CRM software maker Salesforce released its Q1 financial report for fiscal year 2023: revenue of $7.411 billion, net profit of $28 million, down 94% year-on-year

In the early morning of June 1, Beijing time, Salesforce, the world’s largest CRM software service provider, today announced the company’s first-quarter earnings report for fiscal year 2023. The report shows that Salesforce’s total revenue in the first quarter was $7.411 billion, an increase of 24% compared with $5.963 billion in the same period last year, and a 26% year-on-year increase excluding the impact of exchange rate changes;Net income was $28 million, a decrease of 94% compared to net income of $469 million in the same period last year; Earnings per diluted share were $0.03, compared with earnings per diluted share of $0.50 a year earlier.

Salesforce’s first-quarter revenue and adjusted EPS beat Wall Street analysts’ expectations, as well as its full-year adjusted EPS forecast, sending its shares up nearly 8% after hours.

Main achievement:

In the quarter ended April 30, Salesforce’s net income was $28 million, down 94% from $469 million a year earlier; diluted earnings per share were $0.03, compared to a year earlier Diluted earnings per share were $0.50.

Excluding certain one-time items (not in accordance with GAAP), Salesforce’s first-quarter adjusted net income was $982 million, compared with $1.141 billion in the same period last year; adjusted earnings per diluted share were 0.98 U.S. dollars, compared with adjusted earnings per diluted share of $1.21 in the year-ago period, down from a year earlier, but still beating analyst expectations. According to data provided by Yahoo Finance, 35 analysts had expected Salesforce’s first-quarter adjusted earnings per share to reach $0.94.

Salesforce’s total revenue in the first quarter was $7.411 billion, an increase of 24% compared with $5.963 billion in the same period last year. Excluding the impact of currency changes, it was up 26% year-on-year, also exceeding analysts’ expectations. According to data provided by Yahoo Finance, 32 analysts had on average expected Salesforce’s first-quarter revenue to reach $7.38 billion.

By business category, Salesforce’s subscription and support business reported first-quarter revenue of $6.856 billion, compared with $5.536 billion in the same period last year; and accounted for 93% of total revenue, compared to last year’s During the same period, the proportion was also 93%. Salesforce’s professional services and other businesses reported first-quarter revenue of $555 million, compared with $427 million in the same period last year; and accounted for 7% of total revenue, compared to the same period last year The same is 7%.

By region, Salesforce’s Americas first-quarter revenue was $4.971 billion, compared to $4.094 billion a year earlier; Europe’s first-quarter revenue was $1.738 billion, compared to $13.02 a year earlier $702 million in Asia Pacific first-quarter revenue, compared with $567 million in the same period last year.

Salesforce’s total cost of revenue in the fiscal first quarter was $2.045 billion, compared with $1.555 billion in the same period last year; it accounted for 28% of total revenue, compared with 26% in the same period last year. Among them, the cost of revenue of subscription and support business was $1.44 billion, accounting for 20% of total revenue, compared with $1.122 billion in the same period last year, accounting for 19% of total revenue; Professional Services and Others cost of revenue was $605 million, or 8 percent of total revenue, compared with $433 million, or 7 percent, of total revenue in the same period last year.

Salesforce’s total operating expenses in the fiscal first quarter were $5.346 billion, compared with $4.054 billion in the same period last year; it accounted for 72% of total revenue, compared with 68% in the same period last year. Among them, research and development spending was $1.318 billion, accounting for 18% of total revenue, compared with $951 million in the same period last year, accounting for 16% of total revenue; marketing and sales expenses were 33.72% billion, accounting for 45% of total revenue, compared with $2.544 billion in the same period last year, accounting for 43% of total revenue; general and administrative expenses were $6.56, accounting for 43% of total revenue The proportion of total revenue was 9%, compared with $559 million in the same period last year, and the proportion of total revenue was 9%.

Salesforce’s first-quarter operating profit was $20 million, compared to $354 million in the year-ago period; as a percentage of total revenue, or operating margin, was 0.3%, compared to a year earlier to 6%. Excluding certain one-time items (not in accordance with GAAP), Salesforce’s adjusted operating profit in the fiscal first quarter was $1.308 billion, compared to $1.206 billion in the same period last year; as a percentage of total revenue (that is, adjusted operating margin) was 17.6%, compared to 20.2% a year earlier.

Salesforce’s first-quarter cash from operating activities was $3.68 billion, up 14% from a year earlier. At the end of the fiscal first quarter, Salesforce held $13.50 billion in cash, cash equivalents and marketable securities.

At the end of the fiscal first quarter, Salesforce had about $42 billion in remaining performance obligations, up 20% from the same period last year. At the end of the fiscal first quarter, Salesforce’s current remaining performance obligations were approximately $21.5 billion, an increase of 21% from the same period last year, or a 24% increase excluding the impact of currency changes.

Performance Outlook:

Salesforce expects the company’s revenue to reach between $7.69 billion and $7.70 billion in the second quarter of fiscal 2023, an increase of about 21% year-on-year, missing analysts’ expectations; loss per share is expected to be between $0.02 and $0.03 ; Non-GAAP earnings per share were expected to be between $1.01 and $1.02, which also missed analysts’ expectations. According to data provided by Yahoo Finance Channel, 34 analysts had expected Salesforce’s second-quarter revenue to reach $7.77 billion on average, and 36 analysts on average expected Salesforce’s second-quarter earnings per share to reach $1.14.

Separately, Salesforce expects year-over-year growth in the company’s remaining performance obligations to be -15% in the second quarter of fiscal 2023.

Salesforce also expects the company’s revenue to reach between $31.7 billion and $31.8 billion in fiscal 2023, a year-on-year increase of about 20%, which is below analysts’ expectations; earnings per share are expected to be between $0.38 and $0.40; GAAP earnings per share are expected to be between $4.74 and $4.76, beating analyst expectations; operating cash flow is expected to grow between 21% and 22% year over year; operating margin is expected to be 3.8% , the non-GAAP operating margin is expected to be 20.4%. According to data provided by Yahoo Finance Channel, 44 analysts had expected Salesforce’s full-year revenue to reach $32.06 billion, and 42 analysts expected Salesforce’s full-year earnings per share to reach $4.65.

Share price changes:

On the same day, Salesforce shares fell $4.86 to close at $160.24, or 2.94%. In subsequent after-hours trading as of 5:26 pm ET on May 31 (5:26 am Beijing time on June 1), Salesforce shares rose sharply by $12.46, or 7.78%, to $172.70. Over the past 52 weeks, Salesforce’s highest price was $311.75 and its lowest price was $154.55.