Salesforce (CRM) -) shares surged higher in pre-market trading after the cloud-focused client software group posted stronger-than-expected second quarter earnings and boosted its full-year revenue guidance.
Salesforce said earnings for the three months ending in July, its fiscal second quarter rose 78% from last year to $2.12 per share, firmly topping Street forecasts of a $1.90 tally. Group revenues were also impressive, rising 11.4% to $8.6 billion, just ahead of analysts' estimates of an $8.53 billion top line.
Looking into the back half of the year, Salesforce said it sees revenues in the region of $34.7 billion to $34.8 billion, modestly higher than its May forecast, with operating margins improving to 30% from 28%. Current quarter revenues were forecast between $8.7 billion and $8.72 billion.
Salesforce also linked its upgraded revenue forecasts to its long-running investments in AI, which the group has devoted $20 billion in research and development over the past seven years.
"No CRM platform on the planet is better positioned than Salesforce," CEO Marc Benioff told investors on a conference call late Wednesday. "To use this amazing Salesforce and business data to fuel the AI-powered applications, because of this architecture, it's very easy for our customers to set up and just go."
"And our Data Cloud is so deeply integrated as part of this core metadata architecture, it's allowing our customers to quickly action all of their data from any source without the costly integration project necessary with stand-alone data warehouses and data lakes that they've been forced to buy," he added. "We're moving our customers from having islands of data to having a single source of truth for all of their data."
Salesforce shares, a Dow component, were marked 5.8% higher in pre-market trading to indicate an opening bell price of $227.45 each.
- Action Alerts PLUS offers expert portfolio guidance to help you make informed investing decisions. Sign up now.
