Salesforce released its latest earnings report after closing bell tonight, posting adjusted earnings of 24 cents per share on $1.92 billion in revenue. Analysts had been expecting 23 cents per share in earnings on an adjusted basis and $1.89 billion in revenue. Salesforce said revenue increased 28% year over year in constant currencies.
Salesforce posts solid results
On a reported basis, the company’s earnings were 6 cents per share. Subscription and support revenues grew 26% year over year to $1.78 billion, while professional services and other revenues increased 33% from the year-ago quarter to reach $141 million. Deferred revenue increased 31% to $4.01 billion, while unbilled deferred revenue increased 27% to $7.6 billion.
Salesforce said operating cash flow increased 43% year over year to pass the $1 billion mark in a quarter, marking the first time the company has done this, Chief Financial Officer Mark Hawkins said. The company’s non-GAAP operating margin expanded 283 basis points in the first quarter, marking the eighth quarter in a row in which the company saw an improvement year over year.
“Our first quarter was an extremely strong start to our fiscal year, with outstanding execution across the board,” said Keith Block, vice chairman, president and COO. “We continued to drive larger and more strategic transactions in the first quarter, including yet another 9-figure transaction.”
Salesforce increases revenue guide
For the second quarter, Salesforce management expects revenue to be between $2.005 billion and $2.015 billion, representing a 23% increase from the previous year at the midpoint. They expect GAAP earnings of 3 cents to 4 cents per share and adjusted earnings of 24 cents to 25 cents for the quarter. They’re also expecting on-balance-sheet deferred revenue to grow by 26% to 28%.
The company said its Customer Success Platform was well-received, so they increased their full-year sales guidance. Management’s new outlook is $8.16 billion to $8.2 billion, representing a 22% to 23% increase. Salesforce projects GAAP earnings of 20 cents to 22 cents and adjusted earnings of $1 to $1.02 per share for the full year.
Salesforce shares surged 6.24% to $82.75 in after-hours trades following tonight’s earnings report.