Wed, Apr. 29, 2:50 PM
- Bloomberg reports Salesforce (CRM) has been approached by a potential acquirer, and is working with bankers to field offers. Shares have soared in response.
- With a current $51B market cap, only a handful of enterprise tech companies could afford to digest Salesforce. The short list includes Oracle ($197B market cap), Microsoft ($400B), IBM ($173B), and just maybe SAP ($94B). Oracle (NYSE:ORCL), which has made plenty of cloud software acquisitions, just launched a $10B debt offering.
- Update: BuzzFeed reports Oracle wasn't the company that approached Salesforce.
Thu, Apr. 16, 4:32 PM
- Cloud IT service desk software leader ServiceNow beat Q1 estimates in spite of major forex headwinds, but also offered light Q2 and (to a lesser extent) full-year sales guidance, and forecast a slight Q/Q billings decline.
- Cloud CRM software leader Salesforce (NYSE:CRM) is down 1.1% AH to $67.20, and cloud HR/financials software leader Workday (NYSE:WDAY) is down 2.8% to $87.25. Both companies are expected to report next month.
Mon, Mar. 2, 12:40 PM
- Citing valuation, Argus Research has downgraded Salesforce (CRM -1.8%) to Hold. The firm had launched coverage on the cloud CRM software leader at Buy back in Oct. 2013, when shares were at $52.58.
- The downgrade comes after Salesforce soared to new highs last week in response to its FQ4 report. Shares currently trade for 49x trailing free cash flow; the FY16 revenue growth consensus is at 21.3%.
Wed, Feb. 25, 5:37 PM
Wed, Feb. 25, 4:24 PM
- Salesforce (NYSE:CRM) is guiding for FQ1 revenue of $1.485B-$1.505B and EPS of $0.13-$0.14, slightly unfavorable to a consensus of $1.5B and $0.15. FY16 (ends Jan. '16) guidance is for revenue of $6.475B-$6.52B (+20-21% Y/Y) and EPS of $0.67-$0.69 vs. a consensus of $6.5B and $0.69.
- Forex (i.e. a strong dollar) is expected to have a $175M-$200M impact on FY16 revenue. With many other enterprise IT firms having offered below-consensus guidance thanks at least partly to forex pressures, Salesforce's outlook is going over well.
- Also going over well: The deferred revenue balance rose 32% Y/Y in FQ4 to $3.32B, an acceleration from FQ3's 28% growth. The unbilled deferred revenue balance rose 27% Y/Y to $5.7B; FQ3 growth was 29%.
- The deferred revenue growth helped Salesforce generate free cash flow of $246.9M, +23% Y/Y and well above net income of $92.8M. GAAP operating expenses rose 15% Y/Y to $1.12B (compares with 26% revenue growth) - sales/marketing spend totaled $736.1M, R&D $206M, and G&A $181.4M.
- Americas revenue (73% of total revenue) rose 29% Y/Y to $1.06B. European revenue rose 21% to $255M, and Asia-Pac 17% to $134M.
- CRM +8.9% AH to $68.44, making new 52-week highs along the way.
- FQ4 results, PR
Wed, Feb. 25, 4:08 PM
Thu, Feb. 12, 2:22 PM
- A slew of enterprise IT names are outperforming after Cisco beat estimates and respectively reported 10%, 8%, and 7% Y/Y growth in enterprise, SMB, and public sector orders. The Nasdaq overall is up 1%.
- Cisco reported particularly strong figures for enterprise-focused business lines: Switching revenue rose 11%, wireless (Wi-Fi-dominated) 18%, collaboration 10%, and data center (UCS servers) 40%. Service provider demand (orders -1%) remained soft.
- Enterprise standouts include EMC (EMC +2.5%), VMware (VMW +2.3%), SAP (SAP +3.1%), Salesforce.com (CRM +3.8%), NetSuite (N +2.6%), Teradata (TDC +4.6%), Splunk (SPLK +2.5%), Varonis (VRNS +3.9%), Gigamon (GIMO +2.8%), and NetScout (NTCT +2.7%).
- EMC's gains comes in spite of rival NetApp's FQ3 miss and soft FQ4 guidance; share loss to EMC, which has been seeing healthy mid-range and scale-out NAS storage growth, could be partly to blame. VMware is adding to the Wednesday gains seen following a Bernstein upgrade.
- Earlier: Telecom/networking stocks rally thanks to Cisco
Fri, Jan. 30, 11:54 AM
- Salesforce (CRM -2.2%), ServiceNow (NOW -2.2%), Paylocity (PCTY -5.8%), Castlight (CSLT -4.1%), Cornerstone OnDemand (CSOD -3.6%), InContact (SAAS -2.2%), and Zendesk (ZEN -2.1%) are selling off after cloud ERP/HR/e-commerce software vendor NetSuite (N -11.7%) offered light Q1 and 2015 sales guidance to go with a Q4 beat. The Nasdaq is down 0.4%.
- As one would expect, NetSuite states forex has much to do with its guidance. On the CC (transcript), CFO Ronald Gill noted "the weighted average value of the foreign currencies in which we recognize international revenue has fallen more than 8% against the dollar." However, it's worth noting only 27% of NetSuite's Q4 revenue was international.
- NetSuite's Q4 numbers were solid: Subscription/support revenue grew 34%, and billings rose 34% to $201M (well above revenue of $157.9M). 54 customers were added for NetSuite's SuiteCommerce e-commerce software platform - CEO Zach Nelson humbly observes that was more than 3x the 17 customer adds rival Demandware (DWRE -1.6%) reported for Q3 (a seasonally weaker quarter).
- ServiceNow, the top player in the cloud IT service desk software market, provided above-consensus guidance on Wednesday.
Dec. 18, 2014, 2:04 PM
- With the help of stronger-than-expected hardware sales, Oracle (ORCL +9.2%) beat FQ2 estimates in spite of a 400 bps forex headwind (twice what was originally expected). FQ3 guidance was conservative after taking forex pressures into account.
- The numbers have been good enough for Oracle to surge to new highs and receive a slew of target hikes, and to lead many enterprise tech names to outperform amid a big market rally. The Nasdaq is up 1.9%.
- Microsoft (MSFT +3.2%), Cisco (CSCO +2.3%), EMC (EMC +3.7%), VMware (VMW +5.1%), and beaten-down IBM (IBM +2.8%) are among the enterprise tech names outperforming today. Others: SPLK +4.6%. CA +3.5%. RHT +3.4%. VRNS +6.3%. PCTY +5.8%. JIVE +4.6%. VMEM +5.2%. SAAS +4.7%. BRCD +3.8%.
- Oracle's healthy cloud software numbers are drawing attention: While traditional software license revenue fell 4% Y/Y, its SaaS/PaaS revenue rose 41%. SaaS/PaaS bookings totaled $170M, and are expected to be "well over" $1B in FY16 (ends May '16). Fusion cloud app bookings rose over 100%.
- On the CC (transcript), Oracle performed its customary trash-talking of cloud app rivals. "We are clearly growing faster than Salesforce (CRM +4%) and were more than three times the size of Workday (WDAY +3.2%)." Both firms are posting solid gains.
- Oracle's numbers come as Bloomberg reports the Chinese government is looking to "purge most foreign technology from banks, the military, state-owned enterprises and key government agencies by 2020." IBM, Cisco, and other U.S. firms have already seen their Chinese sales fall sharply following last year's NSA spying uproar.
Nov. 19, 2014, 5:38 PM
Nov. 19, 2014, 4:24 PM
- Salesforce (NYSE:CRM) expects FQ4 revenue of $1.436B-$1.441B and EPS of $0.13-$0.14, below a consensus of $1.45B and $0.15.
- Preliminary FY16 (ends Jan. '16) revenue guidance of $6.45B-$6.5B (+20%-21% Y/Y) is below a $6.66B consensus. The guidance assumes a $125M-$150M forex headwind. Salesforce has a history of offering conservative initial full-year guidance.
- The deferred revenue balance rose 28% Y/Y in FQ3 to $2.22B, a slight slowdown from FQ2's 31% growth. The unbilled deferred revenue balance rose 29% Y/Y to $5.4B; 32% growth was seen in FQ2.
- Americas revenue (72% of total) +29% Y/Y to $995.3M; Europe +30% to $253M; Asia-Pac +21% to $135.4M.
- GAAP opex rose 18% Y/Y to $1.07B, trailing revenue growth of 29%. Sales/marketing spend rose 22% to $709.6M.
- Free cash flow was $49.1M, down 25% Y/Y and below net income of $93.6M.
- CRM -3.4% AH. FQ3 results, PR.
Nov. 17, 2014, 11:09 AM
- LinkedIn (LNKD -4%) is seeing profit-taking after the FT reported Facebook (FB -0.7%) is planning to launch a business-focused version of its core service that will support separate work accounts and feature collaboration tools. Enterprise social networking software vendor Jive (JIVE -5.9%) is also selling of.
- Salesforce (CRM -1.5%), whose Chatter business social networking platform has seen strong growth, is off moderately. The Nasdaq is down 0.4%.
- Facebook's service will be able to lean on the company's 1.35B-strong active user base, as well as its very high Web and mobile app engagement rates (much higher than LinkedIn's).
- At the same time, the offering will have to contend with corporate wariness towards Facebook (due to Facebook's historical consumer focus and reputation as a productivity-killer), as well as LinkedIn's established base of professional accounts (332M at the end of Q3) and the popularity of business social networking tools from the likes of Jive, Salesforce, Microsoft, and IBM.
Oct. 3, 2014, 2:40 PM
- With industry M&A speculation refusing to let up, e-commerce software vendor Demandware (DWRE +16.5%) and cloud customer support software vendor Zendesk (ZEN +15.6%) are posting double-digit gains amid a market rally. NetSuite (N +5.5%), Constant Contact (CTCT +5.3%), and ServiceNow (NOW +4.2%) are also doing well.
- Cloud software stocks rallied in September after SAP struck an $8.3B deal to buy Concur. Earlier this week, Oracle suggested it's looking to make fresh software acquisitions of its own.
- NetSuite maintains close ties to Oracle; Larry Ellison is by far the company's largest shareholder. SAP bought Demandware/NetSuite rival hybris last year.
- Meanwhile, Salesforce (CRM +3%) is getting a lift from SocGen and Sterne Agee, each of whom have launched coverage with Buy ratings. Earlier today, Salesforce unveiled a version of its Desk.com low-end cloud customer support platform that's aimed at retail SMBs.
Sep. 19, 2014, 11:23 AM
- SAP (SAP -3.9%) investors have a case of sticker shock after the company agreed to pay $8.3B (to be financed through a credit facility) to buy cloud travel/expense management software leader Concur Technologies. The acquisition price is equal to 9.6x Concur's estimated FY15 (ends Sep. '15) sales.
- On the other hand, enterprise cloud software names are rallying on hopes of fresh deal activity. CRM +1.5%. N +2.7%. NOW +2.6%. PAYC +5%. ULTI +2.2%. JIVE +1.8%. DWRE +1.8%. MKTO +1.7%.
- SAP CEO Bill McDermott proclaims combining Concur's products with Ariba's cloud procurement/B2B marketplace offerings and Fieldglass' cloud labor-management software will help his company redefine "how businesses conduct commerce across goods and services, contingent workforces, travel and entertainment."
- McDermott also praises Concur's corporate travel ecosystem, which includes Hertz, Delta, Expedia, Sabre, and many others, and sees an opportunity to create real-time travel collaboration tools running on SAP's Hana in-memory database. SAP notes only 30% of Concur customers are currently SAP clients, yielding plenty of cross-selling opportunities.
Aug. 29, 2014, 1:00 PM
- Low expectations and a high short interest (11.9M shares as of Aug. 15) are proving a good mix for Veeva (VEEV +18.1%) following its FQ2 beat and guidance hike. Several firms have raised their targets.
- Workday (WDAY +5.5%), which sold off yesterday (and took peers down with it) following its FQ2 report, is following Veeva higher. As are Veeva partner Salesforce (CRM +2.1%) and several other cloud software names. NOW +2.9%. CTCT +3.4%. JIVE +2.5%. CSOD +2%. ULTI +1.9%. MKTO +1.9%.
- "We like [Veeva's] momentum with new products, the pace of customer deployments, and view the second-half guidance as likely conservative," says Deutsche (Buy).
- Pac Crest (Outperform) likes the fact Veeva's billings and subscription revenue each rose over 60% Y/Y, and that its large deal activity also grew. It sees a $5B addressable market for life sciences CRM/content management software.
Aug. 28, 2014, 2:45 PM
- Workday (WDAY -4.7%) has received several target hikes after beating FQ2 estimates and upping its FY15 (ends Jan. '15) guidance. But there have also been some cautious notes focused on cloud HR/financial software giant's valuation.
- Citi observes Workday trades at 15x 2015E sales, and says it has trouble seeing upside catalysts at current levels. Goldman points out Workday is trading at 11x estimated enterprise value/billings even if its upside scenario plays out.
- Cantor (target raised to $121) sees several reasons to be bullish. Among them: The ramp of Workday's recently-launched recruiting product; the pending launch of Workday Student; an enterprise software upgrade cycle; strong international growth (echoes of Salesforce); and expected announcements at the November Workday Rising conference.
- Wedbush (target raised to $106) expects new big data/analytics products to be shown off at the conference. It also sees room for a fresh guidance hike in 3 months, though it thinks it might be smaller than yesterday's hike.
- Workday used its CC (transcript) to hike its FY15 billings guidance by $50M to $940M-$960M (above revenue guidance of $760M-$770M). FQ3 billings guidance is at $225M-$230M (above revenue guidance of $200M-$205M).
- Salesforce (CRM -2%) and several other cloud software names are following Workday lower. CSOD -3.3%. MKTO -3.3%. DWRE -2.2%. JIVE -1.6%. N -1.4%.
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