Salesforce turned in another solid quarterly earnings report May 18, showing a comfortable 25 percent jump in year-over-year revenue in Q1 2018 to $2.39 billion to exceed Wall Street estimates of $2.35 billion.
The world's largest cloud-services business application provider has shown impressive double-digit year-over-year revenue growth in each of the last three quarters, including 25 percent in Q3 2017 and 27 percent in Q4 2017.
After adjustments for stock-based compensation and other effects, the company banked a profit of 28 cents per share.
Investors in Salesforce will be happy to note that the company said its earnings for the year would be higher than previously estimated. The company increased its revenue guidance for the full 2018 fiscal year to a range of $10.25 billion to $10.3 billion; previous guidance called for sales of $10.15 billion to $10.2 billion.
"With our outstanding first quarter results, we are thrilled to be raising our fiscal 2018 revenue guidance by $100 million and raising our GAAP and non-GAAP earnings per share expectations for the year," Chairman and CEO Marc Benioff said in a press statement. "Salesforce has once again been named the CRM market leader, and we continue to grow our share in CRM--the fastest-growing enterprise software market."
Deferred revenue is playing a big part for Salesforce these days. Deferred revenue is income under contract but either not yet billed or billed but not yet received. Because Salesforce has a cloud-service subscription business model, its revenue is not banked when a customer signs a contract but only after the service is delivered or paid for.
Salesforce reported deferred revenue of $5.04 billion as of April 30, up a solid 26 percent year-over-year. Unbilled deferred revenue, which are sales contracted but off the balance sheet, totaled about $9.6 billion at the end of the quarter, which also was up 26 percent year-over-year.
The $9.6 billion includes about $450 million related to unbilled deferred revenue from Demandware. Salesforce bought Demandware and its e-commerce platform for $2.8 billion last June 1 in the most expensive acquisition of its 18-year history.
Salesforce stock gained 2 percent in value in after-hours trading, but it soon fell to a slight loss after closing at $87.75.