Salesforce has raised its revenue guidance for the year — joining AMD and ServiceNow among the tech companies thriving amid a COVID-driven reshaping of the commercial environment– after a storming three months that saw the company surpass $5 billion revenues in a single quarter for the first time.
The Customer Relationship Management (CRM) specialist — which has shifted all of its 54,000 employees to working remotely — saw subscription and support revenues for the quarter hit $4.84 billion, up 29% year-over-year.
“It’s humbling to have had one of the best quarters in Salesforce’s history against the backdrop of multiple crises seriously affecting our communities around the world,” said Marc Benioff, Chair and CEO of Salesforce.
eCommerce Drives Surge
Among the standouts: 89% year-over-year growth in the company’s Commerce Cloud; a suite of eCommerce solutions spanning marketing, merchandising, content, promotions, customer service, fulfillment, and AI that has seen resurgent growth as retail business invested to bolster digital channels as stores closed.
(Adidas, for example — a Computer Business Review, not a Salesforce example — saw sales through its own e-commerce channel increase 93% during the quarter, as it pushed to reduce reliance on partners; digital and physical).
He added on an earnings call: “There’s also just incredible sustainable in terrain; shifts in consumer behavior, like digital commerce and this move to go direct-to-consumer. It’s a great privilege to be able to help our customers navigate this crisis.”
Talking about the cultural shift at the company, since the shift to remote work, Benioff said: “Every week since the pandemic has started, we’ve had an all hands call where we have all 54,000 people on a telephone call, our zoom, and we’re talking to them around the world and giving them like a play-by-play for the week.
“That hasn’t happened since we were like a 10 person, company, a 100 person company. That’s what little startups do. That’s not what companies who are entering the Dow will do. This is like, whoa, this is like a moment…”
Salesforce raised full year fiscal 2021 revenue guidance to $20.7 billion to $20.8 billion representing approximately 21% to 22% growth. The guidance includes approximately $100 million of revenue from Salesforce’s acquisition of Vlocity.
The company, which has been hugely acquisitive in the past, is not eying further M&A activity, Benioff emphasised on the call. It will be making pronounced shifts in how investment is prioritised internally, he suggested.
“As we look out over the next 12 to 24 months we realized it is important for us to make a strategic shift in investments today to better position our company for continued growth and customer success and this new all digital work from anywhere environment. As part of this, we’ll be allocating resources to prepare the company for growth in strategic areas” Benioff said, without offering details.
“This means we will be redirecting some of our resources to fuel growth in areas that are no longer as aligned with the business priority will be deemphasized. Furthermore, we intend to accelerate spend in go to market in product originally planned for next year and pull that into the second half of this year. These investments in growth are planned and they will increase our expenses in the second half.”