Earlier this year it looked as though Salesforce was starting to position itself as a company that would hit $10 billion in annual revenue run rate later this year — and, if all seems well, it looks like it may hit that target.
Salesforce reported its second-quarter earnings today, saying it brought in $2.56 billion in revenue on earnings of 33 cents per share. This is a beat on both fronts, but the stock dipped slightly in extended trading after seeing a rather stunning run-up over the course of the year. Since January, shares of Salesforce have risen almost 36 percent despite dropping around 3 percent after the report came out today.
While Salesforce may be on track to generate $10 billion in revenue, a lot of eyes are on the back half of the year for its annual Dreamforce conference. That’s when Salesforce is expected to announce and unveil some new products, and there will likely especially be scrutiny on its so-called “Einstein” AI products. While Salesforce birthed tools for online customer relationship management, it faces the ever-present threat of smaller companies picking off niches and turning them into big companies.
Salesforce is going to modernize its products as it goes forward, including giving companies ways to reduce workload algorithmically as machine learning starts to bleed into enterprise software. The company has been pitching that line so hard and has gone so far as to state that it’s possible to spin up customer service tools in less than a day. Salesforce is going to likely have to continue pushing this story going forward.
There are certainly a lot of opportunities here, as Salesforce has started to make a push by opening up some tools to developers. So there are going to be a lot of expectations baked into the back half of the year toward that conference as Wall Street looks to the company to unveil a new wave of products that can automate routine tasks on its services.
Wall Street was looking for earnings of 32 cents per share on revenue of $2.51 billion.