Salesforce Aims to Record More Than $10 Billion Revenue in 2018



Salesforce hopes for $10 billion revenue in 2018

Earlier in this series, we discussed how Salesforce (CRM) has continued to achieve double-digit revenue growth in fiscal 3Q17, unlike peers Oracle (ORCL) and IBM (IBM), which are struggling to grow revenue. In 3Q17, the company’s revenue grew 25% to $2.0 billion.

The growing adoption of the cloud and Salesforce’s dominant position in CRM (customer relationship management) and SaaS (software-as-a-service) have helped the company achieve double-digit growth. It is believed that SaaS will be the fastest-growing sector in the cloud computing space. Growth in the cloud space and strong deal execution have prompted Salesforce to expect revenue in the range of $10.1 billion–$10.15 billion for fiscal 2018, which translates to growth of ~21% YoY (year-over-year). In it 3Q17 earnings call, Salesforce stated that it is “excited to deliver our first $10 billion revenue milestone next year.”

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Salesforce raises fiscal 2017 revenue guidance again

For fiscal 4Q17, Salesforce expects revenue and EPS (earnings per share) in the range of $2.27 billion–$2.28 billion and $0.24–$0.25, respectively. For fiscal 2017, Salesforce expects revenue and EPS of $8.37 billion–$8.38 billion and $0.97–$0.98, respectively. In fiscal 2Q17, Salesforce provided guidance for revenue and EPS of $8.28 billion–$8.33 billion and $0.93-$0.95, respectively, for fiscal 2017.

Top-line growth failed to trickle down to bottom line

Unlike the previous quarter, Salesforce reported a loss of $37.3 million in fiscal 3Q17, showing that Salesforce’s top-line growth didn’t trickle down to the bottom line. It also lowered its expected GAAP (generally accepted accounting principles) EPS for 4Q17 and 2017. In fiscal 2Q17, Salesforce expected GAAP EPS of $0.27–$0.29 for fiscal 2017, and lowered this to $0.24–$0.25 in 3Q17.


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