Salesforce’s growth initiatives, including its international expansion and acquisitions that are helping to boost its revenue, continued in the third quarter (ended Oct. 31) and there’s more growth to come, according to company executives.
Noting that Q3 revenue soared to $4.5 billion, Marc Benioff, the company’s co-CEO and chairman, said on an earnings call Dec. 3 that represented 34% growth in constant currency. (It was 33% growth not using constant currency.)
As Salesforce announced a couple of weeks earlier, he noted the company raised its full-year fiscal 2020 revenue forecast to $17 billion, which would represent 28% growth for the year. Salesforce also initiated fiscal year 2021 revenue guidance of $20.9 billion, which would be about 23% growth for the year, he pointed out.
“What’s more significant and extremely exciting to me is that we are also intending to double the company by fiscal year ’24 with a revenue target of $34 [billion] to $35 billion, making us the fastest enterprise software company to reach that milestone,” he added.
International expansion represents “one of our key growth levers and we continue to make investments across the world,” according to Keith Block, the company’s co-CEO. In Q3, Salesforce grew revenue 33% in the Americas, 28% in the Asia-Pacific region and 42% in the Europe Middle East Africa (EMEA) region, all in constant currency, he noted.
That growth factored in Salesforce’s recent acquisition of analytics platform company Tableau, which benefited year-over-year growth in the Americas and EMEA, Block said.
Salesforce’s 2018 MuleSoft acquisition, meanwhile, “has been an incredibly successful acquisition, allowing our customers to unlock and unify data across their enterprises,” Block said, adding: “It’s strategic to every conversation we’ve been having, and adoption continues to accelerate.”
Block sees a “very similar opportunity with Tableau,” Block noted, telling analysts he was able to “see the tremendous impact Tableau is having on customers like Nissan and Morgan Stanley and Home Depot and many, many others.” Salesforce is “just beginning this integration process, but we have clear synergies from a distribution, product development and cultural standpoint and our customers are very, very excited and so are we,” he said.
In Q3, Salesforce continued to see “strong subscription and support revenue growth,” with year-over-year growth for Sales Cloud of 15%, Service Cloud growth of 24%, Marketing and Commerce Cloud growth of 32% and Platform and Other growth of 73%, according to Mark Hawkins, Salesforce president and CFO. The Tableau acquisition added about $308 million in revenue to Platform and Other revenue, while MuleSoft grew 77% year-over-year, contributing about $185 million to Platform and Other revenue, he said.
The company’s $4.5 billion in overall revenue included about $327 million from Tableau and $80 million from Salesforce.org, Hawkins also said.
As the company expands, so has its technology introductions. At its Dreamforce conference in San Francisco in November, Salesforce introduced Einstein Voice Skills and Customer 360 Truth, a new set of data and identity services that Benioff said on the Q3 call “connects all the data from across sales, service, marketing, commerce [and] our entire Customer 360” customer data management “to build an integrated, single source of truth.”
With Customer 360 Truth, Salesforce is “giving companies a complete view of every customer, making it possible to deliver a highly personalized, highly intelligent and highly connected experiences across every customer touchpoint and it’s built right into the Salesforce platform,” he noted, adding: “This is what our customers have been asking for, and we’re making it available to every one of them.”
Customer 360 “fueled our customers’ growth during Cyber Week,” Benioff said, adding: “Commerce Cloud processed more than 30 million orders, up 27 percent year-over-year [and] powered more than 614 million retail site visits, up 17 percent.” Digital sales on Commerce Cloud, meanwhile, grew 13%, Marketing Cloud “delivered more than 24 billion emails during Cyber Week, up 18 percent, and Service Cloud processed more than 428 million agent interactions during this critical time for our customers,” he said. Salesforce also saw 9% of digital orders during Cyber Week “driven by” the Salesforce Einstein artificial intelligence platform’s product recommendations, he told analysts.