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Salesforce Q1 Tops Forecasts

May 30, 2018

Salesforce reported results for its fiscal first quarter ended April 30, 2018. The company adopted ASC 6061, ASC 340-402 and ASU 2016-013 in the first quarter, and these results reflect the impact of these standards. The company also provided re-casted financial results under ASC 606 and ASC 340-40.

Revenue was up 25% to $3.01 billion driving earnings per share of 74 cents, excluding certain items.

Investors were looking for revenue of $2.94 billion and EPS of 46 cents.


"Salesforce delivered more than $3 billion in revenue in the first quarter, surpassing a $12 billion annual revenue run rate," said Marc Benioff, chairman and CEO, Salesforce. "Our relentless focus on customer success is yielding incredible results, including delivering nearly two billion AI predictions per day with Einstein."

Salesforce delivered the following results for its fiscal first quarter:

Revenue: Total first quarter revenue was $3.01 billion, an increase of 25% year-over-year, and 22% in constant currency. Subscription and support revenues were $2.81 billion, an increase of 27% year-over-year. Professional services and other revenues were $196 million, an increase of 4% year-over-year.

Earnings per Share: First quarter GAAP diluted earnings per share was $0.46, and non-GAAP diluted earnings per share was $0.74. Mark-to-market accounting of the company's strategic investments, required by ASU 2016-01, benefitted GAAP diluted earnings per share by $0.25 and non-GAAP diluted earnings per share by $0.22.

Cash: Cash generated from operations for the first quarter was $1.47 billion, an increase of 19% year-over-year. Total cash, cash equivalents and marketable securities finished the first quarter at $7.16 billion.

Unearned Revenue: Unearned revenue, representing ASC 605 deferred revenue less the cumulative timing differences of recognized revenue from ASC 606 adoption, on the balance sheet as of April 30, 2018 was $6.20 billion, an increase of 25% year-over-year, and 23% in constant currency.

Remaining Transaction Price: Remaining transaction price, representing future revenues that are under contract but have not yet been recognized, ended the first quarter at approximately $20.4 billion, an increase of 36% year-over-year. Current remaining transaction price, which represents the future revenues under contract expected to be recognized over the next 12 months, ended the first quarter at approximately $9.6 billion, an increase of 26% year-over-year.

Salesforce sees Q2 revenue in a range of $3.22 billion to $3.23 billion, with expectations being $3.1 billion. Non-GAAP EPS is guided at 46 cents to 47 cents, below expectations of 52-cents.

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