Salesforce, Inc. Quarterly Report for Q1 Ended Apr 30, 2015

Summary

Salesforce, Inc. (CRM) reported its first quarter fiscal year 2016 results for the period ending April 29, 2015. The company demonstrated strong revenue growth, with total revenues increasing by 23% year-over-year to $1.51 billion, primarily driven by a 22% increase in subscription and support revenues. Despite the revenue growth, the company reported a net income of $4.1 million, a significant improvement from a net loss of $96.9 million in the prior year's comparable quarter. This turnaround was partly due to a substantial $36.6 million non-cash gain recognized from the termination of an operating lease related to the acquisition of the 50 Fremont building. However, excluding one-time items and stock-based compensation, non-GAAP net income showed a robust increase of 56% to $108.3 million. The company's operating cash flow also saw a healthy increase, reflecting strong collections from its fourth quarter billings.

Key Highlights

• 1Total revenues grew 23% to $1.51 billion, exceeding the prior year's $1.23 billion.
• 2Subscription and support revenues, the primary revenue driver, increased by 22% to $1.41 billion.
• 3The company returned to profitability with a net income of $4.1 million, a significant improvement from a net loss of $96.9 million in the same quarter last year.
• 4Operating cash flow increased substantially to $730.9 million from $473.1 million year-over-year.
• 5Marketing and sales expenses decreased as a percentage of revenue to 49% from 52%, indicating improved operating leverage.
• 6The company completed the acquisition of the 50 Fremont building in San Francisco for $637.6 million, which included a one-time non-cash gain from lease termination.

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