Salesforce beats second-quarter estimates on steady cloud demand

(Reuters) – Salesforce beat Wall Street expectations for second-quarter revenue and profit on Wednesday, as the business software giant benefited from higher spending on its enterprise cloud products.
Shares of the company rose more than 4% in extended trading.
Salesforce also said finance chief Amy Weaver will step down from the role but will remain in the position till a successor is appointed.
The company’s results reflect that client spending on its suite of cloud products is picking up as the software-as-a-service pioneer battles stiff competition from rising industry players like ServiceNow.
Salesforce reported revenue of $9.33 billion, while analysts on average had expected $9.23 billion.
However the firm forecast third-quarter revenue below estimates, signaling that a full recovery in cloud spending is still yet to come.
The company expects third-quarter revenue between $9.31 billion and $9.36 billion, compared with the average analyst estimate of $9.41 billion, according to LSEG data.
Salesforce’s revenue grew only 8% this quarter, its slowest pace in over a decade, indicating softer growth at the company.
After years of rapid progress and capturing a large chunk of the data cloud market, Salesforce is entering a more mature phase of growth, analysts at TD Cowen said last week, as it leverages margins and focuses on costs.
The company reported second-quarter adjusted operating margin of 33.7%, while analysts polled by Visible Alpha expected 32%.
Salesforce reported an adjusted profit per share of $2.56, beating estimates of $2.36.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Maju Samuel)