CRM Q2 2021 Earnings

Call Details

• Call Title: Salesforce, Inc. Q2 2021 Earnings Call
• Date: August 25, 2020 at 9:00 PM UTC
• Management Team:
  • Evan Goldstein (Senior Vice President of Investor Relations)
  • Marc Benioff (Chair and CEO)
  • Mark Hawkins (President and CFO)
  • Bret Taylor (President and COO)
  • Gavin Patterson (President and Chief Revenue Officer)
  • Amy Weaver (President and Chief Legal Officer)

Call Summary

Financial Performance

• Revenue was $5.15B for Q2, representing 29% year-over-year growth.
• Q2 was the first quarter in which the company surpassed $5.00B in a single quarter.
• Sales Cloud revenue grew 13% year-over-year in Q2.
• Service Cloud revenue grew 20% year-over-year in Q2.
• Platform and Other revenue grew 66% year-over-year, with Tableau contributing 41 percentage points of that growth.
• Marketing and Commerce revenue grew 21% year-over-year in Q2.
• Q2 GAAP EPS was $1.44, and GAAP EPS benefited approximately $0.55 from the Encino IPO mark-to-market adjustments.
• Operating cash flow was $429M in Q2, down 2% year-over-year, and free cash flow (operating cash flow less CapEx) was $315M, up 22% year-over-year.

Guidance

• Full-year fiscal 21 revenue guidance was updated to $20.7B to $20.8B, implying 22% year-over-year growth.
• Fiscal 21 non-GAAP operating margin guidance was raised to a year-over-year improvement of 75 basis points.
• Fiscal 21 GAAP diluted EPS guidance was updated to $3.12 to $3.14, and fiscal 21 non-GAAP diluted EPS guidance was updated to $3.72 to $3.74.
• Q3 GAAP diluted EPS was guided to $0.03 to $0.04, and Q3 non-GAAP diluted EPS was guided to $0.73 to $0.74.
• Operating cash flow guidance for fiscal 21 was raised to 12% to 13% year-over-year growth.
• Capital expenditures were expected to be approximately 3% of revenue for fiscal 21, supporting an expected free cash flow growth rate of approximately 15% to 16%.
• CRPO was expected to grow approximately 19% year-over-year in Q3.
• Guidance assumptions explicitly assume that revenue attrition remains consistent with Q2 actuals and that modest new business growth will occur in the second half of fiscal 21.