- Though FQ4 EPS was only in-line (revenue slightly beat), Salesforce (NYSE:CRM) is guiding for FQ1 revenue of $1.885B-$1.895B (+25% Y/Y) and EPS of $0.23-$0.24, above a consensus of $1.86B and $0.21. On-balance-sheet deferred revenue is expected to be up 24%-25% Y/Y.
- FY17 (ends Jan. '17) guidance is for revenue of $8.08B-$8.12B (+21%-22% Y/Y) and EPS of $0.99-$1.01 vs. a consensus of $8.08B and $0.99. Op. cash flow is expected to be up 23%-24% Y/Y.
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Deferred revenue/cash flow: On-balance-sheet deferred revenue rose 29% Y/Y in FQ4 to $4.29B, a slight improvement from FQ3's 28% growth. Unbilled deferred revenue rose 25% to $7.1B, after growing 24% in FQ3. Deferred revenue growth drove free cash flow of $390.9M (+58% Y/Y). For the whole of FY16, free cash flow rose 50% to $1.33B, easily topping GAAP net income of -$47.4M and non-GAAP net income of $506.8M.
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Top-line performance: Sales Cloud revenue +12% Y/Y to $708.9M. Service Cloud (customer support software) +35% to $495.3M. Marketing Cloud (cloud marketing automation software) +31% to $184M. App Cloud/Other (Heroku/Force.com) +42% to $294.5M.
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Financials: Non-GAAP operating expenses rose 23% Y/Y to $1.19B. On a GAAP basis, cost of revenue totaled $443.7M, sales/marketing spend $890.4M, R&D $250.1M, and G&A $203.9M. Stock compensation spend equaled 9% of revenue. Salesforce ended FQ4 with $2.7B in cash, $1.1B in convertible debt, and a $199M loan tied to its HQ purchase.
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CRM +7.2% after hours to $66.99. Jefferies and CLSA's upgrades appear well-timed.
- Salesforce's FQ4 results, earnings release
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Update (7:29PM ET): The post has been updated to include additional details about Salesforce's results. Shares are now up 9.4% after hours.