Salesforce Shares Explode After Company Beats on Top and Bottom Line in Q2

Shares of cloud based software company Salesforce were heading higher on Thursday after the company reported a revenue beat and increases its forecast.

Notably this was also the company’s first earnings report since it acquired Tableau Software for $15.3 billion, representing the biggest deal for Salesforce ever.

Salesforce shares were moving roughly 7% higher in extended hours trading as traders digested the second quarter report.

For the second quarter, Salesforce reported earnings of 66 cents a share, excluding certain items. Analysts according to Refinitiv had been expecting only 47 cents. Revenue at $4 billion was also ahead of the $3.95 billion expected and was a jump of 22% compared to the year ago quarter.

The company’s biggest product, Sales Cloud, saw $1.13 billion in revenue, a growth of 13%. Service Cloud, the company’s second largest division, saw a growth of 22% and hit $1.09 billion.

It was in early August that Salesforce closed the $15.3 billion acquisition of Tableau.

Looking ahead, the company has raised its outlook and now expects revenue for the year to be in the range of $16.75 billion and $16.9 billion. Previously the company had guided for guidance up to $16.25 billion.

CFO Mark Hawkins said on the earnings call that this includes $550 million to $600 million from the acquisition of Tableau, $200 million from the purchase of Salesforce.org earlier this year and $25 million from ClickSoftware, which Salesforce bought for $1.35 billion this month.

For the fiscal third quarter, Salesforce is expecting revenue of $4.44 billion to $4.45 billion, which would be a 31% growth from a year earlier.
“Following an outstanding quarter, we’re raising our FY20 revenue guidance to $16.9 billion at the high-end of the range. With our Customer 360 vision, Einstein AI and the millions of Trailblazers innovating on our platform, Salesforce has never been better positioned for the future,” said CEO Marc Benioff.

Disclaimer: We have no position in salesforce.com, inc. (NYSE: CRM) and have not been compensated for this article.