Salesforce Non-GAAP EPS of $1.68 beats by $0.32, revenue of $8.38B beats by $390M

• Salesforce press release (NYSE:CRM): Q4 Non-GAAP EPS of $1.68 beats by $0.32.
• Revenue of $8.38B (+14.4% Y/Y) beats by $390M.
• Current Remaining Performance Obligation of $24.6 Billion, up 12% Y/Y, 13% CC.
• Returned $2.3 Billion in Fourth Quarter and $4.0 Billion in FY23 to Shareholders in the Form of Share Repurchases.
• Announces Share Repurchase Program increased to $20 billion.
• Q1 Outlook: Revenue Guidance of $8.16 - $8.18 Billion vs. consensus of $8.03B, Y/Y Growth ~10%, FX Impact ~($150M) Y/Y FX; Non-GAAP Earnings per Share $1.60 - $1.61 vs. consensus of $1.32.
• 2024 Outlook: Revenue Guidance of $34.5 - $34.7 Billion vs. consensus of $34.13B, Y/Y Growth ~10%, Non-GAAP Operating Margin ~27.0%; Non-GAAP Earnings per Share $7.12 - $7.14 vs. consensus of $5.87, Operating Cash Flow Growth (Y/Y) 15% - 16%.
• Shares +9.35%.

Comments

[GDPPP]

Fade the CRM rally. This bump higher won't stay for long. Non GAAP EPS is just bogus accounting as this company still hasn't found a way to make real profits at high margins.

[Amstragram]

What happened with GAAP earnings, I mean this is so distorted by the SBC, buying back stocks is what the company pays for it, at the end this is cash out of the doors.

[TopGun2]

@Amstragram agreed. The GAAP earnings should come first

[TopGun2]

@Amstragram, here are the numbers; quite a difference. And I know, non-recurring, except there is always a non-recurring, which costs money.

EPS Normalized Actual
$1.68 (Beat by $0.32)

EPS GAAP Actual
-$0.10 (Beat by $0.17)

[Amstragram]

@TopGun2 aren’t they still printing 800m$ of new shares per quarter that find their way to “FCF” as well ?

[quinnman]

Still stunned that Dow Jones was so hot to be woke they dropped Exxon for this pig. Non GAAP is BS but the long only crowd loves it.

[Lunch_Buffet]

Why does SeekingAlpha report Non-GAAP EPS, when GAAP is the generally accepted for US public companies? Can someone please shed light on this?

[Nir Nabar]

@Lunch_Buffet , Non- GAAP removes the one time charges and if you really believe that they are one time, take out the noise. Hope this helps.

[Lunch_Buffet]

@Nir Nabar no matter, if it is one time or recurring, finally that’s the money ‘spent’, so not available.. is my understanding correct?

[Nir Nabar]

@Lunch_Buffet , correct but the logic is as the company matures they will not allocate less shares to the employees in the future .

[ghoppe]

Just think what they could make for shareholders if they did not have in-office baristas and pay Matthew Mcconaughey $10m annually for "creative services"

[SquareBear]

@ghoppe Baristas aren’t the issue. The $1B Dreamforce event. Marc’s vanity globetrotting. Excessive highly paid “keynote” executives (talkers, not doers). The office of environmental impact. The office of political activism. The various now redundant roles which exist from overpriced acquisitions. Expensive parties and self congratulatory events for senior leaders (talkers, not doers).

Loads of $0 return investing occurring at CRM in my opinion. But it’s not the baristas haha

[ghoppe]

@SquareBear my point is consistent with yours. Waste, vanity. Stop living like you have money to burn. Focus on the business and not the image. I have a starter position and want more but only if they change their ways.

[SquareBear]

@ghoppe yep! I think investors will grow more interested if they can attenuate that SBC drag over time.
I think they will - it’s part of the company maturation process.
As the company grows, the stock gets more liquid (vs the early days of huge options grants and options for all employees). And more reasonable RSU grants are given to leaders and top performers.

[Value in the future]

After so many years, people are still chasing a company that essentially makes almost no profits for shareholders. They repurchased tens of billions stocks but the shareholders' ownership didn't increase. What exactly do investors get?

[yetanotherinvestor]

@Value in the future This is why I hate companies not returning profits to investors in the form of dividends, while they are enjoying big paychecks and benefits and perks. GOOG is a very good example.

[Value in the future]

@yetanotherinvestor Google actually made a lot of money for shareholders. Last year Google earned almost $60B, CRM almost nothing.

[Legitimate]

@yetanotherinvestor salesforce is issuing more shares than they buyback. At least Google is doing the opposite of that.

[mwilson801]

Take their 31.4b in revenue for FY23.
Grow that 15% for 5 years, 10% for 5 more years.
Their current free cash flow is 6.3b (20% of revenue): stock-based comp eats up half of that, so we are down to 10%. Suppose they distribute all that as buybacks going forward. Applying a terminal cashflow multiple of 20 and discounting at 10%, you get $110.
I skeptically nibbled some at 150 after it consolidated above the 50SMA and broke above the trendline.
I am totally out here.

[cpraderas]

@mwilson801 You’ve already been rewarded. I’m expecting a lot more over the next few years!

[mwilson801]

@cpraderas Why? Am I missing something?
What are you expecting? Continued exponential growth? Margin explosion? Markets continuing to bid up something that is not there?

[cpraderas]

@mwilson801 Not exponentially, just continued growth at minimum same as pre pandemic. Margins will easily get over 30, probably to 40-60. CRM got over-confident after years of easy growth and became progressively sloppy. Now they’re getting efficient again and remotivated, same as most big tech.

[Mark Krieger]

don't be timid to take profits. this one could see profit taking hit before extended hours trading ends.

short the rip and cover the dip to make a fast buck

[cpraderas]

@Mark Krieger Looks like you’re wrong so far

[Winnertakesall]

Such terrible reporting.... the company actually lost money. "GAAP Diluted Loss per Share of $(0.10) and Non-GAAP Diluted Earnings per Share ("EPS") of $1.68"... can anyone explain why the editor excluded the GAAP results?

[Lord Gekko]

@Winnertakesall can't argue with the price action though. quite substantial, especially for a larger company

[jakefountain]

@Winnertakesall In January Marc Benioff, Salesforce’s co-founder and CEO, said the company would cut 10% of its workforce, representing over 7,000 people, and that restructuring strategy led to $828 million in costs during the quarter.

[Philipp Stuelcken]

@Winnertakesall They guided for 10% GAAP-Margin after 3,9% this year so not that terrible.

[ddrv]

Wow! They knocked it out of the ballcourt!

[Stefan Redlich]

@ddrv not really

[JDoe20]

“Returned $2.3 Billion in Fourth Quarter and $4.0 Billion in FY23 to Shareholders in the Form of Share Repurchases.”

So, they’ve “returned” $4B via buybacks already in FY23 - through February??

[Cogency Investments]

@JDoe20 I believe there 2023 YE is soon. They don’t use calendar year end.

[epowerewe]

@JDoe20 teď se naučit jak to převést

[mwilson801]

@JDoe20 They virtually returned nothing in FY23: they repurchased 4b and issued 3.3b to pay employees.
FY23 ended in January for Salesforce.

[vavemula]

all these pundits and seeking alpha authors wrong again. More reason to do your own research. 14% growth not bad all, beat EPS comfortably and $20M buyback.

[Philipp Stuelcken]

27% Non-GAAP margin forecast. Nice!

[JB170]

@Philipp Stuelcken my issue is that ususally that drops to low single digits in Gaap earnings, they spend a boatload of money in comp.

[cpraderas]

@Philipp Stuelcken And going to 30% actually. I think they can almost pick whatever number they want. They’re a cash cow once they get super focused and the economy just turns a bit

[1winner]

revenue growth continues to slow. valuation makes no sense. I'd be selling the AH pop

[Another Mountain's Rock Investing]

@1winner yea valuation cheap~!

[gumy]

Wow that revenue beat is unbelievable

[GERARDO15]

CNBC Talking Heads wrong as usual!!!! Go CRM!!!

[ynwa90]

hell yeah. Benioff has reentered the chat!

[mantles]

@ynwa90 i’ll never trust that arrogant man again!