, inc. (CRM) Surges on Earnings Beat, Strong Outlook


The shares of (NYSE:CRM) are trading higher after the company reported earnings that beat the expectations of Wall Street analysts in the second quarter and strong revenue outlook for the full fiscal year 2016.

The stock price of Salesforce increased 3.73% to $70.39 per share at the time of this writing around 10:20 in the morning in New York.

Salesforce financial results

Salesforce reported a quarterly loss of $852,000 or less than $0.01 per share. During the same period a year earlier, the company recorded a kiss of $61.1 million or $0.10 per share. Excluding items, its earnings were $0.19 per share.

The company said its revenue increased 24% to $1.63 billion. Salesforce achieved $152 million revenue from its subscription and support services and $113 million from professional and other services.

Wall Street analysts expected the company to deliver $0.18 in earnings per share on $1.61 billion in revenue.

During the quarter, Salesforce generated $304 million cash from operations, an increase of 24% year-over-year. The company ended the quarter with $2.07 billion in cash, cash equivalents and marketable securities.

In a statement, the company’s Chairman and CEO Marc Benioff said, Salesforce has now blown past the $6.5 billion annual revenue run rate faster than any other enterprise software company, and we are once again raising our fiscal year 2016 revenue guidance to $6.625 billion at the high end of our range. That puts us on pace to reach a $7 billion run rate later this year, and our goal is to be the fastest to reach $10 billion in annual revenue.”

On the other hand, Salesforce CFO Mark Hawkins said, “In addition to delivering outstanding top-line growth in the second quarter, we also expanded our year-over-year non-GAAP operating margin for the fifth consecutive quarter. We also delivered more than $1 billion in operating cash flow in the first half of the year, an increase of 44% over last year.”

Business outlook

For the third quarter, Salesforce expected to deliver non-GAAP earnings in the range of $0.18 to $0.19 per share or GAAP loss of around -$0.02 to -$0.01 per share. The company estimated that its revenue will increase 22% to 23% to around $1.69 billion to $1.70 billion.

For the full fiscal 2016, Salesforce expected to report non-GAAP earning of around $0.70 to $0.72 per share or GAAP loss in the range of -$0.17 to -$0.15 per share. Its revenue is expected to be around $6.60 billion to $6.625 billion, an increase of 23%.