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What Can We Expect from Salesforce’s Fiscal 3Q17 Results?

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Analysts’ expectations for Salesforce’s fiscal 3Q17 results

Salesforce (CRM) is scheduled to announce its fiscal 3Q17 results on November 17, 2016. For fiscal 3Q17, analysts expect Salesforce to post revenue and non-GAAP (generally accepted accounting principles) EPS (earnings per share) of ~$2.12 billion and $0.21, respectively.
For fiscal 3Q17, Salesforce has provided revenue and EPS (earnings per share) guidance in the range of $2.11 billion–$2.12 billion and $0.20–$0.21, respectively.

In the past seven years, the company has met or exceeded analysts’ expectations with each passing quarter. It’s very likely that Salesforce’s fiscal 3Q17 results will follow its past trends and meet or exceed analysts’ expectations.
cloud adoption

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Increased cloud adoption could provide stimulus to Salesforce’s growth

We know that Salesforce derives the majority of its revenue from subscription and support revenue, as the above chart shows. As a result, the growing adoption of the cloud is working in the company’s favor. In calendar 2Q16, cloud infrastructure revenues surpassed the $8 billion landmark, with TTM (trailing-12-month) cloud revenues close to $28 billion.

The cloud market as a whole grew 51%, with the top four players—Amazon.com (AMZN), Microsoft (MSFT), IBM (IBM), and Google (GOOG) (GOOGL)—collectively reporting 68% growth. The next 20 cloud players, including Oracle (ORCL) and Salesforce (CRM), grew 41%.

Double-digit revenue growth with each passing quarter has enabled Salesforce to raise its guidance, and given its fiscal 2Q17 results, Salesforce seems to be well on its way to achieving a $10-billion revenue milestone by fiscal 2018.

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