Please ensure Javascript is enabled for purposes of website accessibility Revenue Surges 25%

By Joe Tenebruso – Nov 18, 2016 at 1:33PM

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CEO Marc Benioff says the cloud computing titan will reach $20 billion in sales "faster than any other enterprise software company" in history.

Image source: (CRM 1.85%) reported fiscal 2017 third-quarter results on Nov. 17. The cloud software leader continues to deliver strong revenue growth, positioning the company to surpass $10 billion in sales in the year ahead. results: The raw numbers


Q3 2017

Q3 2016

Year-Over-Year Change


$2.15 billion

$1.71 billion


Adjusted net income

$170.94 million

$140.52 million


Adjusted earnings per share (EPS)




Data source: Q3 2017 earnings release.

What happened with this quarter?

Total revenue leapt 25% year over year to $2.1 billion and 27% when excluding the effects of foreign currency fluctuations. The growth was broad-based, with all four of Salesforce's main business segments reporting double-digit sales increases.

Image source: Salesforce.

That strong performance is likely to continue in the quarters ahead, with deferred revenue increasing 23% to $3.5 billion Salesforce as of Oct. 31, and unbilled deferred revenue -- essentially business that is contracted but not yet invoiced -- rising 28% to $8.6 billion.

Image source: Salesforce.

"We had outstanding execution in the third quarter, closing a record number of large transactions as more and more companies look to Salesforce as their trusted advisor to redefine their customer strategies," said President and COO Keith Block in a press release. "No other enterprise software company is delivering customer success at this scale -- and certainly not at this pace."

Importantly, Salesforce's revenue growth is also boosting its cash generation, with operating cash flow improving 21%, to more than $1.4 billion, in the first three quarters of fiscal 2017.

Image source: Salesforce.

Still, Salesforce remains unprofitable on a GAAP basis, with third-quarter net loss per share coming in at $0.05. On an adjusted basis, non-GAAP earnings per share -- which exclude stock-based compensation, acquisition-related expenses, income tax adjustments, and certain other items -- rose 14% to $0.24.

Looking forward

Salesforce expects fourth-quarter revenue of $2.267 billion to $2.277 billion, which would be an increase of 25% to 26% from the prior year period. The company anticipates a GAAP loss of $0.10 to $0.09 per share, while non-GAAP earnings per share are projected to be in the range of $0.24 to $0.25. And deferred revenue is forecasted to rise approximately 22% to 23% year over year.

Looking even further ahead, Salesforce also issued a sales forecast for fiscal 2018, with full-year revenue expected to between $10.1 billion and $10.15 billion, representing an increase of 21% compared to fiscal 2017.

"I'm delighted to announce that we expect to deliver our first $10 billion year during our fiscal year 2018, which puts us well on the path to reach $20 billion faster than any other enterprise software company," said Chaiman and CEO Marc Benioff.

Joe Tenebruso has no position in any stocks mentioned. The Motley Fool recommends We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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