(NYSE:CRM) continued its torrid growth in the fourth quarter of its fiscal 2018, which ended Jan. 31.  The enterprise software titan bested its own guidance for revenue and earnings per share, prompting management to boost its financial outlook for the year ahead. results: The raw numbers


Fiscal Q4 2018

Fiscal Q4 2017

Year-Over-Year Change


$2.85 billion

$2.29 billion


Net income

$68 million

($51 million)


Earnings per share




Data source: Q4 2018 earnings release.

What happened this quarter?

Total revenue for Q4 jumped 24% year over year to $2.85 billion, and 21% when adjusting for the impact of foreign exchange fluctuations. For the year, Salesforce's revenue leaped 25% to $10.48 billion. Those figures were above the company's guidance  ranges for Q4 and full-year sales of $2.801 billion to $2.811 billion and $10.43 billion to $10.44 billion, respectively.

"We had an outstanding quarter of growth that propelled Salesforce over the $10 billion revenue milestone for the year," Chairman and CEO Marc Benioff said in a press release. "No other enterprise software company has achieved this scale faster than Salesforce." CEO Marc Benioff

CEO Marc Benioff has firing on all cylinders. Image source:

Growth in Salesforce's billings was even more impressive. Deferred revenue -- basically, subscription revenue that's been booked from contracts but not earned yet -- surged 28% to $7.09 billion. And unbilled deferred revenue -- essentially business that is contracted but not yet invoiced -- soared 48%, to $13.3 billion.

Salesforce continues to take share in a massive and rapidly growing market. The company estimates that its total addressable market will grow to $123 billion by 2021, up from $72 billion  today. 

Better still, Salesforce is becoming more profitable as it expands. GAAP operating margin improved 375 basis points to 2.7%. And non-GAAP operating margin -- which excludes stock-based compensation and acquisition-related charges -- increased 62 basis points  to 13.5%.

All told, non-GAAP earnings per share rose 25% to $0.35. That was well above Salesforce's guidance  for adjusted EPS of $0.32 to $0.33. Moreover, operating and free cash flow increased 49% and 63%, respectively, to $1.1 billion and $900 million.

Looking forward

For the first quarter of its fiscal 2019, Salesforce expects revenue in the range of $2.925 billion to $2.935 billion -- which would be an increase of 23% compared to the prior-year period -- with GAAP and non-GAAP EPS in the ranges of $0.09 to $0.10 and $0.43 to $0.44, respectively. Deferred revenue, meanwhile, is projected to rise 23% to 24%.

Salesforce also boosted its full-year fiscal 2019 guidance, which now includes:

  • Revenue of $12.60 billion to $12.65 billion, up from a previous estimate of $12.45 billion to $12.50 billion
  • GAAP EPS of $0.61 to $0.63
  • Non-GAAP EPS of $2.02 to $2.04

"Our relentless focus on customer success continues to strengthen our position as the global leader in CRM," Benioff added.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends The Motley Fool has a disclosure policy.