10-QPeriod: Q2 FY2024

Salesforce, Inc. Quarterly Report for Q2 Ended Jul 31, 2023

Filed August 31, 2023For Securities:CRM

Summary

Salesforce, Inc. reported solid financial results for the second quarter of fiscal year 2024, demonstrating resilience in a challenging macroeconomic environment. Total revenues increased by 11% year-over-year to $8.6 billion for the quarter, driven primarily by a robust 12% growth in subscription and support revenues, which constitute the bulk of the company's revenue stream. This growth underscores the continued demand for Salesforce's core CRM and cloud-based offerings. The company also showed significant improvement in profitability, with net income rising substantially to $1.27 billion for the quarter, a significant leap from $68 million in the prior year period. This profit improvement is attributed to strong revenue growth coupled with disciplined cost management, including benefits from the company's ongoing restructuring plan, which has led to a decrease in operating expenses as a percentage of revenue. Diluted earnings per share (EPS) also saw a dramatic increase, reflecting this enhanced profitability. Furthermore, Salesforce maintained a strong liquidity position with $12.4 billion in cash, cash equivalents, and marketable securities as of July 31, 2023. The company also returned capital to shareholders through a significant share repurchase program, demonstrating confidence in its financial health and future prospects. The remaining performance obligation (RPO), a key indicator of future revenue, stood at $46.6 billion, up 12% year-over-year, suggesting a healthy sales pipeline and sustained demand.

Financial Highlights

50 data points
Beta

Revenue

$8.60B

75.4% Gross Margin

Net Income

$1.27B

14.7% Net Margin

EPS (Diluted)

$1.28

Total Assets

$92.45B

Cash & Equivalents

$6.77B

Free Cash Flow

$628.00M

Financial Statements
Beta
Revenue$8.60B
Cost of Revenue$2.11B
Gross Profit$6.49B
R&D Expenses$1.22B
Operating Expenses$5.01B
Operating Income$1.48B
Net Income$1.27B
EPS (Basic)$1.30
EPS (Diluted)$1.28
Shares Outstanding (Basic)975.00M
Shares Outstanding (Diluted)986.00M

Key Highlights

  • 1Total revenues grew 11% year-over-year to $8.6 billion in Q2 FY24.
  • 2Subscription and support revenues, the primary revenue driver, increased by 12% year-over-year.
  • 3Net income saw a substantial increase to $1.27 billion from $68 million in the prior year period, reflecting improved profitability.
  • 4Diluted EPS surged to $1.28 for the quarter, up significantly from $0.07 in Q2 FY23.
  • 5Operating expenses decreased in absolute terms and as a percentage of revenue, benefiting from restructuring initiatives and cost management.
  • 6Cash, cash equivalents, and marketable securities remained strong at $12.4 billion.
  • 7Remaining Performance Obligation (RPO) increased by 12% year-over-year to $46.6 billion, indicating strong future revenue potential.

Frequently Asked Questions

For the three months ended July 31, 2023, Salesforce reported total revenues of $8.6 billion, an 11% increase compared to $7.72 billion in the same period last year. Subscription and support revenues, which form the majority of their business, grew by 12% year-over-year.

Profitability significantly improved. Net income for the quarter was $1.27 billion, a substantial increase from $68 million in the prior year's quarter. Diluted earnings per share also saw a dramatic rise to $1.28 from $0.07 year-over-year.

As of July 31, 2023, Salesforce maintained a strong liquidity position with $12.4 billion in cash, cash equivalents, and marketable securities. The company also repurchased approximately $1.9 billion of its common stock during the quarter, demonstrating capital return to shareholders.

The Remaining Performance Obligation (RPO) increased by 12% year-over-year to $46.6 billion as of July 31, 2023. This metric represents contracted revenue that has not yet been recognized and serves as a strong indicator of future revenue generation, suggesting a healthy sales pipeline.