Salesforce.com Is a Screaming BuyCRM) announced first quarter ended April 30, 2016 total revenue of $1.92 billion, up 27 percent year-over-year from $1.51 billion during the same period last year. Moving ahead, the company estimates second quarter of fiscal 2017 total revenue to be in the range of nearly $2.005 billion to $2.015 billion, up 23 percent on year-over-year basis.
Salesforce.com declared first quarter of 2016 net income of $38.8 million or $0.06 per diluted share, up 846 percent year-over-year from $4.1 million or $0.01 per diluted share in first quarter of 2015.
The key global cloud company reported continued year-over-year growth in both its top and bottom lines primarily driven by a solid customer traction for the company’s innovative customer success platform.
The year-over-year deferred revenue trend for Salesforce.com is evolving significantly and consistently with the evolution expected to be a result of amortization and compounding of greater and greater base. Moreover, there’s notable indexed sequential expansion coupled with impressive billed deferred revenue growth primarily due to the company’s capability to successfully convert unbilled deferred revenue and deferred revenue into attractive revenue growth and suitable cash flows.
Going forward, the cloud partnership market size is forecasted to expand to USD 42.57 billion by 2021 from USD 23.39 billion during 2016 at a CAGR of 12.7% to 2021 from 2016. This cloud partnership market is expected to be allowed by several factors like, enhanced productivity, safety and savings coupled with developing trend of BYOD and mobility. Further, the company social partnership solution is believed to benefit the highest traction for the estimated period and Latin America is projected to expand at the topmost rate in the expected period.
The expanding global cloud partnerships are believed to notably benefit the key cloud services provider over the longer term and further, deliver impressive shareholder returns.
Salesforce.com has been placed in the “Leaders” quadrant of the fiscal year 2016 Mobile Application Development Platforms (MADP) report for the second successive year in a row depending upon the capability to execute and comprehensiveness of vision.
There’s significant growth estimated for already huge and quick expanding global growth markets which are expected to grow at a CAGR of 9% from nearly $70 billion market size in 2013 to about $75 billion market size during the fiscal year 2020. In addition, Salesforce.com has uniquely developed a robust platform for delivering sustainable long-term organic growth with sales cloud, service cloud, marketing cloud, platform or other and analytics cloud constituting 41%, 16%, 11%, 4% and below 1% of overall market share.
The industry-leading position of Salesforce.com in MADP report signifies the strength in the core company operations, superior innovation delivering capabilities and notable room for illustrating attractive organic growth while offering impressive shareholder returns.
Salesforce.com is consistently capturing significant market share and extending its industry-leading market share standing, surpassing the market share growths of SAP, Oracle and Microsoft. Moving ahead, Salesforce.com has developed a robust blueprint for continued growth fueled by a significant installed base growth and expanding new buyers.
Overall, the investors are advised to “Hold” their position in Salesforce.com, Inc. considering the company’s significant long-term growth prospects being supported by the company’s impressive new products development strategy coupled with a healthy total cash position of $2.03 billion with controllable total debt position of $2.07 billion. However, the profit margin of -0.18% seems disappointing. The PEG ratio of 2.94 indicates heathy company growth, somewhat better than the industry’s growth average of 1.02.
Published on Jul 14, 2016By Vinay Singh