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Salesforce Announces Record First Quarter Fiscal 2021 Results
- First Quarter Revenue of $4.87 Billion, up 30% Year-Over-Year, 31% in Constant Currency
- Current Remaining Performance Obligation of Approximately $14.5 Billion, up 23% Year-Over-Year, 24% in Constant Currency
- First Quarter Operating Cash Flow of $1.86 Billion, down 5% Year-Over-Year
- Initiates Q2 FY21 Revenue Guidance of $4.89 Billion to $4.90 Billion, up Approximately 22% to 23% Year-Over-Year
- Updates FY21 Revenue Guidance to Approximately $20.0 Billion, up Approximately 17% Year-Over-Year
SAN FRANCISCO, Calif. - May 28, 2020 - Salesforce (NYSE: CRM), the global leader in CRM, today announced results for its fiscal first quarter ended April 30, 2020.
“Our results, amidst this global crisis, demonstrated our ability to execute at speed, innovate at scale and the strength of our business model,” said Marc Benioff, Chair & CEO, Salesforce. “We made long-term investments in keeping our employees safe, supporting our customers, delivering crucial innovation like Work.com, and helping our communities with PPE, grants, and technology. The pandemic showed us that digital is an imperative for every company, and we’re confident Salesforce will continue to accelerate as we bring our customers into the new normal.”
In response to COVID-19, Salesforce took the following actions in its fiscal first quarter to invest in its customers, employees and community during this unprecedented time, and to prepare for the future:
· Launched Salesforce Care, a set of free rapid response solutions to help companies stay connected to their employees, customers and partners during the COVID-19 crisis
· Created the Tableau Data Hub, a free resource to help companies and governments around the world see and understand data about the pandemic
· Developed an online leadership program called Leading Through Change. The program highlights the work Salesforce customers have been doing during the crisis and has over 75 million views to date
· Provided customers most affected by the COVID-19 pandemic temporary financial flexibility
· Gave certainty to its sales team with a one-time guaranteed commission for the first quarter
· Directed its global workforce to work from home and cancelled all business travel by employees for the foreseeable future
· Committed to no significant layoffs for the first 90 days of the crisis
· Launched B-Well Together for employees, a series focused on aligning the mind and body with leading well-being experts. Based on global demand, the company opened it to the public
· Shifted customer, industry, and employee events to virtual-only experiences for the remainder of 2020
· Donated more than $7.5M in grants to organizations on the front lines of the crisis in the San Francisco Bay Area, New York, Israel, Italy, Spain, France and Germany
· Sourced more than 50 million units of PPE, such as masks, gowns, suits, and face shields for hospitals in the US, U.K., India and France
Salesforce continues to invest in its stakeholders. In the second fiscal quarter, the company introduced Work.com, new technology solutions and resources to help business and community leaders around the world reopen safely, re-skill employees and respond efficiently on the heels of the COVID-19 pandemic. Work.com has generated enormous interest from businesses and governments and deepened partnerships with the world’s top system integrators and technology partners. For example, Workday recently announced that it will integrate its employee data directly into Work.com to make it easier for employers to centralize critical data and get their businesses up and running again.
Salesforce delivered the following results for its fiscal first quarter:
Total first quarter revenue was $4.87 billion, an increase of 30% year-over-year, and 31% in constant currency. Subscription and support revenues for the quarter were $4.58 billion, an increase of 31% year-over-year. Professional services and other revenues for the quarter were $290 million, an increase of 20% year-over-year.
Earnings per Share:
First quarter GAAP earnings per share was $0.11, and non-GAAP diluted earnings per share was $0.70. Mark-to-market accounting of the company’s strategic investments, required by ASU 2016-01, benefited GAAP earnings per share by $0.16 based on a U.S. tax rate of 25% and non-GAAP diluted earnings per share by $0.16 based on a non-GAAP tax rate of 22%.
Cash: Cash generated from operations for the first quarter was $1.86 billion, a decrease of 5% year-over-year. Total cash, cash equivalents and marketable securities ended the first quarter at $9.80 billion.
Remaining Performance Obligation: Remaining performance obligation ended the first quarter at approximately $29.3 billion, an increase of 18% year-over-year. Current remaining performance obligation ended the first quarter at approximately $14.5 billion, an increase of 23% year-over-year, 24% in constant currency.
As of May 28, 2020, the company is initiating its revenue guidance, GAAP earnings per share guidance, non-GAAP earnings per share guidance, and current remaining performance obligation growth guidance for the its second quarter of fiscal year 2021. As a result of the first quarter financial impacts of COVID-19 discussed above, and the company's current assumptions related to the extent to which the pandemic will affect the business going forward, the company is lowering its revenue guidance, GAAP earnings per share guidance, non-GAAP earnings per share guidance, and operating cash flow guidance previously provided on February 25, 2020 for its full fiscal year 2021. Management will provide further commentary around these guidance assumptions on its earnings call, which is expected to occur on May 28, 2020 at 2:00 PM Pacific Time.
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.