Salesforce posted better-than-expected earnings for the third quarter, and solid growth in revenues.
At 61 cents per share, excluding certain items, the cloud-based software company beat analysts’ estimate of 50 cents per share (according to Refinitiv). Revenue soared +26% from the year-ago period to touch $3.39 billion – higher than analyst’s expected $3.37 billion (according to Refinitiv).
The company cites expansion in its Sales Cloud and Service Cloud businesses as significant contributors to its growth. Salesforce is also upping the ante on artificial intelligence and analytics softwares, and that’s probably led to a 22% increase in its research and development costs to $481 million. What's more, it acquired software firm Mulesoft for $6.5 billion in May - a deal that potentially helps Salesforce diversify into the business of providing software that facilitates integration/connectivity between different applications.
Salesforce hopes to rake in revenue of $3.55 billion to $3.56 billion in the fourth quarter, more than analysts’ projection of $3.52 billion (according to Refinitiv). However, the company's earnings expectation of 54 cents to 55 cents a share, excluding certain items, are lower than the average analyst estimate of 57 cents for the fourth quarter.