Salesforce had another impressive earnings report yesterday, blowing past analyst expectations and putting them firmly on the road to surpass $10 billion in annual revenue.
That’s a huge number and not one to be dismissed easily. In fact, Salesforce claims it’s the fastest enterprise software company ever to reach those lofty heights. That would include such enterprise software luminaries as Microsoft, SAP, and Oracle — the very companies Salesforce is competing with on a daily basis for your business.
It’s impressive on its face, but it’s also worth noting that in July 2012, just five years ago, the company had a yearly revenue of $2.64 billion (according to Macro Trends). Yesterday’s quarterly revenue was $2.56 billion, coming very close to matching that yearly number.
What’s more, over the past three years — FY2014 to FY2017 — Salesforce tripled its revenue from $4.07 billion to $8.39 billion, and that $8.39 billion revenue number was up 26 percent year over year, according to the company.
CEO Marc Benioff has always been the quintessential swaggering CEO talking big talk, but unlike many he has delivered. And that was not lost on him during the earnings call:
As you might remember, two and a half years ago, I talked about our dream of surpassing $10 billion in revenue. And at that time, we were just on a $5 billion revenue run rate. While I can remember how many employees and customers and partners came up to me and said there is no way you are going to get to $10 billion. What kind of a dream is this? And now, I am absolutely thrilled that in the second quarter we broke through the $10 billion run rate, doubling the Company in such a short time.
Doubling Again
Benioff has already set his sights on doubling again, although he didn’t put a timetable on that lofty goal. Still, the company sees plenty of room for growth as they project the core CRM product market alone has a $100 billion potential. While companies toss around market potential numbers with ease, even if it’s much less than that, Salesforce still has plenty of room to grow further and grab some of that potential revenue.
The company spent much of last year buying a dozen companies. That included Demandware for $3.2 billion, Krux for $800 million, and Quip for $750 million. That tends to help grow revenue beyond the core CRM product.
In addition, Salesforce’s vice chairman, president, and COO Keith Block talked in yesterday’s earning’s call about international expansion as another big area with plenty of room for growth.
It’s not easy to maintain the kind of growth trajectory Salesforce has been on over the past five years, but given the company’s track record so far, you can’t dismiss the $20 billion goal either.
Photo: Thomas Cloer on Flickr. Used under CC by SA 2.0 license.
