Business

Salesforce saw strong results across its various cloud businesses in the first quarter (ended April 30), helping the company report total revenue that was higher than expectations. Total revenue grew 25% from the same quarter a year ago, to $2.39 billion, with subscription and support revenue increasing 24% to $2.2 billion and professional services and other revenue jumping 32% to $187 million, it said May 18. But the company swung to a $9.21 million loss (1 cent a share) from a $38.76 million (6 cents a share) profit a year earlier. Salesforce shares were trading 0.26% lower at $87.52 the afternoon of May 19.

“Our strong revenue performance shows the strength of our full product portfolio,” CEO and chairman Marc Benioff told analysts on an earnings call. He noted that Sales Cloud revenue grew about 14% in the first quarter, while Service Cloud revenue increased about 21%, Marketing Cloud revenue grew about 32% excluding results from Demandware, which it bought for $2.8 billion last year, and Platform revenue jumped 32%. The company’s portfolio has “not only gotten stronger as we have continued to strategically invest in our business,” but Salesforce also bought several strong companies last year and integration of those firms into Salesforce “has been very successful,” he said.

The Sales Cloud revenue growth of Q1 was “notable” because it “represents another quarter of accelerating growth from an already significant base,” Pivotal Research Group analyst Brian Brian Wieser said in a research note. Including Demandware and Krux, the data management company that Salesforce bought last year for $700 million, Marketing Cloud revenue soared 56.3% in Q1, he said.

Salesforce’s Einstein artificial intelligence (AI) platform, meanwhile, continued to gain steam in the first quarter. As retailers continue to shift more of their business focus from brick and mortar to e-commerce, they are “focusing on building more personalized, one-on-one relationships with customers, using artificial intelligence to provide the best capabilities to their customers, delivering world-case customer experiences,” including in the mobile space, Benioff said on the call, adding Salesforce was “leading all of these transformations.”

Benioff also started using a version of Einstein internally, at staff meetings to help him provide better results forecasts, he disclosed. It’s a capability that he said Salesforce hasn’t rolled out to customers yet.

Salesforce is the first major CRM company to “roll artificial intelligence so dramatically through all of our products,” he went on to say, predicting AI will be “instrumental” for it. The “speed of growth” that’s being seen with AI — not just within Salesforce, but also at companies including Alphabet/Google — is “exceeding everybody’s expectations,” he added.