(Reuters) -Salesforce Inc raised its full-year adjusted profit forecast after it beat quarterly revenue estimates on strong demand for business software as companies increasingly adopt hybrid work models.
The San-Francisco-based company’s shares rose about 7% in extended trading after having fallen about 37% this year as investors moved out of growth stocks on a series of bad news including high inflation in the United States and the Ukraine crisis.
Despite inflation climbing to a four-decade high and tapering consumer demand across a range of sectors, many companies spent generously on software to improve efficiencies and incorporate modern-day work-flows including hybrid-work.
The company’s profit forecast raise is a big positive as this is a key area of investor focus, especially in the current market environment, said William Blair & Company analyst Arjun Bhatia.
The company increased its adjusted profit estimate for the year to $4.75 per share, from its prior forecast of $4.63 per share.
In the last two quarters, the company has logged more than a 25% jump in revenue, but operating margins fell sharply as costs rose.
The company marginally lowered its revenue estimates for the fiscal year ending January 2023 to $31.7 billion to $31.8 billion, from its earlier forecast of $32 billion to $32.1 billion.
Excluding items, the company earned 98 cents per share in the quarter ended April 30, compared with analysts’ average estimate of 94 cents.
Net income fell to $28 million from $469 million, a year earlier.
Revenue rose 24% to $7.41 billion, above analysts’ average estimate of $7.38 billion, according to IBES data from Refinitiv.
(Reporting by Akash Sriram and Yuvraj Malik in Bengaluru; Editing by Shinjini Ganguli)
