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Salesforce’s revenue for Q2 2020 jumped 29% beating Street expectations by a good margin. The company has set a new revenue target for fiscal 2021 as it prepares to make an entry at the Dow Jones replacing Exxon Mobil.
Cloud-computing giant Salesforce.com Inc (NYSE: CRM) took the Wall Street by storm by announcing stellar Q2 2020 numbers. The company managed to beat Street expectations by announcing revenue of $5.15 against the expected $4.90 billion. The net income for the company jumped massively to $2.63 billion from $91 million a year ago.
Meanwhile, CRM stock is up. Yesterday, it closed with a 3.64% rise, at $216.05. After hours, Salesforce stock gained over 13% as teh company announced its Q2 earnings.
Salesforce Performance in Q2
Just like other software companies, Salesforce benefits from a shift to remote working due to the coronavirus pandemic. The company operates in the B2B market offering digital products that help companies to manage their orders or customer relationships, marketing and e-commerce.
Salesforce President and CEO Bret Taylor said that all of their technologies have seen increased use. Speaking to Reuters, Taylor said:
“What it really differentiates Salesforce broadly is we have these low-code values, where you don’t need to be a professional developer to set up Salesforce. Right now, a week lost means you could be out of business.”
Nucleus Research analyst Daniel Elman said that Salesforce technologies will have a great demand going further. Elman added that the existing products have already helped the company to thrive in the current environment. Besides, Elamn thinks that Salesforce products will help the company to further acquire large enterprise customers.
Additionally, Salesforce also registered an unrealized gain of $617 million via its stake in nCino, a cloud-based software company operating in the banking sector. Interestingly, nCino is also the customer of Salesforce.
Salesforce to Replace Exxon Mobil at Dow Jones
On August 31 next week, Salesforce is all set to join the Dow Jones Industrial Average. However, the interesting fact is that it will be replacing Exxon Mobil Corporation (NYSE: XOM), on the index. Well, the growing dominance of the tech companies has eclipsed some old players in the market.
With this stellar performance, Salesforce has also topped the revenue forecast for the year 2021. The company now expects revenue between $20.7 billion and $20.8 billion in fiscal 2021.
Currently, Salesforce’s adjusted earnings per share stood at $2.65. The company expects this to grow to $3.72 to $3.74 per share by 2021. The analysts have given expected earnings of $2.96. During a conference call, Marc Benioff, Salesforce’s co-founder and CEO, said: “I think that for a company like Salesforce, we don’t really see an M&A environment”. He further added that the company is currently focusing on its core business.