Salesforce reported fiscal third-quarter earnings on Tuesday for the period ending Oct. 31, beating Wall Street expectations on earnings and sales. But shares fell over 6% in extended trading after earnings guidance for the fourth quarter fell short of expectations.
Salesforce also named current President and COO Bret Taylor to be co-CEO alongside current CEO Marc Benioff. Benioff said in a statement that Taylor would help lead the company through “the next chapter.”
Salesforce stock fell over 6% in extended trading.
Here’s how the company did versus Refinitiv consensus expectations:
- Earnings: $1.27 per share, adjusted, vs. 92 cents per share expected, up 27% year-over-year.
- Revenue: $6.86 billion, versus $6.80 billion expected
Sales were up 27% from $5.42 billion in the same period a year earlier. The company expects between $7.22 billion and $7.23 billion in revenue in its fiscal fourth quarter, raising its previous guidance, and coming in on par with analyst expectations of $7.22 billion.
Marc Benioff, founder, chairman and CEO of enterprise cloud computing company Salesforce.
Kim Kulish | Corbis News | Getty Images
But Salesforce said earnings per share for the December quarter will fall between 72 and 73 cents, lower than Refinitiv analyst expectations of 81 cents.
Sales Cloud, the company’s core product that salespeople use to track leads and opportunities, reported $1.54 billion in sales, up 17% from last year. Salesforce’s Service Cloud business was up over 20% from last year to $1.66 billion in sales.
“No other software company of our size or scale is really performing at this level,” Benioff said on a call with analysts. “We know that because we’re talking to other cloud CEOs every day.”
The Platform and Other unit reported $1.27 billion in sales during the quarter, although the company said it had re-classified sales from its Tableau and Mulesoft acquisitions into its Data unit, which reported $900 million in sales.
In July, Salesforce closed its acquisition of enterprise chat app Slack for over $27 billion. It said that the app contributed $276 million in sales to the company’s Platform unit, which previously reported Tableau and Mulesoft sales.
“Slack outperformed our expectations in the first full quarter as a part of the Salesforce family,” Taylor said. “The number of customers on Slack that spent over $100,000 is up 44% year over year.”