CRM Stock: Salesforce earnings top estimates amid software maker’s 2023 rally

CRM Stock: Salesforce earnings top estimates amid software maker’s 2023 rally

Shares in Sales force (CRM) on October quarter earnings beat estimates as cost cutting improved margins while revenues beat views. Guidance for CRM shares came in above expectations amid the software maker’s big gains in 2023.




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The software maker reported third-quarter earnings after the market closed on Wednesday. For the quarter ended October 31, Salesforce’s earnings jumped 51% to $2.11 per share on an adjusted basis. San Francisco-based Salesforce also said revenue rose 11% to $8.72 billion.

“On the bottom line, constant currency revenue growth of 10% was in line with expectations,” Arjun Bhatia, an analyst at William Blair, said in a report. “However, the company noted that it is starting to see some green shoots emerge in terms of customer interest in generative AI, pipeline trends and relatively healthy activity at the top of the funnel.”

CRM stock analysts expect Salesforce to report earnings of $2.05 per share on sales of $8.715 billion.

On the stock market today, Salesforce stock rose 7.4% to 247.80 in morning trading.

Salesforce Stock: Top Key Metric Views

A key financial metric, remaining current performance obligations, known as CRPOs, tops the views. In Q3, CRPO rose 14% to $23.9 billion versus estimates of $23.22 billion. CRPO bookings are the total of deferred revenue and order backlog.

“Management attributed the outperformance to strong early renewals as well as booking a large deal in the third quarter, which we believe was Amazon.com (AMZN),” TD Cowen analyst Derek Wood said in a report.

For the current quarter ending in October, Salesforce expected revenue of $91.18 billion to $9.23 billion versus estimates of $9.22 billion.

Activist investors pressured management to improve margins by cutting costs.

“Over the past year we have transformed the company, enabling us to deliver another quarter of strong profitable growth with a GAAP operating margin of 17.2% and a non-GAAP operating margin of 31.2%,” Chief Financial Officer Amy Weaver said in a statement. .

Ahead of Salesforce’s earnings release, CRM stock was up about 70% so far in 2023.

Salesforce provides access to business software applications based on a subscription model. Its software helps companies organize and manage sales processes and customer relationships. Additionally, the company has expanded into marketing, customer service, and e-commerce.

Meanwhile, CRM stock has a Relative Strength Rating of 91 out of a top 99, according to IBD Stock Screener.

Follow Reinhart Krauss on X, formerly known as Twitter, @reinhardtk_tech For updates on artificial intelligence, cybersecurity, and cloud computing.

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