Salesforce Soundly Beats Earnings Expectations for Q4
Salesforce.com just announced earnings that beat the expectations of the Street, and its shares are soaring in after-hours trading.
Sales were $835 million, up 32 percent over the year-ago period, and were well ahead of the $831 million that had been the consensus expectation of Wall Street analysts. Earnings per share on a non-GAAP basis were 51 cents, 11 cents above the consensus of 40 cents. On an old-school GAAP basis, like most cloud companies, Salesforce lost $20.8 million, or 14 cents a share. Salesforce shares rose by more than $6, or nearly 4 percent, in after-hours trading.
The company also finished its fiscal year with more than $3 billion in sales, a goal that CEO Marc Benioff (pictured) had set last year.
Here’s Salesforce’s original announcement:
Salesforce.com Announces Fiscal 2013 Fourth Quarter and Full Year Results
– Quarterly Revenue of $835 Million, up 32% Year-Over-Year
– Full Year Revenue of $3.05 Billion, up 35% Year-Over-Year
– Deferred Revenue of $1.86 Billion, up 35% Year-Over-Year
– Unbilled Deferred Revenue Increases to Approximately $3.5 Billion
– Full Year Operating Cash Flow of $737 Million
– Raises FY14 Revenue Guidance to $3.82 – $3.87 Billion
– Initiates FY14 Non-GAAP EPS Guidance of $1.93 – $1.97SAN FRANCISCO, Feb. 28, 2013 /PRNewswire/ — Salesforce.com (CRM), the enterprise cloud computing (http://www.salesforce.com/cloudcomputing/) company, today announced results for its fiscal fourth quarter and full fiscal year ended January 31, 2013.
“Salesforce.com had a spectacular finish to its fiscal year. We delivered more than $3 billion in revenue and constant currency revenue growth of 37%,” said Marc Benioff, Chairman and CEO, salesforce.com. “Salesforce.com continues to be the fastest growing top ten enterprise software company in the world.”
Salesforce.com delivered the following results for its fiscal fourth quarter and full fiscal year 2013:
Revenue: Total Q4 revenue was $835 million, an increase of 32% on a year-over-year basis. Subscription and support revenues were $785 million, an increase of 32% on a year-over-year basis. Professional services and other revenues were $49 million, an increase of 31% on a year-over-year basis.
For the full fiscal year 2013, the company reported revenue of $3.05 billion, an increase of 35% from the prior year. Subscription and support revenues were $2.87 billion, an increase of 35% on a year-over-year basis. Professional services and other revenues were $181 million, an increase of 29% on a year-over-year basis.
Earnings per Share: Q4 GAAP net loss per share was ($0.14), and non-GAAP diluted earnings per share was $0.51. The company’s non-GAAP results exclude the effects of $108 million in stock-based compensation expense, $21 million in amortization of purchased intangibles, and $6 million in net non-cash interest expense related to the company’s convertible senior notes, and is based on a non-GAAP tax rate of approximately 29%. GAAP EPS calculations are based on a basic share count of approximately 145 million shares. Non-GAAP EPS calculations are based on approximately 153 million diluted shares outstanding during the quarter, including approximately five million shares associated with the company’s convertible senior notes.
For the full fiscal year 2013, GAAP net loss per share was ($1.92), and non-GAAP diluted earnings per share was $1.63. The company’s non-GAAP results exclude the effects of $379 million in stock-based compensation, $149 million related to the one-time tax valuation allowance established in the fiscal third quarter, $88 million in amortization of purchased intangibles, and $24 million in net non-cash interest expense related to the convertible senior notes, and is based on a non-GAAP tax rate of approximately 33%. GAAP EPS calculations are based on a basic share count of approximately 141 million shares. Non-GAAP EPS calculations are based on approximately 149 million diluted shares outstanding during the year, including approximately four million shares associated with the company’s convertible senior notes.
Cash: Cash generated from operations for the fiscal fourth quarter was $282 million, an increase of 17% on a year-over-year basis. For the full fiscal year 2013, operating cash flow totaled $737 million, up 25% year-over-year. Total cash, cash equivalents and marketable securities finished the quarter at $1.8 billion.
Deferred Revenue: Deferred revenue on the balance sheet as of January 31, 2013 was $1.86 billion, an increase of 35% on a year-over-year basis. Current deferred revenue increased by 39% year-over-year to $1.80 billion, benefited in part by longer invoice durations. Non-current deferred revenue decreased by 27% year-over-year to $64 million. Unbilled deferred revenue, representing business that is contracted but unbilled and off balance sheet, ended the fourth quarter at approximately $3.5 billion, up from approximately $2.2 billion at the end of the fiscal 2012.
As of February 28, 2013, salesforce.com is initiating revenue and EPS guidance for its first quarter of fiscal year 2014, and initiating EPS guidance for its full fiscal year 2014. In addition, the company is raising its full fiscal year 2014 revenue guidance previously provided on November 20, 2012.
Q1 FY14 Guidance: Revenue for the company’s first fiscal quarter is projected to be in the range of $882 million to $887 million, an increase of 27% to 28% year-over-year.
GAAP net loss per share is expected to be in the range of ($0.44) to ($0.42), while diluted non-GAAP EPS is expected to be in the range of $0.40 to $0.42. The non-GAAP estimate excludes the effects of stock-based compensation expense, expected to be approximately $113 million, amortization of purchased intangibles related to acquisitions, expected to be approximately $24 million, and net non-cash interest expense related to the convertible senior notes, expected to be approximately $7 million. EPS estimates assume a GAAP tax rate of approximately negative 59%, which reflects the estimated quarterly change in the tax valuation allowance, and a non-GAAP tax rate of approximately 35%. The GAAP EPS calculation assumes an average basic share count of approximately 147 million shares, and the non-GAAP EPS calculation assumes an average fully diluted share count of approximately 158 million shares.
Full Year FY14 Guidance: Revenue for the company’s full fiscal year 2014 is projected to be in the range of $3.82 billion to $3.87 billion, an increase of 25% to 27% year-over-year.
For the company’s full fiscal year 2014, GAAP net loss per share is expected to be in the range of ($1.22) to ($1.18) while diluted non-GAAP EPS is expected to be in the range of $1.93 to $1.97. The non-GAAP estimate excludes the effects of stock-based compensation expense, expected to be approximately $503 million, amortization of purchased intangibles related to acquisitions, expected to be approximately $85 million, and net non-cash interest expense related to the convertible senior notes, expected to be approximately $27 million. EPS estimates assume a GAAP tax rate of approximately negative 54%, which reflects the estimated annual change in the tax valuation allowance, and a non-GAAP tax rate of approximately 35%. Due to the tax valuation allowance, however, the GAAP tax rate could be volatile and is therefore difficult to forecast. The GAAP EPS calculation assumes an average basic share count of approximately 150 million shares, and the non-GAAP EPS calculation assumes an average fully diluted share count of approximately 161 million shares.
