Salesforce earnings blow away Wall Street expectations, but disappoints on guidance

It’s the first earnings report as co-CEO for Keith Block, who got promoted earlier this month. Salesforce
  • Salesforce beat Wall Street’s expectations in is Q2 2019 earnings on Wednesday.
  • The company reported $US3.28 billion in GAAP revenue, up 27% from the year before. It reported adjusted earnings per share of $US0.71 – $US0.24 more than Wall Street expected.
  • However, the stock was down around 1.5% after hours, likely on a single miss in its upcoming Q3 2019 earnings per share guidance.
  • MuleSoft contribued $US122 million to Salesforce’s total revenue for the quarter.

Salesforce beat in its second quarter earnings on Wednesday – its first time reporting since the $US6.5 billion MuleSoft acquisition closed in early May.

The company beat Wall Street expectations on both the top and bottom lines. However, Salesforce is projecting lower-than-expected earnings for the next quarter, though revenue is expected to be mostly in line with what Wall Street wanted to see.

MuleSoft, which Salesforce intends to run as an independent product, contributed $US122 million to the total revenue, net of purchase accounting adjustments, the company said on its earnings call.

The stock was down about 3% in after-hours trading, during the earnings call.

Here’s what Salesforce reported:

  • Revenue for the quarter (GAAP): Salesforce reported $US3.28 billion, up 27% from the year before. Analysts expected $US3.23 billion.
  • Earnings per share for the quarter (adjusted):Salesforce reported $US0.71. Analysts expected $US0.47.
  • Operating cash flow for the quarter:$US458 million, up 38% from the year before.
  • Revenue guidance for Q3 (GAAP): Salesforce expects $US3.355 to $US3.65 billion. Analysts were looking for $US3.35 billion.
  • Earnings per share guidance for Q3 (adjusted):Salesforce expects to post earnings of $US0.49 to $US0.50 per share. Analysts were looking for $US0.54.
  • Revenue guidance for Fiscal Year 2019 (GAAP):Salesforce expects $US13.13 billion to $US13.18 billion. Analysts were looking for $US13.13 billion.
  • Earnings per share guidance for Fiscal Year 2019 (adjusted): Salesforce expects $US2.50 to $US2.52. Analysts were looking for $US2.32.