Salesforce Announces Record Fourth Quarter and Full Year Fiscal 2022

Fourth Quarter Revenue of $7.33 Billion, up 26% Year-Over-Year, 27% in Constant Currency
FY22 Revenue of $26.49 Billion, up 25% Year-Over-Year, 24% in Constant Currency
Current Remaining Performance Obligation of Approximately $22.0 Billion, up 22% Year-Over-Year, 24% in Constant Currency
FY22 GAAP Operating Margin of 2.1%, and Non-GAAP Operating Margin of 18.7%
FY22 Operating Cash Flow of $6.0 Billion, up 25% Year-Over-Year
Raises First Quarter FY23 Revenue Guidance to $7.37 Billion to $7.38 Billion, up Approximately 24% Year-Over-Year
Raises FY23 GAAP Operating Margin Guidance to Approximately 3.6% and Reiterates Non-GAAP Operating Margin Guidance of Approximately 20%

Salesforce (NYSE: CRM), the global leader in CRM, today announced results for its fourth quarter and full year fiscal 2022 ended January 31, 2022.

“We had another phenomenal quarter and full-year of financial results,” said Marc Benioff, Chair and Co-CEO of Salesforce. “As we continue to see tremendous demand from customers, we’re raising our FY23 revenue guidance to $32.1 billion at the high-end of range, with non-GAAP operating margin of 20%, and operating cash flow growth of 22% year-over-year.”

“With our customers’ success driving our financial success, we’re generating disciplined, profitable growth at scale quarter after quarter,” said Bret Taylor, Co-CEO of Salesforce. “Our Customer 360 platform has never been more strategic or relevant in driving the growth and resilience of our customers around the world.”

“Fiscal 2022 was a remarkable year for Salesforce. I am particularly pleased with our focus on discipline and profitable growth which drove record levels of revenue, margin, and cash flow,” said Amy Weaver, President and CFO. “I’m confident in the momentum of the business as we build an even stronger company in FY23 and beyond.”

Salesforce delivered the following results for its fiscal fourth quarter and full fiscal year:

Revenue: Total fourth quarter revenue was $7.33 billion, an increase of 26% year-over-year, and 27% in constant currency. Subscription and support revenues for the quarter were $6.83 billion, an increase of 25% year-over-year. Professional services and other revenues for the quarter were $0.50 billion, an increase of 46% year-over-year.

Total fiscal 2022 revenue was $26.49 billion, up 25% year-over-year, and 24% in constant currency. Subscription and support revenues for the year were $24.66 billion, up 23% year-over-year. Professional services and other revenues for the year were $1.84 billion, up 44% year-over-year.

Operating Margin: Fourth quarter GAAP operating margin was (2.4)%. Fourth quarter non-GAAP operating margin was 15.0%.

Fiscal 2022 GAAP operating margin was 2.1%. Fiscal 2022 non-GAAP operating margin was 18.7%.

Earnings per Share: Fourth quarter GAAP diluted loss per share was $(0.03), and non-GAAP diluted earnings per share was $0.84. Mark-to-market accounting of the company’s strategic investments benefited GAAP diluted earnings per share by $0.03 based on a U.S. tax rate of 25% and non-GAAP diluted earnings per share by $0.03 based on a non-GAAP tax rate of 21.5%.

Fiscal 2022 GAAP diluted earnings per share was $1.48, and non-GAAP diluted earnings per share was $4.78. Mark-to-market accounting of the company’s strategic investments benefited GAAP diluted earnings per share by $0.93 based on a U.S. tax rate of 25% and non-GAAP diluted earnings per share by $0.98 based on a non-GAAP tax rate of 21.5%

Cash: Cash generated from operations for the fourth quarter was $1.98 billion, a decrease of (9)% year-over-year. Total cash, cash equivalents and marketable securities ended the fourth quarter at $10.54 billion.

Cash generated from operations for fiscal 2022 was $6.0 billion, an increase of 25% year-over-year.

Remaining Performance Obligation: Remaining performance obligation ended the fourth quarter at approximately $43.7 billion, an increase of 21% year-over-year. Current remaining performance obligation ended the fourth quarter at approximately $22.0 billion, an increase of 22% year-over-year, 24% in constant currency.

As of March 1, 2022, the company is initiating its first quarter and full fiscal year 2023 GAAP and non-GAAP earnings per share guidance, its first quarter current remaining performance obligation growth guidance, and its full fiscal year 2023 operating cash flow growth guidance. As of March 1, 2022, the company is raising its revenue guidance previously updated on November 30, 2021 for its first quarter and full fiscal year 2023. As of March 1, 2022 the company is raising its GAAP operating margin guidance and reiterating its non-GAAP operating margin guidance previously updated on November 30, 2021 for its full fiscal year 2023.

Management will provide further commentary around these guidance assumptions on its earnings call, which is expected to occur on March 1, 2022 at 2:00 PM Pacific Time.

Our guidance assumes no change to the value of the company’s strategic investment portfolio as it is not possible to forecast future gains and losses. In addition, the guidance below is based on estimated GAAP tax rates that reflect the company’s currently available information, and excludes forecasted discrete tax items such as excess tax benefits from stock-based compensation. The GAAP tax rates may fluctuate due to future acquisitions or other transactions.

	Q1 FY23 Guidance	Full Year FY23 Guidance
Revenue⁽¹⁾	$7.37 – $7.38 Billion	$32.0 – $32.1 Billion
Y/Y Growth	~24%	~21%
GAAP operating margin	N/A	~3.6%
Non-GAAP operating margin	N/A	~20%
GAAP earnings (loss) per share	($0.05) – ($0.04)	$0.46 – $0.48
Non-GAAP earnings per share	$0.93 – $0.94	$4.62 – $4.64
Operating Cash Flow Growth (Y/Y)	N/A	~21% – 22%
Current Remaining Performance Obligation Growth (Y/Y)	~21%	N/A
⁽¹⁾Full Year FY23 revenue guidance includes contributions from Slack Technologies, Inc. of approximately $1.5 billion and contributions from Traction on Demand of approximately $75 million, net of purchase accounting.

The following is a reconciliation of GAAP operating margin guidance to non-GAAP operating margin guidance for the full year:

		Full Year FY23 Guidance
GAAP operating margin⁽¹⁾		~3.6%
Plus
Amortization of purchased intangibles⁽²⁾		6.0%
Stock-based expense⁽²⁾		10.4%
Non-GAAP operating margin⁽¹⁾		~20%
⁽¹⁾ GAAP operating margin is the proportion of GAAP income from operations as a percentage of GAAP revenue. Non-GAAP operating margin is the proportion of non-GAAP income from operations as a percentage of GAAP revenue. ⁽²⁾ The percentages shown above have been calculated based on the midpoint of the low and high ends of the revenue guidance for full year FY23.

The following is a per share reconciliation of GAAP diluted earnings (loss) per share to non-GAAP diluted earnings per share guidance for the next quarter and the full year:

	Fiscal 2023
	Q1			FY23
GAAP earnings (loss) per share range⁽¹⁾⁽²⁾	($0.05) – ($0.04		)	$0.46 – $0.48
Plus
Amortization of purchased intangibles	$	0.50		$	1.88
Stock-based expense	$	0.76		$	3.24
Less
Income tax effects and adjustments⁽³⁾	$	(0.28	)	$	(0.96	)
Non-GAAP diluted earnings per share⁽²⁾	$0.93 – $0.94			$4.62 – $4.64
Shares used in computing basic GAAP net income per share (millions)		992			1,003
Shares used in computing diluted Non-GAAP net income per share (millions)		1,013			1,024
⁽¹⁾The Company’s GAAP tax provision is expected to be approximately 40% for the three months ended April 30, 2022, and approximately 40% for the year ended January 31, 2023. The GAAP tax rates may fluctuate due to discrete tax items and related effects in conjunction with certain provisions in the Tax Cuts and Jobs Act, future acquisitions or other transactions. ⁽²⁾The Company’s projected GAAP and Non-GAAP diluted earnings (loss) per share assumes no change to the value of our strategic investment portfolio as it is not possible to forecast future gains and losses. While historically the company’s strategic investment portfolio has had a positive impact on the company’s financial results, that may not be true for future periods, particularly in periods of significant market fluctuations that affect the publicly traded companies within the company’s strategic investment portfolio. The impact of future gains or losses from the company’s strategic investment portfolio could be material. ⁽³⁾The Company’s Non-GAAP tax provision uses a long-term projected tax rate of 22.0%, which reflects currently available information and could be subject to change.