Salesforce.com Delivers Broad-Based Growth
Salesforce.com (NYSE: CRM) reported fiscal 2018 third-quarter results on Nov. 21. The global leader in customer relationship-management software is enjoying strong demand for its cloud-based solutions.
Salesforce.com results: The raw numbers
What happened with Salesforce.com this quarter?
Total revenue leapt 25% year over year, to $2.68 billion, and 23% in constant currency. Salesforce delivered robust growth across all of its major product lines.
This impressive growth should continue, as Salesforce's deferred revenue -- basically subscription revenue that's been booked from contracts, but not earned yet -- increased 26%, to $4.39 billion. And unbilled deferred revenue -- essentially, business that's contracted, but not yet invoiced -- jumped 34%, to $11.5 billion.
Moreover, Salesforce is becoming more profitable as it grows. GAAP operating income rose 419 basis points, to 4.3%. And non-GAAP operating income -- which excludes stock-based compensation and acquisition-related charges -- improved 360 basis points, to 16.3%.
All told, non-GAAP earnings per share surged 63%, to $0.39.
Salesforce also announced the promotions of Bret Taylor to chief product officer and Alex Dayson to chief strategy officer. Taylor was previously Facebook's chief technology officer, as well as the CEO of Quip, which Salesforce acquired in 2016. Dayson's career at Salesforce spans back to 2008, when he joined its leadership ranks after it acquired his company, InStranet.
"Bret is going to drive our product vision, design, development, go-to-market strategy, and Alex is going to lead strategic initiatives, working more closely with our customers on product direction and transformation," Chairman and CEO Marc Benioff said during a conference call with analysts.
Salesforce expects fourth-quarter revenue of $2.801 billion to $2.811 billion, representing year-over-year growth of 22% to 23%. GAAP and non-GAAP earnings per share (EPS) are projected to be $0.03 to $0.04 and $0.32 to $0.33, respectively. And deferred revenue is forecast to rise 19% to 20%.
In turn, Salesforce's full-year fiscal 2018 guidance now includes:
- Revenue of $10.43 billion to $10.44 billion, up from a prior estimate of $10.35 billion to $10.40 billion.
- GAAP EPS of $0.12 to $0.13, up from $0.07 to $0.09.
- Non-GAAP EPS of $1.32 to $1.33 versus $1.29 to $1.31.
"Salesforce delivered a record third quarter, and we're on a path to exceed $20 billion faster than any enterprise software company in history," added Benioff.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Facebook. The Motley Fool recommends Salesforce.com. The Motley Fool has a disclosure policy.