Salesforce shares moved 4% lower in extended trading on Tuesday after the enterprise software maker reported fiscal third-quarter earnings that exceeded analysts’ expectations.
Here’s how the company did:
- Earnings: $1.15 cents per share, adjusted, vs. 75 cents per share as expected by analysts, according to Refinitiv.
- Revenue: $5.42 billion, vs. $5.25 billion as expected by analysts, according to Refinitiv.
Salesforce also announced its intent to acquire work communication app Slack at an enterprise value of $27.7 billion.
Revenue grew 20% in the quarter ended Oct. 31, according to a statement, compared with 29% in the prior quarter.
The company’s core Sales Cloud product for keeping track of current and potential customers delivered $1.3 billion in revenue, up 12% year over year. Service Cloud, for handling customer service, generated $1.4 billion in revenue, up 21%. Salesforce’s Platform and Other category, which includes the Tableau data visualization software Salesforce acquired last year, came up with $1.6 billion, a 24% gain.
In the quarter Salesforce became one of the 30 companies in the Dow Jones Industrial Average. Salesforce announced Work.com for Schools, a tool to help educators with decisions about when to return to classrooms, along with Salesforce Meetings software that provides sales-related information to salespeople who participate in video calls.
With respect to guidance, Salesforce said in the fiscal fourth quarter it sees 73 cents to 74 cents in adjusted earnings per share on $5.665 billion to $5.675 billion in revenue. Analysts surveyed by Refinitiv had expected 86 cents in adjusted earnings per share and $5.52 billion in revenue.
Salesforce issued revenue guidance for the full 2022 fiscal year that was stronger than expected. The company called for $25.45 billion to $25.55 billion in revenue, which includes a $600 million contribution from Slack, assuming it closes in the late second quarter. The forecast implies 20.8% annualized growth over Salesforce’s fiscal year 2021 guidance. Analysts polled by Refinitiv had been looking for $24.50 billion in revenue.
Mark Hawkins, Salesforce’s chief financial officer since 2014, will retire on Jan. 31. Amy Weaver, Salesforce’s president and chief legal officer, will be Hawkins’ successor.
Excluding the after-hours move, Salesforce stock is up about 49% since the start of the year, compared with 13% growth in the S&P 500 index over the same period.
Executives will discuss the results with analysts on a conference call starting at 5 p.m. ET.
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