salesforce(US:CRM)2024-05-29 20:03Revenue Performance - Q1 revenue reached $9.13 billion, up 11% year-over-year (Y/Y) and 11% in constant currency (CC), with subscription & support revenue at $8.59 billion, up 12% Y/Y[2] - Total revenues for Q1 2024 increased to $9,133 million, up from $8,247 million in Q1 2023, representing a 10.7% growth[21] - Subscription and support revenue grew to $8,585 million in Q1 2024, a 12.3% increase compared to $7,642 million in Q1 2023[21] - Q2 FY25 revenue guidance is $9.20 billion to $9.25 billion, representing 7% - 8% Y/Y growth[5] - Full-year FY25 revenue guidance is maintained at $37.7 billion to $38.0 billion, up 8% - 9% Y/Y, with subscription & support revenue growth slightly below 10% Y/Y and approximately 10% in CC[5] - Subscription and support revenues for the three months ended April 30, 2024, totaled $8.585 billion, with Sales at $1.998 billion, Service at $2.182 billion, Platform and Other at $1.718 billion, Marketing and Commerce at $1.282 billion, and Integration and Analytics at $1.405 billion[32] - Total revenue by geographic region for the three months ended April 30, 2024, was $9.133 billion, with Americas contributing $6.062 billion, Europe $2.145 billion, and Asia Pacific $926 million[33] - Constant currency growth rates for subscription and support revenues showed Integration and Analytics growing at 25% for the three months ended April 30, 2024, compared to the same period in 2023[35] Profitability and Margins - Q1 GAAP operating margin was 18.7%, up 1,370 basis points Y/Y, and non-GAAP operating margin was 32.1%, up 450 basis points Y/Y[3] - Full-year FY25 GAAP operating margin guidance is lowered to 19.9%, while non-GAAP operating margin guidance is maintained at 32.5%[5] - Net income for Q1 2024 was $1,533 million, a significant increase from $199 million in Q1 2023[21] - Gross profit margin improved to 76% in Q1 2024, up from 74% in Q1 2023[23] - Non-GAAP income from operations for the three months ended April 30, 2024, was $2.928 billion, compared to GAAP income from operations of $1.709 billion[37] - Non-GAAP operating margin as a percentage of revenues was 32.1% for the three months ended April 30, 2024, compared to GAAP operating margin of 18.7%[37] - Non-GAAP diluted net income per share for the three months ended April 30, 2024, was $2.44, compared to GAAP diluted net income per share of $1.56[38] Cash Flow and Financial Position - Q1 operating cash flow was $6.25 billion, up 39% Y/Y, and free cash flow was $6.08 billion, up 43% Y/Y[2] - Full-year FY25 operating cash flow growth guidance is maintained at 21% - 24% Y/Y[5] - Cash and cash equivalents increased to $9,958 million at the end of Q1 2024, up from $8,472 million at the end of Q4 2023[25] - Net cash provided by operating activities was $6,247 million in Q1 2024, compared to $4,491 million in Q1 2023[26] - Free cash flow for the three months ended April 30, 2024, was $6.084 billion, compared to GAAP net cash provided by operating activities of $6.247 billion[42] Operational Expenses and Investments - Operating expenses decreased to $5,262 million in Q1 2024 from $5,710 million in Q1 2023, reflecting a 7.8% reduction[21] - Research and development expenses increased to $1,368 million in Q1 2024, up from $1,207 million in Q1 2023, reflecting a 13.3% growth[21] - Strategic investments resulted in a net gain of $37 million in Q1 2024, compared to a net loss of $141 million in Q1 2023[21] - Stock-based compensation expense totaled $750 million in Q1 2024, up from $696 million in Q1 2023[26] Performance Obligations and Revenue Recognition - Current remaining performance obligation (CRPO) was $26.4 billion, up 10% Y/Y and 10% in CC[2] - Remaining Performance Obligation (RPO) as of April 30, 2024, was $53.9 billion, with $27.5 billion current and $26.4 billion noncurrent[29] - Unearned revenue at the end of the period was $16.061 billion, down from $19.003 billion at the beginning of the period[30] Shareholder Returns - Q1 share repurchases totaled $2.2 billion, and dividend payments to stockholders were $0.4 billion[2] Product Releases and Innovation - Salesforce delivered three major product releases annually, with the Summer 2024 Product Release now available[10] Non-GAAP Financial Measures - The company uses non-GAAP financial measures to provide a more complete view of operational performance and enable meaningful period-to-period comparisons[43][44] - Non-GAAP Operating Margin excludes stock-based compensation, amortization of acquisition-related intangibles, and restructuring charges to reflect long-term benefits rather than short-term operational performance[45] - Stock-Based Compensation Expense is excluded from non-GAAP results as it aligns employee interests with stockholders and focuses on long-term retention rather than short-term operational performance[45] - Amortization of Purchased Intangibles is excluded from non-GAAP measures as it arises from pre-acquisition activities and is not affected by current operational performance[46] - Restructuring charges are excluded from non-GAAP results as they are distinct from ongoing operational costs and do not reflect current or future business performance[47] - Gains (Losses) on Strategic Investments are recorded in GAAP financial statements but excluded from non-GAAP estimates due to unpredictability[48] - The Company uses a fixed long-term projected non-GAAP tax rate of 23.5% for fiscal 2024 and 22.0% for fiscal 2025 to provide consistency across reporting periods[49] - Constant currency revenue growth rates are calculated by converting prior period results using the weighted average exchange rate for the quarter being compared[50] - Free cash flow is defined as GAAP net cash provided by operating activities less capital expenditures[51]