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Salesforce Announces Record Fourth Quarter and Full Year Fiscal 2020 Results
Raises FY21 Revenue Guidance to $21.0 Billion to $21.1 Billion
◦ Fourth Quarter Revenue of $4.85 Billion, up 35% Year-Over-Year, 34% in Constant Currency
◦ FY20 Revenue of $17.1 Billion, up 29% Year-Over-Year, 29% in Constant Currency
◦ Fourth Quarter Operating Cash Flow of $1.63 Billion, up 23% Year-Over-Year
◦ Current Remaining Performance Obligation of Approximately $15.0 Billion, up 26% Year-Over-Year, 27% in Constant Currency
◦ Remaining Performance Obligation of Approximately $30.8 Billion, up 20% Year-Over-Year
◦ Raises Q1 FY21 Revenue Guidance to $4.875 Billion to $4.885 Billion, up Approximately 30% to 31% Year-Over-Year
SAN FRANCISCO, Calif. - Feb. 25, 2020 - Salesforce (NYSE: CRM), the global leader in CRM, today announced results for its fourth quarter and fiscal year ended January 31, 2020.
“Our Q4 and FY20 results were phenomenal. We are delighted to raise our revenue guidance for FY21 by $200 million to $21.1 billion at the high end of the range, while expanding our operating margin." said Marc Benioff, Salesforce Chairman and CEO. "Nothing is more important to us than the trust and customer success we have with each one of our customers. Salesforce’s Customer 360 platform uniquely brings companies and customers together.”
Salesforce delivered the following results for its fiscal fourth quarter and full fiscal year:
Total fourth quarter revenue was $4.85 billion, an increase of 35% year-over-year, and 34% in constant currency. Subscription and support revenues for the quarter were $4.56 billion, an increase of 35% year-over-year. Professional services and other revenues for the quarter were $288 million, an increase of 26% year-over-year.
Total Fiscal 2020 revenue was $17.1 billion, up 29% year-over-year, and 29% in constant currency. Subscription and support revenues for the year were $16.0 billion, an increase of 29% year-over-year. Professional services and other revenues for the year were $1.1 billion, an increase of 21% year-over-year.
Earnings per Share:
Fourth quarter GAAP loss per share was $(0.28), and non-GAAP diluted earnings per share was $0.66. Mark-to-market accounting of the company’s strategic investments, required by ASU 2016-01, benefited GAAP loss per share by $0.03 based on a U.S. tax rate of 25% and non-GAAP diluted earnings per share by $0.03 based on a non-GAAP tax rate of 22.5%.
Fiscal 2020 GAAP earnings per share was $0.15, and non-GAAP diluted earnings per share was $2.99. Mark-to-market accounting of the company’s strategic investments, required by ASU 2016-01, benefited GAAP earnings per share by $0.38 based on a U.S. tax rate of 25% and non-GAAP diluted earnings per share by $0.39 based on a non-GAAP tax rate of 22.5%.
Cash: Cash generated from operations for the fourth quarter was $1.63 billion, an increase of 23% year-over-year. Total cash, cash equivalents and marketable securities ended the fourth quarter at $7.95 billion.
Cash generated from operations for Fiscal 2020 was $4.33 billion, an increase of 27% year-over-year.
Remaining Performance Obligation: Remaining performance obligation ended the fourth quarter at approximately $30.8 billion, an increase of 20% year-over-year. Current remaining performance obligation ended the fourth quarter at approximately $15.0 billion, an increase of 26% year-over-year, 27% in constant currency.
As of February 25, 2020, the company is initiating its GAAP earnings per share guidance, non-GAAP earnings per share guidance, and operating cash flow guidance for the full fiscal year 2021. The company is initiating its GAAP earnings per share guidance, non-GAAP earnings per share guidance, and current remaining performance obligation guidance for its first quarter of fiscal year 2021. The company is raising its revenue guidance previously provided on December 3, 2019 for its first quarter and full fiscal year 2021.
On February 25, 2020, the Company entered into an agreement to acquire Vlocity, Inc. (“Vlocity”), a leading provider of industry-specific cloud and mobile software built natively on the Salesforce platform. Under the terms of the agreement, the Company will acquire Vlocity for approximately $1.33 billion, net of the value of shares currently owned by the Company, subject to customary purchase price adjustments. The purchase price will be paid in cash and the assumption of outstanding unvested equity awards held by Vlocity employees. The acquisition is expected to close during the second quarter fiscal 2021, subject to customary closing conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. The anticipated financial impact of the Vlocity acquisition is reflected in the Company’s revenue, non-GAAP earnings per share, and operating cash flow guidance for the full fiscal year 2021, provided herein. More information is available on the Salesforce Newsroom.
Our guidance assumes no change to the value of the company's strategic investment portfolio resulting from ASU 2016-01 as it is not possible to forecast future gains and losses. In addition, the guidance below is based on estimated GAAP tax rates that reflect the company’s currently available information, and excludes forecasted discrete tax items such as excess tax benefits from stock-based compensation. The GAAP tax rates may fluctuate due to future acquisitions or other transactions.
Quarterly Conference Call
Salesforce will host a conference call at 2:00 p.m. (PT) / 5:00 p.m. (ET) to discuss its financial results with the investment community. A live webcast of the event will be available on the Salesforce Investor Relations website at www.salesforce.com/investor. A live dial-in is available domestically at 866-901-SFDC or 866-901-7332 and internationally at 706-902-1764, passcode 1984056. A replay will be available at (800) 585-8367 or (855) 859-2056 until midnight (ET) Mar. 26, 2020.
Salesforce is the global leader in Customer Relationship Management (CRM), bringing companies closer to their customers in the digital age. Founded in 1999, Salesforce enables companies of every size and industry to take advantage of powerful technologies—cloud, mobile, social, internet of things, artificial intelligence, voice and blockchain—to create a 360-degree view of their customers. For more information about Salesforce (NYSE: CRM), visit: www.salesforce.com.
"Safe harbor" statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements about the company's financial and operating results, which may include expected GAAP and non-GAAP financial and other operating and non-operating results, including revenue, net income, diluted earnings per share, operating cash flow growth, operating margin improvement, expected revenue growth, expected current remaining performance obligation growth, expected tax rates, stock-based compensation expenses, amortization of purchased intangibles, shares outstanding, market growth, environmental, social and governance goals and expected capital allocation, including mergers and acquisitions, capital expenditures and other investments. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the company’s results could differ materially from the results expressed or implied by the forward-looking statements it makes.
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Further information on these and other factors that could affect the company’s financial results is included in the reports on Forms 10-K, 10-Q and 8-K and in other filings it makes with the Securities and Exchange Commission from time to time. These documents are available on the SEC Filings section of the Investor Information section of the company’s website at www.salesforce.com/investor.
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