Despite a weak second quarter and a lot of eyes on the end of the year, Salesforce is already starting to look pretty good again to Wall Street.
The company beat analyst expectations today in its third-quarter earnings report across the board. Salesforce reported earnings of 24 cents per share on revenue of $2.14 billion. Wall Street was looking for earnings of 21 cents per share on revenue of $2.12 billion. Shares of the company, already up 2 percent on the day, shot up another 6 percent once the report came out.
That’ll come as a welcome relief to the company, which face planted in the last quarter and showed guidance at the weak end. Still, the company has yet to enter the critical end of the year, and it’s going to have to show that it can offer a more complete suite of tools than emerging competitors on all ends of the spectrum.
The company has had to face the reality of trying to ignite growth, whether that’s from expanding into new businesses or acquiring them. Salesforce, as part of the earnings release, said it was raising its guidance on the year by $50 million.
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To partially get that done, Salesforce has been on a complete acquisition binge. This year it’s picked up Demandware for $2.8 billion and Quip for $750 million, and was even looking to shell out more than $20 billion for LinkedIn, though it inevitably lost that to Microsoft. That still hasn’t stopped it from trying to keep things difficult for Microsoft, which had just acquired one of the largest customer acquisition channels on the planet.
Here’s the scorecard for the third quarter:
- Revenue: $2.14 billion, up 25 percent year-over-year (analysts estimated $2.12 billion)
- Q4 revenue guidance: $2.267 billion to $2.277 billion (analysts estimated $2.24 billion)
- Fiscal year 2018 guidance: $10.1 billion to $10.15 billion
Overall, Salesforce’s stock hasn’t seen many huge swings, though the last quarter was not a friendly one. But given that the company showed some positive signs this quarter, it looks like industry watchers can ratchet up their expectations headed into the fourth quarter.
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