Market participants had hoped that last week’s rally could continue until the last trading day of May, but unfortunately the stock market lost some of its gains. The losses for the Dow Jones Industrial Average (^ DJI -0.67%), S&P500 (^GSPC -0.63%)and Nasdaq Compound (^IXIC 0.00%) were relatively weak at around half a percent, but it still took a toll on investor confidence to see a lack of follow-through on prior big gains.

Data source: Yahoo! Finance.

However, there was some good news after the closing bell. Shares of Selling power (RCMP -2.94%) rose sharply in after-hours trading as the blue-chip software-as-a-service company released its latest financial results. After seeing so many stocks lose ground despite strong trading results in their quarterly reports, investors were happy to see Salesforce surge, even as it faces some of the same challenges as companies in the tech industry.

What Salesforce said

Salesforce’s quarterly results for the period ending April 30 included a lot of good news. Revenue of $7.41 billion was up 24% year over year. Subscription and support revenue grew at the same 24% annual rate, but gains for the much smaller professional services segment of 30% helped boost Salesforce revenue slightly. Remaining performance bonds were 20% above year-ago levels at about $42 billion, about half of which is current bonds.

Investors were also pleased with Salesforce’s bottom line, although it reflected some of the company’s challenges. Adjusted net income was $982 million, down from $1.14 billion in the prior quarter. However, the resulting adjusted earnings of $0.98 per share were still better than most investors feared the customer relationship software specialist would generate.

Salesforce attributed the strong performance to two things. First, the company has worked hard to build a sustainable business model that can handle the ups and downs of the economic cycle. Additionally, the product portfolio that Salesforce offers its customers is broad enough to meet the needs of businesses in almost any industry, and smart internal business decisions have also made Salesforce more operationally efficient.

Will the rest of the year be better for Salesforce?

Salesforce had generally positive things to say about how the near-term future is likely to look. In the second fiscal quarter ending in July, the CRM specialist expects sales of $7.69 billion to $7.7 billion, up about 21% from levels in the last year. Adjusted earnings are expected to increase slightly to between $1.01 and $1.02 per share, with expected gains of approximately 15% in current remaining performance bonds.

For the full year, Salesforce has similar expectations. It forecast revenue of $31.7 billion to $31.8 billion, up 20% from fiscal 2022. Adjusted operating margin is expected to exceed 20%, and Salesforce expects to see adjusted profit of 4 $.74 to $4.76 per share and a 21% to 22% increase in operating cash. to flow.

Interestingly, Salesforce’s full-year projections have changed in a mixed fashion. The earnings call was about $0.12 per share higher than previously expected. However, Salesforce cut its sales estimate by about $300 million from its previous forecast of $32 billion to $32.1 billion.

Salesforce entered its earnings report as one of the Dow’s worst performers in 2022. However, it now appears that some investors see it as a strong candidate for a rebound. If it can maintain its upward momentum, Salesforce has a lot going for it.