15:13 CRM Salesforce.com Earnings Preview (65.68 +1.94)
Salesforce.com (CRM) is set to report earnings today after the close with a conference call to follow at 5pm ET. CRM reported Q3 results at 4:05pm ET. Current Capital IQ consensus stands at EPS of $0.06 on revenues of $1.12 bln. Shares of CRM have rallied to all time highs, rallying nearly 30% since early December. Expectations for the co are high as analysts have been upbeat on Q4 expectations as channel checks are pointing to a positive quarter for CRM. The bottom line will remain a concern for investors and will be closely watched as valuation questions work their way into the equation.
Taking a look at Q3 results, CRM reported Q3 (Oct) earnings of $0.09 per share, excluding non-recurring items, in-line with the Capital IQ Consensus Estimate consensus of $0.09. Revenues rose 36.5% year/year to $1.08 bln vs the $1.05 bln consensus. This marked the second straight quarter that revenue growth accelerated (Q1 28.5%, Q2- 30.7%).
Subscription and support revenues were $1.00 billion, an increase of 36% y/y. Professional services and other revenues were $72 million, an increase of 50% y/y. Deferred revenue on the balance sheet as of October 31, 2013 was $1.73 billion, an increase of 34% y/y, benefited in part by the acquisition of ExactTarget. Current deferred revenue increased by 38% y/y to $1.69 billion, benefited in part by longer invoice durations. Non-current deferred revenue decreased by 26% y/y to $48 million. Unbilled deferred revenue, representing business that is contracted but unbilled and off balance sheet, ended the third quarter at approximately $4.20 billion, up 40% y/y. Co issued guidance for Q4, projecting EPS of $0.05-0.06, excluding non-recurring items, vs. $0.06 Capital IQ Consensus. Q4 revenue was projected to be in the range of $1.124-1.129 bln vs. $1.12 bln Capital IQ Consensus Estimate. Co issued in-line guidance for FY15 (recall CRM has a January end date, so the majority of co's FY15 takes place in 2014), projecting FY15 revs in the range of $5.15-5.20 bln vs. $5.18 bln Capital IQ Consensus Estimate. HPQ PartnershipIn addition to earnings, CRM also announced a JV with HPQ. The plan is to create the new Salesforce Superpod, a dedicated instance in the Salesforce multi-tenant cloud, running on HP's Converged Infrastructure. The companies plan to jointly develop and market the Salesforce Superpod to the world's largest enterprises. HP intends to be the first customer to be deployed on a Salesforce Superpod. Investors will be curious to see how this relationship is progressing. |
