and topping estimates of USD 3.23 Billion. The Company reported an adjusted EPS of USD 71 cents, surpassing estimates of USD 47 cents.

Subscription and support drove in majority of Salesforce’s revenue, reporting USD 3.06 Billion combined and growing 28% year over year. Professional services and other revenues were USD 221 Million for the quarter, increasing 14% year over year.  Salesforce said its in earnings transcript that the stronger than expected earnings were benefited by a partial release of the tax valuation allowance as a result of its MuleSoft acquisition.

Salesforce said it intends to run MuleSoft as an independent company. MuleSoft contributed USD 122 Million to the total revenue in the quarter.  “Salesforce revenue grew 27% to almost $3.3 billion in the second quarter, with excellent performance across our clouds, industry segments and geographies,” said Keith Block, Co-Chief Executive Officer, Salesforce. “With this strong quarter, we’re well on our way to our next milestone of $23 billion in revenue in FY22.”

For the third quarter, Salesforce forecasts revenue of USD 3.35 Billion to USD 3.36 Billion and an adjusted EPS of USD 49 cents to USD 50 cents. Analysts are forecasting revenue of USD 3.35 Billion and earnings of USD 54 cents.  For the full year, Salesforce forecasts earnings of USD 2.50 to USD 2.52 on revenue of USD 13.12 Billion to USD 13.17 Billion. Analysts are projecting earnings of USD 2.32 on revenue of USD 13.13 Billion.  Despite providing weaker guidance, Salesforce shares are still up 48.68% this year.

3 Comments
  1. Elaine Low 12 months ago
    Reply

    $CRM being stopped by 152.30 area on 5 min chart

  2. Jonathan Bin 12 months ago
    Reply

    Closed out the SalesForce $CRM Iron Condor with 1 day left. After a EPS/Rev beat but a Q3 guidance “bust”, resulted in CRM staying in the middle of the Iron Condors range. Max profit on money risked was 34%, I took 31%. #Options

    • Christopher Saint 12 months ago
      Reply

      CRM when all else fails, the 2pm regurgitation of a Tariff headline is good for a nice TrumpDump. #NOTHING NEW

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