On Tuesday, the San Francisco-based cloud software company reported earnings for the period ending in Aug. 31. Total profit equaled $468 million, or 47 cents a share, while sales are up to $6.86 billion from $5.42 billion a year ago.
Adjusted for factors like employee stock-based compensation, earnings came in at $1.27 a share. This number is below last year's $1.72 a share but above analyst estimates of 92 cents a share on sales of $6.8 billion.
Despite beating analyst estimates, Salesforce stock tanked after it reported that it expects revenue between $7.22 billion and $7.23 billion in the fourth quarter. Analysts surveyed by FactSet had predicted 82 cents a share on sales of $7.24 billion on average.
"Our guidance continues to incorporate expense seasonality that is weighted to Q4, including investments in both our workforce and growth opportunities, and [travel and expense] expectations," Salesforce Chief Financial Officer Amy Weaver said in a Tuesday conference call, MarketWatch reported.
On the same day as the earnings report, Salesforce promoted former Facebook executive Bret Taylor as co-CEO alongside Marc Benioff. Despite recent reports, the company is confident in its long-term future — sales of its core product Sales Cloud were up 17% compared to last year.
"No other software company of our size or scale is really performing at this level," Benioff said in the conference call. "We know that because we're talking to other cloud CEOs every day."