Salesforce publishes a stronger than expected earnings report for Q2

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in his free… read more.
on Aug 26, 2020
  • Salesforce Inc. publishes a stronger than expected earnings report for Q2.
  • It forecasts 56.24 pence of adjusted EPS and £3.99 billion of revenue in Q3.
  • Salesforce's stake in nCino resulted in an unrealised gain of £469 million in Q2.

Salesforce (NYSE: CRM) said on Tuesday that its earnings and revenue came in stronger than expected for the fiscal second quarter. The company is set to take Exxon Mobil’s place on the prestigious Dow Jones Industrial Average index on August 31st.   

Salesforce tops estimates in the fiscal second quarter

In its report on Tuesday, Salesforce said that it generated a total of £3.91 billion in revenue in the second quarter and earned £1.09 per share (adjusted). According to Refinitiv, analysts had anticipated the company to see a much lower 51 pence of earnings per share on £3.72 billion of revenue.

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The American software company said that its hawkish performance in the recent quarter was partly attributed to its stake in nCino. The fintech firm went public last month and resulted in an unrealised gain of £469 million in Q2 for Salesforce.

In the quarter that concluded on 31st July, Salesforce said that its net revenue was 29% higher on a year over year basis. The company introduced Work.com in Q2 to streamline the return of businesses to work after months of inactivity due to COVID-19.

Its core business, Sales Cloud generated £970 million in revenue in the fiscal second quarter that translates to a 13% increase as compared to the same quarter last year. Revenue from Service Cloud, on the other hand, came in at £990 million that was 20% up on an annualised basis.

Salesforce acquired Tableau software for £11.25 billion in 2019 that resulted in an almost 66% increase in revenue from its Platform and Other category in the recent quarter. Learn more about the statement of changes in equity.

Salesforce guidance for the fiscal third quarter

For the third quarter, Salesforce forecasts 56.24 pence of adjusted EPS (earnings per share) and £3.99 billion of revenue. As per Refinitiv, experts have predicted a lower £3.81 billion of revenue for Salesforce in Q3 but a higher 58.52 pence of adjusted earnings per share.

The San Francisco-based company says its full-year adjusted EPS will print at around £2.84 on revenue of £15.81 billion. Analysts are anticipating a lower £2.25 of adjusted earnings per share and £15.25 billion in revenue for the fiscal 2021.

Salesforce jumped 14% in extended trading on Tuesday. On a year to date basis, it is now 45% up in the stock market. At the time of writing, the American software company has a market cap of £148 billion.

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