Salesforce.com Earnings Show a Healthy Cloud Outlook
Cloud pioneer Salesforce.com has reported healthy revenue for its fourth quarter fiscal 2016 earnings, and has raised its yearly revenue forecast.
Salesforce.com posted earnings of $0.01 per share and revenue of $1.81 billion. This missed the Zacks Consensus Estimate of $0.04 for profit but beat revenue estimates, reflecting a 25 percent year-over-year increase and a 27 percent increase in constant currency.
It also announced projected Q1 FY17 revenue to be approximately $1.885 billion to $1.895 billion, a 25 percent year-over-year increase. Diluted GAAP earnings per share is projected to be in the range of $0.00 to $0.01, while diluted non-GAAP earnings per share is projected to be in the range of $0.23 to $0.24.
“We hit an all-time high in large transactions in fiscal 2016 as more and more companies look to Salesforce as their trusted advisor,” said Keith Block, vice chairman, president and COO, Salesforce. “The tremendous response to our customer success platform is driving exceptional growth for Salesforce across every region, every cloud and every industry.”
Before the cloud giant’s latest figures were released, Wall Street analysts were looking to the company as a barometer for conditions across the cloud industry.
“Investors will look to the Salesforce.com results for signs that businesses may be beginning to slow their spending because they are worried about the economy,” said JMP Securities analyst Patrick Walravens.
On the earnings call, Salesforce CFO Mark Hawkins added that despite Wall Street analyst fears of a downturn, “We aren’t seeing an economic impact.”
The company also continues to expand into new arenas, demonstrating the flexibility of the cloud model. It recently announced the general release of Salesforce Health Cloud, a patient relationship management platform.
Salesforce is positioning Health Cloud as a user-friendly means to pull in and manage data patient from multiple sources, from electronic health records to wearable fitness trackers. It’s also a communications platform for care coordination and patient engagement, and offers dashboards for outcome management and population health tracking.
Edited by Rory J. Thompson