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Salesforce.com Inc. shares jumped almost 12% in after-hours trading today after the company easily beat its second-quarter earnings targets and raised its fiscal 2021 revenue outlook.

The company, which is best known for its customer relationship management and service clouds, reported a profit before certain costs such as stock compensation of $1.44 per share on revenue of $5.15 billion, up 29% from a year ago.

Wall Street had forecast earnings of just 67 cents per share on revenue of $4.9 billion. Salesforce said it was helped by mark-to-market adjustments on its strategic investments that boosted earnings by 58 cents per share.

Update: Salesforce’s shares surged 26% Wednesday. The company also confirmed the layoff of 1,000 people reported by CNBC. In a statement to the outlet, it said, “We’re reallocating resources to position the company for continued growth,” a spokesperson confirmed in a statement to CNBC. “This includes continuing to hire and redirecting some employees to fuel our strategic areas, and eliminating some positions that no longer map to our business priorities.”

Only on Tuesday, Salesforce Chairman and Chief Executive Marc Benioff (pictured) in a statement hailed “one of the best quarters in Salesforce’s history against the backdrop of multiple crises seriously affecting our communities around the world.”

Revenue from Salesforce’s core Sales Cloud, its main CRM product that’s used by companies to keep track of their business operations, came to $1.28 billion, up 13% from a year ago. Meanwhile, Service Cloud, which is used for customer support, pulled in revenue of $1.3 billion, up 20%.

Nucleus Research analyst Daniel Elman said Salesforce customers are realizing that they cannot afford churn of their own customers, which means they’re making biggest investments in service, sales and marketing to understand and capture complete, end-to-end customer journeys.

“Service in particular has seen an uptick in customer interest as brands look to minimize churn and add additional built-in value to customer relationships,” he said.

The biggest earner, however, was Salesforce’s Platform and Other business, which includes the Tableau data visualization and business intelligence software it acquired last year for $14.8 billion. That unit pulled in $1.51 billion in revenue, up 66% from a year ago.

“The integration between Tableau and Salesforce is becoming more established and Tableau has leveraged the acquisition to accelerate its roadmap, allowing it to continue to exceed customer expectations and remain atop the competitive BI landscape,” Elman said.

The company said its current remaining performance obligation, which is a measure of future revenue under contract that should be recognized over the next 12 months, totaled $15.2 billion.

Elsewhere, Salesforce said its research and development costs came to $898 million in the quarter, up from $607 million in the same period last year. Meanwhile, its marketing and sales expenses rose to $2.27 billion, up from $1.82 billion a year ago.

Constellation Research Inc. analyst Holger Mueller said Salesforce is showing “impressive strength” under difficult conditions, as many of its customers are struggling from the coronavirus pandemic. He noted that this quarter was the first time Salesforce has shown a substantial profit, even though this was aided in part by the initial public offering of a Salesforce Ventures investment, most likely the financial technology company nCino Inc.

“More encouraging for customers is that Salesforce has increased its investment in R&D,” Mueller said. “It now equates to around a third of its marketing and sales expenses, which is good news. On the geographic mix Salesforce has done very well in Europe, but the company still needs to grow its international revenue portion as North American sales outsell the rest of world by a lot more than two to one.”

Not all analysts shared this positive view, though. Patrick Moorhead of Moor Insights & Strategy told SiliconANGLE that Salesforce needed to make numerous acquisitions in order to show the kind of growth it has done.

“While this isn’t a bad thing on face value, it’s covering up share losses to both Microsoft and Oracle,” Moorhead said. “Salesforce needs to focus on organic growth in the next year so it doesn’t turn into a roll-up, dependent on acquisitions for growth.”

Still, the company’s strong quarterly performance serves as another reminder of how cloud and digital technology companies have weathered the economic storm caused by the coronavirus pandemic and outperformed the broader market.

Indeed, the company has benefited from the pandemic by expanding into new markets with its Work.com suite, which is a set of tools designed to help companies return to work safely following the shutdown.

“Another incredible victory in the quarter has really been Work.com,” Benioff said on a call with analysts. “I don’t think there’s a product that we’ve ever built faster, but it’s never been more successful, more rapidly.”

Analyst Charles King of Pund-IT Inc. told SiliconANGLE that Salesforce’s impressive performance was no surprise given the ongoing coronavirus pandemic.

“As COVID-19 has shifted companies’ focus away from on-premises IT infrastructures to trusted cloud services and vendors, Salesforce’s longtime leadership position makes it a natural destination for businesses working to make that transition,” he said.

King also pondered the impressive results would lead more analysts to recognize that software-as-a-service firms like Salesforce can be called “true” cloud vendors.

“The resistance to that among a few analyst firms runs pretty deep,” King said. “However, the current and likely continuing reality of the present situation may inspire them to expand their vision of cloud beyond IaaS and PaaS.”

Benioff announced new deals with AT&T Inc. and PayPal Inc. during the quarter that bought in thousands of new users.

“Salesforce will continue to acquire marquee enterprise customers due to its sprawling solution portfolio that can meet almost any need,” Elman said. “Salesforce’s platform lends itself to long-term investment and is ideally suited for cross-sales, allowing for this prolonged revenue growth we’ve seen and expect to continue.”

Salesforce’s positive story continued with its guidance, with the company calling for a third-quarter profit of 73 to 74 cents on revenue of $5.24 billion to $5.25 billion. That compares with Wall Street’s forecast of a 77-cent profit on revenue of $5.01 billion.

For the full year, Salesforce raised its outlook, saying it now sees total revenue of $20.7 billion to $20.8 billion, up from its previous forecast of $20 billion.

Photo: Peter Ma/Flickr