Marc Benioff, CEO of Salesforce.
Adam Jeffery | CNBC
Salesforce stock rose 3% in expanded trading on Thursday after the cloud software maker posted a profit in the first quarter that exceeded analysts’ expectations.
This is how the company did it:
- Merits: According to Refinitiv, $ 1.21 per share, adjusted down from 88 cents per share as analysts expected.
- Revenue: According to Refinitiv, $ 5.96 billion versus $ 5.89 billion as analysts expected.
Revenue was up 23% year over year for the quarter that ended April 30, the company said in a statement. In the previous quarter, sales rose by 20%.
The Platform and Other segment, which includes MuleSoft and Tableau products, currently Salesforce’s top segment for subscription and support revenue, contributed $ 1.75 billion to revenue, up 28%.
Salesforce’s core Salesforce product, which sales reps use to pursue business opportunities, had sales of $ 1.39 billion, up 11%.
In the quarter, Salesforce acquired Acumen Solutions, a professional services company, and announced voice capabilities for its Service Cloud offering. The company said over 150 government agencies and health organizations used its software to manage vaccine distribution.
Turning to the projections, Salesforce sees adjusted earnings per share of 91 to 92 cents for the second quarter on revenue of $ 6.22 to $ 6.23 billion. Analysts polled by Refinitiv were looking for adjusted earnings per share of 86 cents and sales of $ 6.15 billion.
Salesforce called for adjusted earnings per share of $ 3.79 to $ 3.81 and revenue of $ 25.9 to $ 26.0 billion for the full fiscal year 2022. Analysts surveyed by Refinitiv agreed that adjusted earnings per share were $ 3.43 and revenue was $ 25.76 billion.
Despite the post-close shift, Salesforce stock is up less than 2% since the start of the year, while the S&P 500 index is up nearly 12% over the same period.
Morgan Stanley analysts upgraded their rating on Salesforce stock to the equivalent of buying versus the equivalent of holding earlier this month. “While concerns about the appetite for mergers and acquisitions and permanent margin expansion remain, leading franchisees are not staying cheap for long, especially given the strong demand we anticipate over the next few years,” they write.
Executives will discuss the results with analysts in a conference call starting at 5:00 p.m. Eastern time.
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