Last week, CRM SaaS company Salesforce (NYSE: CRM) reported record results for the third quarter of fiscal year 2019, ended October 31, 2018. The company reported revenue of $3.39 billion, a 26 percent increase year-over-year, and unearned revenue of $5.38 billion, a 25 percent increase year-over-year. Subscription and support revenue was $3.17 billion, a 26 percent increase year-over-year. Professional services and other revenue made up the remaining $224 million, a 15 percent increase year-over-year.

As a result of the stellar quarter, Salesforce announced it would raise its fiscal year 2019 revenue guidance to between $13.23 billion and $13.24 billion.

“Given the strength of this quarter’s results and the incredible customer demand we are seeing, we are again raising our FY19 revenue guidance and initiating our full year fiscal 2020 revenue guidance at $16 billion at the high end of the range,” said Keith Block, co-CEO of Salesforce, in a November 27 news release.

“We are thrilled with our results and our strong momentum heading into Q4 and FY ’20. It’s been an outstanding year-to-date, and we are well on our way to achieving our goal of $21 billion to $23 billion of revenue in FY ’22, faster than any enterprise software company in history,” Block said on the earnings call, transcribed by Thomson Reuters.

Other highlights for the quarter include:

• Third quarter operating cash flow was $143 million, a 14 percent increase year-over-year.
• Remaining performance obligation – which is future revenue under contract but not yet recognized – was $21.2 billion, a 34 percent increase.
• Net income was $105 million and diluted earnings per share (GAAP) were $0.13.
• Total cash, cash equivalents and marketable securities at the end of the quarter were $3.45 billion.
• The company expanded a nine-figure relationship with a customer, one of the largest financial institutions in the world.

Marc Benioff, Salesforce chairman and co-CEO, started off his remarks by thanking the first responders who have helped with the California wildfires and said their hearts are with the victims and their families. He then went on to talk about Salesforce’s record quarter and the company’s plans for the future.

“We are all in this next year…this is all about the Fourth Industrial Revolution. This is about the cloud. It’s about artificial intelligence, machine learning, deep learning,” said Benioff on the earnings call. “…but when it gets right down to digital transformation, well, every digital transformation starts and ends for all of our customers with their customer.”

“It’s all about the customer. And Salesforce remains this global CRM leader. We’re the #1 CRM. We’ve continued to take share and outpace the market. You can see that in our results as we’re moving to $16 billion,” Benioff said. “This is because we are the only company that is dedicated 100 percent to CRM at this size and scale. And we’re the only company with a complete Customer Success Platform for both these B2B customers and their B2C companies as well.”

Subscription and support revenue account for 93 percent of total revenue. Professional services and other revenue make up the remaining 7 percent.

For the fourth quarter of fiscal year 2019, Salesforce estimates revenue of $3.551 billion to $3.561 billion, a 25 percent increase year-over-year, and GAAP diluted earnings per share of $0.08 to $0.09.

Since the earnings report was released on November 27, Salesforce stock has risen from $127.54 per share to $144.15 per share, as of 7:34 p.m. Eastern yesterday. This is quite a jump from Salesforce’s share value a year ago when it was $99.85 per share on December 4, 2018.

Insider Take:

Salesforce is doing well and singing its praises to the world. Investors are responding in kind. They like what they see, and they are encouraged by Salesforce updated guidance. There is no reason to expect anything less than a solid finish for fiscal year 2019 for Salesforce.