Home » Stocks » Salesforce is the Biggest Cloud But Cash Drops $CRM #salesforce

Salesforce is the Biggest Cloud But Cash Drops $CRM #salesforce

Image representing Salesforce as depicted in C...

Image via CrunchBase

Salesforce.com has become the first enterprise cloud computing company to reach a $2.0 billion annual revenue run rate,” said Marc Benioff, Chairman and CEO. “We are delighted to see our revenue growth rate continue to accelerate.”

The earnings release starts with a very frothy quote from uber-promoter Marc Benioff  leader of Tribe Salesforce (NYSE:CRM)

This is important for why Marc? An investment is there to create shareholder wealth. Being big is not always profitable. Me thinks that with your stock at your 52 week high you are looking to create a breakout and manage your options. Puffy statements tend to vaporize and then the stock drops when the substance cannot back it up.

A lot of investors would become more comfortable if Marc Benioff could focus on the business fundamentals instead of interesting sound bits.

Speaking of fundamentals serious investors should notice a decreasing cash position. Here is the snip from the earnings release:  

Cash: Cash generated from operations for the fiscal first quarter was $140 million, a decrease of 3% on a year-over-year basis. Total cash, cash equivalents and marketable securities finished the year at approximately $1.5 billion, a decrease of approximately $379 million from the prior year.”

If you beat the drum and focus investors on record high revenues, a balanced management discussion would also explain why cash is a negative story and what is being done about it.

Disclosure: “George Gutowski” writes from a Caveat Emptor Perspective”. I hold no positions in stocks mentioned in this post. I have no plans to initiate new positions within the next 72 hours.