Salesforce shares jumped as much as 12% in after-hours trading on Tuesday after the business reported strong Q2 earnings.
The company said it had $5.15 billion in second-quarter sales, representing a 29% year-over-year jump and surpassing the $4.9 billion analysts forecasted. Salesforce also raised its sales guidance for its fiscal 2021 from $20 billion to between $20.7 billion and $20.8 billion. The company also raised Q3 revenue guidance from $5.24 billion to $5.25 billion, which is approximately a 16% year-over-year increase.
The quarter’s subscription and support revenues reached $4.84 billion, signifying a year-over-year increase of 29%. Professional services and other revenues for the quarter were $310 million, a 23% year-over-year rise.
The Salesforce Sales Cloud saw $1.28 billion in revenue, up from $1.13 billion a year ago. Service Cloud revenue rose to $1.3 billion, up from $1.09 billion. Salesforce Platform and Other revenues also went up, reaching $1.51 billion, up from $912 million. Lastly, Marketing and Commerce Cloud revenue amounted to $746 million, up from $616 million the previous year.
Salesforce CEO Marc Benioff said it was humbling for Salesforce to achieve one of the best quarters in its history against the backdrop of “multiple crises” affecting communities worldwide.
"Salesforce was founded on our belief in stakeholder capitalism and our core values of trust, customer success, innovation and equality. Our success in the quarter brought all of this together with the power of our Customer 360 platform, the resilience of our business model, putting our customers first and doing our part to take care of all of our stakeholders,” Benioff added.
Benioff expects that Salesforce will “emerge from these times even stronger.”
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In a conference call with investors on Tuesday, Benioff was asked by analysts if mergers and acquisition activity will now pick up. Benioff responded with, “We’re not in a good M&A environment,” adding, “Maybe things can change. This isn’t really part of our plan right now.”
A strong Q2 isn’t the only good news coming out of Salesforce this week. On Tuesday, the S&P Dow Jones Indices announced changes to its Dow Jones Industrial Average. The changes included adding Salesforce to the index before trading opens on Aug. 31.
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