Salesforce Inc (CRM) Reports Robust Fiscal Q3 2024 Results with Elevated Margins and EPS
Third Quarter Revenue hits $8.72 Billion, marking an 11% increase Year-Over-Year.
GAAP Operating Margin reaches 17.2% and non-GAAP Operating Margin climbs to 31.2%.
GAAP Diluted Earnings per Share (EPS) at $1.25 and non-GAAP Diluted EPS at $2.11.
Operating Cash Flow surges by 389% Year-Over-Year to $1.53 Billion.
On November 29, 2023, Salesforce Inc (NYSE:CRM) released its 8-K filing, announcing its financial results for the third quarter of fiscal year 2024, which ended on October 31, 2023. The company reported a significant 11% year-over-year increase in revenue, reaching $8.72 billion, with a 10% rise in constant currency terms. This performance underscores Salesforce's continued growth trajectory in the competitive enterprise software market.
Financial Highlights and Performance
Salesforce Inc (NYSE:CRM) demonstrated strong financial discipline, reflected in a GAAP Operating Margin of 17.2% and an even more impressive non-GAAP Operating Margin of 31.2%. The company's GAAP Diluted EPS stood at $1.25, while non-GAAP Diluted EPS was reported at $2.11. The substantial growth in operating cash flow, which soared by 389% to $1.53 billion, highlights Salesforce's operational efficiency and cash-generating capabilities.
Income Statement and Balance Sheet Insights
The company's subscription and support revenues were the primary revenue drivers, amounting to $8.14 billion, a 13% year-over-year increase. However, professional services and other revenues saw a slight decline of 4% year-over-year, totaling $0.58 billion. Salesforce's ability to manage its cost of revenues and operating expenses effectively contributed to the robust operating margins reported.
On the balance sheet, the remaining performance obligation ended the quarter at $48.3 billion, marking a 21% year-over-year increase. The current remaining performance obligation, which indicates future revenue that is contracted but not yet recognized, stood at $23.9 billion, up 14% year-over-year and 13% in constant currency terms.
Management Commentary
We had another strong quarter of executing on our profitable growth plan we set in motion last year, delivering $8.7 billion in revenue and again raising our operating margin guidance for this fiscal year, said Marc Benioff, Chair and CEO, Salesforce. We're now the third largest enterprise software company by revenue, the number one AI CRM and the number one enterprise apps company. Most importantly, we're bringing CRM, data, AI and trust together in a single, integrated platform, leading our customers into a new era of incredible productivity and growth.
Over the last year we have transformed the company, enabling us to deliver another quarter of strong profitable growth with GAAP operating margin of 17.2% and non-GAAP operating margin of 31.2%, said Amy Weaver, President and CFO of Salesforce. We remain focused on driving shareholder value as we deliver innovation to our customers as the #1 AI CRM.
Forward-Looking Guidance
Looking ahead, Salesforce Inc (NYSE:CRM) has initiated fourth-quarter revenue guidance of $9.18 billion to $9.23 billion, representing a 10% year-over-year increase. The company has also narrowed its full-year FY24 revenue guidance to $34.75 billion to $34.8 billion, up 11% year-over-year. Additionally, Salesforce raised its full-year FY24 GAAP Operating Margin Guidance to 14.5% and non-GAAP Operating Margin Guidance to 30.5%, with Operating Cash Flow Growth Guidance increasing to 30% to 33% year-over-year.
In summary, Salesforce Inc (NYSE:CRM) has delivered a strong financial performance in the third quarter of fiscal 2024, with significant growth in revenue, operating margins, and earnings per share. The company's focus on driving shareholder value and delivering innovative solutions to its customers continues to pay off, positioning Salesforce as a leader in the enterprise software space.
Explore the complete 8-K earnings release (here) from Salesforce Inc for further details.
This article first appeared on GuruFocus.
