01—Abstract
Summary
Summary of the 10-Q filed June 2, 2021. Cited figures are marked; the original filing is the authoritative source.
Salesforce, Inc. reported strong financial results for the first quarter of fiscal year 2022, ending April 30, 2021.
Total revenues surged by 23% year-over-year to $6.0 billiona, driven by robust subscription and support revenue growth of 21%. This top-line expansion translated into significant bottom-line improvement, with diluted earnings per share increasing to $0.50, a substantial rise from $0.11 in the prior year period. The company also demonstrated strong operational cash flow generation, with $3.2 billion provided by operating activities, up 74% year-over-year, underscoring its efficient business model and effective cash management.
Looking ahead, Salesforce is actively pursuing strategic growth initiatives, including the pending acquisition of Slack Technologies, Inc., which is expected to further enhance its integrated customer relationship management platform. The company's remaining performance obligation, a key indicator of future contracted revenue, stood at $35.0 billionb, reflecting continued demand for its cloud-based solutions and providing a solid revenue visibility. Despite ongoing investments in innovation and expansion, Salesforce maintains a strong balance sheet with $15.0 billion in cash, cash equivalents, and marketable securities, positioning it well for continued growth and strategic opportunities.
02—Key points
Key Highlights
- Total revenues increased by 23% year-over-year to $5.96 billion for the three months ended April 30, 2021.
- Subscription and support revenues grew by 21% year-over-year to $5.54 billion.
- Net income significantly increased to $469 million, up from $99 million in the prior year period.
- Diluted earnings per share rose to $0.50 from $0.11 year-over-year.
- Net cash provided by operating activities more than doubled, increasing by 74% to $3.23 billion.
- Remaining performance obligation stood at $35.0 billion as of April 30, 2021, indicating strong future revenue visibility.
- The company is actively pursuing the acquisition of Slack Technologies, Inc., valued at approximately $15.7 billion.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2022, Salesforce, Inc. kept $0.08.
- Revenue$5.96B100.0%
- Cost of revenue−$1.55B26.1%
- Gross profit$4.41B73.9%
- Operating costs−$4.05B68.0%
- Operating income$354.0M5.9%
- Interest, other & tax$115.0M1.9%
- Net income$469.0M7.9%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2022filed June 2, 2021Financial Statements
Q1 FY2022 against Q1 FY2021
| Line item | Q1 FY2022Q1 FY2021 | Change |
|---|---|---|
| Revenue | $5.96B$4.87B | +22.6% |
| Cost of Revenue | $1.55B$1.25B | +24.0% |
| Gross Profit | $4.41B$3.61B | +22.1% |
| R&D Expenses | $951.00M$859.00M | +10.7% |
| Operating Expenses | $4.05B$3.75B | +8.1% |
| Operating Income | $354.00M-$140.00M | +352.9% |
| Interest Expense | $33.00M$25.00M | +32.0% |
| Net Income | $469.00M$99.00M | +373.7% |
| EPS (Basic) | $0.51$0.11 | +363.6% |
| EPS (Diluted) | $0.50$0.11 | +354.5% |
| Shares Outstanding (Basic) | 921.00M896.00M | +2.8% |
| Shares Outstanding (Diluted) | 940.00M913.00M | +3.0% |
05—Questions
Frequently Asked Questions
How did Salesforce's revenue perform in the first quarter of fiscal year 2022?
Salesforce reported a strong increase in total revenues, which grew by 23% year-over-year to $5.96 billion for the three months ended April 30, 2021. This growth was primarily driven by the subscription and support revenue segment, which increased by 21% to $5.54 billion.
What is the status of the Slack acquisition, and what is its estimated value?
Salesforce entered into a definitive agreement to acquire Slack Technologies, Inc. in December 2020. As of April 30, 2021, the estimated value of the transaction was approximately $15.7 billion in cash consideration and 45 million shares of Salesforce common stock, based on outstanding Slack shares at that time. The acquisition is expected to close in the latter half of fiscal year 2022, subject to customary closing conditions and regulatory approvals.
How is Salesforce managing its cash and liquidity?
The company demonstrated strong cash generation, with net cash provided by operating activities increasing by 74% year-over-year to $3.23 billion for the first quarter. As of April 30, 2021, Salesforce had $15.0 billion in cash, cash equivalents, and marketable securities. Additionally, the company has a $3.0 billion unsecured revolving credit facility available, providing further liquidity to meet working capital needs, capital expenditures, and potential funding for the Slack acquisition.
What does the 'Remaining Performance Obligation' (RPO) figure signify, and how is it trending?
Remaining Performance Obligation (RPO) represents contracted revenue that has not yet been recognized. It includes unearned revenue (invoiced amounts not yet earned) and unbilled amounts (contracted revenue not yet invoiced). As of April 30, 2021, Salesforce's RPO was $35.0 billion, an increase of 19% year-over-year, and the current portion (expected to be recognized within the next 12 months) was $17.8 billion, up 23% year-over-year. This growth in RPO indicates a strong backlog of future revenue and provides good visibility into future financial performance.
06—Continue