Salesforce Q4 Earnings Top Estimates, Q1 View Upsets

salesforce.com Inc. (CRM - Free Report) delivered impressive fourth-quarter fiscal 2019 non-GAAP earnings of 70 cents per share, comprehensively exceeding the Zacks Consensus Estimate of 56 cents and also the year-ago quarter’s figure of 47 cents.

Revenues of $3.60 billion increased 26% year over year and also surpassed the Zacks Consensus Estimate of $3.56 billion. Moreover, the top line improved 27% at constant currency (cc). Excluding the acquisition of Mulesoft, the same grew 20%. Notably, MuleSoft contributed $181 million to revenues in the fourth quarter.

Additionally, the rapid adoption of the company’s cloud-based solutions led to better-than-expected results. However, unfavorable foreign exchange volatility persists to be an overhang.

Although fourth-quarter 2019 EPS and revenues beat consensus estimates, the stock still declined following the earnings release as guidance for first-quarter fiscal 2020 disappointed. Management projected a revenue range of $3.67-$3.68 billion, lower than the Zacks Consensus Estimate of $3.72 billion.

Further, for the fiscal first quarter non-GAAP earnings are estimated in the range of 60-61 cents per share while the Zacks Consensus Estimate is pegged at 62 cents.

However, the company’s strong guidance for fiscal 2020 is positive. Further, the company is now aiming to achieve revenues of $26-$28 billion by fiscal 2023.

Quarter in Detail

Coming to its business segments, revenues at Subscription and Support (94% of total) rose about 26% from the year-earlier period to $3.68 billion. Professional Services and Other revenues (6%) climbed 16% to $228 million.

Sales Cloud revenues ascended 11% year over year to $1.05 billion. Revenues from Service Cloud, one of the company’s largest and fastest-growing businesses, augmented 22% to $964 million. Marketing & Commerce Cloud surged 34% to $535 million.

salesforce’s Platform and other revenues soared 54% to $825 million. Excluding Mulesoft’s subscription and support revenues of $156 million, the segment grew 25%.

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