Salesforce revenue up 20% from last year, forecast calls for similar growth rate

Salesforce shares fell as much as 4% in extended trading on Thursday after the enterprise-software company issued earnings that exceeded analysts’ estimates, but Salesforce came up short on its full-year earnings forecast as it factors in the implications of buying team communication app Slack.

Here’s how the company did:

• Earnings: $1.04 per share, adjusted, vs. 75 cents per share as expected by analysts, according to Refinitiv.
• Revenue: $5.82 billion, vs. $5.68 billion as expected by analysts, according to Refinitiv.

The company reported 20% year-over-year revenue growth in the fourth quarter of the company’s 2021 fiscal year, which ended on Jan. 31, according to a statement. In the previous quarter revenue grew 20%.

While revenue guidance for the full 2022 fiscal year surpassed estimates, earnings guidance was soft.

For the full year, which would include impact from Slack, the company called for $3.39 to $3.41 in adjusted earnings per share on $25.65 billion to $25.75 billion in revenue. That includes $600 million in revenue from Slack. Analysts polled by Refinitiv had been anticipating $3.49 in adjusted earnings per share and $25.42 billion in revenue.

Salesforce sees 88 cents to 89 cents in adjusted earnings per share in the fiscal first quarter on $5.875 billion to $5.885 billion in revenue. Analysts polled by Refinitiv had expected adjusted earnings of 76 cents per share on $5.72 billion in revenue.

In the fiscal fourth quarter, Salesforce generated $1.36 billion in subscription and support revenue from its key Sales Cloud product for tracking sales leads, translating into roughly 11% annualized growth, compared with 12% in the prior quarter. Acquisitions have helped Salesforce expand over the years, and the Tableau data visualization software Salesforce bought in 2019 contributed to Salesforce’s $1.81 billion in subscription and support revenue from Platform and Other products, up 26% and accelerating from 24% in the prior quarter.

In December Salesforce said it planned to acquire Slack for over $27 billion. Salesforce said it expects to close the deal late in the quarter that ends on July 31. Also in the quarter Salesforce announced Vaccine Cloud, a tool that government agencies and companies can use to manage deployment of coronavirus vaccines.

Salesforce had $18 billion in current remaining performance obligations at the end of the quarter, up 20%. Analysts polled by FactSet had expected 16% growth, and the growth rate was 20% in the previous quarter.

Salesforce shares have risen 4% since the start of 2021, while the S&P 500 index is up about 2%.

Executives will hold a conference call with analysts to discuss the results starting at 5 p.m. Eastern time.

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