Quarterly company results

Salesforce acquires Slack for $27 billion with a combination of shares and cash. Salesforce outperformed Wall Street's estimate for the third quarter, but revenue growth is slowing down. Salesforce's profit forecast for the fourth quarter is lower than analysts expected.

Salesforce (CRM) on Tuesday published its quarterly report and forecasts and announced the largest transaction in its history to purchase the Slack service communication application (WORK).

Salesforce shares, which have increased by 48.4 per cent since the beginning of the year, fell by 4 per cent after closing trading on Tuesday.

Salesforce 3Q Report

A corporate software company reported earnings per share for the 3rd quarter (ended 31 October) of $1.74, which is significantly better than previous figures and $0.99 better than analyst estimates of $0.75. Total Salesforce revenue increased 20% to $5.42 billion, the third consecutive quarter-on-quarter slowdown, but above the analytical average of $5.25 billion.

Sales Cloud revenue grew 12% to $1.3 billion. Service Cloud revenue for customer support and attraction increased 21% to $1.4 billion. Platform Other brought in $1.6 billion, 24% more than last year.

The quarter was marked for Salesforce by the addition of its shares to the Dow Jones blue chip index on 31 August.

Salesforce announced Work.com for Schools, a teacher-student interaction tool, as well as Salesforce Meetings software, which enables the use of data stored on Salesforce services during video conferences that can be held in different applications.

Projections from the company

Salesforce expects earnings per share for the fourth quarter of 2021 to be $0.73-$0.74, which is below the analytical average of $0.86.

Salesforce expects earnings for the fourth quarter of 2021 to be $5.665 billion to $5.675 billion, which is better than the analyst forecast of $5.52 billion.

Salesforce expects revenues for the first quarter of 2022 to be $5.86 billion to $5.715 billion.

For the full year 2022, the company expects to generate $25.45 billion to $25.55 billion, including $600 million in revenues from Slack, assuming the deal closes at the end of the second quarter.