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Salesforce (CRM) Q2 Earnings and Revenues Beat Estimates
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salesforce.com inc. (CRM - Free Report) delivered better-than-expected results for second-quarter fiscal 2021. The company’s fiscal second-quarter non-GAAP earnings soared 118% year over year to $1.44 per share and beat the Zacks Consensus Estimate of 67 cents.
Salesforce’s quarterly revenues of $5.15 billion climbed 29%, year on year, surpassing the Zacks Consensus Estimate of $4.9 billion. The top-line figure also improved 29% in constant currency (cc).
The enterprise cloud computing solutions provider has been benefiting from the robust demand environment as customers are undergoing a major digital transformation. The rapid adoption of its cloud-based solutions led to the better-than-expected performance during the fiscal second quarter.
salesforce.com, inc. Price, Consensus and EPS Surprise
Coming to the company’s business segments, revenues at Subscription and Support increased about 29% from the year-earlier period to $4.84 billion. Professional Services and Other revenues climbed 23% to $311 million.
Sales Cloud revenues grew 13%, year over year, to $1.3 billion. Revenues from Service Cloud, one of the company’s largest and the fastest-growing businesses, also improved 20% to $1.3 billion. Moreover, Marketing & Commerce Cloud revenues jumped 21% to $700 million. Salesforce Platform and Other revenues surged 66% to $1.5 billion.
Geographically, the company registered revenue growth of 28% in the Americas (70% of total revenues), 23% in the Asia Pacific (9%), and 37% in Europe and Middle East Asia or EMEA (21%) on a year-over-year basis.
Salesforce’s gross profit came in at $3.84 billion, up 26.7% from the prior-year quarter. Additionally, gross margin contracted 130 basis points (bps) to 74.5%.
Salesforce posted a non-GAAP operating income of $1.04 billion, up 81.5% year on year. Operating margin expanded 590 bps to 20.2% on efficient cost management. Operating expenses flared up 23% year over year to $3.66 billion.
Salesforce exited the fiscal second quarter with cash, cash equivalents and marketable securities of $9.3 billion compared with the $9.8 billion recorded at the end of previous quarter. The company generated an operating cash flow of $429 million in the fiscal second quarter.
As of Jul 31, 2020, remaining performance obligation, which reflects future revenues under contract, were $30.6 billion, up 21% on a year-over-year basis.
Guidance
Buoyed by stronger-than-expected second-quarter results, Salesforce raised its revenue outlook for fiscal 2021 to $20.7-$20.8 billion from the $20 billion projected earlier. The company now expects full-fiscal non-GAAP earnings per share to come in at $3.72-$3.74, up from the earlier expectation of $2.93-$2.95.
Operating cash flow is projected to be between 12% and 13%, up from the previous guided range of 10-11% on a year-over-year basis.
Coming to the fiscal third quarter, revenues are estimated between $5.24 billion and $5.25 billion, calling for 16% growth, year on year.
Furthermore, Salesforce anticipates non-GAAP earnings per share in the band of 73-74 cents for the fiscal third quarter.
Zacks Rank and Other Key Picks
Currently, Salesforce carries a Zacks Rank of 2 (Buy).
The long-term earnings growth rate for Apple, Lam Research and Synaptics is currently pegged at 10.7%, 15.4%, and 10%, respectively.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, SherazMian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
Image: Bigstock
Salesforce (CRM) Q2 Earnings and Revenues Beat Estimates
salesforce.com inc. (CRM - Free Report) delivered better-than-expected results for second-quarter fiscal 2021. The company’s fiscal second-quarter non-GAAP earnings soared 118% year over year to $1.44 per share and beat the Zacks Consensus Estimate of 67 cents.
Salesforce’s quarterly revenues of $5.15 billion climbed 29%, year on year, surpassing the Zacks Consensus Estimate of $4.9 billion. The top-line figure also improved 29% in constant currency (cc).
The enterprise cloud computing solutions provider has been benefiting from the robust demand environment as customers are undergoing a major digital transformation. The rapid adoption of its cloud-based solutions led to the better-than-expected performance during the fiscal second quarter.
salesforce.com, inc. Price, Consensus and EPS Surprise
salesforce.com, inc. price-consensus-eps-surprise-chart | salesforce.com, inc. Quote
Quarter in Detail
Coming to the company’s business segments, revenues at Subscription and Support increased about 29% from the year-earlier period to $4.84 billion. Professional Services and Other revenues climbed 23% to $311 million.
Sales Cloud revenues grew 13%, year over year, to $1.3 billion. Revenues from Service Cloud, one of the company’s largest and the fastest-growing businesses, also improved 20% to $1.3 billion. Moreover, Marketing & Commerce Cloud revenues jumped 21% to $700 million. Salesforce Platform and Other revenues surged 66% to $1.5 billion.
Geographically, the company registered revenue growth of 28% in the Americas (70% of total revenues), 23% in the Asia Pacific (9%), and 37% in Europe and Middle East Asia or EMEA (21%) on a year-over-year basis.
Salesforce’s gross profit came in at $3.84 billion, up 26.7% from the prior-year quarter. Additionally, gross margin contracted 130 basis points (bps) to 74.5%.
Salesforce posted a non-GAAP operating income of $1.04 billion, up 81.5% year on year. Operating margin expanded 590 bps to 20.2% on efficient cost management. Operating expenses flared up 23% year over year to $3.66 billion.
Salesforce exited the fiscal second quarter with cash, cash equivalents and marketable securities of $9.3 billion compared with the $9.8 billion recorded at the end of previous quarter. The company generated an operating cash flow of $429 million in the fiscal second quarter.
As of Jul 31, 2020, remaining performance obligation, which reflects future revenues under contract, were $30.6 billion, up 21% on a year-over-year basis.
Guidance
Buoyed by stronger-than-expected second-quarter results, Salesforce raised its revenue outlook for fiscal 2021 to $20.7-$20.8 billion from the $20 billion projected earlier. The company now expects full-fiscal non-GAAP earnings per share to come in at $3.72-$3.74, up from the earlier expectation of $2.93-$2.95.
Operating cash flow is projected to be between 12% and 13%, up from the previous guided range of 10-11% on a year-over-year basis.
Coming to the fiscal third quarter, revenues are estimated between $5.24 billion and $5.25 billion, calling for 16% growth, year on year.
Furthermore, Salesforce anticipates non-GAAP earnings per share in the band of 73-74 cents for the fiscal third quarter.
Zacks Rank and Other Key Picks
Currently, Salesforce carries a Zacks Rank of 2 (Buy).
Other top-ranked stocks in the broader technology sector include Apple (AAPL - Free Report) , Lam Research Corporation (LRCX - Free Report) and Synaptics (SYNA - Free Report) , all sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term earnings growth rate for Apple, Lam Research and Synaptics is currently pegged at 10.7%, 15.4%, and 10%, respectively.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, SherazMian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
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