- Salesforce beat estimates on revenue for its fiscal first quarter, and its second-quarter revenue guidance also exceeded estimates.
- The company got off to a slow start in the quarter, according to one analyst note.
Salesforce stock rose 4 percent on Tuesday after the company delivered better-than-expected results for the first quarter of its 2019 fiscal year.
- Earnings: Excluding certain items, 74 cents per share.
- Revenue: $3.01 billion vs. $2.95 billion as expected by analysts, according to Thomson Reuters.
In terms of guidance, Salesforce said in a statement that it predicts in the fiscal second quarter it will come up with 46-47 cents in earnings per share, excluding certain items, on $3.22-3.23 billion in revenue. Analysts were expecting Salesforce to forecast $3.11 billion in revenue, according to Thomson Reuters.
Across the board, the company's revenue rose 25 percent year over year. Salesforce gets almost all of its revenue from subscription and support fees, and in that category revenue of $2.81 billion was up 27 percent, coming in above the FactSet analyst consensus of $2.73 billion.
Sales Cloud for customer relationship management is Salesforce's biggest product, but Service Cloud saw greater year-over-year growth -- 29.3 percent -- in the quarter. The company's Einstein artificial intelligence technology is also getting more use, with 2 billion predictions happening every day.
Three months ago Salesforce raised its guidance more than ever before. Since then the company announced its $6.5 billion acquisition of MuleSoft. It also announced the launch of Salesforce Essentials for small businesses.
Mizuho analysts Abhey Lamba and Parthiv Varadarajan wrote in a note on Tuesday that they were hearing of "consistent deal flow following a very strong" fiscal fourth quarter, but Evercore ISI analysts led by Kirk Materne said in a note last Thursday that conversations with partners suggested "the year got off to a slower start in certain segments."
On a call with analysts, chief financial officer Mark Hawkins said MuleSoft will deliver $315 million in additional revenue in the fiscal year. "We're pleased with this, especially post-close," Hawkins said.
Salesforce raised its full 2019 fiscal year guidance by $47.5 million, pegging it at $13.08-13.13 billion.
Salesforce shares are up 24 percent since the beginning of the year.
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