Salesforce Reports Strong First Quarter Fiscal 2023 Results

During the first fiscal quarter of the financial year 2023, Salesforce recorded double-digit revenue growth. The company also raised guidance for the second quarter and full financial year for its operating margins.

“We had another great quarter, delivering $7.4 billion in revenue, up 24% year-over-year,“ said Marc Benioff, Co-CEO of Salesforce. “There is no greater measure of our resilience and the momentum in our business than the $42 billion we have in remaining performance obligation, representing all future revenue under contract. While delivering incredible growth at scale, we’re committed to consistent margin expansion and cash flow growth as part of our long-term plan to drive both top and bottom-line performance.“

“Our financial results once again demonstrate the strength and durability of our business model as we continue to see strong demand from customers across the entire Customer 360 portfolio,“ said Bret Taylor, Co-CEO of Salesforce. “We have become even more strategic and relevant to our customers as we are providing them with the agility and resilience they need to drive growth and efficiency in these uncertain economic times.“

Total first-quarter revenue was $7.41 billion, an increase of 24% year-over-year, and 26% in constant currency. Subscription and support revenues for the quarter were $6.86 billion, an increase of 24% year-over-year. Professional services and other revenues for the quarter were $0.56 billion, an increase of 30% year-over-year. GAAP operating margin was 0.3% while the non-GAAP margin was 17.6%.

GAAP diluted earnings per share were $0.03, and non-GAAP diluted EPS was $0.98. Mark-to-market accounting of the company’s strategic investments benefited GAAP diluted earnings per share by $0.01 based on a U.S. tax rate of 25% and non-GAAP by $0.01 based on a non-GAAP tax rate of 22%. Cash generated from operations for the first quarter was $3.68 billion, an increase of 14% year-over-year. Total cash, cash equivalents, and marketable securities ended the first quarter at $13.50 billion.

The company adjusted its EPS guidance for the second quarter and the full fiscal year. Salesforce expects its second-quarter GAAP and non-GAAP earnings (loss) per share to be at -$0.02 to -$0.03 and $1.01 to $1.02 respectively. For the full year, FY23 GAAP and non-GAAP earnings per share are expected to be at $0.38 to $0.40 and $4.74 to $4.76 respectively.