Salesforce Rides Hybrid Work Boost to Post Upbeat Results

Salesforce on Tuesday reported quarterly revenue and profit above Wall Street estimates, as a pandemic-led shift to hybrid work kept up the strong demand for its cloud-based software, sending its shares up 4% in extended trading. Companies like Salesforce have reaped the benefits of the pandemic, with organizations doubling down on their effort for digitization and switch to remote working and learning. The fresh restrictions from the spread of the Omicron variant also added a boost.

San Francisco, California-based Salesforce's subscription and support revenue for the fourth quarter rose 24.7 percent to $6.83 billion (roughly Rs. 51,700 crore).

Along with demand for its platforms like Customer 360, the recent addition of Slack's workplace app also helped the cloud-based software maker in adding users.

"Slack continues to exceed our expectations that I think is benefiting not only from the trend towards this new way of working ... It's also benefiting being a part of our Customer 360 portfolio," Bret Taylor, Salesforce co-chief executive officer, said on a call.

Rival Microsoft in January also reported 26 percent growth in second-quarter revenue for its biggest segment, which offers cloud services and includes its flagship cloud offering, Azure.

For 2023, Salesforce expects revenue of $32 billion (roughly Rs. 2,42,100 crore) to $32.1 billion (roughly Rs. 2,42,800 crore), above expectation of $31.78 billion (roughly Rs. 2,40,300 crore).

The company's revenue rose 26 percent to $7.33 billion (roughly Rs. 55,400 crore) in the quarter, beating analysts' estimate of $7.24 billion (roughly Rs. 54,800 crore), according to IBES data from Refinitiv.

On an adjusted basis, Salesforce earned 84 (roughly Rs. 64) cents per share, topping estimates of 74 cents (roughly Rs. 56). However, its current-quarter and full-year adjusted earnings guidance came below expectations.

The company also forecast first-quarter revenue to be between $7.37 billion (roughly Rs. 55,700 crore) and $7.38 billion (roughly Rs. 55,814 crore). Analysts on average expect it to be $7.26 billion (roughly Rs. 54,900 crore).

© Thomson Reuters 2022