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Salesforce share price up after raising revenue guidance up to $16.9 billion

The cloud-based software company saw its shares climbed higher in extended trading Thursday following its record second quarter results.

Salesforce Source: Bloomberg

Salesforce shares rose as much 7% in extended trading on Thursday after the company recorded better-than-expected second quarter (Q2) results that saw it raise its full-year revenue guidance.

‘Following an outstanding quarter, we're raising our FY20 revenue guidance to $16.9 billion at the high-end of the range," Salesforce Chairman and co-CEO Marc Benioff said.

‘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,’ he added.

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Salesforce results: key figures

Salesforce recorded $4.0 billion in Q2 revenue, representing an increase of 22% year-over-year and 23% in constant currency.

Subscription and support revenues climbed to $3.75 billion, up 22% year-over-year, while professional services and other revenues hit $252 million, up 14% year-over-year.

‘An enormous wave of digital transformation is sweeping across every industry, and major brands, like FedEx, AXA and Unicredit, turned to Salesforce in the quarter to propel their growth,’ Salesforce co-CEO Keith Block said.

‘The trust our customers have in us to drive their digital transformations is reflected in our strong quarterly results across our clouds and regions.’

Earnings per share (EPS) on a diluted basis came in at $0.11, while EPS on a non-diluted basis hit $0.66.

The cloud-based software company generated $436 million in cash from its operations, representing a decrease of 5% year-over-year, with total cash equivalents and marketable securities ending the quarter at $6.04 billion.

Inorganic growth expands Salesforce offering

Salesforce’s Q2 results show that the company is generating strong organic growth, driven by more corporates opting to move their applications to the cloud, but it has also deployed capital effectively to move into new areas via acquisitions.

Earlier this month, Salesforce acquired data visualisation company Tableau in a deal valued at $15.3 billion. The purchase follows its acquisition of MuleSoft for $6.5 billion last year.

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