Salesforce (CRM) is on a post-earnings high with its figures for Q2 2021 coming out just two days ago. The cloud-based customer relationship management platform saw a 23% annual increase in its quarterly revenues (which reached $6.3b), yet net income decreased by 80% (to $535m). The decrease in net income was due to an unusually high figure in Q2 2020, where the company recorded a $2b benefit from income taxes. If you adjust for that, the net income decrease is only 15%.
The main drivers behind Salesforce’s revenues were its subscription services — like its core Sales Cloud product and Tableau software — which saw a 22% annual increase. The company also made a $30b acquisition of the communications app Slack this quarter, which led to a $530m boost in revenue – a 39% increase compared to last quarter during pre-acquisition.
The firm is expecting the momentum to continue into Q3 2021, with it projecting a 25% revenue growth. This is driven by Salesforce’s plans to launch a Cloud product dedicated to financial services clientele and an update to its Work.com software (a workplace command center).
why it matters
In response to Salesforce’s upward revisions to its projections for next quarter and a robust revenue base, its share price rose by 1.8% following the earnings release and was up by 2.5% at market close yesterday.