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On Wednesday, Salesforce.com Inc (NYSE: CRM) released better than expected fiscal second-quarter earnings estimates and full-year earnings guidance. Even the delta variant cannot harm its business, moreover, it can only accelerate it. Not surprisingly, shares rose 3% as CEO Marc Benioff and his team had plenty of good news to deliver as the positive momentum seems to be in for the long run.
During the quarter that ended on July 31st, revenue rose 23% YoY as it amounted to $6.34 billion, exceeding the $6.24 billion that analysts expected. It was the company's first-ever quarter that exceeded $6 billion in sales. Adjusted earnings amounted to $1.48 per share, also exceeding expectations of 92 cents per share.
The unit includes the MuleSoft integration software and Tableau data-analytics software expanded 24% and delivered $1.88 billion in revenue. The Service Cloud unit's revenue grew approximately 23% as it amounted to $1.60 billion. The core Sales Cloud product brought in $1.48 billion to the revenue table as it grew 15%.
During the quarter, the $27.7 billion acquisition of team communication app company Slack was completed and is expected to bring in revenue of $530 million during the second half of the year. Late last year, the company announced it will purchase an IT consulting firm Acumen Solutions which is expected to generate $200 million in revenue also during this time frame.
The company announced its plans to target investment banks through its Financial Services Cloud, as well as that it plans to Work.com software for employee wellness.
Half of the enterprise software maker's offices have been open after being closed last year due to the pandemic. CEO Marc Benioff referred to a global phenomenon as fewer employees are returning to offices than CEOs had expected. The reality is that the COVID-19 pandemic has fundamentally changed the workings of the corporate world. Luckily, Salesforce is among those companies that provide its employees significant flexibility in choosing where they work so it does not fear the Delta variant which can only accelerate its business. Benioff previously told CNBC he expects about 50% to 60% of the company's staff to work remotely once the pandemic becomes history, which is up from about 20% that was the case before COVID-19 started its march across the globe.
In a nutshell, the core business is going strong. The earnings call included a long list of both new and expanded relationships with IBM (NYSE: IBM), PayPal (NASDAQ: PYPL), Coinbase Global (NASDAQ: COIN), and Vodafone (NASDAQ: VOD). By the looks of it, Salesforce is doing all the right things to be a leading enterprise software firm, just like Microsoft (NASDAQ: MSFT). Although many are still questioning its acquisition of Slack, it is the new "digital HQ" for companies, in the same basket as Zoom Video Communications (NASDAQ: ZM).
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