Post Earnings Coverage as Salesforce.com Revenue Soared 25%; Raises Earnings Outlook

Upcoming AWS Coverage on Nuance Communications Post-Earnings Results

LONDON, UK / ACCESSWIRE / November 29, 2016 / Active Wall St. announces its post-earnings coverage on salesforce.com, inc. (NYSE: CRM). The company reported its third quarter fiscal 2017 (Q3 FY17) earnings on November 17, 2016. The business software provider posted strong revenue growth with earnings and revenue outperforming Wall Street's expectations. The company also provided Q4 FY17 and FY18 guidance which was above expectations. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of salesforce.com's competitors within the Application Software space, Nuance Communications, Inc. (NASDAQ: NUAN), announced on November 17, 2016, financial results for its fiscal 2016 and fourth quarter, ended September 30, 2016. AWS will be initiating a research report on Nuance Communications in the coming days.

Today, AWS is promoting its earnings coverage on CRM; touching on NUAN. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=CRM

http://www.activewallst.com/registration-3/?symbol=NUAN

Earnings Reviewed

For the three months ended on October 31st, 2016, Salesforce reported a loss of $37 million, or $0.5 per share, bigger than a year-earlier loss of $25 million, or $0.4 per share. Excluding one-time items; however, the company reported earnings of $0.24 per share which topped analysts' estimates of adjusted earnings $0.21 per share. Salesforce attributed the earnings growth to a surge in new bookings. During the reported quarter, the company's revenue soared 25% on dollar basis and 27% in a constant currency basis to $2.14 billion compared with revenue of $1.71 billion in Q3 FY16 and surpassing market forecasts of $2.12 billion.

Segment Performance

During Q3 FY17, Salesforce' subscription and support revenues totaled $1.98 billion, an increase of 24% on a y-o-y basis. The company's Professional services and other revenues surged 39% on a y-o-y basis to $161 million. Salesforce' Commerce Cloud contributed $49 million to total revenue after adjusting for purchase and accounting.

During the reported quarter, Salesforce's Cloud sales grew 13% on a y-o-y basis, Service Cloud grew 26%, App Cloud and Other grew 38%. Marketing Cloud grew 46%, however excluding approximately $42 million of subscription and support revenue related to Demandwear, Marketing Cloud grew 21%.

Balance Sheet

Salesforce reported that during Q3 FY17, cash generated from operations was $154 million, a decrease of 5% on a y-o-y basis. Total cash, cash equivalents, and marketable securities finished the quarter at $1.75 billion. Deferred revenue on the balance sheet as of October 31, 2016, was $3.50 billion, an increase of 23% from the year ago period, and 25% in a constant currency basis. Unbilled deferred revenue, representing business that is contracted but unbilled and off balance sheet, ended Q3 FY17 at approximately $8.6 billion, up 28% on a y-o-y basis. This includes approximately $350 million related to unbilled deferred revenue from the Demandware acquisition. In the reported quarter, approximately 80% of all subscription and support related invoices were issued with annual terms, excluding Demandwear.

Earnings Outlook

For Q4 FY17, Salesforce is projecting revenue to climb by 25% to 26% on a y-o-y basis to be approximately $2.267 billion to $2.277 billion. For the upcoming quarter, GAAP loss per share is projected to be ($0.10) to ($0.09), while non-GAAP diluted earnings is expected to be $0.24 to $0.25 per share. On its balance sheet, deferred revenue growth is projected to be approximately 22% to 23% on a y-o-y basis.

For FY17, Salesforce is forecasting revenue growth of 25% to 26% on a y-o-y basis to be approximately $8.365 billion to $8.375 billion. GAAP diluted earnings per share is anticipated to be $0.24 to $0.25, adjusted diluted earnings are projected to be $0.97 to $0.98 per share.

For FY18, Salesforce is forecasting revenue to be approximately $10.1 billion to $10.15 billion, an increase of 21% on a y-o-y basis.

Stock Performance

At the close of trading session on November 28, 2016, salesforce.com's stock price fell 1.09% to end the day at $72.93. A total volume of 6.44 million shares were exchanged during the session. The stock currently has a market cap of $50.81 billion.

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