One week after it opened its new tower in downtown San Francisco, Salesforce showed why it felt confident making that investment, posting strong gains in revenue and profit that exceeded Wall Street’s expectations.
Revenue for the period ending April 30th was $3.01 billion, up 25 percent compared to last year’s first quarter and surpassing analyst expectations of $2.94 billion, as polled by Yahoo Finance. The vast majority of that revenue comes from subscriptions to Salesforce’s sales and marketing software services and support contracts.
Net income for the first fiscal quarter of 2019 was $344 million, or $0.46 a share, up from a breakeven quarter Salesforce recorded last year during this period. Excluding special items — and there were a lot of those this quarter thanks to new accounting regulations — non-GAAP earnings per share were $0.74. Given all the accounting changes it’s not immediately clear how that relates to Wall Street expectations of $0.46 a share, which are usually applied to non-GAAP earnings per share amounts.
Revenue from the flagship Sales Cloud product rose 16.2 percent to $965 million, while Support Cloud revenue grew 29 percent. As has been the case of late, Salesforce’s investments in marketing tech services have been paying off, with a 41 percent jump in revenue from its Marketing and Commerce Cloud group to $422 million.
The company said it now expects to record between $13.075 and $13.125 billion for the entire fiscal 2019 year, which would represent either 24 percent or 25 percent growth compared to its 2018 fiscal year. Salesforce now employs over 30,000 people, a jump of nearly 4,000 people since its first fiscal quarter a year ago.
Salesforce made a major acquisition in the middle of this past quarter, snapping up Mulesoft for $6.5 billion in cash and stock. The company disclosed that it paid $4.9 billion in cash for the hybrid app development company, taking on $2.5 billion in debt after the deal closed in May.
[Editor’s Note: Salesforce is a GeekWire annual sponsor. This post was updated several times as more information became available.]