Salesforce shares pop on raised profit guidance

Salesforce (NYSE: CRM) reported better-than-expected second-quarter results and raised its full-year profit guidance, sending its shares up 2% in after-hours trading.

The cloud-based software company posted adjusted earnings per share of $2.56, surpassing analyst estimates of $2.35. Revenue for the quarter came in at $9.33 billion, beating the consensus forecast of $9.22 billion and representing an 8% increase YoY, or 9% in constant currency.

Subscription and support revenue, which makes up the bulk of Salesforce's business, grew 9% YoY to $8.76 billion. The company's current remaining performance obligation, a measure of future revenue under contract, rose 10% YoY to $26.5 billion.

"In Q2, we delivered strong performance across revenue, cash flow, margin and cRPO, and raised our fiscal year non-GAAP operating margin and cash flow growth guidance," said Marc Benioff, Chair and CEO of Salesforce.

For the third quarter, Salesforce expects revenue between $9.31 billion and $9.36 billion, slightly below the analyst consensus of $9.41 billion. The company maintained its full-year revenue guidance of $37.7 billion to $38.0 billion.

On another note, Salesforce raised its full-year adjusted EPS forecast to $10.03-$10.11, up from its previous outlook and above the analyst consensus of $9.89.

The company also increased its operating cash flow growth guidance to 23% to 25% YoY.

Amy Weaver, President and CFO, highlighted the company's focus on profitability, noting, "We continue to deliver disciplined profitable growth and this quarter, operating margins closed at record highs."

Weaver will step down from her role as President and Chief Financial Officer at Salesforce. She will remain CFO until a successor is appointed.

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