- Salesforce raised its revenue guidance for fiscal 2022, which ends in January, and initiated guidance for 2023.
- CFO Amy Weaver also said the company is getting more efficient, thanks in part to Slack.
- "We can sell effectively without going on a plane everyday," CFO Amy Weaver said on Thursday.
Salesforce shares rose 7% on Thursday after the cloud software company boosted its revenue forecast for the current fiscal year and provided an outlook for next year that exceeded analysts' estimates.
Revenue for fiscal 2022, which ends in January, will be as high as $26.35 billion, up from a previous prediction for up to $26.3 billion, Salesforce said in a statement. For the following year, Salesforce expects $31.65 billion to $31.80 billion, topping the average estimate of $31.47 billion, according to analysts polled by Refinitiv.
The new outlook coincides with Salesforce's annual Dreamforce conference, which is mostly virtual due to the pandemic, but includes limited in-person sessions in San Francisco. Salesforce CFO Amy Weaver told analysts in a session tied to the conference that the acquisition of Slack, which closed in July, is providing a boost in multiples ways.
In addition to contributing hundreds of millions of dollars to annual revenue, Slack's communications tools are helping the company in its bid to operate a more remote workforce, cut back on travel and be more disciplined on spending.
"It's the new world," Weaver said. "We're not going back. We can sell effectively without going on a plane everyday." Salesforce's revenue chief, Gavin Peterson, said last month that sales representatives are beginning to sell products through Slack.
Salesforce told analysts in August that the Slack deal will negatively impact its adjusted operating margin. However, the company said on Thursday that its adjusted operating margin for 2023 will be about 20%, wider than the 19.2% consensus among analysts polled by StreetAccount. Strong revenue performance gives the company some room on operating margin, Weaver said.
"We believe this guidance should be well-received in the context of Salesforce digesting Slack and continuing to deliver ~20% top-line growth," analysts at Stifel, which has a buy rating on Salesforce stock, wrote in a note to clients.
Salesforce rose 6.3% to $275.59 as of mid-day on Thursday. The stock is up about 24% this year.