01—Abstract
Summary
Summary of the 10-K filed March 5, 2020. Cited figures are marked; the original filing is the authoritative source.
Salesforce, Inc. (CRM) reported strong revenue growth of 29% in fiscal year 2020, reaching $17.1 billiona.
This growth was significantly driven by strategic acquisitions, notably Tableau for $14.8 billionb and ClickSoftware for $1.4 billion, which expanded the company's analytics and field service management capabilities. Despite substantial investments in R&D and sales and marketing to support growth and integration, Salesforce managed to generate positive income from operations, although net income saw a significant decrease year-over-year due to various factors including acquisition-related costs and tax benefits in the prior year. The company's core business remains subscription-based, with subscription and support revenues accounting for 94% of total revenue.
A key metric, Remaining Performance Obligation, grew 20% year-over-year to $30.8 billionc, indicating strong future revenue potential. Salesforce continues to focus on expanding customer relationships, international growth, and strengthening its partner ecosystem.
The company's balance sheet shows robust cash and marketable securities, providing ample liquidity. However, investors should note the significant increase in goodwill and intangible assets due to acquisitions, as well as ongoing investments in technology and personnel, which are expected to continue impacting operating expenses.
02—Key points
Key Highlights
- Total revenue for fiscal year 2020 reached $17.1 billion, a 29% increase year-over-year.
- Acquisitions of Tableau ($14.8 billion) and ClickSoftware ($1.4 billion) significantly expanded the company's analytics and field service capabilities.
- Subscription and support revenues formed the vast majority of revenue, accounting for 94% of the total.
- Remaining Performance Obligation increased by 20% to $30.8 billion, signaling strong future revenue visibility.
- Cash, cash equivalents, and marketable securities totaled $7.9 billion, indicating strong liquidity.
- Marketing and sales expenses were the largest operating expense category at 46% of total revenues, reflecting continued investment in growth.
- The company experienced a significant increase in goodwill and intangible assets due to acquisitions.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2020, Salesforce, Inc. kept $0.01.
- Revenue$17.10B100.0%
- Cost of revenue−$4.24B24.8%
- Gross profit$12.86B75.2%
- Operating costs−$12.57B73.5%
- Operating income$297.0M1.7%
- Interest, other & tax−$171.0M1.0%
- Net income$126.0M0.7%
Where FY2020 revenue went
$17.10B- Other operating costs: $9.80B, 57% of revenue
- Cost of revenue: $4.24B, 25% of revenue
- R&D: $2.77B, 16% of revenue
- Net income: $126.0M, 0.7% of revenue
- Interest, other & tax: $171.0M, 1.0% of revenue
Kept 0.7% as net incomeNet income $126.0M · 0.7%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2020filed March 5, 2020Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $17.10B$13.28B | +28.7% |
| Cost of Revenue | $4.24B$3.45B | +22.7% |
| Gross Profit | $12.86B$9.83B | +30.8% |
| R&D Expenses | $2.77B$1.89B | +46.7% |
| Operating Expenses | $12.57B$9.30B | +35.2% |
| Operating Income | $297.00M$535.00M | −44.5% |
| Interest Expense | $110.00M$126.00M | −12.7% |
| Net Income | $126.00M$1.11B | −88.6% |
| EPS (Basic) | $0.15$1.48 | −89.9% |
| EPS (Diluted) | $0.15$1.43 | −89.5% |
| Shares Outstanding (Basic) | 829.00M751.00M | +10.4% |
| Shares Outstanding (Diluted) | 850.00M775.00M | +9.7% |
05—Questions
Frequently Asked Questions
What were the key growth drivers for Salesforce in fiscal year 2020?
The primary growth drivers were organic growth through expanding relationships with existing customers and acquiring new ones, alongside significant strategic acquisitions. Notably, the acquisitions of Tableau and ClickSoftware in fiscal year 2020 substantially contributed to revenue growth and expanded the company's service offerings in analytics and field service management.
How did acquisitions impact Salesforce's financial performance?
Acquisitions, particularly Tableau and ClickSoftware, significantly boosted revenue and expanded market reach. However, these acquisitions also led to a substantial increase in goodwill and intangible assets on the balance sheet and contributed to higher operating expenses (including amortization) and transaction costs, which impacted profitability metrics like net income.
What is the significance of Salesforce's Remaining Performance Obligation (RPO)?
The Remaining Performance Obligation (RPO) represents contracted revenue that has not yet been recognized. An increase in RPO, such as the 20% year-over-year growth to $30.8 billion, is a strong indicator of future revenue, demonstrating continued demand and strong customer commitments for Salesforce's services.
What are Salesforce's main areas of investment?
Salesforce continues to invest heavily in marketing and sales to drive customer acquisition and retention, as well as in research and development to enhance its platform and develop new technologies. Investments are also directed towards integrating acquired companies and expanding its international operations and partner ecosystem.
06—Continue