Salesforce reported revenue of $18.5 billion for the six months ended July 31, 2024, marking a 10% increase year-over-year. The income from operations during this period was $3.5 billion, compared to $1.9 billion in the previous year, resulting in an operating margin of approximately 19%. The diluted net income per share was $3.03, up from $1.49 in the prior year.
The company's cash provided by operations for the same period was $7.1 billion, reflecting a 35% increase year-over-year, with total cash, cash equivalents, and marketable securities amounting to $12.6 billion as of July 31, 2024.
Salesforce's total remaining performance obligation, which represents all future revenue under contract yet to be recognized, was approximately $53.5 billion, showing a 15% increase year-over-year. The current remaining performance obligation as of July 31, 2024, stood at approximately $26.5 billion, up by 10% year-over-year.
During this period, Salesforce repurchased approximately 25 million shares of its common stock for approximately $6.5 billion and paid approximately $772 million in dividends.
The company noted challenges related to macroeconomic factors and the more measured buying behavior of customers, leading to elongated sales cycles, additional deal approval layers, and deal compression. Additionally, foreign currency fluctuations impacted revenues by approximately one percent in the six months ended July 31, 2024, compared to the same period in the previous year.
Salesforce's attrition rate, excluding Slack self-service, was approximately eight percent as of July 31, 2024, and the company continued to maintain a variety of customer programs and initiatives to keep its attrition rate consistent compared to the prior year.
The company highlighted the seasonal nature of its unearned revenue, accounts receivable, and operating cash flow, noting that the fourth quarter has historically been its strongest quarter for new business and renewals, leading to a disproportionate weighting toward annual billings in that period.
Salesforce operates as one segment and derives its revenues from subscription and support revenues, which accounted for approximately 94% of its total revenues for the six months ended July 31, 2024. The company's remaining performance obligation is influenced by factors such as seasonality, the timing of renewals, average contract terms, and fluctuations in new business growth.
Following these announcements, the company's shares moved -0.6%, and are now trading at a price of $257.46. For the full picture, make sure to review Salesforce's 10-Q report.
