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Salesforce Q1 - Tops Forecasts - Guides Up

May 19, 2017

Salesforce results for its fiscal first quarter ended April 30, 2017.

“With our outstanding first quarter results, we are thrilled to be raising our fiscal 2018 revenue guidance by $100 million and raising our GAAP and non-GAAP earnings per share expectations for the year,” said Marc Benioff, chairman and CEO, Salesforce. “Salesforce has once again been named the CRM market leader, and we continue to grow our share in CRM -- the fastest growing enterprise software market.”

Salesforce delivered the following results for its fiscal first quarter 2018:

Revenue: Total Q1 revenue was $2.39 billion, an increase of 25% year-over-year, and 25% in constant currency. Subscription and support revenues were $2.2 billion, an increase of 24% year-over-year. Professional services and other revenues were $187 million, an increase of 32% year-over-year.

Earnings per Share: Q1 GAAP loss per share was ($0.01), and non-GAAP diluted earnings per share was $0.28.

Investors were looking for adjusted earnings of 26 cents a share on sales of $2.35 billion.

Cash: Cash generated from operations for the first quarter was $1.23 billion, an increase of 17% year-over-year. Total cash, cash equivalents and marketable securities finished the quarter at $3.22 billion.

Deferred Revenue: Deferred revenue on the balance sheet as of April 30, 2017 was $5.04 billion, an increase of 26% year-over-year, and 27% in constant currency. Unbilled deferred revenue, representing business that is contracted but unbilled and off balance sheet, ended the first quarter at approximately $9.6 billion, up 26% year-over-year. This includes approximately $450 million related to unbilled deferred revenue from Demandware.

As of May 18, 2017, the company is initiating revenue, earnings per share, and deferred revenue guidance for its second quarter of fiscal year 2018. In addition, the company is raising its full fiscal year 2018 revenue and earnings per share guidance, and maintaining its operating cash flow guidance, previously provided on February 28, 2017.

Q2 FY18 Guidance: Revenue is projected to be approximately $2.51 billion to $2.52 billion, an increase of 23% to 24% year-over-year.

GAAP diluted earnings per share is projected to be $0.00 to $0.01, while non-GAAP diluted earnings per share is projected to be $0.31 to $0.32.

On balance sheet deferred revenue growth is projected to be approximately 22% year-over-year.

Full Year FY18 Guidance: Revenue is projected to be approximately $10.25 billion to $10.30 billion, an increase of 22% to 23% year-over-year.

GAAP diluted earnings per share is projected to be $0.06 to $0.08, while non-GAAP diluted earnings per share is projected to be $1.28 to $1.30.

Operating cash flow growth is projected to be 20% to 21% year-over-year.

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