As Salesforce Revenue Surges, Co-CEO Benioff Looks To Double The Business In Four Years

Salesforce

As Salesforce prepares to celebrate its 20th birthday, the CRM leader continues to see soaring growth, allowing it to set its sights on organically doubling the massive enterprise software business within the next four years.

The fourth quarter that ended Jan.31 notched a 26 percent year-over-year gain to deliver $3.6 billion in sales while blowing past $13 billion in annual revenue. In fiscal year 2019, Salesforce grew by 26 percent, and the San Francisco-based cloud computing company expects to take in more than $16 billion in sales this fiscal year 2020.

Growth at that pace is "truly amazing for a company of our size," CEO Marc Benioff said Monday during the company's earnings call.

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Salesforce beat expectations in earnings and revenue, delivering 70 cents per share, compared to the 55 cents analysts had expected and the $3.56 billion in revenue.

The stock slid, however, based on lower guidance in EPS and revenue for the first quarter of fiscal year 2020. Salesforce shares closed at $158.50 before falling to $153.90 after the market closed Monday.

While short-term guidance disappointed Wall Street, Benioff spoke to investors about longer-term milestones—particularly reaching $20 billion in revenue in the coming years and between $26 and $28 billion by fiscal year 2023.

CRM is still "the most important market in enterprise software," Benioff said, and the trends of cloud adoption, digital transformation and customer engagement are thrusting Salesforce to record highs quarter after quarter.

"As all trends continue to play out over the next 48 months, you're going to see us have dramatic increase in revenue we're forecasting today," Benioff said.

As Salesforce continues scaling, artificial intelligence will become a crucial driver of the company's transformative business technology, Benioff said.

"Soon, every Salesforce app that has been built will have Einstein available to it," Benioff told investors about his company's AI platform.

And voice interactions, powered by Einstein, "will become a dominant user interface," he said.

Customers will be able to update all their databases in Salesforce with voice commands. That capability, modeled after consumer voice services, will help customers enjoy greater productivity, he told investors.

Recent acquisitions have proven an important component of Salesforce's strategy, especially MuleSoft, the largest deal in Salesforce history, co-CEO Keith Block said on the call.

The company is "thrilled by the outstanding performance" of its Integration Cloud almost a year after it pulled the trigger on the $6.5 billion deal for the integration software vendor.

Salesforce hired more than 450 additional MuleSoft employees in 2019 as it builds out its Customer 360 capabilities for connecting data across its Sales, Service, Marketing and Commerce clouds.

Benioff also spoke to the advantages of Salesforce's partnership with Google, which has delivered "tremendous analytic capabilities" through integration with Google Analytics.

Salesforce customers are rapidly adopting Google's analytics platform, which is allowing them to better understand relationships with their own customers, he said.