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Cloud enterprise software firm Salesforce.com reported better than expected fourth quarter earnings after the market Monday. $CRM fell on the news however after what was seen as disappointing guidance. 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 continues to add tier one customers. Their major competitor is Oracle $ORCL.

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

$0.70 Beat $0.55 EPS And $3.60B Beat $3.55 billion Forecast in Revenue. 

Earnings 

Salesforce's (CRM) reported fourth-quarter fiscal 2019 earnings of 70 cents per share, excluding certain items ahead of 55 cents per share as expected by analysts, according to Refinitiv. Revenue was $3.60 billion ahead of $3.56 billion as expected by analysts, according to Refinitiv. For fiscal 2019 and the latest quarter, revenue rose 26 percent, Salesforce said. Full-year revenue reached $13.28 billion.

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. 

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.

salesforce.com, inc. NYSE: CRM

Market Reaction - After hours $154.39 −4.11 (-2.59%)

“This is just the beginning, which is why we’re now targeting $26 to $28 billion in revenue by FY23 – organically doubling our revenue again in the next four years,” said Salesforce co-CEO Keith Block.

Highlights

  • Subscription and support revenue accounted for $3.38 billion of sales in the quarter,
  • Professional services coming in at $228 million.

 

Salesforce earnings Q4 2019

Outlook

Salesforce forecast  earnings per share of 60 cents to 61 cents on $3.67 billion to $3.68 in revenue in the fiscal first quarter. Analysts polled by Refinitiv had been looking for guidance of 63 cents in earnings per share, excluding certain items, on $3.70 billion in revenue.

Full-year guidance was in line with estimates. For the entire 2020 fiscal year Salesforce is forecasting $2.74 to $2.76 in earnings per share, excluding certain items, on $15.95 billion to $16.05 billion in revenue. Refinitiv estimates were $2.75 in earnings per share, excluding certain items, and revenue of $15.99 billion. 

salesforce.com, inc Q3 Earnings Recap

$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.

Source: Saleforce.com, AlphaStreet

From The TradersCommunity Research Desk

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