Enterprise cloud company salesforce.com (NYSE: CRM) just posted its results for its second quarter of fiscal 2018, and they didn't disappoint. Thanks to continued rapid top-line growth during the quarter, revenue hit an annual revenue run rate of $10 billion -- a milestone the company achieved faster than any other enterprise cloud software provider in history.
Continue Reading Below
Salesforce's second quarter was flush with impressive numbers as the company continued to benefit from the momentum of its leadership position in customer relationship management (CRM) enterprise solutions.
3: In its second-quarter earnings release, Salesforce raised its guidance for its fiscal 2018 revenue. Management guided for full-year revenue of $10.35 billion to $10.40 billion, representing 23% to 24% year-over-year growth. This guidance range is up $100 million compared to its previous guidance.
But this isn't the first time Salesforce has raised its guidance for fiscal 2018. Indeed, management has raised its revenue expectations for the period three times. Its initial guidance for fiscal 2018 was issued in the company's third-quarter earnings release in fiscal 2017. At the time, management guided for full-year revenue to be between $10.1 billion and $10.15 billion.
On a similar note, Salesforce also raised its expectations for full-year GAAP earnings per share and non-GAAP EPS. Management now expects fiscal 2018 GAAP and non-GAAP EPS ranges of $0.07 to $0.09 and $1.29 to $1.31, up from previous guidance ranges of $0.06 to $0.08 and $1.28 to $1.30, respectively.
26%: Salesforce's second-quarter revenue climbed 26% year over year, notably accelerating compared to the 25% year-over-year growth Salesforce posted in Q1.
Continue Reading Below
$2.56 billion: Salesforce's second-quarter revenue of $2.56 billion handily exceeded management's expectations for the quarter. Management had guided for second-quarter revenue to be between $2.51 billion and $2.52 billion.
38%: Salesforce's non-GAAP EPS during Q2 climbed about 38%, from $0.24 in the year-ago quarter to $0.33 in the second quarter of 2018.
$3.5 billion: Salesforce has evolved into a cash machine. The company's operating cash flow has steadily climbed over the years -- and this trend continued in Q2. Salesforce generated $331 million from operations during the quarter, helping bring the company's total cash, cash equivalents, and marketable securities to $3.5 billion, up from $3.22 billion in Salesforce's first quarter of fiscal 2018.
195 basis points: Salesforce's second-quarter non-GAAP operating margin climbed 195 basis points, to 14.9%. Meanwhile, its GAAP operating margin gained 38 basis points year over year, coming in at 2%.
34%: Salesforce's Europe, Middle East, and Africa (EMEA) geographic segment was the company's strongest market, with revenue up 34% year over year. EMEA was Salesforce's second-largest geographic segment, with quarterly revenue of $464 million.
24%: Importantly, Salesforce's core Americas segment, which brought in a significant $1.9 billion of revenue during the quarter, is still growing healthily. Americas revenue was up 24% year over year.
$20 billion: What's the next stop for Salesforce? More growth. After hitting a $10 billion annual revenue run rate, and with combined billed and unbilled deferred revenue above $15 billion, management has its sights set on annual revenue of "$20 billion and beyond," said Salesforce CEO Marc Benioff in the company's second-quarter earnings release.
Investors should keep an eye on revenue growth and profitability as management continues to prove its business model's ability to gain market share and benefit from economies of scale.
10 stocks we like better than Salesforce.com
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Salesforce.com wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of August 1, 2017