Salesforce stock rose after the enterprise software maker reported second-quarter earnings and revenue that topped estimates while revenue guidance came in below expectations. Operating margin in the July quarter also beat views.
The July-quarter Salesforce earnings report was released after the market close on Wednesday.
"Salesforce reported a solid second quarter, delivering upside to both revenue and profitability," said William Blair analyst Arjun Bhatia in a report. "Revenue grew 9% in constant currency and was $100 million ahead of Street estimates for the quarter. Outperformance was largely driven by good bookings execution and favorable early renewals."
He added: "Despite the good performance, Salesforce only reiterated its full-year outlook of 8% to 9% growth due to a persistent challenging macro environment and expectations for second-half headwinds in professional services and licensed revenue."
Salesforce Stock: CFO Leaving
Meanwhile, the software maker said Chief Financial Officer Amy Weaver will step down.
On the stock market today, Salesforce stock rose 4.7% to 271.15 in early trading.
Further, Salesforce earnings rose 21% to $2.56 per share on an adjusted basis. Operating margin rose to 33.7%, topping estimates of 32%.
Also, the San Francisco-based enterprise software firm said revenue climbed 8% to 9.33 billion.
CRM stock analysts expected Salesforce to report earnings of $2.35 a share on sales of $9.2 billion.
A key financial metric, current remaining performance obligations, known as CRPO bookings, topped views. In Q2, CRPO rose 10% to $26.5 billion vs. estimates of $26.3 billion. CRPO bookings are an aggregate of deferred revenue and order backlog. Salesforce stock sold off earlier this year when April quarter CRPO missed estimates.
For the current quarter ending in October, Salesforce projected revenue in the range of $9.31 billion to 9.36 billion, below estimates of $9.42 billion.
Salesforce Technical Ratings
Before the Salesforce earnings release, CRM stock was about even so far this year. The underperformance comes amid slower-than-expected growth from artificial intelligence products and services.
Salesforce is among AI stocks to watch.
Salesforce offers access to business software applications based on a subscription model. Its software helps businesses organize and handle sales operations and customer relationships. In addition, the company has expanded into marketing, customer services and e-commerce.
Meanwhile, CRM stock owns a Relative Strength Rating of 48 out of a best-possible 99, according to IBD Stock Checkup.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
