Salesforce (CRM +1%) hit a new all-time high this morning after the company reported better than expected first quarter results.
Salesforce is the fastest growing top five enterprise software company and the leader in customer relationship management (CRM). The company competes with software giants Oracle (ORCL) and SAP (SAP).
First quarter revenue was $2.39 billion, an increase of 25% year-over-year, and 25% in constant currency. Subscription and support revenues were $2.2 billion, an increase of 24% year-over-year. Professional services and other revenues were $187 million, an increase of 32% year-over-year. Revenue growth was broad based in every region. Deferred revenue on the balance sheet rose 26% to $5.04 billion. Unbilled deferred revenue, representing business that is contracted but unbilled and off balance sheet, ended the first quarter up 26% to $9.6 billion. Billings rose 16%. Non-GAP earnings per share rose 17% to $0.28/share.
Salesforce offered second quarter earnings and sales guidance in-line with consensus. The company also raised guidance for fiscal 2018: Non-GAAP EPS to $1.28-1.30 from $1.27-1.29 and sales to $10.25-10.30 billion from $10.15-10.20 billbion.
Some are concerned about slowing growth. The company has made as series of recent acquisitions. Salesforce has good visibility on its subscription business model so the company rarely if ever disappoints.
Marc Benioff, chairman and CEO, Salesforce. "Salesforce has once again been named the CRM market leader, and we continue to grow our share in CRM -- the fastest growing enterprise software market."
Salesforce has a ~$64 billion market capitalization and trades at ~6x 2017 sales estimates. The enterprise value is ~28x EBITDA estimates for the year.