Salesforce shares rise on increased revenue guidance for fiscal 2022
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Marc Benioff, co-founder and chief executive officer of Salesforce.com Inc., speaks during the WSJDLive Global Technology Conference in Laguna Beach, California, U.S., on Wednesday, Oct. 26, 2016. This conference gathers a unique group of CEOs, entrepreneurs, innovators, investors, and luminaries who will explore the new opportunities in tech around the globe.
Getty Images Shares rose over 6% Thursday, after cloud software giant Salesforce raised its revenue outlook for current fiscal year. It also provided a forecast for next year which exceeded analyst estimates.| Bloomberg | Getty Images
Salesforce shares rose more than 6% on Thursday after the cloud software company boosted its revenue forecast for the current fiscal year and provided an outlook for next year that exceeded analysts’ estimates.
Revenue for fiscal 2022, which ends in January, will be as high as $26.35 billion, up from a previous prediction for up to $26.3 billion, Salesforce said in a statement. Refinitiv’s analysts found Salesforce expecting revenue to rise to between $31.65 billion-$3.80 billion next year. That is more than the average estimate at $31.47 trillion.
Salesforce’s Dreamforce conference is slated to coincide with the new outlook. The Dreamforce conference takes place virtually due to pandemic. However, it does include a few in-person sessions. Amy Weaver (Salesforce CFO) told conference attendees that Slack acquisition in July has given them a boost in many ways.
In addition to contributing hundreds of millions of dollars to annual revenue, Slack’s communications tools are helping the company in its bid to operate a more remote workforce, cut back on travel and be more disciplined on spending.
Weaver stated, “It is the new world.” We are not looking back. You can still sell well without getting on an airplane every day. Gavin Peterson from Salesforce, the revenue chief, stated last month that Slack is allowing salespeople to start selling their products using Slack.
In August, Salesforce informed analysts that Slack’s deal would negatively affect its adjusted operating margin. On Thursday, Salesforce stated that its 2023 adjusted operating margin will exceed the 19.2% consensus reached by StreetAccount’s analysts. Weaver indicated that strong revenue performance allows the company to increase its operating margin.
We believe that this guidance should have been well received, given Salesforce digesting Slack as well as continuing to deliver 20% top line growth,” Stifel’s analysts, who hold a Buy rating for Salesforce stock, said in a note sent to clients.
At mid-day Thursday, Salesforce was up 6.3% at $275.59 This year, the stock has risen by 24%.
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