Salesforce (NYSE: CRM), the global leader in CRM, today announced results for its fourth quarter and full fiscal year ended January 31, 2023.

• Fourth Quarter Revenue of $8.38 Billion, up 14% Year-Over-Year ("Y/Y"), up 17% Constant Currency ("CC")
• FY23 Revenue of $31.4 Billion, up 18% Y/Y, up 22% CC
• FY23 GAAP Operating Margin of 3.3% and Non-GAAP Operating Margin of 22.5%
• FY23 Operating Cash Flow of $7.1B, up 19% Y/Y
• Current Remaining Performance Obligation of $24.6 Billion, up 12% Y/Y, 13% CC
• Fourth Quarter GAAP Diluted Loss per Share of $(0.10) and Non-GAAP Diluted Earnings per Share ("EPS") of $1.68
• Returned $2.3 Billion in Fourth Quarter and $4.0 Billion in FY23 to Shareholders in the Form of Share Repurchases
• Full Year FY24 Revenue Guidance of $34.5 Billion to $34.7 Billion, up ~10% Y/Y
• Full Year FY24 GAAP Operating Margin Guidance of ~10.8% and Non-GAAP Operating Margin Guidance of ~27.0%
• Full Year FY24 Operating Cash Flow Guidance of ~15 - 16% growth Y/Y
• Announces Share Repurchase Program increased to $20 billion

“For the full year we delivered $31.4 billion in revenue, up 18% year-over-year, or 22% in constant currency, one of the best performances of any enterprise software company our size,” said Marc Benioff, Chair and CEO of Salesforce. “We closed FY23 with operating cash flow reaching $7.1 billion, up 19% year-over-year, the highest cash flow in our company’s history, and one of the highest cash flows of any enterprise software company our size.”

“Our relentless focus on execution and proactive management of the current environment allowed us to close out a strong quarter and set us up for a transformational fiscal year 24,” said Amy Weaver, President and CFO, Salesforce. “It’s a New Day at Salesforce and as we look ahead, I am excited for the opportunity in front of us as we continue to drive profitable growth.”

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

Revenue: Total fourth quarter revenue was $8.38 billion, an increase of 14% Y/Y, and 17% CC. Subscription and support revenues were $7.79 billion, an increase of 14% Y/Y. Professional services and other revenues were $0.60 billion, an increase of 19% Y/Y.

Total fiscal 2023 revenue was $31.35 billion, an increase of 18% Y/Y, and 22% CC. Subscription and support revenues were $29.02 billion, an increase of 18% Y/Y. Professional services and other revenues were $2.33 billion, an increase of 27% Y/Y.

Operating Margin: Fourth quarter GAAP operating margin was 4.3%. Fourth quarter non-GAAP operating margin was 29.2%. Restructuring impacted fourth quarter GAAP and non-GAAP operating margin by (990) bps and +140 bps, respectively.

Fiscal 2023 GAAP operating margin was 3.3%. Fiscal 2023 non-GAAP operating margin was 22.5%. Restructuring impacted fiscal 2023 GAAP and non-GAAP operating margin by (260) bps and +40 bps, respectively.

Earnings per Share: Fourth quarter GAAP diluted loss per share was $(0.10), and non-GAAP diluted EPS was $1.68. Mark-to-market accounting of the Company’s strategic investments negatively impacted GAAP diluted loss per share by $(0.24) based on a U.S. tax rate of 25% and non-GAAP diluted EPS by $(0.25) based on a non-GAAP tax rate of 22%. Restructuring impacted fourth quarter GAAP diluted loss per share and non-GAAP diluted EPS by (84) cents and +9 cents, respectively.

Fiscal 2023 GAAP diluted EPS was $0.21, and non-GAAP diluted EPS was $5.24. Mark-to-market accounting of the company’s strategic investments negatively impacted GAAP diluted EPS by $(0.18) based on a U.S. tax rate of 25% and non-GAAP diluted EPS by $(0.19) based on a non-GAAP tax rate of 22%. Restructuring impacted fiscal 2023 GAAP and non-GAAP diluted EPS by (83) cents and +9 cents, respectively.

Cash Flow: Cash generated from operations for the fourth quarter was $2.79 billion, an increase of 41% Y/Y. Free cash flow was $2.57 billion, an increase of 42% Y/Y. Restructuring impacted fourth quarter operating cash flow growth by (370) bps.

Cash generated from operations for fiscal 2023 was $7.1 billion, an increase of 19% Y/Y. Free cash flow was $6.3 billion, an increase of 19% Y/Y. Restructuring impacted fiscal 2023 operating cash flow growth by (120) bps.

Remaining Performance Obligation: Remaining performance obligation ended the fourth quarter at $48.6 billion, an increase of 11% Y/Y. Current remaining performance obligation ended at $24.6 billion, an increase of 12% Y/Y, 13% CC.

Forward-Looking Guidance

As of March 1, 2023, the Company is initiating its first quarter GAAP and non-GAAP EPS guidance, current remaining performance obligation growth guidance, and revenue guidance. The Company is initiating its full year FY24 revenue guidance, GAAP and non-GAAP EPS guidance, GAAP and non-GAAP operating margin guidance, and operating cash flow guidance.

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 the tax effects of stock-based compensation. The GAAP tax rates may fluctuate due to future acquisitions or other transactions.

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

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

For additional information regarding non-GAAP financial measures see the reconciliation of results and related explanations below.

Management will provide further commentary around these guidance assumptions on its earnings call.

Quarterly Conference Call

Salesforce plans to host a conference call at 2:00 p.m. (PT) / 5:00 p.m. (ET) to discuss its financial results with the investment community. A live webcast and replay details of the event will be available on the Salesforce Investor Relations website at www.salesforce.com/investor.

About Salesforce

Salesforce, the global CRM leader, empowers companies of every size and industry to digitally transform and create a 360° view of their customers. For more information about Salesforce (NYSE: CRM), visit: www.salesforce.com.

"Safe harbor" statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements about the Company's financial and operating results, which include, but are not limited to, expected GAAP and non-GAAP financial and other operating and non-operating results, including revenue, net income, earnings per share, operating cash flow growth, operating margin, expected revenue growth, expected foreign currency exchange rate impact, expected current remaining performance obligation growth, expected tax rates or provisions, stock-based compensation expenses, amortization of purchased intangibles, shares outstanding, market growth, strategic investments, and expected restructuring expense or charges. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the Company’s results could differ materially from the results expressed or implied by the forward-looking statements it makes.

The risks and uncertainties referred to above include -- but are not limited to -- risks associated with the impact of, and actions we may take in response to, the COVID-19 pandemic, related public health measures and resulting economic downturn and market volatility; our ability to maintain security levels and service performance meeting the expectations of our customers, and the resources and costs required to avoid unanticipated downtime and prevent, detect and remediate performance degradation and security breaches; the expenses associated with our data centers and third-party infrastructure providers; our ability to secure additional data center capacity; our reliance on third-party hardware, software and platform providers; the effect of evolving domestic and foreign government regulations, including those related to the provision of services on the Internet, those related to accessing the Internet, and those addressing data privacy, cross-border data transfers and import and export controls; current and potential litigation involving us or our industry, including litigation involving acquired entities such as Slack Technologies, Inc., and the resolution or settlement thereof; regulatory developments and regulatory investigations involving us or affecting our industry; our ability to successfully introduce new services and product features, including any efforts to expand our services; the success of our strategy of acquiring or making investments in complementary businesses, joint ventures, services, technologies and intellectual property rights; our ability to complete, on a timely basis or at all, announced transactions; our ability to realize the benefits from acquisitions, strategic partnerships, joint ventures and investments, and successfully integrate acquired businesses and technologies; our ability to compete in the markets in which we participate; the success of our business strategy and our plan to build our business, including our strategy to be a leading provider of enterprise cloud computing applications and platforms; our ability to execute our business plans; our ability to continue to grow unearned revenue and remaining performance obligation; the pace of change and innovation in enterprise cloud computing services; the seasonal nature of our sales cycles; our ability to limit customer attrition and costs related to those efforts; the success of our international expansion strategy; the demands on our personnel and infrastructure resulting from significant growth in our customer base and operations, including as a result of acquisitions; our ability to preserve our workplace culture, including as a result of our decisions regarding our current and future office environments or work-from-home policies; our dependency on the development and maintenance of the infrastructure of the Internet; our real estate and office facilities strategy and related costs and uncertainties; fluctuations in, and our ability to predict, our operating results and cash flows; the variability in our results arising from the accounting for term license revenue products; the performance and fair value of our investments in complementary businesses through our strategic investment portfolio; the impact of future gains or losses from our strategic investment portfolio, including gains or losses from overall market conditions that may affect the publicly traded companies within our strategic investment portfolio; our ability to protect our intellectual property rights; our ability to maintain and enhance our brands; the impact of foreign currency exchange rate and interest rate fluctuations on our results; the valuation of our deferred tax assets and the release of related valuation allowances; the potential availability of additional tax assets in the future; the impact of new accounting pronouncements and tax laws; uncertainties affecting our ability to estimate our tax rate; uncertainties regarding our tax obligations in connection with potential jurisdictional transfers of intellectual property, including the tax rate, the timing of the transfer and the value of such transferred intellectual property; uncertainties regarding the effect of general economic, business and market conditions, including inflationary pressures, general economic downturn or recession, market volatility, increasing interest rates and changes in monetary policy; the impact of geopolitical events, including the recent conflict in Europe; uncertainties regarding the impact of expensing stock options and other equity awards; the sufficiency of our capital resources; our ability to execute our Share Repurchase Program; our ability to comply with our debt covenants and lease obligations; the impact of climate change, natural disasters and actual or threatened public health emergencies the expected benefits of and timing of completion of the restructuring plan and the expected costs and charges of the restructuring plan, including, among other things, the risk that the restructuring costs and charges may be greater than we anticipate, the risk that our restructuring efforts may adversely affect our internal programs and our ability to recruit and retain skilled and motivated personnel, and may be distracting to employees and management, the risk that our restructuring efforts may negatively impact our business operations and reputation with or ability to serve customers, and the risk that our restructuring efforts may not generate their intended benefits to the extent or as quickly as anticipated; and our ability to achieve our aspirations, goals and projections related to our environmental, social and governance initiatives.

Further information on these and other factors that could affect the Company’s financial results is included in the reports on Forms 10-K, 10-Q and 8-K and in other filings it makes with the Securities and Exchange Commission from time to time. These documents are available on the SEC Filings section of the Financials section of the Company’s website at http://investor.salesforce.com/financials/.

Salesforce, Inc. assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

© 2023 Salesforce, Inc. All rights reserved. Salesforce and other marks are trademarks of Salesforce, Inc. Other brands featured herein may be trademarks of their respective owners.

Supplemental Revenue Analysis

Remaining Performance Obligation

Remaining performance obligation ("RPO") represents contracted revenue that has not yet been recognized, which includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods. RPO is influenced by several factors, including seasonality, the timing of renewals, the timing of software license deliveries, average contract terms and foreign currency exchange rates. Remaining performance obligation is also impacted by acquisitions. Unbilled portions of RPO denominated in foreign currencies are revalued each period based on the period end exchange rates. The portion of RPO that is unbilled is not recorded on the consolidated balance sheets.

RPO consisted of the following (in billions):

Unearned Revenue

Unearned revenue represents amounts that have been invoiced in advance of revenue recognition and is recognized as revenue when transfer of control to customers has occurred or services have been provided. The change in unearned revenue was as follows (in millions):

Disaggregation of Revenue

Subscription and Support Revenue by the Company's service offerings

Subscription and support revenues consisted of the following (in millions):

Total Revenue by Geographic Locations

Revenues by geographical region consisted of the following (in millions):

Constant Currency Growth Rates

The Company presents constant currency information to provide a framework for assessing how the Company's underlying business performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the weighted average exchange rate for the quarter being compared to for growth rate calculations presented, rather than the actual exchange rates in effect during that period.

Subscription and support revenues constant currency growth rates by the Company's service offerings were as follows:

Revenue constant currency growth rates by geographical region were as follows:

The Company presents constant currency information for current remaining performance obligation to provide a framework for assessing how the Company's underlying business performed excluding the effects of foreign currency rate fluctuations. To present the information, the Company converted the current remaining performance obligation balances in local currencies in previous comparable periods using the United States dollar currency exchange rate as of the most recent balance sheet date.

Current remaining performance obligation constant currency growth rates were as follows: