01—Abstract
Summary
Summary of the 10-K filed March 17, 2021. Cited figures are marked; the original filing is the authoritative source.
Salesforce, Inc. demonstrated robust revenue growth in fiscal year 2021, reporting $21.3 billiona in total revenue, a 24% increase year-over-year.
This growth was primarily driven by subscription and support services, which constitute the vast majority of their revenue. The company successfully navigated the challenges presented by the COVID-19 pandemic, with new business growth resuming at historical trends after a slight Q1 dip. Significant strategic moves during the year included the acquisition of Vlocity and the announcement of the pending acquisition of Slack Technologies, Inc., signaling continued investment in expanding their Customer 360 platform and market reach.
Financially, Salesforce reported diluted earnings per share of $4.38b, significantly boosted by a one-time tax benefit and gains from strategic investments. Operating cash flow saw an 11% increase, reaching $4.8 billion, and the company ended the fiscal year with a strong cash position of $12.0 billion. The company's Remaining Performance Obligation (RPO) also showed healthy growth, increasing by 17% year-over-year to $36.1 billion, indicating a strong pipeline of future contracted revenue.
02—Key points
Key Highlights
- Revenue grew by 24% year-over-year to $21.3 billion in fiscal year 2021, driven by subscription and support services.
- Diluted EPS was $4.38, significantly improved from the prior year, aided by a $2.0 billion discrete tax benefit and $1.7 billion in unrealized gains from strategic investments.
- Operating cash flow increased by 11% to $4.8 billion, demonstrating strong operational cash generation.
- Remaining Performance Obligation (RPO) reached $36.1 billion, up 17% year-over-year, indicating a robust future revenue pipeline.
- The company completed the acquisition of Vlocity for $1.4 billion and announced the pending acquisition of Slack Technologies for an estimated $15.6 billion, signaling strategic expansion.
- Cash, cash equivalents, and marketable securities totaled $12.0 billion at the end of the fiscal year, providing ample liquidity.
- No single customer accounted for more than 5% of revenues, indicating a diversified customer base.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Salesforce, Inc. kept $0.19.
- Revenue$21.25B100.0%
- Cost of revenue−$5.44B25.6%
- Gross profit$15.81B74.4%
- Operating costs−$15.36B72.3%
- Operating income$455.0M2.1%
- Interest, other & tax$3.62B17.0%
- Net income$4.07B19.2%
Where FY2021 revenue went
$21.25B- Other operating costs: $11.76B, 55% of revenue
- Cost of revenue: $5.44B, 26% of revenue
- R&D: $3.60B, 17% of revenue
- Operating income: $455.0M, 2.1% of revenue
Kept 2.1% as operating incomeOperating income $455.0M · 2.1%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed March 17, 2021Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $21.25B$17.10B | +24.3% |
| Cost of Revenue | $5.44B$4.24B | +28.4% |
| Gross Profit | $15.81B$12.86B | +22.9% |
| R&D Expenses | $3.60B$2.77B | +30.1% |
| Operating Expenses | $15.36B$12.57B | +22.2% |
| Operating Income | $455.00M$297.00M | +53.2% |
| Interest Expense | $110.00M$110.00M | 0.0% |
| Net Income | $4.07B$126.00M | +3131.7% |
| EPS (Basic) | $4.48$0.15 | +2886.7% |
| EPS (Diluted) | $4.38$0.15 | +2820.0% |
| Shares Outstanding (Basic) | 908.00M829.00M | +9.5% |
| Shares Outstanding (Diluted) | 930.00M850.00M | +9.4% |
05—Questions
Frequently Asked Questions
What is Salesforce's primary business and how does it generate revenue?
Salesforce is a global leader in Customer Relationship Management (CRM) technology. Its primary revenue source is subscription and support services for its Customer 360 platform, which offers integrated CRM solutions for sales, service, marketing, commerce, and more. Professional services are a smaller but significant revenue stream.
How did the COVID-19 pandemic impact Salesforce's financial performance in fiscal year 2021?
While the pandemic caused a slight decline in new business in the first quarter of fiscal 2021, Salesforce experienced a rebound, with new business growth resuming at historical trends for the remainder of the year. The company also incurred incremental operating expenses and saw lower-than-expected operating cash flows due to pandemic-related actions and investments. However, many of their operations benefited from the shift to remote work.
What are the key strategic growth initiatives for Salesforce?
Salesforce's key growth strategies include expanding relationships with existing customers through cross-selling and upselling, extending go-to-market capabilities globally, expanding into new categories and verticals, strengthening their partner ecosystem, and promoting strong customer adoption while reducing attrition. Strategic acquisitions, like the pending Slack acquisition, are also central to their growth strategy.
What is the significance of the Slack acquisition for Salesforce?
The announced acquisition of Slack is a major strategic move aimed at integrating a leading channel-based messaging platform into Salesforce's Customer 360 platform. The company believes this integration will further enable companies to grow and succeed in the all-digital, work-from-anywhere era, enhancing collaboration and customer engagement capabilities.
06—Continue