Shares of Salesforce rose more than 6% on Thursday after cloud software companies forecast their earnings this year and provided a forecast for next year that exceeded analysts’ forecasts.
Salesforce said in a statement that revenue for fiscal year 2022 ending in January will increase to $26.35 billion from a previous forecast of $26.3 billion. According to analysts surveyed by Refinitiv, Salesforce expects $31.65 billion to $31.80 billion next year, up from the average estimate of $31.47 billion.
The new approach is in line with Salesforce’s annual Dreamforce meeting. It’s mostly virtual for a pandemic, but it includes a limited one-on-one session in San Francisco. Salesforce CFO Amy Weaver told analysts in a conference-related session that the acquisition of Slack, which ended in July, is providing support in a number of ways.
Slack’s communication tools not only donate hundreds of millions of dollars in annual revenue, but also help companies employ more remote employees, reduce travel trips, and better control their spending.
“It’s a new world,” Weaver said. “We’re not coming back. We can effectively sell without having to fly every day.” Salesforce revenue manager Gavin Peterson said last month that sales reps have started selling products through Slack. Rice field.
Salesforce told analysts in August that Slack’s transaction would have a negative impact on adjusted operating profit. However, the company said Thursday that its adjusted operating margin will be around 20% in 2023, which is broader than the consensus of 19.2% among analysts surveyed by Street Account. According to Weaver, there is some margin in operating profit due to the company’s strong earnings performance.
“This guidance should be well received in the context of Salesforce digesting Slack and achieving top-line growth of up to 20%,” an analyst at Stifel with a Salesforce stock buy rating told clients. I wrote in the memo.
Salesforce was up 6.3% at $275.59 as of Thursday afternoon. This year’s inventory has increased by about 24 per cent.
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