Seeking Alpha

Salesforce +8.3%; Street likes billings and cash flow growth

  • Salesforce's (NYSE:CRM) 33% Y/Y FQ2 billings growth was better than a Street forecast of 28%, says Nomura (Buy). The firm also estimates organic revenue growth was 28% (total growth was 38%), and notes op. cash flow grew 34% to $246M.
  • Nomura sees Salesforce's Microsoft partnership yielding favorable press this fall, and also thinks Salesforce will announce a new cloud service, possibly by leveraging recently-acquired CRM analytics startup RelateIQ.
  • BofA/Merrill (Buy) also talks up Salesforce's billings/cash flow growth, and points out the company's backlog ($7.35B) is now 24% above forward revenue estimates. FBR likes the fact op. margin (a recent concern, given heavy spending) rose 130 bps.
  • Goldman (Conviction Buy) observes FQ3 guidance implies ~25% billings growth, which in turn points to a pickup in organic growth. "We believe CRM continues to be the preeminent SaaS vendor with significant runway ahead."
  • On the CC (transcript), Salesforce mentioned it struck major deals with 3M and Safeway during FQ2, and expanded relationships with GM, P&G, and Yahoo (among others). The company also claimed European deal activity is picking up. Marc Benioff: "Europe tends to be a laggard when it comes to implementing new technology. And that has not escaped our cloud companies."
  • Prior Salesforce earnings coverage

Check out Seeking Alpha’s new Earnings Center »

Comments (0)
Be the first to comment
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs