Salesforce Narrows Loss, Revs Up - Analyst Blog
01 März 2013 - 10:15AM
Zacks
Salesforce.com Inc. (CRM) reported
fourth-quarter fiscal 2013 adjusted loss per share of 2 cents,
narrower than the Zacks Consensus Estimate of 3 cents loss per
share.
Revenues
Revenues in the quarter were $834.7 million, up 32.0% from the
year-ago quarter. The quarter’s result was also above the company’s
guidance range of $825.0 million to $830.0 million.
Salesforce witnessed an improvement in revenues from all its
business segments. Subscription and support revenue was $785.5
million, up 32.0% on a year-over-year basis, while the Professional
services and other revenue was $49.2 million, up 31.0% year over
year.
Geographically, the company witnessed decent revenue growth in
all of its operating regions. Revenue in the Americas was up 34.0%
to $583.0 million, while Europe grew 37.0% to $149 million. This
apart, revenue from Asia grew by 17.0% in dollars to $103 million.
Although Asian revenue grew, but the growth has been affected by
slowing demand from enterprise customers in Japan.
Operating Results
Gross profit expanded 31.4% year over year to $651.3 million.
Gross margin was 78.0%, down 40 basis points from the year-ago
quarter.
Total operating expenses rose 33.9% year over year to $672.1
million on the back of a 50.3% rise in research and development
expense (R&D), 33.0% increase in sales and marketing expense,
and 23.0% rise in general and administrative expense. Continuous
increase in headcount from the recent acquisitions drove the
operating expenses higher.
Operating loss of $20.8 million during the quarter was more than
the year-ago quarter’s loss of $6.4 million. Operating loss margin
was 2.5% versus 1.0% in the prior-year quarter.
GAAP net loss in the quarter was $20.8 million or 14 cents per
share compared with net loss of $4.1 million or 3 cents in the
comparable quarter last year. Excluding special items but including
stock-based compensation expense, adjusted net loss was 2 cents per
share compared with a profit of 9 cents in the year-ago
quarter.
Balance Sheet & Cash Flow
Salesforce.com ended the quarter with cash and cash equivalents
of $747.2 million, up from $605.6 million in the prior quarter.
Accounts receivable increased to $872.6 million from $418.6 million
in the prior quarter. Total deferred revenue in the quarter was
$1.79 billion, up from $1.29 billion in the previous quarter.
Cash from operating activities was $281.6 million compared with
$105.9 million in the prior quarter.
Guidance
For the first quarter of 2014, the company expects revenue in the
range of $882 million to $887 million, expecting an increase of
27.0% to 28.0% year over year.
Moreover, GAAP net loss per share is expected in the range loss
per share of 44 to 42 cents, while non-GAAP EPS is expected in the
range of 40 to 42 cents.
For the full year 2014, revenue is expected in the range of
$3.82 billion to $3.87 billion, up 25%–27% year over year. Again,
GAAP net loss per share is expected in the range of
($1.22)–($1.18), while non-GAAP EPS is expected in the range of
$1.93–$1.97.
Summary
Salesforce.com reported mediocre fourth-quarter 2013 results.
Loss per share was narrower than the Zacks Consensus Estimate. The
first-quarter guidance was modest. This apart, revenue grew across
geographies, which was a positive factor.
The company also received decent cloud business. Moreover,
business in Europe also grew to a considerable extent. However,
headwinds in the form of not-so-encouraging tech expenses. Though
we are encouraged by Salesforce’s growth prospects in the cloud
market, the renewed focus of the tech giants such as Dell
Inc. (DELL), Hewlett-Packard Co. (HPQ)
and IBM (IBM) into the cloud space intensified
competition in the third quarter.
Salesforce shares carry a Zacks Rank #5 (Strong Sell).
SALESFORCE.COM (CRM): Free Stock Analysis Report
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