Company Update (NYSE:CRM): salesforce.com, inc. Reports Fiscal 2016 Fourth Quarter and Full Year Results


CRM

salesforce.com, inc. (NYSE:CRM), the Customer Success Platform and world’s #1 CRM company, today announced results for its fiscal fourth quarter and full fiscal year ended January 31, 2016.

“By any measure, this was a spectacular finish to the year with 27% revenue growth in constant currency for the fourth quarter, and for the full year,” said Marc Benioff, chairman and CEO, Salesforce. “We are raising our fiscal year 2017 revenue guidance to $8.12 billion at the high end of our range — unprecedented growth for a company of our size and scale.”

“We increased our non-GAAP operating margin by 177 basis points, which drove outstanding full year operating cash flow of $1.6 billion, up 37% from a year ago,” said Mark Hawkins, CFO, Salesforce. “We expect to continue to drive operating leverage and strong cash flow growth in fiscal 2017.”

“We hit an all-time high in large transactions in fiscal 2016 as more and more companies look to Salesforce as their trusted advisor,” saidKeith Block, vice chairman, president and COO, Salesforce. “The tremendous response to our customer success platform is driving exceptional growth for Salesforce across every region, every cloud and every industry.”

Salesforce delivered the following results for its fourth fiscal quarter and full fiscal year 2016:

Revenue:  Total Q4 revenue was $1.81 billion, an increase of 25% year-over-year, and 27% in constant currency.  Subscription and support revenues were $1.68 billion, an increase of 25% year-over-year.  Professional services and other revenues were $127 million, an increase of 28% year-over-year.

Full fiscal year 2016 revenue was $6.67 billion, an increase of 24% year-over-year, and 27% in constant currency.  Subscription and support revenues were $6.21 billion, an increase of 24% year-over-year.  Professional services and other revenues were $462 million, an increase of 28% year-over-year.

Earnings per Share:  Q4 GAAP loss per share was ($0.04), and non-GAAP diluted earnings per share was $0.19. For the full fiscal year 2016, GAAP loss per share was ($0.07), and non-GAAP diluted earnings per share was $0.75.

Cash:  Cash generated from operations for the fourth quarter was $459 million, an increase of 38% year-over-year. Cash generated from operations for the full fiscal year 2016 was $1.61 billion, an increase of 37% year-over-year. Total cash, cash equivalents and marketable securities finished the year at $2.73 billion.

Deferred Revenue:  Deferred revenue on the balance sheet as of January 31, 2016 was $4.29 billion, an increase of 29% year-over-year, and 31% in constant currency. Unbilled deferred revenue, representing business that is contracted but unbilled and off balance sheet, ended the fourth quarter at approximately $7.1 billion, up 25% year-over-year.

As of February 24, 2016, the company is initiating revenue, earnings per share, and deferred revenue guidance for its first quarter of fiscal year 2017. In addition, the company is raising its full fiscal year 2017 revenue guidance previously provided on November 18, 2015. The company is also initiating earnings per share and operating cash flow guidance for its fiscal year 2017.

Q1 FY17 Guidance:  Revenue is projected to be approximately $1.885 billion to $1.895 billion, an increase of 25% year-over-year.

Diluted GAAP earnings per share is projected to be in the range of $0.00 to $0.01, while diluted non-GAAP earnings per share is projected to be in the range of $0.23 to $0.24.

On balance sheet deferred revenue growth is projected to be approximately 24% to 25% year-over-year.

Full Year FY17 Guidance:  Revenue is projected to be approximately $8.08 billion to $8.12 billion, an increase of 21% to 22% year-over-year.

GAAP loss per share is projected to be in the range of ($0.02) to $0.00, while diluted non-GAAP earnings per share is projected to be in the range of $0.99 to $1.01.

Operating cash flow growth is projected to be approximately 23% to 24% year-over-year. (Original Source)

Shares of Salesforce jumped nearly 9% in after-hours trading. CRM has a 1-year high of $82.90 and a 1-year low of $52.60. The stock’s 50-day moving average is $66.91 and its 200-day moving average is $73.12.

On the ratings front, Salesforce has been the subject of a number of recent research reports. In a report issued on February 22, Roth Capital analyst Richard Baldry maintained a Buy rating on CRM, with a price target of $93, which implies an upside of 48.8% from current levels. Separately, on February 19, Brean Murray Carret’s Yun Kim maintained a Buy rating on the stock and has a price target of $100.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Richard Baldry and Yun Kim have a total average return of -3.2% and 6.8% respectively. Baldry has a success rate of 37.9% and is ranked #2969 out of 3664 analysts, while Kim has a success rate of 65.2% and is ranked #724.

Overall, 2 research analysts have assigned a Hold rating and 14 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $86.63 which is 38.6% above where the stock opened today.

Salesforce.com Inc provides enterprise cloud computing solutions, offering social and mobile cloud apps and platform services, as well as professional services to facilitate the adoption of its solutions.