Galaxy S23 Ultra Review ChatGPT and Microsoft Bing 5 Things New Bing Can Do How to Try New Bing Ozempic vs. Obesity Best Super Bowl Ads Super Bowl: How to Watch Massive Listeria Recall
Want CNET to notify you of price drops and the latest stories?
No, thank you
Accept

Salesforce.com shares drop on outlook

Shares fall more than $9, or 15 percent, by midday, as analyst expresses concerns about the software-as-a-service company's future revenue.

Shares of software-as-a-service company Salesforce.com fell Thursday in morning trading after the company announced cautious guidance for the upcoming third quarter.

Shares were trading at $55.80 by midday, down from Wednesday's close of $65.30.

Looking ahead, the company said it expects revenue in the third quarter to be between $273 million and $274 million, slightly below analysts' expectations.

Thursday, Piper Jaffray downgraded the stock from "buy" to "neutral."

The stock slip came despite a strong second quarter. Salesforce announced revenue of $263.1 million for the second quarter ended July 31, up 49 percent year-over-year, and 6 percent from the most recent quarter. Revenue from subscriptions hit $239.7 million, up from $160 million in the year-ago quarter, while services revenue rose to $23.4 million from $16.6 million in the year-ago quarter.

Net income for the quarter was $10 million, or 8 cents per share, up from $3.7 million, or 3 cents per share, in the previous year.

On Wednesday, Salesforce announced it was acquiring InStranet, a Chicago-based maker of call-center software, for around $31.5 million. Salesforce plans to use InStranet's technology both internally, and as a new software-as-a-service offering expected to launch within 18 months.