Salesforce.com (CRM  ) topped second-quarter expectations and issued full-year guidance above expectations which caused shares to jump as much as 15% higher in premarket trading. The earnings beat also comes after Dow Jones saying that Salesforce will be replacing Exxon Mobil (XOM  ) as one of 30 stocks in the Dow Jones Industrial Average (DIA  ).

Salesforce is one of the first, cloud-based enterprise software companies. It IPO'd in 2004 and has gained 5,300% since its debut. The company sells customer relationship management software with the goal to help companies boost their sales by coordinating and organizing their marketing, customer outreach, and sales activities.

Inside the Numbers

In the second-quarter, Salesforce reported earnings per share of $1.44 which was higher than analysts' expectations of $0.67. Revenue came in at $5.15 billion which beat expectations of $4.9 billion.Revenue grew by 29% on a year over year basis.

Salesforce's results also show that business' spending on enterprise software remains resilient. One factor in the company's strength was the successful debut of nCino (NCNO  ), a cloud platform for banks. Salesforce has a stake in the company and earns a royalty on its sales. It contributed about $0.55 to EPS.

Guidance for the third-quarter came in slightly below expectations at $0.73-$0.74 vs $0.77. Revenue was slightly above at $5.25 billion vs $5.01 billion. However, full-year guidance beat on both the top and bottom-line at $3.72-$3.74 and $20.7-$20.8 billion against $2.96 EPS and $20.07 billion in revenue. This represents about a 22% increase on both metrics.

Stock Price Impact

Salesforce is one of the first-cloud based company. The company and its stock price has grown with the increase in IT and cloud spending. Further, the product's purpose is that it increases company's revenues with more efficiency.

It makes the company an ideal fit for COVID-19, as businesses transition to remote work which means that businesses are having to rethink how they sell their products. Since the March low, the stock is up 110%, and 53% higher year-to-date.

Salesforce has focused on growth rather than profits throughout its history, and public markets have rewarded the company for this decision. It's impressive that despite being a public company for more than 15 years, it's still growing sales at a 30% rate. Its product is profitable given that it has 75% gross margins.

Today, there are a number of cloud-based CRM products, but Salesforce basically invented the category. It still dominates the sector and an entire ecosystem has grown around the product including installers, developers, and people to manage and configure the software.