Salesforce has managed to sustain its growth momentum following a strong performance in 2016, and exceed market expectation for revenue and earnings per share by nearly 2% and 8%, respectively.
A surge in subscription and support across all its cloud products (marketing, sales, service and commerce) has primarily seen the company’s revenue grow by 25% year-on-year to $2.39 billion for the quarter.
Despite this huge growth in revenues, the company’s bottom line remained under pressure due to a significant surge in operating expenses and a higher cost of revenues.
In the previous year, Salesforce pushed into other domains and made several acquisitions, which although is expected to make margins suffer now, it invites further growth for the future. From this strong growth outlook, investors are pleased and the stock price has grown 28% since the beginning of the year.
The strongest revenue growth resulted from product categories, with the Sales Cloud growing 15% over the prior year, Service Cloud by 21% and Marketing Cloud a revenue increase of 32%, excluding the acquisition of Demandware. By rending cloud services quickly across all its products, it has enabled itself to capture the leading market share in the CRM space.
Over the course of the coming year the Salesforce growth momentum is expected to continue on a global scale, with increased adoption and demand for cloud and integrated end-to-end solutions the company is looking at revenues of over $2.51 billion in Q2 to be generated and $10.25-$10.30 billion for the full year.