Summary
Salesforce opened fiscal 2022 with revenue of $5.96 billion for the quarter ended April 30, 2021, up 22.6% from $4.86 billion a year earlier, and 20% growth in constant currency. Subscription and support revenue was $5.54 billion, up 21% year over year, and professional services and other revenue rose 47% to $0.43 billion. The quarter swung to a GAAP profit. Operating income was $354 million against a loss of $140 million in the prior-year quarter. Net income was $469 million, up from $99 million, and diluted earnings per share was $0.50 versus $0.11.
Growth was broad across the product lines. Sales subscription and support revenue was $1,388 million, up 11%; Service was $1,506 million, up 20%; Platform and Other was $1,747 million, up 28%; and Marketing and Commerce was $895 million, up 25%. By region, Americas revenue was $4,094 million, Europe was $1,302 million and Asia Pacific was $567 million, with growth of 21%, 26% and 23%. Operating leverage improved sharply, with GAAP operating margin of 5.9%, up 8.8 percentage points from negative 2.9% a year ago, and non-GAAP operating margin of 20.2%. Gross margin slipped to 73.9% from 74.2%, a decline of 0.3 percentage points, while gross profit rose 22.1% to $4.41 billion.
Quality of earnings deserves a note. Stock-based expense was $564 million and amortization of purchased intangibles was $288 million. Mark-to-market accounting of the strategic investment portfolio added $0.23 to GAAP diluted earnings per share, and gains on strategic investments, net, were $288 million. Other expense was $38 million.
Cash generation was the cleanest part of the story. Operating cash flow was $3.23 billion, up 73.6% from $1.86 billion, and capital expenditures fell 47.1% to $171 million. Free cash flow, a non-GAAP measure, was $3,057 million. Cash, cash equivalents and marketable securities totaled $15.02 billion at April 30, 2021. Backlog also expanded. Deferred revenue, current portion, was $11.16 billion, up 22.5%, and remaining performance obligations were $35.0 billion, up 19.5%. Current remaining performance obligation was approximately $17.8 billion, up 23% year over year and 20% in constant currency.
Guidance for the full fiscal year 2022 moved up. Salesforce raised its revenue outlook by $250 million to approximately $26 billion and set a range of $25.9 billion to $26.0 billion, about 22% growth. That number assumes Slack closes late in the second quarter and includes roughly $500 million of Slack contribution, net of purchase accounting. Full-year GAAP operating margin guidance is approximately 1.4%, non-GAAP operating margin guidance is 18.0%, GAAP earnings per share guidance is $0.22 to $0.24, and non-GAAP earnings per share guidance is $3.79 to $3.81. Operating cash flow growth is guided to 12% to 13%. For the second quarter of fiscal 2022, the company guided revenue of $6.22 billion to $6.23 billion, up approximately 21%, a GAAP loss per share of $0.10 to $0.09, non-GAAP earnings per share of $0.91 to $0.92, and current remaining performance obligation growth of 20%.
The Slack deal carries real weight and risk. The agreement provides for $15.7 billion of cash consideration and 45 million shares, supported by a $4.0 billion bridge facility and a $3.0 billion acquisition term loan. Interest expense was $34 million in the quarter, and the company expects it to increase with the new debt. Attrition, excluding the Integration offering, Salesforce.org and Tableau, was between 9.0 and 9.5 percent as of April 30, 2021. Foreign currency fluctuations lifted revenue by about three percent. Cash consideration for the Acumen acquisition, net of cash acquired, was approximately $425 million. Headcount ended the quarter at 59,895 full-time equivalent employees. The filing keeps COVID-19 among its risk factors, including a recent surge in India, and the second quarter GAAP outlook is a loss.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2022 | Q4 FY2021 | QoQ | Q1 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $5.96B | $5.82B | +2.5% | $4.87B | +22.6% |
| Gross profit | $4.41B | $4.34B | +1.6% | $3.61B | +22.1% |
| Gross margin | 73.9% | 74.6% | -0.6 pp | 74.2% | -0.3 pp |
| Research & development | $951.0M | $939.0M | +1.3% | $859.0M | +10.7% |
| Sales & marketing | $2.54B | $2.63B | -3.3% | $2.39B | +6.4% |
| General & administrative | $559.0M | $574.0M | -2.6% | $502.0M | +11.4% |
| Total operating expenses | $4.05B | $4.14B | -2.2% | $3.75B | +8.1% |
| Operating income (loss) | $354.0M | $193.0M | +83.4% | -$140.0M | +352.9% |
| Operating margin | 5.9% | 3.3% | +2.6 pp | -2.9% | +8.8 pp |
| Net income (loss) | $469.0M | $267.0M | +75.7% | $99.0M | +373.7% |
| Net margin | 7.9% | 4.6% | +3.3 pp | 2.0% | +5.8 pp |
| Diluted EPS | $0.50 | $0.29 | +$0.21 | $0.11 | +$0.39 |
Risks
Completion of the pending Slack acquisition is subject to a DOJ Second Request under the HSR Act, which extends the waiting period and could delay or prevent closing. The filing states the transaction may not be completed within the anticipated timeframe, and failure to satisfy closing conditions could materially harm business and reputation.
Salesforce may fail to realize the anticipated benefits and synergies of the Slack acquisition, or integration may take longer and disrupt existing operations. Post-closing, the company expects to devote significant attention and resources to aligning business practices, and failure could adversely affect results of operations or cash flows and dilute earnings per share.
In connection with the pending Slack acquisition, Salesforce has commitments for a $4.0 billion bridge facility and a $3.0 billion acquisition term loan, adding substantial debt service obligations. This could impair financing flexibility, dedicate cash flow to debt service, and expose the company to credit rating changes or covenant defaults.
The COVID-19 pandemic and related public health measures have materially affected how Salesforce and its customers operate, with the recent surge in India impacting business infrastructure, support staff and third-party suppliers. The duration and extent of the impact on future results and cash flows remain uncertain.
Evolving data privacy laws such as CPRA, CCPA and GDPR, plus the invalidation of the EU-US Privacy Shield, impose new obligations and may restrict cross-border data transfers. Salesforce faces lawsuits in the Netherlands and UK alleging GDPR violations, and noncompliance could lead to fines, liabilities and slower sales.
As Salesforce targets larger enterprise customers, sales cycles may become more time-consuming and expensive, with greater pricing pressure and implementation challenges that can delay revenue recognition. MD&A notes longer and less predictable sales cycles and more variation from forecasted new business activity.
Periodic changes to the sales organization, made in response to market opportunities, competitive threats and other factors, have in some periods reduced productivity and may negatively impact revenue growth in current and future quarters. MD&A states Salesforce periodically makes such changes to position for long-term growth.
Salesforce depends on key management and skilled development, operations, sales and data science personnel; the February 2021 retirement of President and CFO Mark Hawkins and intense competition for technology talent increase retention risk. Remote-work and office-reopening policies may also affect culture and retention.
Salesforce is increasingly building AI into its offerings, and AI plus the Customer 360 platform present emerging ethical issues that could draw controversy over human rights, privacy or employment. Such controversy could cause brand or reputational harm, competitive harm or legal liability.
Fair value adjustments on Salesforce's strategic investments flow through the statement of operations, and volatility in public and private equity markets can materially impact quarterly results. MD&A notes the quarter's net gains were driven by an unrealized gain on one privately held investment, partially offset by unrealized losses on two publicly traded strategic investments.
Unanticipated changes in Salesforce's effective tax rate and additional tax liabilities, including global tax developments and a potential one-time Israeli tax charge related to integrating ClickSoftware, could affect financial results. The company may also face tax effects from acquisitions and changes in operating structure.
Salesforce and Slack face lawsuits in connection with the mergers, and Salesforce is subject to privacy lawsuits in the Netherlands and UK, plus securities litigation risk from stock price volatility. These could cause reputational harm, liabilities and diversion of management attention.
Customers have no obligation to renew subscriptions after typical 12 to 36 month terms and may renew for fewer subscriptions or shorter contract lengths. The attrition rate, excluding certain offerings, was between 9.0 and 9.5 percent as of April 30, 2021, and failure to predict renewals could harm revenue and remaining performance obligation.
SaaS KPIs
All quarters →Free cash flow
Non-GAAP operating margin
Current remaining performance obligation (cRPO)
Remaining performance obligation (RPO)
Operating Cash Flow
Summary, forecast, risks and KPIs are extracted from Salesforce, Inc.'s SEC filings for Q1 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.