Salesforce.com (NYSE: CRM) announced yet another marvelous financially quarterly result on Wednesday after the close of the stock market. Everything had not been so cheerful for ‘cloud’ stocks recently from a stock price perspective. LinkedIn (NYSE: LNKD) and Tableau Software (NYSE: DATA) are too recent examples of financial investors punishing stocks for weak forward-looking guidance.
Salesforces’ outstanding Q4’16 results are evident in the numbers however, Marc Benioff, Salesforce CEO, disclosed an important reason why, in his opinion, that his Company is having success against competitive rival of Oracle (NYSE: ORCL) and SAP (NYSE: SAP). This reason is the strategy of CEO engagement. Below is a link to the full article:
Also, here is a quick summary of the financial results for your convenience:
- Revenue: $1.81 billion vs. $1.79 billion expected (25% growth year over year)
- Revenue guidance: $1.885 billion to $1.895 billion vs. $1.86 billion expected
- Full year guidance, Salesforce had $6.67 billion in revenue, up 24% year-over-year
- Also raised its full year revenue guidance to $8.12 billion
- 2 deals of nine-figures (i.e $xxx,xxx,xxx)
- 600 deals of seven-figures (i.e $x,xxx,xxx)
- Brought in $459 million in operating cash flow in the fourth quarter, a 38% increase from last year
- For the full year, it generated $1.61 billion in operating cash flow, bringing its total cash reserve to $2.73 billion
- It also reported $4.29 billion in deferred revenue and $7.1 billion in unbilled deferred revenue, meaning more than $11.3 billion worth of sales have not been recorded yet
While these numbers are all great it’s still important to know that Salesforce still produces a net loss as summarized below:
- In fourth quarter, it saw $25.5 million in net loss, down from last year’s $65.7 million net loss
- For the full year, it decreased its net loss to $47 million from a loss of $263 million the previous year
However, this net loss is shrinking and the reason for net loss is that Salesforce is constantly doing major financial investment in growth via acquisitions, strategic investment or other sales/marketing resources for their Company. As Mr. Benioff was once famously quoted:
This is the heyday of the Cloud. This is the Renaissance.
We are in the Great Time. ”
…and he continues…
“So we’re still at the very, very beginning.
We are in the first innings of Cloud Computing.
This is still the Renaissance. ”