Raises FY23 Revenue Guidance to $32.0
Billion to $32.1 Billion
- Fourth Quarter Revenue of $7.33 Billion, up 26%
Year-Over-Year, 27% in Constant Currency
- FY22 Revenue of $26.49 Billion, up 25% Year-Over-Year, 24%
in Constant Currency
- Current Remaining Performance Obligation of Approximately
$22.0 Billion, up 22% Year-Over-Year, 24% in Constant
Currency
- FY22 GAAP Operating Margin of 2.1%, and Non-GAAP Operating
Margin of 18.7%
- FY22 Operating Cash Flow of $6.0 Billion, up 25%
Year-Over-Year
- Raises First Quarter FY23 Revenue Guidance to $7.37 Billion
to $7.38 Billion, up Approximately 24% Year-Over-Year
- Raises FY23 GAAP Operating Margin Guidance to Approximately
3.6% and Reiterates Non-GAAP Operating Margin Guidance of
Approximately 20%
Salesforce (NYSE: CRM), the global leader in CRM, today
announced results for its fourth quarter and full year fiscal 2022
ended January 31, 2022.
“We had another phenomenal quarter and full-year of financial
results,” said Marc Benioff, Chair and Co-CEO of Salesforce. “As we
continue to see tremendous demand from customers, we’re raising our
FY23 revenue guidance to $32.1 billion at the high-end of range,
with non-GAAP operating margin of 20%, and operating cash flow
growth of 22% year-over-year.”
“With our customers’ success driving our financial success,
we’re generating disciplined, profitable growth at scale quarter
after quarter,” said Bret Taylor, Co-CEO of Salesforce. “Our
Customer 360 platform has never been more strategic or relevant in
driving the growth and resilience of our customers around the
world.”
“Fiscal 2022 was a remarkable year for Salesforce. I am
particularly pleased with our focus on discipline and profitable
growth which drove record levels of revenue, margin, and cash
flow,” said Amy Weaver, President and CFO. “I’m confident in the
momentum of the business as we build an even stronger company in
FY23 and beyond.”
Salesforce delivered the following results for its fiscal fourth
quarter and full fiscal year:
Revenue: Total fourth quarter revenue
was $7.33 billion, an increase of 26% year-over-year, and 27% in
constant currency. Subscription and support revenues for the
quarter were $6.83 billion, an increase of 25% year-over-year.
Professional services and other revenues for the quarter were $0.50
billion, an increase of 46% year-over-year.
Total fiscal 2022 revenue was $26.49 billion,
up 25% year-over-year, and 24% in constant currency. Subscription
and support revenues for the year were $24.66 billion, up 23%
year-over-year. Professional services and other revenues for the
year were $1.84 billion, up 44% year-over-year.
Operating Margin: Fourth quarter GAAP
operating margin was (2.4)%. Fourth quarter non-GAAP operating
margin was 15.0%.
Fiscal 2022 GAAP operating margin was 2.1%.
Fiscal 2022 non-GAAP operating margin was 18.7%.
Earnings per Share: Fourth quarter
GAAP diluted loss per share was $(0.03), and non-GAAP diluted
earnings per share was $0.84. Mark-to-market accounting of the
company’s strategic investments benefited GAAP diluted earnings per
share by $0.03 based on a U.S. tax rate of 25% and non-GAAP diluted
earnings per share by $0.03 based on a non-GAAP tax rate of
21.5%.
Fiscal 2022 GAAP diluted earnings per share
was $1.48, and non-GAAP diluted earnings per share was $4.78.
Mark-to-market accounting of the company’s strategic investments
benefited GAAP diluted earnings per share by $0.93 based on a U.S.
tax rate of 25% and non-GAAP diluted earnings per share by $0.98
based on a non-GAAP tax rate of 21.5%
Cash: Cash generated from operations
for the fourth quarter was $1.98 billion, a decrease of (9)%
year-over-year. Total cash, cash equivalents and marketable
securities ended the fourth quarter at $10.54 billion.
Cash generated from operations for fiscal
2022 was $6.0 billion, an increase of 25% year-over-year.
Remaining Performance Obligation:
Remaining performance obligation ended the fourth quarter at
approximately $43.7 billion, an increase of 21% year-over-year.
Current remaining performance obligation ended the fourth quarter
at approximately $22.0 billion, an increase of 22% year-over-year,
24% in constant currency.
As of March 1, 2022, the company is initiating its first quarter
and full fiscal year 2023 GAAP and non-GAAP earnings per share
guidance, its first quarter current remaining performance
obligation growth guidance, and its full fiscal year 2023 operating
cash flow growth guidance. As of March 1, 2022, the company is
raising its revenue guidance previously updated on November 30,
2021 for its first quarter and full fiscal year 2023. As of March
1, 2022 the company is raising its GAAP operating margin guidance
and reiterating its non-GAAP operating margin guidance previously
updated on November 30, 2021 for its full fiscal year 2023.
Management will provide further commentary around these guidance
assumptions on its earnings call, which is expected to occur on
March 1, 2022 at 2:00 PM Pacific Time.
Our guidance assumes no change to the value of the company's
strategic investment portfolio as it is not possible to forecast
future gains and losses. In addition, the guidance below is based
on estimated GAAP tax rates that reflect the company’s currently
available information, and excludes forecasted discrete tax items
such as excess tax benefits from stock-based compensation. The GAAP
tax rates may fluctuate due to future acquisitions or other
transactions.
Q1 FY23 Guidance
Full Year FY23
Guidance
Revenue(1)
$7.37 - $7.38 Billion
$32.0 - $32.1 Billion
Y/Y Growth
~24%
~21%
GAAP operating margin
N/A
~3.6%
Non-GAAP operating margin
N/A
~20%
GAAP earnings (loss) per share
($0.05) - ($0.04)
$0.46 - $0.48
Non-GAAP earnings per share
$0.93 - $0.94
$4.62 - $4.64
Operating Cash Flow Growth (Y/Y)
N/A
~21% - 22%
Current Remaining Performance Obligation
Growth (Y/Y)
~21%
N/A
(1) Full Year FY23 revenue guidance
includes contributions from Slack Technologies, Inc. of
approximately $1.5 billion and contributions from Traction on
Demand of approximately $75 million, net of purchase
accounting.
The following is a reconciliation of GAAP operating margin
guidance to non-GAAP operating margin guidance for the full
year:
Full Year FY23
Guidance
GAAP operating margin(1)
~3.6%
Plus
Amortization of purchased
intangibles(2)
6.0%
Stock-based expense(2)
10.4%
Non-GAAP operating margin(1)
~20%
(1) GAAP operating margin is the
proportion of GAAP income from operations as a percentage of GAAP
revenue. Non-GAAP operating margin is the proportion of non-GAAP
income from operations as a percentage of GAAP revenue. (2) The
percentages shown above have been calculated based on the midpoint
of the low and high ends of the revenue guidance for full year
FY23.
The following is a per share reconciliation of GAAP diluted
earnings (loss) per share to non-GAAP diluted earnings per share
guidance for the next quarter and the full year:
Fiscal 2023
Q1
FY23
GAAP earnings (loss) per share
range(1)(2)
($0.05) - ($0.04
)
$0.46 - $0.48
Plus
Amortization of purchased intangibles
$
0.50
$
1.88
Stock-based expense
$
0.76
$
3.24
Less
Income tax effects and adjustments(3)
$
(0.28
)
$
(0.96
)
Non-GAAP diluted earnings per share(2)
$0.93 - $0.94
$4.62 - $4.64
Shares used in computing basic GAAP net
income per share (millions)
992
1,003
Shares used in computing diluted Non-GAAP
net income per share (millions)
1,013
1,024
(1)The Company's GAAP tax provision is
expected to be approximately 40% for the three months ended April
30, 2022, and approximately 40% for the year ended January 31,
2023. The GAAP tax rates may fluctuate due to discrete tax items
and related effects in conjunction with certain provisions in the
Tax Cuts and Jobs Act, future acquisitions or other
transactions.
(2) The Company's projected GAAP and
Non-GAAP diluted earnings (loss) per share assumes no change to the
value of our strategic investment portfolio as it is not possible
to forecast future gains and losses. While historically the
company's strategic investment portfolio has had a positive impact
on the company's financial results, that may not be true for future
periods, particularly in periods of significant market fluctuations
that affect the publicly traded companies within the company's
strategic investment portfolio. The impact of future gains or
losses from the company's strategic investment portfolio could be
material.
(3) The Company’s Non-GAAP tax provision
uses a long-term projected tax rate of 22.0%, which reflects
currently available information and could be subject to change.
For additional information regarding non-GAAP financial measures
see the reconciliation of results and related explanations
below.
Quarterly Conference Call
Salesforce plans to host a conference call at 2:00 p.m. (PT) /
5:00 p.m. (ET) to discuss its financial results with the investment
community. A live webcast and replay details of the event will be
available on the Salesforce Investor Relations website at
www.salesforce.com/investor.
About Salesforce
Salesforce, the global CRM leader, empowers companies of every
size and industry to digitally transform and create a 360° view of
their customers. For more information about Salesforce (NYSE: CRM),
visit: www.salesforce.com.
"Safe harbor" statement under the Private Securities Litigation
Reform Act of 1995: This press release contains forward-looking
statements about the company's financial and operating results,
which may include expected GAAP and non-GAAP financial and other
operating and non-operating results, including revenue, net income,
earnings per share, operating cash flow growth, operating margin,
expected revenue growth, expected current remaining performance
obligation growth, expected tax rates, stock-based compensation
expenses, amortization of purchased intangibles, shares
outstanding, market growth, environmental, social and governance
goals, expected capital allocation, including mergers and
acquisitions, capital expenditures and other investments, and
expected contributions from acquired companies. The achievement or
success of the matters covered by such forward-looking statements
involves risks, uncertainties and assumptions. If any such risks or
uncertainties materialize or if any of the assumptions prove
incorrect, the company’s results could differ materially from the
results expressed or implied by the forward-looking statements it
makes.
The risks and uncertainties referred to above include -- but are
not limited to -- risks associated with the impact of, and actions
we may take in response to, the COVID-19 pandemic, related public
health measures and resulting economic downturn and market
volatility; our ability to maintain security levels and service
performance meeting the expectations of our customers, and the
resources and costs required to avoid unanticipated downtime and
prevent, detect and remediate performance degradation and security
breaches; the expenses associated with our data centers and
third-party infrastructure providers; our ability to secure
additional data center capacity; our reliance on third-party
hardware, software and platform providers; the effect of evolving
domestic and foreign government regulations, including those
related to the provision of services on the Internet, those related
to accessing the Internet, and those addressing data privacy,
cross-border data transfers and import and export controls; current
and potential litigation involving us or our industry, including
litigation involving acquired entities such as Tableau Software,
Inc. and Slack Technologies, Inc., and the resolution or settlement
thereof; regulatory developments and regulatory investigations
involving us or affecting our industry; our ability to successfully
introduce new services and product features, including any efforts
to expand our services; the success of our strategy of acquiring or
making investments in complementary businesses, joint ventures,
services, technologies and intellectual property rights; our
ability to complete, on a timely basis or at all, announced
transactions; our ability to realize the benefits from
acquisitions, strategic partnerships, joint ventures and
investments, including our July 2021 acquisition of Slack
Technologies, Inc., and successfully integrate acquired businesses
and technologies; our ability to compete in the markets in which we
participate; the success of our business strategy and our plan to
build our business, including our strategy to be a leading provider
of enterprise cloud computing applications and platforms; our
ability to execute our business plans; our ability to continue to
grow unearned revenue and remaining performance obligation; the
pace of change and innovation in enterprise cloud computing
services; the seasonal nature of our sales cycles; our ability to
limit customer attrition and costs related to those efforts; the
success of our international expansion strategy; the demands on our
personnel and infrastructure resulting from significant growth in
our customer base and operations, including as a result of
acquisitions; our ability to preserve our workplace culture,
including as a result of our decisions regarding our current and
future office environments or work-from-home policies; our
dependency on the development and maintenance of the infrastructure
of the Internet; our real estate and office facilities strategy and
related costs and uncertainties; fluctuations in, and our ability
to predict, our operating results and cash flows; the variability
in our results arising from the accounting for term license revenue
products; the performance and fair value of our investments in
complementary businesses through our strategic investment
portfolio; the impact of future gains or losses from our strategic
investment portfolio, including gains or losses from overall market
conditions that may affect the publicly traded companies within our
strategic investment portfolio; our ability to protect our
intellectual property rights; our ability to develop our brands;
the impact of foreign currency exchange rate and interest rate
fluctuations on our results; the valuation of our deferred tax
assets and the release of related valuation allowances; the
potential availability of additional tax assets in the future; the
impact of new accounting pronouncements and tax laws; uncertainties
affecting our ability to estimate our tax rate; uncertainties
regarding our tax obligations in connection with potential
jurisdictional transfers of intellectual property, including the
tax rate, the timing of the transfer and the value of such
transferred intellectual property; uncertainties regarding the
effect of general economic and market conditions; the impact of
geopolitical events; uncertainties regarding the impact of
expensing stock options and other equity awards; the sufficiency of
our capital resources; our ability to comply with our debt
covenants and lease obligations; the impact of climate change,
natural disasters and actual or threatened public health
emergencies; and our ability to achieve our aspirations and
projections related to our environmental, social and governance
initiatives..
Further information on these and other factors that could affect
the company’s financial results is included in the reports on Forms
10-K, 10-Q and 8-K and in other filings it makes with the
Securities and Exchange Commission from time to time. These
documents are available on the SEC Filings section of the
Financials section of the company’s website at
http://investor.salesforce.com/financials/.
salesforce.com, inc. assumes no obligation and does not intend
to update these forward-looking statements, except as required by
law.
© 2022 salesforce.com, inc. All rights reserved. Salesforce and
other marks are trademarks of salesforce.com, inc. Other brands
featured herein may be trademarks of their respective owners.
salesforce.com, inc.
Consolidated Statements of
Operations
(in millions, except per share
data)
(Unaudited)
Three Months Ended January
31,
Fiscal Year Ended January
31,
2022
2021
2022
2021
Revenues:
Subscription and support
$
6,828
$
5,476
$
24,657
$
19,976
Professional services and other
498
341
1,835
1,276
Total revenues
7,326
5,817
26,492
21,252
Cost of revenues (1)(2):
Subscription and support
1,456
1,115
5,059
4,154
Professional services and other
558
364
1,967
1,284
Total cost of revenues
2,014
1,479
7,026
5,438
Gross profit
5,312
4,338
19,466
15,814
Operating expenses (1)(2):
Research and development
1,291
939
4,465
3,598
Marketing and sales
3,464
2,632
11,855
9,674
General and administrative
733
574
2,598
2,087
Total operating expenses
5,488
4,145
18,918
15,359
Income (loss) from operations
(176
)
193
548
455
Gains on strategic investments, net
34
260
1,211
2,170
Other expense
(55
)
(28
)
(227
)
(64
)
Income (loss) before benefit from
(provision for) income taxes
(197
)
425
1,532
2,561
Benefit from (provision for) income taxes
(3)
169
(158
)
(88
)
1,511
Net income (loss)
$
(28
)
$
267
$
1,444
$
4,072
Basic net income (loss) per share
$
(0.03
)
$
0.29
$
1.51
$
4.48
Diluted net income (loss) per share
$
(0.03
)
$
0.28
$
1.48
$
4.38
Shares used in computing basic net income
(loss) per share
986
916
955
908
Shares used in computing diluted net
income (loss) per share
986
939
974
930
(1) Amounts include amortization of
intangible assets acquired through business combinations, as
follows:
Three Months Ended January
31,
Fiscal Year Ended January
31,
2022
2021
2022
2021
Cost of revenues
$
273
$
168
$
897
$
662
Marketing and sales
236
115
727
459
(2) Amounts include stock-based expense,
as follows:
Three Months Ended January
31,
Fiscal Year Ended January
31,
2022
2021
2022
2021
Cost of revenues
$
106
$
61
$
386
$
241
Research and development
272
172
918
703
Marketing and sales
287
223
1,104
941
General and administrative
98
86
371
305
(3) During the second quarter of fiscal
2021, the Company recorded approximately $2.0 billion of a one-time
benefit from a discrete tax item related to the recognition of
deferred tax assets resulting from an intra-entity transfer of
intangible property.
salesforce.com, inc.
Consolidated Statements of
Operations
(As a percentage of total
revenues)
(Unaudited)
Three Months Ended January
31,
Fiscal Year Ended January
31,
2022
2021
2022
2021
Revenues:
Subscription and support
93
%
94
%
93
%
94
%
Professional services and other
7
6
7
6
Total revenues
100
100
100
100
Cost of revenues (1)(2):
Subscription and support
20
19
19
20
Professional services and other
7
6
8
6
Total cost of revenues
27
25
27
26
Gross profit
73
75
73
74
Operating expenses (1)(2):
Research and development
18
16
17
17
Marketing and sales
47
46
44
45
General and administrative
10
10
10
10
Total operating expenses
75
72
71
72
Income (loss) from operations
(2
)
3
2
2
Gains on strategic investments, net
0
4
5
10
Other expense
(1
)
0
(1
)
0
Income (loss) before benefit from
(provision for) income taxes
(3
)
7
6
12
Benefit from (provision for) income
taxes
3
(2
)
(1
)
7
Net income (loss)
0
%
5
%
5
%
19
%
(1) Amounts include amortization of
intangible assets acquired through business combinations as a
percentage of total revenues, as follows:
Three Months Ended January
31,
Fiscal Year Ended January
31,
2022
2021
2022
2021
Cost of revenues
4
%
3
%
3
%
3
%
Marketing and sales
3
2
3
2
(2) Amounts include stock-based expense as
a percentage of total revenues, as follows:
Three Months Ended January
31,
Fiscal Year Ended January
31,
2022
2021
2022
2021
Cost of revenues
1
%
1
%
1
%
1
%
Research and development
4
3
4
4
Marketing and sales
4
4
4
4
General and administrative
1
1
1
1
salesforce.com, inc.
Consolidated Balance
Sheets
(in millions)
January 31, 2022
January 31, 2021
Assets
(unaudited)
Current assets:
Cash and cash equivalents
$
5,464
$
6,195
Marketable securities
5,073
5,771
Accounts receivable, net
9,739
7,786
Costs capitalized to obtain revenue
contracts, net
1,454
1,146
Prepaid expenses and other current
assets
1,120
991
Total current assets
22,850
21,889
Property and equipment, net
2,815
2,459
Operating lease right-of-use assets,
net
2,880
3,204
Noncurrent costs capitalized to obtain
revenue contracts, net
2,342
1,715
Strategic investments
4,784
3,909
Goodwill
47,937
26,318
Intangible assets acquired through
business combinations, net
8,978
4,114
Deferred tax assets and other assets,
net
2,623
2,693
Total assets
$
95,209
$
66,301
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable, accrued expenses and
other liabilities
$
5,474
$
4,355
Operating lease liabilities, current
686
766
Unearned revenue
15,628
12,607
Total current liabilities
21,788
17,728
Noncurrent debt
10,592
2,673
Noncurrent operating lease liabilities
2,703
2,842
Other noncurrent liabilities
1,995
1,565
Total liabilities
37,078
24,808
Stockholders’ equity:
Common stock
1
1
Additional paid-in capital
50,919
35,601
Accumulated other comprehensive loss
(166
)
(42
)
Retained earnings
7,377
5,933
Total stockholders’ equity
58,131
41,493
Total liabilities and stockholders’
equity
$
95,209
$
66,301
salesforce.com, inc.
Consolidated Statements of
Cash Flows
(in millions)
(Unaudited)
Three Months Ended January
31,
Fiscal Year Ended January
31,
2022
2021
2022
2021
Operating activities:
Net income (loss)
$
(28
)
$
267
$
1,444
$
4,072
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
931
869
3,298
2,846
Amortization of costs capitalized to
obtain revenue contracts, net
356
290
1,348
1,058
Stock-based expense
763
542
2,779
2,190
Gains on strategic investments, net
(34
)
(260
)
(1,211
)
(2,170
)
Tax benefit from intra-entity transfer of
intangible property
0
0
0
(2,003
)
Changes in assets and liabilities, net of
business combinations:
Accounts receivable, net
(5,719
)
(4,429
)
(1,824
)
(1,556
)
Costs capitalized to obtain revenue
contracts, net
(1,060
)
(672
)
(2,283
)
(1,645
)
Prepaid expenses and other current assets
and other assets
115
1
114
(133
)
Accounts payable and accrued expenses and
other liabilities
1,343
1,096
507
1,100
Operating lease liabilities
(194
)
(214
)
(801
)
(830
)
Unearned revenue
5,509
4,684
2,629
1,872
Net cash provided by operating
activities
1,982
2,174
6,000
4,801
Investing activities:
Business combinations, net of cash
acquired
(60
)
0
(14,876
)
(1,281
)
Purchases of strategic investments
(785
)
(127
)
(1,718
)
(1,069
)
Sales of strategic investments
37
366
2,201
1,051
Purchases of marketable securities
(1,165
)
(865
)
(5,674
)
(4,833
)
Sales of marketable securities
414
630
4,179
1,836
Maturities of marketable securities
267
239
2,069
1,035
Capital expenditures
(167
)
(149
)
(717
)
(710
)
Net cash provided by (used in) investing
activities
(1,459
)
94
(14,536
)
(3,971
)
Financing activities:
Proceeds from issuance of debt, net of
issuance costs
0
(20
)
7,906
(20
)
Repayments of Slack Convertible Notes, net
of capped call proceeds
(17
)
0
(1,197
)
0
Proceeds from employee stock plans
259
216
1,289
1,321
Principal payments on financing
obligations
(38
)
(19
)
(156
)
(103
)
Repayments of debt
(1
)
(1
)
(4
)
(4
)
Net cash provided by financing
activities
203
176
7,838
1,194
Effect of exchange rate changes
(15
)
27
(33
)
26
Net increase (decrease) in cash and
cash equivalents
711
2,471
(731
)
2,050
Cash and cash equivalents, beginning of
period
4,753
3,724
6,195
4,145
Cash and cash equivalents, end of
period
$
5,464
$
6,195
$
5,464
$
6,195
salesforce.com, inc.
Additional Metrics
(Unaudited)
January 31, 2022
October 31, 2021
July 31, 2021
April 30, 2021
January 31, 2021
October 31, 2020
Full time equivalent headcount
(1)
73,541
69,530
65,595
59,895
56,606
54,557
Financial data (in millions):
Cash, cash equivalents and marketable
securities
$ 10,537
$ 9,391
$ 9,650
$ 15,023
$ 11,966
$ 9,492
Strategic investments
4,784
4,004
4,105
3,944
3,909
3,927
Principal due on the Company's outstanding
debt obligations
10,686
10,698
11,551
2,689
2,690
2,691
(1) Full time equivalent headcount
includes 2,814 from the second quarter fiscal 2022 acquisition of
Slack.
Supplemental Revenue Analysis
Remaining Performance Obligation
Remaining performance obligations ("RPO") represents contracted
revenue that has not yet been recognized, which includes unearned
revenue and unbilled amounts that will be recognized as revenue in
future periods. RPO is influenced by several factors, including
seasonality, the timing of renewals, average contract terms and
foreign currency exchange rates. Unbilled portions of RPO
denominated in foreign currencies are revalued each period based on
the period end exchange rates.
The portion of RPO that is unbilled is not recorded on the
balance sheet. RPO consisted of the following (in billions):
Current
Noncurrent
Total
As of January 31, 2022 (1)
$ 22.0
$ 21.7
$ 43.7
As of October 31, 2021 (2)
18.8
17.5
36.3
As of July 31, 2021 (3)
18.7
17.5
36.2
As of April 30, 2021
17.8
17.2
35.0
As of January 31, 2021
18.0
18.1
36.1
(1) Includes approximately $1.2 billion of
RPO related to Slack. (2) Includes approximately $0.9 billion of
RPO related to Slack. (3) Includes approximately $0.8 billion of
RPO related to Slack.
Unearned Revenue
Unearned revenue represents amounts that have been invoiced in
advance of revenue recognition and is recognized as revenue when
transfer of control to customers has occurred or services have been
provided. The change in unearned revenue was as follows (in
millions):
Three Months Ended January
31,
Fiscal Year Ended January
31,
2022
2021
2022
2021
Unearned revenue, beginning of period
$
10,116
$
7,923
$
12,607
$
10,662
Billings and other (1)
12,992
10,598
29,011
23,096
Contribution from contract asset
(157
)
(97
)
110
28
Revenue recognized over time
(6,771
)
(5,361
)
(24,841
)
(19,955
)
Revenue recognized at a point in time
(555
)
(456
)
(1,651
)
(1,297
)
Unearned revenue from business
combinations
3
0
392
73
Unearned revenue, end of period
$
15,628
$
12,607
$
15,628
$
12,607
(1) Other includes, for example, the
impact of foreign currency translation.
Disaggregation of Revenue
Subscription and Support Revenue by the Company's service
offerings
Subscription and support revenues consisted of the following (in
millions):
Three Months Ended January
31,
Fiscal Year Ended January
31,
2022
2021
2022
2021
Sales
$ 1,586
$ 1,356
$ 5,989
$ 5,191
Service
1,710
1,446
6,474
5,377
Platform and Other (1)
1,350
885
4,509
3,324
Marketing and Commerce
1,046
869
3,902
3,133
Data (2)
1,136
920
3,783
2,951
$ 6,828
$ 5,476
$ 24,657
$ 19,976
(1) Platform and Other includes
approximately $308 million and $584 million of Slack subscription
and support revenues for the three and twelve months ended January
31, 2022, respectively. (2) Data is comprised of revenue from
Analytics, which includes Tableau, and Integration, which includes
Mulesoft, which were reclassified from Platform and Other beginning
in the third quarter of fiscal 2022.
Total Revenue by Geographic Locations
Revenues by geographical region consisted of the following (in
millions):
Three Months Ended January
31,
Fiscal Year Ended January
31,
2022
2021
2022
2021
Americas
$ 4,939
$ 4,012
$ 17,983
$ 14,736
Europe
1,717
1,248
6,016
4,501
Asia Pacific
670
557
2,493
2,015
$ 7,326
$ 5,817
$ 26,492
$ 21,252
Constant Currency Growth Rates
The Company presents constant currency information to provide a
framework for assessing how the Company's underlying business
performed excluding the effect of foreign currency rate
fluctuations. To present this information, current and comparative
prior period results for entities reporting in currencies other
than United States dollars are converted into United States dollars
at the weighted average exchange rate for the quarter being
compared to for growth rate calculations presented, rather than the
actual exchange rates in effect during that period.
Revenue constant currency growth rates were as follows:
Three Months Ended January 31,
2022 compared to Three Months Ended January 31, 2021
Three Months Ended October 31,
2021 compared to Three Months Ended October 31, 2020
Three Months Ended January 31,
2021 compared to Three Months Ended January 31, 2020
Americas
23%
23%
18%
Europe
40%
35%
20%
Asia Pacific
28%
29%
21%
Total growth
27%
26%
19%
The Company presents constant currency information for current
remaining performance obligation to provide a framework for
assessing how the Company's underlying business performed excluding
the effects of foreign currency rate fluctuations. To present the
information, the Company converted the current remaining
performance obligation balances in local currencies in previous
comparable periods using the United States dollar currency exchange
rate as of the most recent balance sheet date.
Current remaining performance obligation constant currency
growth rates were as follows:
January 31, 2022 compared to
January 31, 2021
October 31, 2021 compared to
October 31, 2020
January 31, 2021 compared to
January 31, 2020
Total growth
24%
23%
18%
salesforce.com, inc.
GAAP Results Reconciled to non-GAAP
Results
The following table reflects selected GAAP
results reconciled to non-GAAP results.
(in millions, except per share data)
(Unaudited)
Three Months Ended January
31,
Fiscal Year Ended January
31,
2022
2021
2022
2021
Non-GAAP income
from operations
GAAP income (loss) from operations
$
(176
)
$
193
$
548
$
455
Plus:
Amortization of purchased intangibles
(1)
509
283
1,624
1,121
Stock-based expense (2)
763
542
2,779
2,190
Non-GAAP income from operations
$
1,096
$
1,018
$
4,951
$
3,766
Non-GAAP
operating margin as a percentage of revenues
Total revenues
$
7,326
$
5,817
$
26,492
$
21,252
GAAP operating margin (3)
(2.4
) %
3.3
%
2.1
%
2.1
%
Non-GAAP operating margin (3)
15.0
%
17.5
%
18.7
%
17.7
%
Non-GAAP net
income
GAAP net income (loss)
$
(28
)
$
267
$
1,444
$
4,072
Plus:
Amortization of purchased intangibles
(1)
509
283
1,624
1,121
Stock-based expense (2)
763
542
2,779
2,190
Income tax effects and adjustments
(401
)
(117
)
(1,188
)
(2,803
)
Non-GAAP net income
$
843
$
975
$
4,659
$
4,580
Three Months Ended January
31,
Fiscal Year Ended January
31,
2022
2021
2022
2021
Non-GAAP diluted
net income per share
GAAP diluted net income (loss) per
share
$ (0.03
)
$ 0.28
$ 1.48
$ 4.38
Plus:
Amortization of purchased intangibles
0.51
0.30
1.67
1.21
Stock-based expense
0.76
0.58
2.85
2.35
Income tax effects and adjustments
(0.40
)
(0.12
)
(1.22
)
(3.02
)
Non-GAAP diluted net income per share
$ 0.84
$ 1.04
$ 4.78
$ 4.92
Shares used in computing Non-GAAP diluted
net income per share
1,003
939
974
930
Reported GAAP loss per share for the three months ended January
31, 2022 was calculated using the basic share count. Non-GAAP
diluted earnings per share was calculated using the diluted share
count which includes approximately 17 million shares of dilutive
securities related to employee stock awards.
(1) Amortization of purchased intangibles was as follows:
Three Months Ended January
31,
Fiscal Year Ended January
31,
2022
2021
2022
2021
Cost of revenues
$ 273
$ 168
$ 897
$ 662
Marketing and sales
236
115
727
459
$ 509
$ 283
$ 1,624
$ 1,121
(2) Stock-based expense was as follows:
Three Months Ended January
31,
Fiscal Year Ended January
31,
2022
2021
2022
2021
Cost of revenues
$ 106
$ 61
$ 386
$ 241
Research and development
272
172
918
703
Marketing and sales
287
223
1,104
941
General and administrative
98
86
371
305
$ 763
$ 542
$ 2,779
$ 2,190
(3) GAAP operating margin is the proportion of GAAP income from
operations as a percentage of GAAP revenue. Non-GAAP operating
margin is the proportion of non-GAAP income from operations as a
percentage of GAAP revenue. Non-GAAP income from operations
excludes the impact of the amortization of purchased intangibles
and stock-based expense.
salesforce.com, inc.
Computation of Basic and Diluted GAAP
and non-GAAP Net Income (Loss) Per Share
(in millions, except per share data)
(Unaudited)
Three Months Ended January
31,
Fiscal Year Ended January
31,
2022
2021
2022
2021
GAAP Basic Net Income (Loss) Per
Share
Net income (loss)
$ (28
)
$ 267
$ 1,444
$ 4,072
Basic net income (loss) per share
$ (0.03
)
$ 0.29
$ 1.51
$ 4.48
Shares used in computing basic net income
(loss) per share
986
916
955
908
Three Months Ended January
31,
Fiscal Year Ended January
31,
2022
2021
2022
2021
Non-GAAP Basic Net Income Per
Share
Non-GAAP net income
$ 843
$ 975
$ 4,659
$ 4,580
Non-GAAP basic net income per share
$ 0.85
$ 1.06
$ 4.88
$ 5.04
Shares used in computing Non-GAAP basic
net income per share
986
916
955
908
Three Months Ended January
31,
Fiscal Year Ended January
31,
2022
2021
2022
2021
GAAP Diluted Net Income (Loss) Per
Share
Net income (loss)
$ (28
)
$ 267
$ 1,444
$ 4,072
Diluted net income (loss) per share
$ (0.03
)
$ 0.28
$ 1.48
$ 4.38
Shares used in computing diluted net
income (loss) per share
986
939
974
930
Three Months Ended January
31,
Fiscal Year Ended January
31,
2022
2021
2022
2021
Non-GAAP Diluted Net Income Per
Share
Non-GAAP net income
$ 843
$ 975
$ 4,659
$ 4,580
Non-GAAP diluted net income per share
$ 0.84
$ 1.04
$ 4.78
$ 4.92
Shares used in computing Non-GAAP diluted
net income per share
1,003
939
974
930
Supplemental Cash Flow
Information
Free cash flow analysis, a non-GAAP
measure
(in millions)
Three Months Ended January
31,
Fiscal Year Ended January
31,
2022
2021
2022
2021
GAAP net cash provided by operating
activities
$ 1,982
$ 2,174
$ 6,000
$ 4,801
Capital expenditures (1)
(167
)
(149
)
(717
)
(710
)
Free cash flow
$ 1,815
$ 2,025
$ 5,283
$ 4,091
(1) Capital expenditures for the fiscal
year ended January 31, 2021 includes the Company's purchase of the
property located at 450 Mission St. in San Francisco ("450
Mission") in March 2020 for approximately $150 million.
Non-GAAP Financial Measures: This press release includes
information about non-GAAP operating margin, non-GAAP diluted
earnings per share, non-GAAP tax rates, free cash flow, constant
currency revenue and constant currency current remaining
performance obligation growth rates (collectively the “non-GAAP
financial measures”). These non-GAAP financial measures are
measurements of financial performance that are not prepared in
accordance with U.S. generally accepted accounting principles and
computational methods may differ from those used by other
companies. Non-GAAP financial measures are not meant to be
considered in isolation or as a substitute for comparable GAAP
measures and should be read only in conjunction with the company’s
consolidated financial statements prepared in accordance with GAAP.
Management uses both GAAP and non-GAAP measures when planning,
monitoring and evaluating the company’s performance.
The primary purpose of using non-GAAP measures is to provide
supplemental information that may prove useful to investors and to
enable investors to evaluate the company’s results in the same way
management does. Management believes that supplementing GAAP
disclosure with non-GAAP disclosure provides investors with a more
complete view of the company’s operational performance and allows
for meaningful period-to-period comparisons and analysis of trends
in the company’s business. Further to the extent that other
companies use similar methods in calculating non-GAAP measures, the
provision of supplemental non-GAAP information can allow for a
comparison of the company’s relative performance against other
companies that also report non-GAAP operating results.
Non-GAAP Operating Margin is the proportion of non-GAAP income
from operations as a percentage of GAAP revenue. Non-GAAP income
from operations excludes the impact of the following items:
stock-based compensation and amortization of acquisition-related
intangibles. Non-GAAP diluted earnings per share excludes, to the
extent applicable, the impact of the following items: stock-based
compensation, amortization of purchased intangibles, and income tax
adjustments. These items are excluded because the decisions that
give rise to them are not made to increase revenue in a particular
period, but instead for the company’s long-term benefit over
multiple periods.
As described above, the company excludes or adjusts for the
following in its non-GAAP results and guidance:
- Stock-Based Expenses: The company’s compensation strategy
includes the use of stock-based compensation to attract and retain
employees and executives. It is principally aimed at aligning their
interests with those of our stockholders and at long-term employee
retention, rather than to motivate or reward operational
performance for any particular period. Thus, stock-based
compensation expense varies for reasons that are generally
unrelated to operational decisions and performance in any
particular period.
- Amortization of Purchased Intangibles: The company views
amortization of acquisition-related intangible assets, such as the
amortization of the cost associated with an acquired company’s
research and development efforts, trade names, customer lists and
customer relationships, and in some cases, acquired lease
intangibles, as items arising from pre-acquisition activities
determined at the time of an acquisition. While these intangible
assets are continually evaluated for impairment, amortization of
the cost of purchased intangibles is a static expense, which is not
typically affected by operations during any particular period.
Although the Company excludes the amortization of purchased
intangibles from these non-GAAP measures, management believes that
it is important for investors to understand that such intangible
assets were recorded as part of purchase accounting and contribute
to revenue generation.
- Gains on Strategic Investments, net: The company records all
fair value adjustments to its equity securities held within the
strategic investment portfolio through the statement of operations.
As it is not possible to forecast future gains and losses, the
company assumes no change to the value of its strategic investment
portfolio in its GAAP and non-GAAP estimates for future periods,
including its guidance. Gains on Strategic Investments, net, are
included in its GAAP financial statements.
- Income Tax Effects and Adjustments: The company utilizes a
fixed long-term projected non-GAAP tax rate in order to provide
better consistency across the interim reporting periods by
eliminating the effects of items such as changes in the tax
valuation allowance and tax effects of acquisition-related costs,
since each of these can vary in size and frequency. When projecting
this long-term rate, the company evaluated a three-year financial
projection that excludes the direct impact of the following
non-cash items: stock-based expenses and the amortization of
purchased intangibles. The projected rate also considers factors
including the company’s expected tax structure, its tax positions
in various jurisdictions and key legislation in major jurisdictions
where the company operates. For fiscal 2021 and 2022, the company
used a projected non-GAAP tax rate of 22.0% and 21.5%,
respectively. For fiscal 2023, the company uses a projected
non-GAAP tax rate of 22%, which reflects currently available
information, as well as other factors and assumptions. The non-GAAP
tax rate could be subject to change for a variety of reasons,
including the rapidly evolving global tax environment, significant
changes in the company’s geographic earnings mix due to acquisition
activity, or other changes to the company’s strategy or business
operations. The company will re-evaluate its long-term rate as
appropriate.
The company defines the non-GAAP measure free cash flow as GAAP
net cash provided by operating activities, less capital
expenditures. For this purpose, capital expenditures includes the
cash consideration related to the purchase of 450 Mission in March
2020, but does not include its strategic investments.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220301005835/en/
Evan Goldstein Salesforce Investor Relations 415-819-2987
evan.goldstein@salesforce.com Carolyn Guss Salesforce Public
Relations 415-536-4966 cguss@salesforce.com
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