Salesforce Posts Strong FQ2 2016 Results On “Massive” Opportunity
CRM cloud service provider Salesforce (CRM) posted strong FQ2 sales and earnings, beating Wall Street estimates amid solid performances in subscription and support sales and professional services.
Total sales for the period increased 24 percent year-over-year to $1.63 billion as the company recorded non-GAAP earnings per share of $0.19. Subscription and support revenues rose 23 percent from last year to $1.52 billion while professional services and other revenues spiked 32 percent year-over-year to $113 million, the company said.
Salesforce’s cash reserves gained another $304 million during the quarter, an increase of 24 percent from the same time last year, to finish the period at $2.07 billion.
Marc Benioff, Salesforce chief executive, credited a “massive customer relationship opportunity” for fueling the company’s growth.
“Right now every company in the world is looking to strengthen how they connect with their customers,” said Benioff on an earnings call. “This is a massive customer relationship management opportunity. Perhaps it is the largest opportunity in the software industry. Every company is looking to connect with their customer in a whole new way. Every company is looking for a whole new type of customer success and no company is better positioned to deliver this to our customers than Salesforce.”
Salesforce also raised its full fiscal year 2016 revenue and earnings guidance from the prior outlook provided in May. The company now expects full fiscal year 2016 revenue to come in at about $6.60 billion for a 23 percent jump from last year. Non-GAAP EPS is expected to be in the range of $0.70 to $0.72 while GAAP EPS loss is projected to be about $0.17 to $0.15, the company said.
The vendor projects FQ3 revenue to be about $1.69 billion to $1.70 billion, an increase of up to 23 percent year-over-year. GAAP EPS loss is for the period is expected to be in the range of $0.02 to $0.01 with non-GAAP EPS forecast in the $0.18 to $0.19 range, the company said.
“I’ll tell you, this second quarter, well this was just the best quarter we have ever had at salesforce.com, and just one quarter after crossing the $6 billion annual revenue run rate milestone, we have now surpassed a $6.5 billion revenue run rate,” said Benioff.
“That’s faster than any enterprise software company in history, and we anticipate we’re going to reach a $7 billion run rate by the end of this year and we are now well on our way,” he said. “I mean, we have a clear trajectory to accomplishing our goal of being the fastest ever to reach $10 billion in revenue, so exciting. And no one in our industry is producing this kind of results of our size and scale.”
Salesforce’s Dreamforce extravaganza is slated for September 15-18 in San Francisco. The vendor is expecting upwards of 150,000 people to attend the event and another 10 million to participate online.