Will Tableau deal closure aid in outlook lift?
Since the deal is now closed, Salesforce has hinted this month that it would provide an update on the guidance on Thursday. Investors would be tracking closely whether the firm is revising the outlook on August 22. The street is anticipating top line of $16.64 billion and non-GAAP earnings of $2.64 for the full-year period.
Q2 Expectations
Last quarter, Salesforce saw increased demand for its products from its customers resulting in 24% jump in revenues and 26% jump in adjusted EPS, surpassing street estimates. All four cloud services offerings recorded double-digit growth. Service Cloud joined Sales Cloud reporting $1 billion quarterly run rate, which is a good sign for investors. Thanks to the MuleSoft deal, “Salesforce platform and other” saw a 46% surge in sales.
Investors would be hoping the momentum to continue into the second quarter. Salesforce is expecting second quarter revenue of $3.94-3.95 billion and GAAP loss of 8-7 cents per share. Analysts are anticipating top line to come in at $3.95 billion and adjusted earnings of 47 cents per share.
Looking Ahead
Salesforce is focusing on improving its moat both organically and inorganically. Internally, it’s up-selling and cross-selling its products to its clients. Based on the demand, the cloud provider is augments its offerings catering to the needs of the customers. On the inorganic side, the company has acquired MuleSoft, Datorama and Tableau this year to complement its existing offerings.
The street is guiding Q3 revenue of $4.21 billion and adjusted earnings of 62 cents per share. With the fundamentals intact, shareholders can expect better performance from the firm in the latter half of the year.