Salesforce has announced a record first fiscal quarter, delivering more than $3 billion in revenue.
Stock in Salesforce rose 4% on Tuesday after the company posted first-quarter 2019 results that exceeded even its own high expectations. What’s more, its second-quarter revenue guidance has also increased as a result.
The company’s revenue rose 25% year over year across the board. Sales Cloud remains Salesforce’s biggest standalone product, but Service Cloud saw greater year-over-year growth (29.3%) in the first quarter.
Here are the highlights of the Q1 2019 results:
- Salesforce raises FY19 revenue guidance from $13.075 billion to $13.125 billion
- First quarter revenue of $3.01 billion, up 25% year-over-year, 22% in constant currency
- Unearned revenue of $6.20 billion, up 25% year-over-year, 23% in constant currency
- Remaining transaction price of approximately $20.4 billion, up 36% year-over-year
- First quarter operating cash flow of $1.47 billion, up 19% year-over-year
After recently being named the world’s most popular CRM solution for the fifth straight year, Salesforce’s first quarter results compound the success that the technology giant has enjoyed in recent times.
Marc Benioff, Salesforce Chairman and CEO, believes that the company’s customer-focused approach is the reason for the astounding results. “Salesforce delivered more than $3 billion in revenue in the first quarter, surpassing a $12 billion annual revenue run rate,” said Benioff. “Our relentless focus on customer success is yielding incredible results, including delivering nearly two billion AI predictions per day with Einstein.”
Here are the results in greater detail:
Revenue: Total first-quarter revenue was $3.01 billion, an increase of 25% year-over-year, and 22% in constant currency. Subscription and support revenues were $2.81 billion, an increase of 27% year-over-year. Professional services and other revenues were $196 million, an increase of 4% year-over-year.
Earnings per Share: First quarter GAAP diluted earnings per share was $0.46, and non-GAAP diluted earnings per share was $0.74. Mark-to-market accounting of the company’s strategic investments, required by ASU 2016-01, benefitted GAAP diluted earnings per share by $0.25 and non-GAAP diluted earnings per share by $0.22.
Cash: Cash generated from operations for the first quarter was $1.47 billion, an increase of 19% year-over-year. Total cash, cash equivalents and marketable securities finished the first quarter at $7.16 billion.
Unearned Revenue: Unearned revenue, representing ASC 605 deferred revenue less the cumulative timing differences of recognized revenue from ASC 606 adoption, on the balance sheet as of April 30, 2018 was $6.20 billion, an increase of 25% year-over-year, and 23% in constant currency.
Remaining Transaction Price: Remaining transaction price, representing future revenues that are under contract but have not yet been recognized, ended the first quarter at approximately $20.4 billion, an increase of 36% year-over-year. Current remaining transaction price, which represents the future revenues under contract expected to be recognized over the next 12 months, ended the first quarter at approximately $9.6 billion, an increase of 26% year-over-year.
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