Summary
Salesforce reported strong revenue growth for the third quarter of fiscal 2021, with total revenues reaching $5.4 billion, a 20% increase year-over-year. This growth was primarily driven by a 20% increase in subscription and support revenues. The company also demonstrated a significant improvement in profitability, reporting diluted earnings per share of $1.15 compared to a loss of $0.12 in the prior year's quarter. This improvement was partly due to a substantial unrealized gain of $1.1 billion from a strategic investment that went public. Operating cash flow saw a healthy increase of 14% year-over-year, reaching $339 million. The company's remaining performance obligation, a key indicator of future revenue, also grew by 17% year-over-year to $30.3 billion, with current remaining performance obligation up 20% to $15.3 billion. Financially, Salesforce ended the quarter with a robust cash and marketable securities balance of $9.5 billion, indicating strong liquidity. The company also made strategic acquisitions, notably Vlocity in June 2020, and announced its intention to acquire Slack Technologies, Inc. in December 2020, signaling continued investment in expanding its platform and market reach. Despite the positive financial performance and strategic moves, investors should remain mindful of the ongoing impact of COVID-19 on future business operations and customer spending, as highlighted by management.
Financial Highlights
50 data points| Revenue | $5.42B |
| Cost of Revenue | $1.39B |
| Gross Profit | $4.03B |
| R&D Expenses | $902.00M |
| Operating Expenses | $3.80B |
| Operating Income | $224.00M |
| Interest Expense | $25.00M |
| Net Income | $1.08B |
| EPS (Basic) | $1.19 |
| EPS (Diluted) | $1.15 |
| Shares Outstanding (Basic) | 911.00M |
| Shares Outstanding (Diluted) | 939.00M |
Key Highlights
- 1Total revenues increased by 20% year-over-year to $5.4 billion for the third quarter of fiscal 2021.
- 2Diluted earnings per share improved significantly to $1.15 from a loss of $0.12 in the prior year's quarter, aided by a $1.1 billion unrealized gain on a strategic investment.
- 3Cash provided by operating activities increased by 14% year-over-year to $339 million.
- 4Remaining Performance Obligation (RPO) increased by 17% year-over-year to $30.3 billion, indicating strong future revenue potential.
- 5The company ended the quarter with $9.5 billion in cash, cash equivalents, and marketable securities, demonstrating strong liquidity.
- 6Strategic acquisitions, including Vlocity and the announced intent to acquire Slack, highlight the company's commitment to platform expansion and growth.
- 7The company noted that new business growth in Q2 and Q3 of fiscal 2021 was consistent with historical trends prior to COVID-19.