Salesforce shares are up on the corporate’s elevated income steering for this yr and the corporate’s optimism about earnings

Marc Benioff, Co-Founder and CEO of Inc., speaks during the WSJDLive Global Technology Conference in Laguna Beach, Calif., USA, on Wednesday, October 26th, 2016. The conference brings together an unmatched group of top CEOs, founders, pioneers, Investors and luminaries to explore technological opportunities emerging around the world.

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Salesforce stock rose 7% on Thursday after the cloud software company raised its revenue forecast for the current fiscal year and provided an outlook for the next year that beat analysts’ estimates.

Revenue for fiscal 2022, which ends in January, will be up to $ 26.35 billion, up from an earlier forecast of up to $ 26.3 billion, Salesforce said in a statement. For the following year, Salesforce expects $ 31.65 billion to $ 31.80 billion, which is higher than 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 face-to-face sessions in San Francisco. Salesforce CFO Amy Weaver told analysts in a session related to the conference that the acquisition of Slack, which closed in July, is a boost in several ways.

Not only do Slack’s communication tools add hundreds of millions of dollars to annual revenue, but they also help the company run a remote workforce, limit travel, and be more disciplined with spending.

“It’s the new world,” said Weaver. “We’re not going back. We can effectively sell without getting on a plane every day.” Salesforce sales chief Gavin Peterson said last month that sales reps are starting to sell products through Slack.

Salesforce told analysts in August that the Slack deal will have a negative impact on adjusted operating margin. However, the company announced Thursday that its adjusted operating margin will be around 20% for 2023, which is above the 19.2% consensus of analysts surveyed by StreetAccount. The strong sales performance gives the company some margin in operating margin, said Weaver.

“We believe this forecast should be well received in the context of Salesforce, which digests Slack and continues to achieve ~ 20% sales growth,” wrote analysts at Stifel, which has a buy rating for Salesforce shares, in a press release the customer.

Salesforce rose 6.3% to $ 275.59 on Thursday lunchtime. The stock is up 24% this year.

SEE: Salesforce CEO on new partnerships

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