Why Salesforce.com Stock Popped Today

Shares ofSalesforce.com (NYSE:CRM)rose 2.5% on Wednesday after the cloud titan delivered strong fiscal 2022 second-quarter results and boosted its full-year outlook.

So what

Salesforce’s revenue jumped 23% year over year to $6.34 billion. Rising demand for digital transformation services is driving growth across the software provider’s business lines.

“Our Customer 360 platform is now fueled by a herd of unicorns perfectly designed for this all-digital world,” CEO Marc Benioff said in a press release. “Sales, Service, Marketing & Commerce, Platform, Tableau, MuleSoft, and now Slack are all billion-dollar-plus products delivering customer success like no other company.”

A person is holding an upwardly sloping digital chart. g.foolcdn.com/image/?url=https%3A//g.foolcdn.com/editorial/images/640912/growth-gettyimages-937862440.jpg&w=1000&op=resize 1000w, g.foolcdn.com/image/?url=https%3A//g.foolcdn.com/editorial/images/640912/growth-gettyimages-937862440.jpg&w=2000&op=resize 2000w”/>

Salesforce’s revenue is expanding at a rapid clip. Image source: Getty Images.

Better still, Salesforce’s operating and adjusted operating margins increased by 170 and 20 basis points, respectively, to 5.2% and 20.4%. During a conference call with analysts, CFO Amy Weaver said efficiencies gained by its employees working from home during the pandemic contributed to the profitability gains.

All told, Salesforce’s adjusted net income checked in at $1.4 billion, or $1.48 per share. That was well above Wall Street’s expectations for adjusted EPS of $0.92.

Now what

These results and ongoing sales trends prompted Salesforce to lift its full-year forecast. Management now expects revenue to grow as much as 24% to $26.3 billion in fiscal 2022, with Slack contributing roughly $530 million. Salesforce completed its $27.7 billion acquisition of the popular messaging platform in July.

“We exceeded our financial expectations in the quarter, achieving record levels of new business, and saw strong demand across our portfolio,” Weaver said. “And we are excited to build on Slack’s momentum with the power of our two companies now together.”

This article represents the opinion of the writer, who may disagree with the official recommendation position of a Motley Fool premium advisory service. Were motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Leave a Reply

Your email address will not be published. Required fields are marked *