Salesforce: Brex-pensive mistake, guys. Your little referendum dented our brilliant results
CEO shoots for $10bn revs, though 2017 will start slowly
Salesforce.com has posted record quarterly and annual results.
The company today announced its fourth quarter and full 2016 results, both of which had CEO March Benioff beaming.
And well he might: the CEO used his prepared remarks to note that this is Salesforce's 50th quarterly earnings call as a public company and that in the first he reported US$46m of revenue. This time he got to announce $2.3 billion in revenue for a full-year total of $8.39bn. The first figure is up by 27 per cent year-over-year, the latter is up by 26 per cent. Benioff said “those numbers would be even higher if we did not see things that have happened in Brexit and pressure on the Great British Pound.”
The CEO therefore predicted the company would crack the $10bn revenue barrier in 2017 and in so doing achieve the milestone faster than any other software company in history.
All of the company's core products did well. CFO Mark Hawkins told the company's earnings call that “Sales Cloud grew 13 per cent for the full year, becoming the first $3 billion cloud. Service Cloud grew 20 per cent for the full year. Platform and Other grew 39 per cent for the full year and Marketing Cloud, excluding Demandware and Krux, grew 25 per cent for the full year.”
The company has over $2bn in the bank and can see deferred revenue of approximately $9bn. On top of improved cashflow the company is clearly going to remain a going concern, even if it posted a Q4 GAAP loss per share of seven cents. Non-GAAP diluted earnings per share were $0.28 for the quarter and $1.01 for the year.
Benioff said the company expects its AI effort, “Einstein”, will help to drive sales higher, by creating an up-selling opportunity but mostly by differentiating Salesforce from its CRM rivals. Benioff promised more AI innovation and said the company will reveal more about it next week.
But not all is well. Benioff said the company has very seasonal licence payments, one reason Q1 2017's profits are going to be a few cents lower than the $0.30 that markets expected. The company's shares took a hit of about two per cent on that news.
Overall, the company is in fine health. In the Q&A section of the call, financial analysts congratulated the Salesforce executives on the result. Two even offered the epithet “spectacular finish” to describe the Q4 results. Impressing those folks isn't easy, so Salesforce may be as pleased with the reaction to its results as to the result itself. ®