- Investors now looking for positives after 2022 sell-off
- Salesforce Q1 figures beat forecasts
- Software giant steers for 20% fiscal 2023 growth
Muted guidance has been the crushing blow for many growth companies in recent months so when Salesforce (CRM:NYSE) steer for Q2 2023, shareholders might have been worried.
Alongside its Q1 earnings release (to 30 Apr), the customer relationship management software giant told investors that it anticipated Q2 2023 revenue to be in the range of $7.69 billion to $7.7 billion, with earnings of $1.01 to $1.02 likely.
This compared to the consensus estimate of $1.14 per share of earnings on $7.77 billion revenue.
But rather than triggering a sell-off in the stock, the shares rallied hard, jumping nearly 8.5% in after-hours trading.
LIFTING MARKET MOOD
The strength of Q1 played its part. EPS of $0.98 beat the consensus estimate of $0.94 on a 24% rise in revenues, year-on-year, to $7.41 billion. That was versus the $7.38 billion consensus estimate. Subscription and support revenues grew 24% year-on-year to $6.86 billion, and Professional services and other revenues grew 30% over Q1 2022 to $0.56 billion.
‘There is no greater measure of our resilience and the momentum in our business than the $42 billion we have in remaining performance obligation, representing all future revenue under contract,’ Co-CEO Marc Benioff stated.
But what is really interesting is the market’s response to Salesforce’s 2023 full year, which runs to 31 January 2023. Revenue is expected to be in the range of $31.7 billion to $31.8 billion, a fraction off compared to the consensus estimate of $32.06 billion but implying 20% year-on-year growth.
