Resolutely Marches Towards $20 Billion Milestone

Photo credit: (NYSE: CRM) is a horse that just keeps giving. It recently released its first quarter results, and unsurprisingly, the results shot past market expectations. The market was pleased and it sent the stock to record-high levels.

Salesforce’s Financials

For the first quarter of the year, Salesforce’s revenue grew 25% over the year to $3.006 billion, above analyst projections of $2.94 billion. Adjusted EPS of $0.74 shattered the market’s expected earnings of $0.46 per share.

By segment, subscription and support revenues grew 27% to $2.81 billion, and professional services and other revenues grew 4% to $196 million. Within the subscription segment, sales cloud revenues grew 16% to $965 million, service cloud revenues grew 29% to $848 million, salesforce platform and other revenues increased 36% to $575 million, and marketing and commerce cloud revenues grew 41% to $422 million.

For the current quarter, Salesforce forecast revenues of $3.22-$3.23 billion with an adjusted EPS of $0.46-$0.47. The market was looking for revenues of $3.11 billion for the quarter with an EPS of $0.52.

Salesforce expects to end the year with revenues of $13.075-$13.125 billion. It had earlier forecast the year’s revenues at $12.6-$12.65 billion. $300 million of this increase in forecast was attributed to the acquisition of MuleSoft. The market expected Salesforce to post $12.73 billion in revenues with an EPS of $2.12 for the year.

Salesforce reaffirmed that it was on track to reach $20 billion in revenues by 2022, and will become the fastest enterprise software company to cross that mark. According to a recent survey, the recent $6.5 billion acquisition of MuleSoft has something to contribute to that goal. The survey revealed that 59% of technology C-level executives said they planned to invest more with Salesforce on integration projects following its acquisition of MuleSoft, a leading player in the Applications Programming Interface market.

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Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual incubator that aims to help one million entrepreneurs ...

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