Salesforce Boasts Q4 Subscription and Support Revenue of $2.11 Billion

Last week SaaS provider Salesforce (NYSE: CRM) posted its fiscal 2017 fourth quarter and full year results, including fourth quarter revenue of $2.29 billion,

Subscription News: Salesforce Boasts Q4 Subscription and Support Revenue of $2.11 Billion

Source: Salesforce

Last week SaaS provider Salesforce (NYSE: CRM) posted its fiscal 2017 fourth quarter and full year results, including fourth quarter revenue of $2.29 billion, a 27 percent increase year-over-year, and subscription and support revenue of $2.11 billion, a 25 percent increase year-over-year. Professional services and other revenue made up the remaining $183 million, a 45 percent increase year-over-year. Subscription and support revenue represents 92 percent of total revenue, while professional services and other revenue account for the other 8 percent.

Other fiscal 2017 fourth quarter highlights include:

  • Q4 operating cash flow was $706 million, a 50 percent increase year-over-year.
  • Deferred revenue was $5.54 billion, a 29 percent increase year-over-year.
  • Unbilled deferred revenue was $9.0 billion, a 27 percent increase year-over-year.
  • Earnings per share (GAAP) were a loss of $0.07 per share.

Subscription News: Salesforce Boasts Q4 Subscription and Support Revenue of $2.11 Billion

Source: Salesforce

“Salesforce continues to deliver incredible innovation and unprecedented customer success,” said Marc Benioff, Salesforce chairman and CEO, in a February 28 statement. “We led the industry as the first to bring cloud, social and mobile to CRM, and now with our latest release, we are making artificial intelligence available to millions of Salesforce users with Einstein.

Fiscal full year 2017 highlights include:

  • Full year revenue was $8.39 billion, a 26 percent increase year-over-year.
  • Subscription and support revenue was $7.76 billion, a 25 percent increase year-over-year.
  • Professional services and other revenue was $636 million, a 38 percent increase year-over-year.
  • Operating cash flow was $2.16 billion, a 29 percent increase year-over-year.
  • Earnings per share (GAAP) were $0.26 per share.

Keith Block, vice chairman, president and COO of Salesforce, also commented on the company’s results.

“We drove tremendous execution during the quarter, delivering nearly $2.3 billion in revenue. And for fiscal 2018, we expect to deliver more than $10 billion in revenue – reaching that milestone faster than any enterprise software company in history. No other software company of our size and scale is growing at this rate,” said Block.

Salesforce offered the following guidance for fiscal year 2018 Q1:

  • Revenue is estimated to be between $2.34 billion and $2.35 billion, an increase of between 22 percent and 23 percent year-over-year.
  • GAAP loss per share is estimated to be between ($0.02) and ($0.03).

Salesforce offered the following guidance for fiscal year 2018:

  • Revenue is estimated to be between $10.15 billion to $10.20 billion, an increase between 21 percent and 22 percent year-over-year.
  • GAAP diluted earnings per share are estimated to be between $0.05 and $0.07.

Investors were lukewarm on the results. On the day the earnings results were posted, February 28, stock closed at $81.35 per share. On March 7 at 7:12 PM EST, stock was $82.97 per share, so it has inched up a bit since last week. Compared to its stock price of $69.82 per share on March 8, 2016, Salesforce’s value has increased.

Subscription News: Salesforce Boasts Q4 Subscription and Support Revenue of $2.11 Billion

Source: Google Finance – Yahoo Finance – MSN Money

Insider Take:

As Market Realist points out, Salesforce has 19.7 percent of market share in the customer relationship management space, and it is positioning itself for more growth in fiscal year 2018. Last year Salesforce acquired several companies – Demandware, Quip, Beyondcore, Implisit Insights, Coolan, PredictionIQ and Your SL, all to help it with Einstein, the company’s artificial intelligence product, reports Forbes. If Salesforce continues its double-digit growth and does well with Einstein, Salesforce is setting itself up for a very strong year.

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