CRM Q3 2021 Earnings

Call Details

• Call Title: Salesforce, Inc. Q3 2021 Earnings Call
• Date: December 1, 2020 at 10:00 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

• Total revenue for Q3 was $5.42B, up 20% year-over-year and up 19% in constant currency.
• Subscription and support revenue growth by cloud was Sales up 12%, Service up 21%, Marketing and Commerce up 25%, and Platform and Other up 24%.
• Remaining performance obligation (RPO) at quarter end was $30.3B, up 17% year-over-year, and CRPO was $15.3B, up 19% in constant currency.
• Q3 GAAP EPS was $1.15 and non-GAAP EPS was $1.74, with mark-to-market gains on strategic investments boosting GAAP EPS by ~$0.83 and non-GAAP EPS by ~$0.86.
• Operating cash flow for the quarter was $339M, up 14% year-over-year, CapEx was $124M, and free cash flow was $215M, up 68% year-over-year.
• Revenue attrition in Q3 remained between the 9% and 10% range and was modestly better than prior Q1 guidance.
• Holiday commerce metrics included processing more than 31M orders during Cyber Week, which was up 62% year-over-year, and platform activity metrics cited daily volumes including billions of marketing messages and billions of AI predictions.

Guidance

• Raised fiscal 2021 revenue guidance to $21.10B to $21.11B, representing approximately 23% year-over-year growth.
• Q4 revenue is guided to $5.665B to $5.675B, representing approximately 17% year-over-year growth.
• Maintaining fiscal 2021 non-GAAP operating margin guidance at 17.6%, which represents a year-over-year improvement of 75 basis points.
• Fiscal 2021 GAAP diluted EPS guidance is $4.14 to $4.15 and non-GAAP diluted EPS guidance is $4.62 to $4.63.
• Q4 EPS guidance assumes GAAP diluted EPS of $0.05 to $0.06 and non-GAAP diluted EPS of $0.73 to $0.74, with no future mark-to-market gains assumed.
• Operating cash flow guidance for fiscal 2021 is growth of 12% to 13% year-over-year, with CapEx expected at approximately 3% of revenue and free cash flow growth of approximately 15% to 16%.
• Fiscal 2022 revenue guidance is $25.45B to $25.55B, representing 21% growth and includes Slack contribution of $600M and Acumen Solutions of $150M (both net of purchase accounting) assuming late Q2 closings.