Salesforce Q1 FY1/24 Earnings Review

Oracle, Salesforce, Salesforce, Oracle … So Hard To Tell Them Apart

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Old Software Companies Never Die

by Alex King

Salesforce ($CRM), once the enfant terrible of enterprise software, is now sat comfortably in the old folks’ home with pipe, slippers, and a “dang those yahoo youngsters” take on life. It has, in short, become its alma mater, Oracle ($ORCL). Although without the killer cashflow margins.

Here’s the headline numbers.

In short:

• Revenue growth remains at 11% vs PY this quarter … the same growth rate for the last three quarters … and the guide for next quarter is … you guessed it … 11%. That is an unusual level of consistency.
• EBITDA and cashflow margins are climbing nicely, but note the meaningful gap between them. For me this means I tend to disregard EBITDA and focus on cashflow; and those cashflow margins are rather low for the business model. Grandpa Larry will give you >40%, come rain or shine.
• The balance sheet is safe as houses, with almost $10bn of net cash now (if you deduct the value of their long-term equity investments, a more cautious measure, you can say there is around $6bn net cash).

Let's turn to the stock price outlook, more detailed financials, valuation analysis, and our rating.

Read on!