Salesforce.com's Q4, $3 billion in annual revenue on deck
Leading up to the Salesforce report has been a series of surveys and partner checks on the fourth quarter. The theme: Salesforce is an enterprise staple, but may have needed some big deals to close out the quarter.
Salesforce.com reports its fourth quarter and fiscal 2013 results on Thursday and analysts expect the $3 billion annual revenue mark to be surpassed handily as the company garners more enterprise momentum.
Wall Street is expecting fourth quarter earnings of 40 cents a share on revenue of $830.86 million. For fiscal 2013, Salesforce is expected to report non-GAAP earnings of $1.52 a share on revenue of $3.046 billion.
And if analysts’ projections for fiscal 2014 are correct, Salesforce is expected to push up to the $4 billion annual sales mark (technically $3.85 billion is the estimate).
Leading up to the Salesforce report has been a series of surveys and partner checks on the fourth quarter. Most of the analysts reports have been solid, but do note that Salesforce may have needed a series of large deals to close in January to hit its targets. As a result, Salesforce's fourth quarter will be relatively upbeat.
Here's the read on Salesforce's quarter:
Macquarie analyst Brad Zelnick:
Lackluster Partner Survey (n=73). While our survey results appear tepid, our work outside of the survey suggests a surge in large deal activity at quarter end likely offset weaker SMB run rate business. Net 40% of respondents indicated their Salesforce related businesses performed above plan during the period (% above plan minus % below). This compares with 54% a year ago and 47% last quarter. 59% of respondents believe Salesforce’s sense of urgency and promotional activity into quarter end was more aggressive than usual (49% year ago and 28% last quarter).
Zelnick also noted that billings growth and deferred revenue will hit "peak confusion" in the fourth quarter. Salesforce began to focus on billings growth last year.
Piper Jaffray analyst Mark Murphy:
We conducted deep-dive interviews with 12 key contacts in the Salesforce ecosystem to provide a detailed view from the trenches. The feedback is almost universally positive and fairly consistent with recent quarters, with perhaps a greater focus on forward pipeline health. The central theme is: companies are looking at using Salesforce as their main Cloud Computing platform and tying it in with other apps to re-charge, reenergize, and change the way they do business. Companies will be going wall-to-wall and embracing Salesforce as their transformational vehicle. The nascent Marketing Cloud is trying to find its way by rationalizing acquired products into the existing framework, but the Service Cloud is on fire, with CRM telling its partners that 70% of customer service systems will be replaced or upgraded by 2016.
Jefferies analyst Ross MacMillan:
Updates from field work: 1) Our field work suggests that enterprise deal activity in the US was generally good. Sales Cloud continues to be a significant driver of growth, but we hear of many transactions that include elements of Sales Cloud, Service Cloud and Platform bundled together. 2) We continue to hear of good momentum in deals that include Platform (both Force.com and Heroku) within the sale, or stand-alone platform deals. 3) After encouraging checks in F3Q13, we felt our European field work down-ticked this time potentially due to a combination of macro-economic factors and sales staff turnover.