The company said on Tuesday there was strong demand for its software from companies looking to improve efficiencies and incorporate modern-day work-flows, including hybrid work, despite a four-decade high inflation and tapering consumer demand.
Shares of the San-Francisco-based company rose 7.7% to $172.50, after plummeting 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.
Shares of rivals Oracle Corp and Microsoft Corp , which have also forecast an upbeat year, have fallen between 18% and 19% this year.
“Macroeconomic or geopolitical headwinds may show up sooner or later, but Salesforce is well positioned to capitalize on enterprise spending on digital transformation, and the company has a fairly resilient model,” SMBC Nikko Securities analyst Steven Koenig said.
Salesforce increased its adjusted profit estimate for the fiscal year ending January 2023 to $4.75 per share from its prior forecast of $4.63.
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The profit forecast raise is a big positive as it’s a key area of investor focus, especially in the current market environment, said William Blair & Company analyst Arjun Bhatia.
However, foreign exchange headwinds forced the company to marginally lower its revenue forecast for the year to $31.7 billion to $31.8 billion, from its earlier forecast of $32 billion to $32.1 billion.
Revenue in the first quarter ending April 30 rose 24% to $7.41 billion from a year earlier, above analysts’ average estimate of $7.38 billion, according to IBES data from Refinitiv.
Net income fell to $28 million from $469 million.
