Raises FY22 Revenue Guidance to $26.2 Billion to $26.3 Billion
- Second Quarter Revenue of $6.34 Billion, up 23% Year-Over-Year, 21% in Constant Currency
- Current Remaining Performance Obligation of Approximately $18.7 Billion, up 23% Year-Over-Year, 23% in Constant Currency
- Second Quarter Operating Cash Flow of $0.39 Billion, down 10% Year-Over-Year
- Second Quarter GAAP Operating Margin of 5.2% and Non-GAAP Operating Margin of 20.4%
- Raises FY22 GAAP Operating Margin Guidance to Approximately 1.8% and Non-GAAP Operating Margin Guidance to Approximately 18.5%
- Initiates Third Quarter FY22 Revenue Guidance of $6.78 Billion to $6.79 Billion, up Approximately 25% Year-Over-Year
SAN FRANCISCO–(BUSINESS WIRE)–Salesforce (NYSE: CRM), the global leader in CRM, today announced results for its second quarter of fiscal 2022 ended July 31, 2021.
“With companies and governments around the world continuing to accelerate their digital transformations, we delivered our fifth phenomenal quarter in a row,” said Marc Benioff, Chair & CEO, Salesforce. “Salesforce has never seen better execution or greater momentum. Our Customer 360 platform is now fueled by a herd of unicorns perfectly designed for this all-digital world. Sales, Service, Marketing & Commerce, Platform, Tableau, MuleSoft and now Slack are all billion dollar-plus products delivering customer success like no other company.”
“We had another remarkable quarter of top and bottom line performance, making this an impressive first half of this fiscal year,” said Amy Weaver, President and CFO. “We exceeded our financial expectations in the quarter, achieving record levels of new business, and saw strong demand across our portfolio. And we are excited to build on Slack’s momentum with the power of our two companies now together.”
Salesforce delivered the following results for its fiscal second quarter:
Revenue: Total second quarter revenue was $6.34 billion, an increase of 23% year-over-year, and 21% in constant currency. Subscription and support revenues for the quarter were $5.91 billion, an increase of 22% year-over-year. Professional services and other revenues for the quarter were $0.43 billion, an increase of 37% year-over-year.
Operating Margin: Second quarter GAAP operating margin was 5.2%. Second quarter non-GAAP operating margin was 20.4%.
Earnings per Share: Second quarter GAAP diluted earnings per share was $0.56, and non-GAAP diluted earnings per share was $1.48. Mark-to-market accounting of the company’s strategic investments benefited GAAP diluted earnings per share by $0.42 based on a U.S. tax rate of 25% and non-GAAP diluted earnings per share by $0.43 based on a non-GAAP tax rate of 21.5%.
Cash: Cash generated from operations for the second quarter was $0.39 billion, a decrease of 10% year-over-year. Total cash, cash equivalents and marketable securities ended the second quarter at $9.65 billion.
Remaining Performance Obligation: Remaining performance obligation ended the second quarter at approximately $36.2 billion, an increase of 18% year-over-year. Current remaining performance obligation ended the second quarter at approximately $18.7 billion, an increase of 23% year-over-year, 23% in constant currency.
As of August 25, 2021, the company is initiating its revenue guidance, GAAP earnings per share guidance, non-GAAP earnings per share guidance, and current remaining performance obligation growth guidance for its third quarter of fiscal year 2022. As of August 25, 2021, the company is raising its revenue guidance previously provided on December 1, 2020 and updated on February 25, 2021 and May 27, 2021 for its full fiscal year 2022. As of August 25, 2021 the company is raising its operating cash flow guidance, GAAP earnings per share guidance, non-GAAP earnings per share guidance, GAAP operating margin guidance and non-GAAP operating margin guidance previously provided on February 25, 2021 and updated on May 27, 2021 for its full fiscal year 2022.
Management will provide further commentary around these guidance assumptions on its earnings call, which is expected to occur on August 25, 2021 at 2:00 PM Pacific Time.
Our guidance assumes no change to the value of the company’s strategic investment portfolio as it is not possible to forecast future gains and losses. In addition, the guidance below is based on estimated GAAP tax rates that reflect the company’s currently available information, and excludes forecasted discrete tax items such as excess tax benefits from stock-based compensation. The GAAP tax rates may fluctuate due to future acquisitions or other transactions.
|
|
Q3 FY22 Guidance |
|
Full Year FY22 Guidance |
|
Revenue(1) |
$6.78 – $6.79 Billion |
|
$26.2 – $26.3 Billion |
|
Y/Y Growth |
~25% |
|
~23% to ~24% |
|
GAAP operating margin |
N/A |
|
~1.8% |
|
Non-GAAP operating margin |
N/A |
|
~18.5% |
|
GAAP earnings (loss) per share |
($0.06) – ($0.05) |
|
$0.81 – $0.83 |
|
Non-GAAP earnings per share |
$0.91 – $0.92 |
|
$4.36 – $4.38 |
|
Operating Cash Flow Growth (Y/Y) |
N/A |
|
~14% – 15% |
|
Current Remaining Performance Obligation Growth (Y/Y) |
~22% |
|
N/A |
|
(1) Full Year FY22 revenue guidance includes contributions from Slack Technologies, Inc. of approximately $530 million, net of purchase accounting. |
|||
The following is a reconciliation of GAAP operating margin guidance to non-GAAP operating margin guidance for the full year:
|
|
|
Full Year FY22 Guidance |
|
GAAP operating margin(1) |
|
1.8% |
|
Plus |
|
|
|
Amortization of purchased intangibles(2) |
|
6.1% |
|
Stock-based expense(2) |
|
10.6% |
|
Non-GAAP operating margin(1) |
|
18.5% |
|
(1) GAAP operating margin is the proportion of GAAP income from operations as a percentage of GAAP revenue. Non-GAAP operating margin is the proportion of non-GAAP income from operations as a percentage of GAAP revenue. |
||
|
(2) The percentages shown above have been calculated based on the midpoint of the low and high ends of the revenue guidance for full year FY22. |
||
The following is a per share reconciliation of GAAP diluted earnings (loss) per share to non-GAAP diluted earnings per share guidance for the next quarter and the full year:
|
|
Fiscal 2022 |
||||||
|
|
Q3 |
|
FY22 |
||||
|
GAAP earnings (loss) per share range(1)(2) |
($0.06) – ($0.05 |
) |
|
$0.81 – $0.83 |
|||
|
Plus |
|
|
|
||||
|
Amortization of purchased intangibles |
$ |
0.50 |
|
|
$ |
1.64 |
|
|
Stock-based expense |
$ |
0.82 |
|
|
$ |
2.86 |
|
|
Less |
|
|
|
||||
|
Income tax effects and adjustments(3) |
$ |
(0.35 |
) |
|
$ |
(0.95 |
) |
|
Non-GAAP diluted earnings per share(2) |
$0.91 – $0.92 |
|
$4.36 – $4.38 |
||||
|
Shares used in computing basic GAAP net income per share (millions) |
980 |
|
|
955 |
|
||
|
Shares used in computing diluted Non-GAAP net income per share (millions) |
1,006 |
|
|
978 |
|
||
|
(1)The Company’s GAAP tax provision is expected to be approximately 67% for the three months ended October 31, 2021, and approximately 23% for the year ended January 31, 2022. The GAAP tax rates may fluctuate due to discrete tax items and related effects in conjunction with certain provisions in the Tax Cuts and Jobs Act, future acquisitions or other transactions. |
|||||||
|
(2) The Company’s projected GAAP and Non-GAAP diluted earnings (loss) per share assumes no change to the value of our strategic investment portfolio resulting from ASU 2016-01 as it is not possible to forecast future gains and losses. While historically the company’s strategic investment portfolio has had a positive impact on the company’s financial results, that may not be true for future periods, particularly in periods of significant market fluctuations that affect the publicly traded companies within the company’s strategic investment portfolio. The impact of future gains or losses from the company’s strategic investment portfolio could be material. |
|||||||
|
(3) The Company’s Non-GAAP tax provision uses a long-term projected tax rate of 21.5%, which reflects currently available information and could be subject to change. |
|||||||
For additional information regarding non-GAAP financial measures see the reconciliation of results and related explanations below.
Quarterly Conference Call
Salesforce plans to host a conference call at 2:00 p.m. (PT) / 5:00 p.m. (ET) to discuss its financial results with the investment community. A live webcast and replay details of the event will be available on the Salesforce Investor Relations website at www.salesforce.com/investor.
About Salesforce
Salesforce, the global CRM leader, empowers companies of every size and industry to digitally transform and create a 360° view of their customers. For more information about Salesforce (NYSE: CRM), visit: www.salesforce.com.
“Safe harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements about the company’s financial and operating results, which may include expected GAAP and non-GAAP financial and other operating and non-operating results, including revenue, net income, earnings per share, operating cash flow growth, operating margin, expected revenue growth, expected current remaining performance obligation growth, expected tax rates, stock-based compensation expenses, amortization of purchased intangibles, shares outstanding, market growth, environmental, social and governance goals, expected capital allocation, including mergers and acquisitions, capital expenditures and other investments, and expected contributions from acquired companies. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the company’s results could differ materially from the results expressed or implied by the forward-looking statements it makes.
The risks and uncertainties referred to above include — but are not limited to — risks associated with the impact of, and actions we may take in response to, the COVID-19 pandemic, related public health measures and resulting economic downturn and market volatility; our ability to maintain security levels and service performance meeting the expectations of our customers, and the resources and costs required to avoid unanticipated downtime and prevent, detect and remediate performance degradation and security breaches; the expenses associated with our data centers and third-party infrastructure providers; our ability to secure additional data center capacity; our reliance on third-party hardware, software and platform providers; the effect of evolving domestic and foreign government regulations, including those related to the provision of services on the Internet, those related to accessing the Internet, and those addressing data privacy, cross-border data transfers and import and export controls; current and potential litigation involving us or our industry, including litigation involving acquired entities such as Tableau Software, Inc. and Slack Technologies, Inc., and the resolution or settlement thereof; regulatory developments and regulatory investigations involving us or affecting our industry; our ability to successfully introduce new services and product features, including any efforts to expand our services; the success of our strategy of acquiring or making investments in complementary businesses, joint ventures, services, technologies and intellectual property rights; our ability to complete, on a timely basis or at all, announced transactions; our ability to realize the benefits from acquisitions, strategic partnerships, joint ventures and investments, including our July 2021 acquisition of Slack Technologies, Inc., and successfully integrate acquired businesses and technologies; our ability to compete in the markets in which we participate; the success of our business strategy and our plan to build our business, including our strategy to be a leading provider of enterprise cloud computing applications and platforms; our ability to execute our business plans; our ability to continue to grow unearned revenue and remaining performance obligation; the pace of change and innovation in enterprise cloud computing services; the seasonal nature of our sales cycles; our ability to limit customer attrition and costs related to those efforts; the success of our international expansion strategy; the demands on our personnel and infrastructure resulting from significant growth in our customer base and operations, including as a result of acquisitions; our ability to preserve our workplace culture, including as a result of our decisions regarding our current and future office environments or work-from-home policies; our dependency on the development and maintenance of the infrastructure of the Internet; our real estate and office facilities strategy and related costs and uncertainties; fluctuations in, and our ability to predict, our operating results and cash flows; the variability in our results arising from the accounting for term license revenue products; the performance and fair value of our investments in complementary businesses through our strategic investment portfolio; the impact of future gains or losses from our strategic investment portfolio, including gains or losses from overall market conditions that may affect the publicly traded companies within our strategic investment portfolio; our ability to protect our intellectual property rights; our ability to develop our brands; the impact of foreign currency exchange rate and interest rate fluctuations on our results; the valuation of our deferred tax assets and the release of related valuation allowances; the potential availability of additional tax assets in the future; the impact of new accounting pronouncements and tax laws; uncertainties affecting our ability to estimate our tax rate; uncertainties regarding our tax obligations in connection with potential jurisdictional transfers of intellectual property, including the tax rate, the timing of the transfer and the value of such transferred intellectual property; uncertainties regarding the effect of general economic and market conditions; the impact of geopolitical events; uncertainties regarding the impact of expensing stock options and other equity awards; the sufficiency of our capital resources; our ability to comply with our debt covenants and lease obligations; and the impact of climate change, natural disasters and actual or threatened public health emergencies, including the ongoing COVID-19 pandemic.
Further information on these and other factors that could affect the company’s financial results is included in the reports on Forms 10-K, 10-Q and 8-K and in other filings it makes with the Securities and Exchange Commission from time to time. These documents are available on the SEC Filings section of the Investor Information section of the company’s website at www.salesforce.com/investor.
Salesforce.com, inc. assumes no obligation and does not intend to update these forward-looking statements, except as required by law.
© 2021 salesforce.com, inc. All rights reserved. Salesforce and other marks are trademarks of salesforce.com, inc. Other brands featured herein may be trademarks of their respective owners.
|
salesforce.com, inc. Consolidated Statements of Operations (in millions, except per share data) (Unaudited) |
|||||||||||||||||||
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
|||||||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||||||
|
Revenues: |
|
|
|
|
|
|
|
||||||||||||
|
Subscription and support |
$ |
5,914 |
|
|
|
$ |
4,840 |
|
|
|
$ |
11,450 |
|
|
|
$ |
9,415 |
|
|
|
Professional services and other |
426 |
|
|
|
311 |
|
|
|
853 |
|
|
|
601 |
|
|
||||
|
Total revenues |
6,340 |
|
|
|
5,151 |
|
|
|
12,303 |
|
|
|
10,016 |
|
|
||||
|
Cost of revenues (1)(2): |
|
|
|
|
|
|
|
||||||||||||
|
Subscription and support |
1,146 |
|
|
|
1,013 |
|
|
|
2,268 |
|
|
|
1,979 |
|
|
||||
|
Professional services and other |
467 |
|
|
|
298 |
|
|
|
900 |
|
|
|
586 |
|
|
||||
|
Total cost of revenues |
1,613 |
|
|
|
1,311 |
|
|
|
3,168 |
|
|
|
2,565 |
|
|
||||
|
Gross profit |
4,727 |
|
|
|
3,840 |
|
|
|
9,135 |
|
|
|
7,451 |
|
|
||||
|
Operating expenses (1)(2): |
|
|
|
|
|
|
|
||||||||||||
|
Research and development |
1,020 |
|
|
|
898 |
|
|
|
1,971 |
|
|
|
1,757 |
|
|
||||
|
Marketing and sales |
2,736 |
|
|
|
2,275 |
|
|
|
5,280 |
|
|
|
4,665 |
|
|
||||
|
General and administrative |
639 |
|
|
|
489 |
|
|
|
1,198 |
|
|
|
991 |
|
|
||||
|
Total operating expenses |
4,395 |
|
|
|
3,662 |
|
|
|
8,449 |
|
|
|
7,413 |
|
|
||||
|
Income from operations |
332 |
|
|
|
178 |
|
|
|
686 |
|
|
|
38 |
|
|
||||
|
Gains on strategic investments, net |
526 |
|
|
|
682 |
|
|
|
814 |
|
|
|
874 |
|
|
||||
|
Other expense |
(32 |
) |
|
|
(21 |
) |
|
|
(70 |
) |
|
|
(26 |
) |
|
||||
|
Income before benefit from (provision for) income taxes |
826 |
|
|
|
839 |
|
|
|
1,430 |
|
|
|
886 |
|
|
||||
|
Benefit from (provision for) income taxes (3) |
(291 |
) |
|
|
1,786 |
|
|
|
(426 |
) |
|
|
1,838 |
|
|
||||
|
Net income |
$ |
535 |
|
|
|
$ |
2,625 |
|
|
|
$ |
1,004 |
|
|
|
$ |
2,724 |
|
|
|
Basic net income per share |
$ |
0.57 |
|
|
|
$ |
2.90 |
|
|
|
$ |
1.08 |
|
|
|
$ |
3.02 |
|
|
|
Diluted net income per share |
$ |
0.56 |
|
|
|
$ |
2.85 |
|
|
|
$ |
1.06 |
|
|
|
$ |
2.96 |
|
|
|
Shares used in computing basic net income per share |
933 |
|
|
|
904 |
|
|
|
927 |
|
|
|
901 |
|
|
||||
|
Shares used in computing diluted net income per share |
950 |
|
|
|
922 |
|
|
|
945 |
|
|
|
919 |
|
|
||||
|
(1) Amounts include amortization of intangible assets acquired through business combinations, as follows: |
|||||||||||||||||||
|
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
||||||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||||||
|
Cost of revenues |
$ |
184 |
|
|
|
$ |
166 |
|
|
|
$ |
352 |
|
|
|
$ |
325 |
|
|
|
Marketing and sales |
135 |
|
|
|
118 |
|
|
|
255 |
|
|
|
230 |
|
|
||||
|
(2) Amounts include stock-based expense, as follows: |
|||||||||||||||||||
|
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
||||||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||||||
|
Cost of revenues |
$ |
95 |
|
|
|
$ |
63 |
|
|
|
$ |
177 |
|
|
|
$ |
115 |
|
|
|
Research and development |
197 |
|
|
|
184 |
|
|
|
370 |
|
|
|
350 |
|
|
||||
|
Marketing and sales |
263 |
|
|
|
253 |
|
|
|
501 |
|
|
|
476 |
|
|
||||
|
General and administrative |
85 |
|
|
|
78 |
|
|
|
156 |
|
|
|
141 |
|
|
||||
|
(3) During the three months ended July 31, 2020 the Company recorded approximately $2.0 billion of benefit from income taxes due to a one-time discrete tax item from the recognition of deferred tax assets related to an intra-entity transfer of intangible property. |
|||||||||||||||||||
|
salesforce.com, inc. Consolidated Statements of Operations (As a percentage of total revenues) (Unaudited) |
|||||||||||
|
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||
|
Revenues: |
|
|
|
|
|
|
|
||||
|
Subscription and support |
93 |
% |
|
94 |
% |
|
93 |
% |
|
94 |
% |
|
Professional services and other |
7 |
|
|
6 |
|
|
7 |
|
|
6 |
|
|
Total revenues |
100 |
|
|
100 |
|
|
100 |
|
|
100 |
|
|
Cost of revenues (1)(2): |
|
|
|
|
|
|
|
||||
|
Subscription and support |
18 |
|
|
19 |
|
|
18 |
|
|
20 |
|
|
Professional services and other |
7 |
|
|
6 |
|
|
7 |
|
|
6 |
|
|
Total cost of revenues |
25 |
|
|
25 |
|
|
25 |
|
|
26 |
|
|
Gross profit |
75 |
|
|
75 |
|
|
75 |
|
|
74 |
|
|
Operating expenses (1)(2): |
|
|
|
|
|
|
|
||||
|
Research and development |
16 |
|
|
18 |
|
|
16 |
|
|
17 |
|
|
Marketing and sales |
43 |
|
|
44 |
|
|
43 |
|
|
47 |
|
|
General and administrative |
11 |
|
|
10 |
|
|
10 |
|
|
10 |
|
|
Total operating expenses |
70 |
|
|
72 |
|
|
69 |
|
|
74 |
|
|
Income from operations |
5 |
|
|
3 |
|
|
6 |
|
|
0 |
|
|
Gains on strategic investments, net |
8 |
|
|
13 |
|
|
7 |
|
|
9 |
|
|
Other expense |
0 |
|
|
0 |
|
|
(1 |
) |
|
0 |
|
|
Income before benefit from (provision for) income taxes |
13 |
|
|
16 |
|
|
12 |
|
|
9 |
|
|
Benefit from (provision for) income taxes |
(5 |
) |
|
35 |
|
|
(4 |
) |
|
18 |
|
|
Net income |
8 |
% |
|
51 |
% |
|
8 |
% |
|
27 |
% |
|
(1) Amounts include amortization of intangible assets acquired through business combinations as a percentage of total revenues, as follows: |
|||||||||||
|
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||
|
Cost of revenues |
3 |
% |
|
3 |
% |
|
3 |
% |
|
3 |
% |
|
Marketing and sales |
2 |
|
|
2 |
|
|
2 |
|
|
2 |
|
|
(2) Amounts include stock-based expense as a percentage of total revenues, as follows: |
|||||||||||
|
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||
|
Cost of revenues |
1 |
% |
|
1 |
% |
|
1 |
% |
|
1 |
% |
|
Research and development |
3 |
|
|
4 |
|
|
3 |
|
|
4 |
|
|
Marketing and sales |
5 |
|
|
5 |
|
|
5 |
|
|
5 |
|
|
General and administrative |
1 |
|
|
1 |
|
|
1 |
|
|
1 |
|
|
salesforce.com, inc. Consolidated Balance Sheets (in millions) |
|||||||||
|
|
July 31, 2021 |
|
January 31, 2021 |
||||||
|
Assets |
(unaudited) |
|
|
||||||
|
Current assets: |
|
|
|
||||||
|
Cash and cash equivalents |
$ |
6,299 |
|
|
|
$ |
6,195 |
|
|
|
Marketable securities |
3,351 |
|
|
|
5,771 |
|
|
||
|
Accounts receivable, net |
4,074 |
|
|
|
7,786 |
|
|
||
|
Costs capitalized to obtain revenue contracts, net |
1,211 |
|
|
|
1,146 |
|
|
||
|
Prepaid expenses and other current assets |
1,321 |
|
|
|
991 |
|
|
||
|
Total current assets |
16,256 |
|
|
|
21,889 |
|
|
||
|
Property and equipment, net |
2,711 |
|
|
|
2,459 |
|
|
||
|
Operating lease right-of-use assets, net |
3,123 |
|
|
|
3,204 |
|
|
||
|
Noncurrent costs capitalized to obtain revenue contracts, net |
1,820 |
|
|
|
1,715 |
|
|
||
|
Strategic investments |
4,105 |
|
|
|
3,909 |
|
|
||
|
Goodwill |
48,103 |
|
|
|
26,318 |
|
|
||
|
Intangible assets acquired through business combinations, net |
9,746 |
|
|
|
4,114 |
|
|
||
|
Deferred tax assets and other assets, net |
2,794 |
|
|
|
2,693 |
|
|
||
|
Total assets |
$ |
88,658 |
|
|
|
$ |
66,301 |
|
|
|
Liabilities and stockholders’ equity |
|
|
|
||||||
|
Current liabilities: |
|
|
|
||||||
|
Accounts payable, accrued expenses and other liabilities |
$ |
4,274 |
|
|
|
$ |
4,355 |
|
|
|
Operating lease liabilities, current |
713 |
|
|
|
766 |
|
|
||
|
Unearned revenue |
11,067 |
|
|
|
12,607 |
|
|
||
|
Slack Convertible Notes |
1,339 |
|
|
|
0 |
|
|
||
|
Total current liabilities |
17,393 |
|
|
|
17,728 |
|
|
||
|
Noncurrent debt |
10,589 |
|
|
|
2,673 |
|
|
||
|
Noncurrent operating lease liabilities |
2,878 |
|
|
|
2,842 |
|
|
||
|
Other noncurrent liabilities |
2,278 |
|
|
|
1,565 |
|
|
||
|
Total liabilities |
33,138 |
|
|
|
24,808 |
|
|
||
|
Stockholders’ equity: |
|
|
|
||||||
|
Common stock |
1 |
|
|
|
1 |
|
|
||
|
Additional paid-in capital |
48,666 |
|
|
|
35,601 |
|
|
||
|
Accumulated other comprehensive loss |
(84 |
) |
|
|
(42 |
) |
|
||
|
Retained earnings |
6,937 |
|
|
|
5,933 |
|
|
||
|
Total stockholders’ equity |
55,520 |
|
|
|
41,493 |
|
|
||
|
Total liabilities and stockholders’ equity |
$ |
88,658 |
|
|
|
$ |
66,301 |
|
|
|
salesforce.com, inc. Consolidated Statements of Cash Flows (in millions) (Unaudited) |
|||||||||||||||||||
|
Three Months Ended July 31, |
|
Six Months Ended July 31, |
|||||||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||||||
|
Operating activities: |
|
|
|
|
|
|
|
||||||||||||
|
Net income |
$ |
535 |
|
|
|
$ |
2,625 |
|
|
|
$ |
1,004 |
|
|
|
$ |
2,724 |
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
||||||||||||
|
Depreciation and amortization |
719 |
|
|
|
649 |
|
|
|
1,404 |
|
|
|
1,307 |
|
|
||||
|
Amortization of costs capitalized to obtain revenue contracts, net |
334 |
|
|
|
250 |
|
|
|
648 |
|
|
|
497 |
|
|
||||
|
Expenses related to employee stock plans |
640 |
|
|
|
578 |
|
|
|
1,204 |
|
|
|
1,082 |
|
|
||||
|
Gains on strategic investments, net |
(526 |
) |
|
|
(682 |
) |
|
|
(814 |
) |
|
|
(874 |
) |
|
||||
|
Tax benefit from intra-entity transfer of intangible property |
0 |
|
|
|
(2,003 |
) |
|
|
0 |
|
|
|
(2,003 |
) |
|
||||
|
Changes in assets and liabilities, net of business combinations: |
|
|
|
|
|
|
|
||||||||||||
|
Accounts receivable, net |
(812 |
) |
|
|
(349 |
) |
|
|
3,804 |
|
|
|
2,745 |
|
|
||||
|
Costs capitalized to obtain revenue contracts, net |
(463 |
) |
|
|
(455 |
) |
|
|
(818 |
) |
|
|
(480 |
) |
|
||||
|
Prepaid expenses and other current assets and other assets |
(173 |
) |
|
|
(203 |
) |
|
|
(190 |
) |
|
|
(214 |
) |
|
||||
|
Accounts payable and accrued expenses and other liabilities |
805 |
|
|
|
693 |
|
|
|
(288 |
) |
|
|
(64 |
) |
|
||||
|
Operating lease liabilities |
(200 |
) |
|
|
(209 |
) |
|
|
(416 |
) |
|
|
(412 |
) |
|
||||
|
Unearned revenue |
(473 |
) |
|
|
(465 |
) |
|
|
(1,924 |
) |
|
|
(2,020 |
) |
|
||||
|
Net cash provided by operating activities |
386 |
|
|
|
429 |
|
|
|
3,614 |
|
|
|
2,288 |
|
|
||||
|
Investing activities: |
|
|
|
|
|
|
|
||||||||||||
|
Business combinations, net of cash acquired |
(14,356 |
) |
|
|
(1,154 |
) |
|
|
(14,781 |
) |
|
|
(1,257 |
) |
|
||||
|
Purchases of strategic investments |
(509 |
) |
|
|
(232 |
) |
|
|
(786 |
) |
|
|
(574 |
) |
|
||||
|
Sales of strategic investments |
913 |
|
|
|
51 |
|
|
|
1,469 |
|
|
|
652 |
|
|
||||
|
Purchases of marketable securities |
(507 |
) |
|
|
(1,681 |
) |
|
|
(2,316 |
) |
|
|
(2,515 |
) |
|
||||
|
Sales of marketable securities |
2,464 |
|
|
|
207 |
|
|
|
3,045 |
|
|
|
544 |
|
|
||||
|
Maturities of marketable securities |
1,154 |
|
|
|
330 |
|
|
|
1,652 |
|
|
|
557 |
|
|
||||
|
Capital expenditures |
(213 |
) |
|
|
(114 |
) |
|
|
(384 |
) |
|
|
(437 |
) |
|
||||
|
Net cash used in investing activities |
(11,054 |
) |
|
|
(2,593 |
) |
|
|
(12,101 |
) |
|
|
(3,030 |
) |
|
||||
|
Financing activities: |
|
|
|
|
|
|
|
||||||||||||
|
Proceeds from issuance of debt, net of issuance costs |
7,922 |
|
|
|
0 |
|
|
|
7,912 |
|
|
|
0 |
|
|
||||
|
Repayments of Slack Convertible Notes, net of capped call proceeds |
168 |
|
|
|
0 |
|
|
|
168 |
|
|
|
0 |
|
|
||||
|
Proceeds from employee stock plans |
375 |
|
|
|
466 |
|
|
|
600 |
|
|
|
724 |
|
|
||||
|
Principal payments on financing obligations |
(24 |
) |
|
|
(24 |
) |
|
|
(73 |
) |
|
|
(72 |
) |
|
||||
|
Repayments of debt |
(1 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
|
||||
|
Net cash provided by financing activities |
8,440 |
|
|
|
441 |
|
|
|
8,605 |
|
|
|
650 |
|
|
||||
|
Effect of exchange rate changes |
(17 |
) |
|
|
3 |
|
|
|
(14 |
) |
|
|
(1 |
) |
|
||||
|
Net increase (decrease) in cash and cash equivalents |
(2,245 |
) |
|
|
(1,720 |
) |
|
|
104 |
|
|
|
(93 |
) |
|
||||
|
Cash and cash equivalents, beginning of period |
8,544 |
|
|
|
5,772 |
|
|
|
6,195 |
|
|
|
4,145 |
|
|
||||
|
Cash and cash equivalents, end of period |
$ |
6,299 |
|
|
|
$ |
4,052 |
|
|
|
$ |
6,299 |
|
|
|
$ |
4,052 |
|
|
|
salesforce.com, inc. Additional Metrics (Unaudited) |
||||||||||||||||||||||||
|
|
|
July 31, 2021 |
|
April 30, 2021 |
|
January 31, 2021 |
|
October 31, 2020 |
|
July 31, 2020 |
|
April 30, 2020 |
||||||||||||
|
Full time equivalent headcount (1) |
|
65,595 |
|
|
59,895 |
|
|
56,606 |
|
|
54,557 |
|
|
54,255 |
|
|
51,613 |
|
||||||
|
Financial data (in millions): |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Cash, cash equivalents and marketable securities (2) |
|
$ |
9,650 |
|
|
$ |
15,023 |
|
|
$ |
11,966 |
|
|
$ |
9,492 |
|
|
$ |
9,283 |
|
|
$ |
9,802 |
|
|
Strategic investments |
|
4,105 |
|
|
3,944 |
|
|
3,909 |
|
|
3,927 |
|
|
2,555 |
|
|
1,902 |
|
||||||
|
Principal due on the Company’s outstanding debt obligations (2)(3) |
|
11,551 |
|
|
2,689 |
|
|
2,690 |
|
|
2,691 |
|
|
2,692 |
|
|
2,693 |
|
||||||
|
(1) Full time equivalent headcount includes 2,814 from the second quarter fiscal 2022 acquisition of Slack. |
||||||||||||||||||||||||
|
(2) On July 21, 2021, the Company acquired Slack Technologies, Inc. (“Slack”) for approximately $15.8 billion of cash and 46 million shares of Salesforce common stock. The Company funded the cash portion of the consideration with a combination of new unsecured fixed rate Senior Notes (“the July 2021 Notes”) raised in a public offering in July 2021 of approximately $7.9 billion, net of discounts and debt issuance costs, and cash on the Company’s balance sheet. The July 2021 Notes include $1.0 billion of 2028 Senior Sustainability Notes. The net proceeds of the 2028 Senior Sustainability Notes will be allocated to finance or refinance, in whole or in part, one or more new or existing green or social projects that satisfy certain criteria. |
||||||||||||||||||||||||
|
(3) In connection with the July 2021 acquisition of Slack, the Company assumed 862,500 outstanding Slack Convertible Notes with an aggregate par value of $863 million, which is included in the amount above. The Company expects to settle substantially all the convertible notes in the third quarter of fiscal 2022 for approximately $1.3 billion in cash. |
||||||||||||||||||||||||
Contacts
Evan Goldstein
Salesforce
Investor Relations
415-819-2987
Carolyn Guss
Salesforce
Public Relations
415-536-4966
