<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Shares of software-as-a-service giant salesforce.com (NYSE: CRM) were rising during after-hours trading on Tuesday, following the company’s first-quarter report for fiscal 2020. Shares were up nearly 3% in after-hours trading as of 6:05 p.m. EDT. The stock’s gain reflects the Street’s optimism about Salesforce’s strong quarterly results, including steep revenue growth, robust cash flow, and more.” data-reactid=”11″>Shares of software-as-a-service giant salesforce.com (NYSE: CRM) were rising during after-hours trading on Tuesday, following the company’s first-quarter report for fiscal 2020. Shares were up nearly 3% in after-hours trading as of 6:05 p.m. EDT. The stock’s gain reflects the Street’s optimism about Salesforce’s strong quarterly results, including steep revenue growth, robust cash flow, and more.
To better understand how well the customer relationship management platform company is executing, consider six of the top takeaways from Salesforce’s fiscal first-quarter results.
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<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="1. 24% revenue growth” data-reactid=”25″>1. 24% revenue growth
Salesforce’s fiscal first-quarter revenue rose 24% year over year, or 26% growth in constant currency. Highlighting the resilience of the company’s strong top-line momentum, this is nearly in line with the 27% constant currency revenue growth the company reported in its fourth quarter of fiscal 2019.
Salesforce co-CEO Keith Block credited the company’s momentum to “tremendous demand” for its offerings as companies “undergoing a digital transformation to better serve their customers and they are choosing Salesforce as their partner.”
<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="2. Non-GAAP earnings per share of $0.93” data-reactid=”28″>2. Non-GAAP earnings per share of $0.93
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Salesforce said its non-GAAP earnings per share for its fiscal first quarter was $0.93, up from $0.74 in the year-ago quarter. But non-GAAP earnings per share saw a $0.27 contribution from mark-to-market accounting of strategic investments.” data-reactid=”29″>Salesforce said its non-GAAP earnings per share for its fiscal first quarter was $0.93, up from $0.74 in the year-ago quarter. But non-GAAP earnings per share saw a $0.27 contribution from mark-to-market accounting of strategic investments.
On average, analysts expected non-GAAP earnings per share of $0.61 for the period.
<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="3. 34% operating cash flow growth” data-reactid=”31″>3. 34% operating cash flow growth
Highlighting the strength of Salesforce’s business model, operating cash flow rose 34% year over year to $1.97 billion. This put the company’s cash, cash equivalents, and marketable securities at the end of the period at $6.38 billion.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="With a cash hoard over $6 billion, Salesforce has a cash position that's nearing what it was before the company acquired information technology company MuleSoft last year. Given the company’s good track record of creating value from acquisitions in the past, it wouldn’t be surprising if Salesforce is mulling over another merger.” data-reactid=”33″>With a cash hoard over $6 billion, Salesforce has a cash position that’s nearing what it was before the company acquired information technology company MuleSoft last year. Given the company’s good track record of creating value from acquisitions in the past, it wouldn’t be surprising if Salesforce is mulling over another merger.
<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="4. Service cloud revenue surpassed $1 billion” data-reactid=”34″>4. Service cloud revenue surpassed $1 billion
Salesforce’s service cloud revenue rose 20% year over year in Q1 to $1.02 billion, narrowing the gap between it and Salesforce’s largest subscription and support segment: sales cloud. Sales cloud revenue increased 11% year over year during the quarter to $1.07 billion.
<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="5. A non-GAAP operating margin of 18.2%” data-reactid=”36″>5. A non-GAAP operating margin of 18.2%
Salesforce’s non-GAAP operating margin increased by 122 basis points year over year, rising from 17% in the first quarter of fiscal 2019 to 18.2% in the first quarter of fiscal 2020.
<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="6. Salesforce platform and other cloud revenue rose 46%” data-reactid=”38″>6. Salesforce platform and other cloud revenue rose 46%
Helped by $14 million in revenue from Salesforce’s acquisition of information technology company Mulesoft, salesforce platform and other was the company’s fastest growing cloud, boasting 46% year-over-year revenue growth. Salesforce’s marketing and commerce cloud was the company’s second fastest-growing cloud, with revenue increasing 33%.
Chairman and co-CEO Mar Benioff believes the company is positioned for more strong growth. “We have a massive opportunity in front of us and are well-positioned for long-term growth as the world’s [No. 1] CRM,” he said in the company’s fiscal first-quarter earnings release.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content=" More From The Motley Fool ” data-reactid=”41″> More From The Motley Fool
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends salesforce.com. The Motley Fool has a disclosure policy.” data-reactid=”49″>Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends salesforce.com. The Motley Fool has a disclosure policy.
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