Salesforce Slips On Weak Guidance, Despite Beating On Both Revenue And Profit In Its FQ3

In its fiscal 2015 third quarter, Salesforce reported revenue of $1.383 billion, non-GAAP earnings per share of $0.14, a GAAP net loss of $38.92 million, and a GAAP loss per share of $0.06. Analysts had expected $0.13 in adjusted profit on revenue of $1.371 billion.

The percentage of its revenue that came from recurring, subscription sources — a key metric for any SaaS business — totaled 93 percent for the firm, unchanged from the year-ago quarter.

The company’s GAAP losses were down steeply year-over-year, when the company lost $124.434 million, or $0.21 per share. For the period, Salesforce’s total revenue rose 29 percent compared to its year-ago quarter.

For its current fiscal fourth quarter, Salesforce expects revenue of $1.436 billion to $1.441 billion. Those figures would push the company’s revenue up between 25 and 26 percent on a year-over-year basis.

Salesforce expects its revenue growth to slip further in its rapidly-approaching fiscal 2016, during which it expects to generate top line of $6.45 billion to $6.50 billion, which according to the firm will represent growth of around 20 to 21 percent compared to the preceding fiscal year.

That Salesforce is seeing slowing percentage growth is not surprising. The law of large numbers drags harder every time you increase your revenue compared to a prior-year quarter. Salesforce’s predicted full-year 20 to 21 percent growth doesn’t appear to have greatly enthused investors — its shares are off after-hours, after all — but I don’t think that the number is too soft either. Analysts had expected a few hundred million more for its fiscal 2016.

The company had cash and equivalents of $1.83 billion at the end of its fiscal third quarter.

Salesforce has been extremely busy this quarter making a flurry of announcements around their mega Dreamforce user conference. The big news was the long awaited analytics product called Wave. In addition, Salesforce announced that they were extending the partnership with Microsoft announced last Spring and there was a major overhaul and rebranding of the mobile app development program, which is now called Salesforce 1 Lightning. They also gave their core CRM tool a refresh and added an interactive live customer service feature.