Shares of salesforce.com Inc. (CRM – Analyst Report) gained more than 6% in after-hour trade yesterday following strong first-quarter fiscal 2016 results and upbeat fiscal year guidance issued by the company.
The company’s adjusted earnings (including stock-based compensation but excluding all one-time items on a proportionate tax basis) of 2 cents per share came ahead of the Zacks Consensus Estimate of a penny. Moreover, quarterly earnings compared favorably with the year-ago period loss of 7 cents per share.
Salesforce.com Inc. – Earnings Surprise | FindTheCompany
Salesforce’s revenues of $1.511 billion not only increased 23.2% from the year-ago quarter but also beat the Zacks Consensus Estimate of $1.501 billion. Reported revenues also beat management’s guided range of $1.485 to $1.505 billion. The year-over-year improvement was primarily attributed to rapid adoption of the company’s cloud-based solutions.
Also, higher demand for Salesforce ExactTarget Marketing Cloud platform, part of the Salesforce1 Customer Platform, contributed to the year-over-year revenue growth.
During the quarter, the company’s cloud-based solutions were selected by a number of companies including Bank of America (BAC – Analyst Report), Dentsu, Expedia (EXPE – Analyst Report), Hitachi, Japan Post, John Deere, Medtronic, TELUS, T-Mobile (TMUS – Analyst Report), U.S. Citizenship and Immigration Services, Western Union and Zurich Insurance.
Among its business segments, revenues from Subscription and Support increased 22.5% from the year-ago quarter to $1.405 billion. Professional Services and Other revenues jumped 33.2% on a year-over-year basis to $105.9 million.
Geographically, the company witnessed revenue growth of 27.2% in the Americas, while revenues from Europe and Asia increased 12.1% and 14.8%, respectively, on a year-over-year basis.
Operating Results
Salesforce’s adjusted gross profit (including stock-based compensation but excluding amortization expenses) came in at $1.149 billion, up 19.3% from the year-ago quarter. However, gross margin contracted 250 basis points (bps) to 76% from the year-ago period, primarily due to increased investment in infrastructure development, including the expansion of international data center.
