Salesforce.com has forecast first-quarter revenue below Wall Street’s estimates, casting a shadow on an upbeat performance in the third quarter, and sending its shares down 6% in extended trading.
The San Francisco, California-based company also picked insider Bret Taylor to co-lead the company alongside top boss Marc Benioff.
Taylor was named the chairman of Twitter Inc’s board on Monday. He will also be the vice chair of Salesforce’s board, effective immediately, the company said.
Salesforce, a bellwether in the Customer Relationship Management (CRM) sector, has seen a boost in demand due to the pandemic accelerating businesses’ transition to cloud-based platforms.
However, the company continues to face stiff competition from competitors including Microsoft Corp’s Azure, Amazon.com Inc’s Amazon Web Services and Google Cloud.
Last month, Microsoft reported strong growth in its Azure segment, its flagship cloud-computing business. Revenue in the segment grew 48% in constant currency in the first quarter.
Meanwhile, Google Cloud’s third-quarter revenue rose 45% to $4.99 billion.
Salesforce said it expected first-quarter revenues to be between $7.22 and $7.25 billion, compared with Refinitiv IBES estimates of $7.36 billion.
However, the company reported better-than-expected revenue for the third quarter, boosted by strong demand for its cloud-based software.
Revenue rose 27% to $6.86 in the quarter ended Oct. 31, beating analysts’ estimate of $6.8 billion, according to IBES data from Refinitiv.
Stripping one-time costs, the company reported earnings of $1.27 per share, also above estimates of 92 cents per share.
The team at Platform Executive hope you have enjoyed the ‘Salesforce forecasts lower revenue as cloud competition heats up‘ article. Automatic translation from English to a growing list of languages via Google AI Cloud Translation. Initial reporting via our official content partners at Thomson Reuters. Reporting by Niket Nishant in Bengaluru. Editing by Amy Caren Daniel.
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