Partnerships & Buyouts To Drive Salesforce (CRM) Q3 Earnings

Salesforce.com, Inc. (CRM – Free Report) is set to report third-quarter fiscal 2018 results on Nov 21. The Zacks Consensus Estimate for the quarter is pegged at 37 cents, representing a year-over-year increase of a whopping 52%. Additionally, analysts polled by Zacks project revenues of roughly $2.65 billion, up 23.5% from the year-ago quarter. Let’s see what’s driving this overwhelming expectation.

Amazon Partnership Stoking International Growth

For the last few years, Salesforce has been keen on building partnerships to expand its international operations. Its partnership with Amazon’s Amazon Web Services (AWS) is very crucial and the company, during its last earnings conference call, stated that the collaboration has helped it gain businesses overseas.

It should be noted that earlier Salesforce used to run its software at the company’s data centers, which was curbing its growth potential. However, last year, the company decided to utilize the AWS data center’s geographical reach to expand its international business. In addition, Salesforce plans to invest about $400 million on AWS’ cloud platform, over the next four years.

In the last few months, Salesforce has entered into an agreement with AWS to run its software in the latter’s Canadian and Australian data centers. This has opened up fresh prospects in the Canadian and Asia-Pacific markets.

During the fiscal second quarter, the company won several deals due to its international expansion initiatives. Companies like Toshiba, Nomura, Queensland Urban Utilities and Australia Post picked Salesforce’s solutions to fuel digital transformation. It is most likely that the company will continue winning international deals which will drive its fiscal third-quarter top- and bottom-line results.

Salesforce.com Inc Price and EPS Surprise