Salesforce.com's Q2 Conference Call Highlights
Second quarter highlights
Benioff began the conference call by highlighting the company's accomplishments in Europe which included the opening of offices in Paris and London. Benioff claimed that as a result of the company's aggressive expansion across the continent, Salesforce is the “absolute” top CRM platform.
During the quarter, Salesforce exceeded the $5 billion revenue run rate, the first enterprise cloud company to make claim to such an accomplishment. Helping drive revenue was the company's ExactTarget acquisition which took place a year ago.
Total revenue grew 38 percent from a year ago to more than $1.3 billion while deferred revenue exceeded expectation by growing 31 percent. Americas saw a 39 percent growth in revenue; Europe, Middle East and Africa saw its revenue grow 42 percent; Asia-Pacific saw its revenue grow 25 percent.
According to Benioff, the value of booked business on and off the balance sheet grew 32 percent from a year ago to $7.4 billion. The executive added that the company's next “big goal” is bring its differed business to the $10 billion mark.
Operating cash flow rose 34 percent from a year ago to $246 million, bringing the total to more than $719 million for the year. The company remains on track to achieve its guidance of more than $1.1 billion in operating cash flow.
Earnings per share improved to $0.13 which exceeded the company's expectations and topped analyst expectations. Gross margin fell 140 basis points to 79.3 percent due to the acquisition of ExactTarget late in the second quarter of last year.
Capital expenditure during the quarter fell 30 percent from a year ago to $72 million. The company expects its full year capital expenditure as a percent of revenue to be in a range of five percent to seven percent.
The company ended the quarter with approximately $1.7 billion in cash and marketable securities.
Looking forward, Salesforce expects its 2015 revenue to be $5.34 billion to $5.37 billion, representing year over year growth of 31 percent to 32 percent. The company expects its full year earnings per share to be in a range of $0.50 to $0.52.
For the third quarter, Salesforce expects its revenue to be in a range of $1.365 billion to $1.37 billion, representing year over year growth of 27 percent. Earnings per share is expected to be in a range of $0.12 to $0.13.
Marc Benioff on the company's image:
“We're also honored that Forbes yesterday named Salesforce the world's most innovative company for the fourth year in row and that is just a testament to our relentless focus on customer success, delivering a truly innovative customer platform and honestly we're just in shock on that recognition. We couldn't believe it when we were the Forbes most innovative company in the world and now [we've done it] four years in a row.“
Marc Benioff on shareholder value:
“Of course I think we've now delivered more than 1700% return for our investors since we went public and we now are one of the top 10 best performing equities over the last decade.”
Marc Benioff on the company's upcoming Dreamforce event:
“You're going to see the future of cloud, social, mobile, the future of the connected world. You're going to see businesses running -- you're going to see businesses running their entire business right from their phone. You're going to see people creating these amazing customer journeys like Microsoft is doing with Office 365 and you're going to see incredible new capabilities from Salesforce and we're going be also launching a major new product line there, as we like to call it a new cloud. So we're going to have the biggest and most exciting and most thrilling Dreamforce ever.”
Marc Benioff on wearable technology:
“I'm confident we're going to see wearables from major providers like Apple and others this year. You've already seen wearables emerge from huge companies like Samsung and it's going to be a huge part of all of our lives and Salesforce has to be deeply integrated as part of that, which is why we launched this Salesforce Wear program.
Marc Benioff on whose idea it was to acquire RelateIQ:
“I have dinner that I attend every month with 15 CEOs of mostly very strong and emerging companies, a lot of them who now have become huge companies. And two of them looked me in the eye and this has never happened before and they go, you really need to buy RelateIQ. And I said why do I need to buy RelateIQ and they said, we use Salesforce but we use RelateIQ also and it's an incredible complement to your product line and it can be a huge part of your future and I started, I knew about RelateIQ, I've used it.”
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