Earnings Reports

Google Ad

Cloud enterprise software firm Salesforce.com reported better than expected third quarter earnings after the market Tuesday. Technology stocks have been sold off heavily recently and $CRM was up around 3% after the release. Salesforce saw growth from it's $6.5 billion acquisition of MuleSoft.


Salesforce

CRM cloud software has been one of the fastest growing tech spaces and Salesforce contues to add tier one customers. Their major competitor is Oracle $ORCL.

salesforce.com, inc. NYSE: CRM  Reported Earnings After Close Tuesday

$0.61 Beat $0.50 EPS And $3.39 Beat $3.37 billion Forecast in Revenue. 

Earnings Preview

Salesforce's (CRM) reported third-quarter fiscal 2019 earnings of adj'd EPS 61c beating the consensus 50c confirming the high expectations for gains from a rapid adoption of CRM's cloud-based solutions. ( Salesforce expectations were down from the 53 cents a share expected at the beginning of the quarter. Estimize, a software platform that uses crowdsourcing from hedge-fund executives, brokerages, buy-side analysts and others, calls for earnings of 55 cents a share.)

Revenue was $3.39 billion higher than the analysts expected revenue of $3.37 billion, according to polls by FactSet. Salesforce had predicted revenue of $3.36 billion to $3.37 billion. Estimize expected revenue of $3.39 billion. CRM has four major cloud service segments,Sales Cloud, Service Cloud, Platform and other. Marketing & Commerce Cloud continue to boost the company’s subscription and support revenues, the major contributor.

Growing Cloud Adoption Salesforce’s varied cloud offerings are helping it expand clientele. The rapid adoption of the SaaS-based Salesforce platform has demonstrated solid demand for the company’s cloud-based solutions. The question is going forward in this less confident environment of higher rates.

Continued adoption of Heroku and the Lightning is helping Salesforce Platform revenues. The company is actively leveraging its Sales Cloud and Marketing Cloud, and Service Cloud and Einstein to strengthen customer-centric growth across its portfolio of brands. In the last reported quarter, Sales Cloud, Service Cloud, Platform and other, and Marketing & Commerce Cloud grew 12.7%, 27.4%, 53.8% and 37.4%, respectively.

Sales Cloud service is the company’s largest contributor of subscription and support revenues, surpassed the $1 billion mark in quarterly revenues for the first time in the fiscal second quarter. For the fiscal third quarter, the consensus estimates for Sales Cloud revenues was $1.03 billion. The Service Cloud and Marketing Cloud.consensus was $923 million.

salesforce.com, inc. NYSE: CRM

Market Reaction - After hours 131.91 +4.37 (+3.43%) 

Highlights

  • Salesforce is investing in artificial intelligence and analytics tools to help customers make better use of their data leading to a 22 percent increase in research and development costs in the quarter to $481 million
  • Sales and marketing costs rose 36 percent to $1.59 billion.

CRM Q3 2018 earnings

Outlook

  • For the fourth quarter, Salesforce said it expects revenue of $3.55 billion to $3.56 billion, beating the $3.52 billion average analyst estimate, according to Refinitiv.
  • However, the earnings forecast of 54 cents to 55 cents a share, excluding certain items, trailed the average estimate of 57 cents.

 

salesforce.com, inc. Q2 Earnings Recap

 $0.71 Beat $0.47 EPS And $3.28 billion Beat $3.23 billion forecast in revenue. 

Earnings 

  • Salesforce.com net income increased six times to $299 million or $0.39 per share. Excluding special items, earnings per share almost doubled to $0.71 well ahead of analyst views for 47 cents.
  • $CRM reported revenue of $3.28 billion, up 27% from the year-ago period and above predictions of $3.23 billion.

 

salesforce.com, inc. NYSE: CRM

Market Reaction - After hours $149.70 −$5.10 (-3.29%)

Highlights

  • Subscription and support revenues were $3.06 billion, an increase of 28% year-over-year.
  • Professional services and other revenues were $221 million, an increase of 14% year-over-year.
  • Salesforce Platform reporting the highest growth of 54%.
  • Geographically, the Americas, which contributes 71% to the company’s revenue, jumped 25%
  • Europe posted the highest growth of 35% for the quarter.

CRM Earnings Q2 18

Outlook

Salesforce lowered it's third-quarter outlook on adjusted earnings in the range of 49 cents to 50 cents a share. This was below expectations of 53 cents. Salesforce.com revenue guidance is in the range of $3.35 billion to $3.65 billion. The midpoint was above analyst views for $3.35 billion.

For the fiscal year 2019, the company raised its revenue outlook to a range of $13.125 billion to $13.175 billion from the prior estimate of $13.075 billion to $13.125 billion. GAAP EPS is now expected to be in the range of $0.97 to $0.99 and non-GAAP EPS is now predicted to be $2.50 to $2.52.

Source: Saleforce.com, AlphaStreet

Log in to comment
Discuss this article in the forums (1 replies).