Summary
Salesforce, Inc.'s (CRM) Form 10-Q for the period ending October 30, 2017, showcases robust revenue growth driven by its core subscription and support services. Total revenues increased by 25% year-over-year for both the three and nine-month periods, reaching $2.7 billion and $7.6 billion respectively. This growth was primarily fueled by strong performance in their Sales Cloud and Service Cloud offerings. The company continues to invest heavily in research and development and marketing and sales, as evidenced by the significant increases in these expense categories. The balance sheet reflects a healthy cash position and a substantial amount of deferred revenue, indicating strong future revenue potential. While the company generated positive income from operations and net income for the three months ended October 31, 2017, the nine-month period showed a significant decrease in net income compared to the prior year, primarily due to a large tax benefit recorded in the prior year related to the Demandware acquisition. The company's liquidity remains strong, with substantial cash, cash equivalents, and marketable securities.
Financial Highlights
50 data points| Revenue | $2.68B |
| Cost of Revenue | $714.00M |
| Gross Profit | $1.99B |
| R&D Expenses | $394.00M |
| Operating Expenses | $1.83B |
| Operating Income | $155.00M |
| Interest Expense | $13.00M |
| Net Income | $107.00M |
| EPS (Basic) | $0.15 |
| EPS (Diluted) | $0.14 |
| Shares Outstanding (Basic) | 717.00M |
| Shares Outstanding (Diluted) | 738.00M |
Key Highlights
- 1Total revenues grew by 25% year-over-year to $2.7 billion for the third quarter and $7.6 billion for the first nine months of fiscal 2018.
- 2Subscription and support revenues, the primary revenue driver, increased by 25% year-over-year for both periods, representing 92-93% of total revenues.
- 3Operating expenses, particularly R&D and Marketing & Sales, saw significant increases in absolute dollars to support growth and ongoing innovation.
- 4Income from operations improved substantially for the three-month period, reaching $116.0 million, compared to $3.0 million in the prior year.
- 5The company maintains a strong liquidity position with over $3.6 billion in cash, cash equivalents, and marketable securities as of October 31, 2017.
- 6Deferred revenue remains a significant balance at $4.4 billion, indicating strong future revenue streams from contracted services.