Rapid Cloud Migration to Drive Salesforce (CRM) Q3 Earnings
Salesforce's (CRM) Q3 results are likely to reflect gains from the accelerated adoption of SaaS-based platforms amid the pandemic-led accelerated digital transformation.
Salesforce's CRM third-quarter fiscal 2022 results, slated for a Nov 30 release, are likely to reflect the benefits from a robust demand environment as organizations are undergoing a major digital transformation.
The increased adoption of cloud-based solutions amid business disruptions caused by the COVID-19 pandemic is expected to have driven demand for Salesforce’s products. Its ability to provide an integrated solution for customers’ business problems is the key driver.
Click here to know how CRM’s overall fiscal third-quarter results are likely to be.
Increased Cloud Adoption to Have Aided Q3 Performance
The rapid adoption of the software-as-a-service (SaaS)-based platforms amid the ongoing work-from-home and online learning trend is expected to have spurred demand for Salesforce’s cloud-based solutions. Salesforce’s diverse cloud offerings are likely to have helped expand its clientele, fueling the top line.
salesforce.com, inc. Price and EPS Surprise
The company’s Customer 360 Truth platform that helps connect all the data from sales, service, marketing, commerce and build a single Salesforce ID for each customer is likely to have boosted its performance.
Also, Salesforce’s initiatives to capitalize on overseas demand for the cloud-based applications are anticipated to have bolstered the top line during the period in discussion. Further, the improved customer experience is anticipated to have aided the cloud segment. Also, CRM’s focus on AI and the substantial progress in its Einstein Analytics platform make it optimistic about the upcoming quarterly results.
However, a decline in software spending by small & medium businesses amid the macroeconomic uncertainty due to the pandemic might have affected Salesforce’s fiscal third-quarter performance. Also, increasing investments in International expansions and data centers might have eroded the company’s profitability during the to-be-reported quarter.
Partnerships and Acquisitions to Have Fueled Growth
Salesforce’s focus on building partnerships is anticipated to have fueled the top line. These strategic partnerships have not only helped it grab new deals but also expanded the firm’s operations internationally.
Further, partnership agreements with the likes of Apple, Amazon, Google parent Alphabet, Microsoft, HP, Dell, International Business Machines and others for the firms’ cloud services are likely to have aided Salesforce’s performance during the fiscal third quarter.
Additionally, CRM’s strategic acquisitions over the past 12 months are anticipated to have brought incremental revenues in the quarter under review. On Jul 21, 2021, Salesforce announced completing the buyout of Slack, which has positioned it as a leader in the enterprise team collaboration solution space.
Salesforce bought Acumen Solutions, a McLean, Virginia-based professional services firm, in February 2021. Salesforce anticipates revenue contributions from the newly acquired Slack and Acumen businesses to be approximately $530 million and $200 million, respectively in fiscal 2022.
Zacks Rank & Other Stocks to Consider
Salesforce currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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