Summary
Salesforce, Inc. reported strong performance for the fiscal second quarter ended July 31, 2018. Total revenues grew by a significant 27% year-over-year, reaching $3.3 billion, primarily driven by a 28% increase in subscription and support revenues. This growth was fueled by new business, customer upgrades, and existing customer expansions, with the acquisition of MuleSoft contributing notably. The company maintained a low attrition rate, which is crucial for its subscription-based model. Despite increased operating expenses, particularly in marketing and sales and research and development, largely due to strategic acquisitions and investments in growth, Salesforce demonstrated solid operational execution. The company also saw substantial growth in operating income, which increased to $115 million from $84 million in the prior year's comparable quarter. A significant boost in net income to $299 million was driven by strong operational performance and a substantial one-time tax benefit related to the release of a valuation allowance following the MuleSoft acquisition. Salesforce's balance sheet remains robust, with total assets growing significantly, largely due to goodwill and intangible assets recognized from recent acquisitions, notably MuleSoft for approximately $6.4 billion and CloudCraze for $190 million. The company also strengthened its financial position by issuing new senior notes. Overall, the results indicate a healthy trajectory of growth and strategic execution.
Financial Highlights
51 data points| Revenue | $3.28B |
| Cost of Revenue | $849.00M |
| Gross Profit | $2.43B |
| R&D Expenses | $463.00M |
| Operating Expenses | $2.32B |
| Operating Income | $115.00M |
| Interest Expense | $32.00M |
| Net Income | $299.00M |
| EPS (Basic) | $0.40 |
| EPS (Diluted) | $0.39 |
| Shares Outstanding (Basic) | 747.00M |
| Shares Outstanding (Diluted) | 774.00M |
Key Highlights
- 1Total revenues increased by 27% to $3.3 billion for the three months ended July 31, 2018, compared to $2.6 billion in the prior year.
- 2Subscription and support revenues, the primary revenue driver, grew by 28% to $3.1 billion.
- 3Operating income improved to $115 million, up from $84 million in the prior year's comparable quarter.
- 4Net income significantly increased to $299 million from $46 million, aided by a substantial tax benefit.
- 5The company completed the acquisition of MuleSoft for approximately $6.4 billion, adding significant goodwill and intangible assets.
- 6Salesforce issued $1.0 billion in 2023 Senior Notes and $1.5 billion in 2028 Senior Notes to fund strategic initiatives.
- 7Total assets grew to $25.8 billion from $22.0 billion, largely due to acquisitions and increased goodwill.