Salesforce rises on strong earnings; CEO sees little inflation impact - The Average Joe


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    Salesforce rises on strong earnings; CEO sees little inflation impact


    June 2, 2022

    Salesforce — the cloud software provider — had a strong first-quarter earnings report that sent its stock up 10% yesterday.

    What’s the big deal? Despite a challenging economic environment, Salesforce managed to beat both sales and adjusted earnings expectations — growing sales 24% to $7.41B in the first quarter.

    • In the earnings call, CEO Marc Benioff said, “we’re just not seeing material impact on the broader economic world.”
    • After last week’s Uvalde school shooting, over 4,000 Salesforce employees signed a letter demanding the company cut ties with its customer, the National Rifle Association (NRA).

    Slackforce: Salesforce is highly diversified among its sales and marketing tools — expanding further after acquiring messaging platform Slack for a monster $27B last year.

    • Slack customers spending over $100K grew more than 40% — exceeding management’s expectations.
    • Salesforce has grown at least 20% each quarter since 2016 — despite a challenging 2022.

    Investors: Salesforce reduced its sales forecast for the full year but raised its profit estimate. Chief Financial Officer Amy Weaver says they’re slowing down hiring and are committing to “improve profitability over the long-term.”

    • According to a William Blair analyst, raising earnings in this environment where many others forecast lower earnings is a big positive (Reuters).
    • Per JPMorgan Analyst Mark Murphy, the recent tumble has left CRM undervalued (BBG). $CRM has fallen 31% in 2022.

    Dive Deeper: Is Salesforce a bargain at its current levels?

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