10-KPeriod: FY2021

Salesforce, Inc. Annual Report, Year Ended Jan 31, 2021

Filed March 17, 2021For Securities:CRM

Summary

Salesforce, Inc. demonstrated robust revenue growth in fiscal year 2021, reporting $21.3 billion 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 $4.38, 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.

Financial Highlights

51 data points
Beta

Revenue

$21.25B

74.4% Gross Margin

Net Income

$4.07B

19.2% Net Margin

EPS (Diluted)

$4.38

Total Assets

$66.30B

Cash & Equivalents

$6.20B

Free Cash Flow

$4.09B

Financial Statements
Beta
Revenue$21.25B
Cost of Revenue$5.44B
Gross Profit$15.81B
R&D Expenses$3.60B
Operating Expenses$15.36B
Operating Income$455.00M
Interest Expense$110.00M
Net Income$4.07B
EPS (Basic)$4.48
EPS (Diluted)$4.38
Shares Outstanding (Basic)908.00M
Shares Outstanding (Diluted)930.00M

Key Highlights

  • 1Revenue grew by 24% year-over-year to $21.3 billion in fiscal year 2021, driven by subscription and support services.
  • 2Diluted 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.
  • 3Operating cash flow increased by 11% to $4.8 billion, demonstrating strong operational cash generation.
  • 4Remaining Performance Obligation (RPO) reached $36.1 billion, up 17% year-over-year, indicating a robust future revenue pipeline.
  • 5The 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.
  • 6Cash, cash equivalents, and marketable securities totaled $12.0 billion at the end of the fiscal year, providing ample liquidity.
  • 7No single customer accounted for more than 5% of revenues, indicating a diversified customer base.

Frequently Asked Questions

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.

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.

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.

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.