Salesforce (CRM) Q3 Earnings And Revenues Surpass Estimates
Zacks Investment Research | Dec 03, 2019 10:28PM ET
salesforce.com Inc. (NYSE:CRM) delivered third-quarter fiscal 2020 non-GAAP earnings of 75 cents per share, beating the Zacks Consensus Estimate by 13.64% and also the year-ago quarterly figure by 23%.
Meanwhile, revenues of $4.51 billion surged 33% year over year and also surpassed the Zacks Consensus Estimate of $4.436 billion. Moreover, the top line improved 34% in constant currency (cc). While the acquisition of Salesforce.org contributed $80 million to the company’s revenue stream, Tableau buyout generated $327 million. Excluding the acquired revenues from Tableau and Salesforce.org, total revenues grew 21% in dollars and 22% at cc.
However, adverse foreign exchange volatility is a persistent challenge. The company experienced FX headwinds of approximately $29 million in the third quarter.
It is benefiting from a robust demand environment as customers are undergoing a major digital transformation. The rapid adoption of its cloud-based solutions led to better-than-expected results.
Quarter in Detail
Coming to the company’s business segments, revenues at Subscription and Support rose about 34% from the year-earlier period to $4.24 billion. Professional Services and Other revenues climbed 22% to $274 million.
Sales Cloud revenues ascended 15% year over year to $1.17 billion. Revenues from Service Cloud, one of the company’s largest and the fastest-growing businesses, also improved 24% to $1.14 billion. Moreover, Marketing & Commerce Cloud revenues jumped 32% to $640 million.
salesforce’s Platform and Other revenues soared 73% to $1.29 billion. Tableau contributed nearly $308 million while MuleSoft revenues of $185 million grew 77% year over year.
Geographically, the company witnessed revenue growth of 33% in the Americas (71% of total revenues), 28% in the Asia Pacific (10%) and 42% in Europe (19%) on a year-over-year basis at cc. Year-over-year growth in the Americas and the EMEA is driven by the acquisition of Tableau.
Operating Details
salesforce’s non-GAAP gross profit came in at $3.59 billion, up 37.7% from the prior-year quarter. Additionally, gross margin expanded 260 basis points (bps) to 79.5%.
salesforce posted non-GAAP operating income of $874 million, up 52.8% year over year. Operating margin also expanded 250 bps to 19.4%
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