Salesforce Continues Its Shopping Spree

According to Gartner, worldwide spending on customer experience and relationship management (CRM) software grew 15.6% to reach $48.2 billion in 2018. Salesforce (NYSE:CRM), which is the leader in the CRM market with 19.5% share, recently reported a strong quarter and raised its forecast following its recent acquisitions.

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Salesforce’s Financials

Salesforce’s second quarter revenues grew 22% over the year to $4 billion, ahead of analyst estimates of $3.95 billion. Adjusted EPS was $0.66, compared with the Street’s forecast of $0.47 for the quarter.

By segment, Subscription and Support revenues grew 22% to $3.75 billion. Professional Services and Other revenues grew 14% to $2552 million.

Within the Subscription segment, revenue from Sales Cloud grew 12.5% to $1.13 billion, Service Cloud gew 22% to $1.09 billion and Marketing and Commerce Cloud grew 36% to $616 million.

By region, revenue from Americas grew 20.4% to $2.82 billion, Europe grew 25% to 786 million, and Asia Pacific grew 25.8% to $395 million.

Cash generated from operations for the second quarter was $436 million, down 5%. Total cash, cash equivalents and marketable securities at the end of the second quarter was $6.04 billion.

For the third quarter, Salesforce forecast revenues of $4.44-$4.45 billion with an adjusted EPS of $0.65-$0.66. The market was looking for revenues of $3.93 billion with an adjusted EPS of $0.63. Salesforce raised its FY2020 guidance to revenue of $16.75-$16.9 billion from a range of $16.1-$16.25 billion. This raised estimate includes revenue of $550 million to $600 million from the acquisition of Tableau, $200 million from the purchase of earlier this year and $25 million from the most recent acquisition of ClickSoftware. Adjusted EPS for the full year is expected to be $2.82-$2.84, down from the previous guidance of $2.88-$2.90. The Street has forecast revenues of $16.86 billion with an EPS of $2.85 for the year.

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Danny Straus 6 months ago Member's comment

#Salesforce is gobbling up companies like pacman! $CRM