will report first quarter results this afternoon and host a call at 17:00 PM
ET. Salesforce is the leader in customer relationship management (CRM) cloud
software, including sales force automation, customer service and support,
marketing automation, digital commerce, community management, analytics,
application development, Internet of Things (IoT) integration, and
collaborative productivity tools. Salesforce had a near 20% market share in CRM
last year while Oracle (ORCL)
and SAP (SAP)
were both in the 7% range.
Salesforce hasn't missed on the top-line since January of 2006. Its subscription business model results in highly visible revenue streams. The company has issued revenue guidance for the next quarter just above estimates four quarters in a row. Last quarter, deferred revenue growth accelerated to 25% in constant currency (versus +19-20% guidance) as unbilled deferred revenue grew 48% to $13.3 bln.
Salesforce has guided for Q1 adjusted EPS of $0.46-0.47 (vs. $0.28 last year) with revenue up 23% to $2.935-2.945 bln and deferred revenue up 23-24%.
The company has guided for Fiscal 2019 (January) EPS of $2.25-2.27 with revenue up 21% to $12.66-12.71 bln and operating cash flow (OCF) up 20-21%. Updated guidance for the second quarter and fiscal 2019 should include recently acquired MuleSoft.
In late March, the company announced the $6.5 bln acquisition of MuleSoft. The company's largest acquisition before MULE was commerce cloud Demandware for $2.8 bln in 2016. Salesforce it will accelerate customers' digital transformations, enabling them to unlock data across legacy systems, cloud apps, and devices. MuleSoft will continue to build toward its vision of the application network with Anypoint Platform, and MuleSoft will power the new Salesforce Integration Cloud, which will enable all enterprises to surface any data—regardless of where it resides.
Salesforce paid a mid-teens 2018 sales multiple, which turned some heads. March Benioff clearly saw a huge strategic value in MuleSoft's offerings.
Salesforce has a $97 bln market cap and the stock trades at ~56x EPS or ~7.6x sales estimates for the year.
- OUR VIEW
- LEARNING CENTER