What happened

Shares of Salesforce.com (CRM 0.11%) surged 7.2% on Thursday after the cloud-based CRM software leader lifted its revenue forecast and offered investors an optimistic outlook for its next fiscal year.

So what 

Salesforce now expects to generate revenue in the $26.25 billion to $26.35 billion range in its fiscal 2022, which ends on Jan. 31. That's up from a prior estimated range of $26.2 billion to $26.3 billion.

A person is drawing an upwardly sloping line labeled sales.

Image source: Getty Images.

Management also issued financial guidance for fiscal 2023, including:

  • Revenue in the $31.65 billion to $31.80 billion range, representing year-over-year growth of roughly 20%;
  • GAAP operating margin of between 3% and 3.5%;
  • An adjusted operating margin of 20%.

Now what 

Salesforce has been a major beneficiary of the growing work-from-home trend. As businesses have closed their offices due to coronavirus-related safety concerns during the pandemic, they have ramped up their spending on cloud software. Even as more offices are beginning to reopen, spending on remote work solutions is expected to remain elevated as more companies embrace the use of distributed workforces.

Salesforce is also a leader in artificial intelligence and data integration technology. Demand for digital transformation services is booming as organizations shift the digital aspects of their operations to the cloud. The ability to collect and effectively analyze ever-growing amounts of data from disparate sources is becoming more important for businesses every day, and Salesforce is helping supply the vital tools that allow them to do so.

The software titan's sales, in turn, are growing at a rapid clip. And judging by the stock's gains Thursday, investors are clearly excited about the prospect of another year of greater than 20% revenue growth.