'Mission accomplished': Salesforce lifts guidance after hitting its profitability target; shares jump

investing.com:

Investing.com — Salesforce (NYSE:CRM) lifted annual guidance after reporting second-quarter results that topped Wall Street estimates as the software company touted improved demand for the second half of the year.

Shares gained nearly 6% in pre-market Thursday trade following the report.

Salesforce.com reported adjusted EPS of $2.12 on revenue of $8.60 billion. Analysts polled by Investing.com anticipated EPS of $1.9 on revenue of $8.53B.

Subscription and support revenues for the quarter were $8.60B, an increase of 11% year-over-year. Professional services and other revenues for the quarter were $600M, an increase of 3% year-over-year.

Adjusted operating margin was 31.6%, which means that Salesforce hit its profitability target three quarters earlier than initially planned.

Looking ahead, the company lifted its annual guidance, as demand and margins are expected to improve in the back half of the year.

For the full-year 2024, adjusted EPS was guided in a range of $8.04 to $8.06, up from $7.41 to $7.43 previously. While revenue was guided in a range of $34.7B to $34.8B, up from a prior estimate of $34.5B to $34.7B. That topped analyst estimates for annual EPS of $7.45 on revenue of $34.65B.

Operating margin and operating cash flow growth were raised to 13.3% and a range of 22% to 23%, respectively. That compared with a prior estimate for margins of 11.4% and operating cash flow growth of 16% to 17%.

Third-quarter adjusted EPS was expected in a range of $2.05 to $2.06 on revenue of between $8.70B and $8.72B, topping Wall Street estimates of $1.82 and $8.67B, respectively.

Wolfe Research analysts commented:

«Given the „mission accomplished early“ feel around margins, and the commentary around 30% being a floor not a