Slide 1: Financial Update Q4 FY19
Financial Update Q4 FY19 NYSE: CRM @Salesforce_ir
Slide 2: Safe Harbor
Safe Harbor "Safe harbor" statement under the Private Securities Litigation Reform Act of 1995: This presentation contains forward-looking statements about our financial results, which may include expected GAAP and non-GAAP financial and other operating and non-operating results, including revenue,
Slide 3: Company Overview
Company Overview Delivering durable growth at scale - Salesforce is the #1 CRM software provider based on total software revenue worldwide in 20171 - CRM is the fastest growing segment in Enterprise Software (projected CAGR of 13% 2018 – 2022)2 - Consistently delivering durable revenue growth, more
Slide 4: Financial Overview: Annual Results
Financial Overview Annual Results 4
Slide 5: FY19 Results Highlights
FY19 Results Highlights Durable top-line and operating cash flow growth • Revenue of $13.28 billion, up 26% year-over-year, 26% in constant currency1 • Unearned Revenue of $8.56 billion, up 22% year-over-year, 24% in constant currency2 • Remaining Performance Obligation of approximately $25.7 billio
Slide 6: FY19 Financial Summary
FY19 Financial Summary GAAP Non-GAAP1 Annual Results Increase Y/Y Annual Results Increase Y/Y Revenue $13,282M 26% $13,243M 26% CC Unearned Revenue $8,564M 22% $8,668M2 24% CC2 Current Remaining Performance Obligation3 $11.9B 24% N/A N/A Total Remaining Performance Obligation3 $25.7B 25% N/A N/A Ope
Slide 7: FY19 Financial Results
FY19 Financial Results Balanced top-line growth with record operating cash flow Revenue and Operating Margin $13.3B Operating Cash Flow $3.4B 17.1% 13.6% 5.9% 4.0% $1.1B $0.2B FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19E Revenue (ASC
Slide 8: Annual Subscription and Support Revenue by Cloud
Annual Subscription and Support Revenue by Cloud Complete portfolio of CRM products +13% Y/Y +26% Y/Y +49% Y/Y +37% Y/Y $4.0B $3.6B $2.9B $1.9B FY18 FY19 FY18 FY19 FY18 FY19 FY18 FY19 Sales Cloud Service Cloud Salesforce Marketing Cloud Platform & Other1 & Commerce Cloud Note: FY18 information has b
Slide 9: FY19 Revenue by Region
FY19 Revenue by Region Incremental investments in international markets driving growth AMERICAS EMEA APAC $9,445M $2,553M $1,284M +24% Y/Y +33% Y/Y +28% Y/Y +24% Y/Y CC1 +31% Y/Y CC1 +28% Y/Y CC1 1Non-GAAP revenue CC growth rates as compared to the comparable prior period. We present CC information
Slide 10: Financial Overview: Quarterly Results
Financial Overview Quarterly Results 10
Slide 11: Q4 FY19 Financial Summary
Q4 FY19 Financial Summary GAAP Non-GAAP1 Quarterly Results Increase Y/Y Quarterly Results Increase Y/Y Revenue $3,603M 26% $3,641M 27% CC Unearned Revenue $8,564M 22% $8,668 M2 24% CC2 Current Remaining Performance Obligation3 $11.9B 24% N/A N/A Total Remaining Performance Obligation3 $25.7B 25% N/A
Slide 12: Total Quarterly Revenue and Operating Margin
Total Quarterly Revenue and Operating Margin $3,603 $3,392 $3,281 Q4 FY19 $3,006 Y/Y Growth $2,865 $2,701 +26% / +27% CC $2,577 1 $2,397 17.6% 18.1% 17.8% 17.0% 16.9% 16.1% 16.5% Revenue 13.8% 5.7% 7.4% 6.4% (356 bps) GAAP Operating Margin 3.3% 3.5% 3.8% 2.7% (154 bps) 0.2% Non-GAAP Operating Margin
Slide 13: Quarterly Subscription and Support Revenue by Cloud
Quarterly Subscription and Support Revenue by Cloud Complete portfolio of CRM products +11% Y/Y +22% Y/Y +54% Y/Y +34% Y/Y $1.1B $1.0B $0.8B $0.5B Q418 Q419 Q418 Q419 Q418 Q419 Q418 Q419 Sales Cloud Service Cloud Salesforce Marketing Cloud Platform & Other1 & Commerce Cloud Note: FY18 information ha
Slide 14: Q4 FY19 Revenue by Region
Q4 FY19 Revenue by Region Incremental investments in international markets driving growth AMERICAS EMEA APAC $2,581M $677M $345M +26% Y/Y +25% Y/Y +25% Y/Y +26% Y/Y CC1 +31% Y/Y CC1 +26% Y/Y CC1 1Non-GAAP revenue CC growth rates as compared to the comparable prior period. We present CC information f
Slide 15: Remaining Performance Obligation
Remaining Performance Obligation Represents all future revenue under contract $25.7B Q4 FY19 $20.6B $20.4B $21.0B $21.2B Y/Y Growth $13.8B $15.0B $15.4B $15.8B $11.0B $10.8B $11.2B $11.2B +24% +25% Current RPO Total RPO $7.4B $7.7B $7.9B Remaining Performance Obligation (RPO) is a new metric disclos
Slide 16: Quarterly Operating Cash Flow
Quarterly Operating Cash Flow Q4 OCF reflects ongoing invoicing/collections seasonality $1,466 $1,331 Q4 FY19 $1,230 Y/Y OCF Growth $1,052 +27% Our fourth quarter has historically been our strongest quarter for new business and renewals and we generally invoice our customers annually. As a result, o
Slide 17: Cash, Cash Equivalents, and Marketable Securities
Cash, Cash Equivalents, and Marketable Securities Lower cash balances reflect MuleSoft acquisition $7,159 Q4 FY19 (4%) $4,522 Total Cash and Marketable $4,342 Securities Y/Y Growth $3,501 $3,629 $3,427 $3,450 $3,220 MuleSoft Acquisition In Q1 FY19, the increase in cash was primarily due to $2.5 bill
Slide 18: Business Overview
Business Overview 18
Slide 19: The Digital Transformation Imperative
The Digital Transformation Imperative DX initiatives are a top priority for CIOs IDC FutureScape: Worldwide IT Industry 2019 Top 10 Predictions1 Higher By 2022 2018 - 2023 Digitized Economy 1 COST / COMPLEXITY TO ADDRESS 3rd Platform IT 2 >60% 500M Multicloud Hyper-agile Apps 10 6 Innovation Explosi
Slide 20: The Only Complete Cloud CRM Platform
The Only Complete Cloud CRM Platform Uniquely positioned to help our customers drive digital transformation 20
Slide 21: Salesforce #1 in CRM
Salesforce #1 in CRM Worldwide CRM applications 2018H1 revenue market share by IDC 20.3% 7.5% 5.4% 4.1% 3.6% 2014 2015 2016 2017 2018H1 Source: IDC, Worldwide Semiannual Software Tracker, October 2018. CRM market includes the following IDC-defined functional markets: Sales Force Productivity and Man
Slide 22: Empowering Companies to Connect With their Customers Since 1999
Empowering Companies to Connect With their Customers Since 1999 Datorama MuleSoft B2B Marketing Salesforce Commerce Cloud IoT Lightning Trailhead Platform Quip Salesforce Einstein Mobile Analytics Commerce Cloud Chatter Heroku Salesforce Platform Service Cloud & AppExchange Sales Cloud 1999 2006 200
Slide 23: Product Advantage
Product Advantage Unmatched depth of functionality Cloud Sales Service Marketing eCommerce Communities Collaboration Integration Industries Platform Inbox Field Service Social Studio B2B & B2C Self Service Slides & Sheets Heroku Connectivity Government Media CPQ Self Service DMP Order Management PRM
Slide 24: Large and Growing Addressable Markets
Large and Growing Addressable Markets More products, more opportunities Total Addressable Market CY18 to CY22 $, Growth CAGR % Total TAM $143B Sales $19B, 12%1 Service $29B, 13%1 Marketing $20B, 13%1 Commerce $11B, 14%1 Platform & Other $32B, 6%2 Analytics $20B, 5%1 Integration $12B, 10%3 Calculatio
Slide 25: Success in Core Markets
Success in Core Markets Momentum across all segments of CRM Sales Service Marketing Commerce Platform & Other Market Share 32%1 19%1 10%1 5%1 8%2 CY17 Market Rank #11 #11 #21 #31 n/a CY17 Market Growth 12%3 13%3 13%3 14%3 6%4 CY18 - CY22 CAGR Revenue Growth 11%5 22%5 34%5 25%5 Fiscal Q419 Y/Y Calcul
Slide 26: Salesforce is a Values Driven Company
Salesforce is a Values Driven Company A culture of engaging all stakeholders Trust Deliver the most trusted infrastructure and communicate openly. Customer Success Focus on customer success to drive mutual growth. Innovation Empower Trailblazers with technology to succeed in the Fourth Industrial Re
Slide 27: Putting Our Values into Action
Putting Our Values into Action Doing well by doing good #1 BEST WORKPLACES FOR BEST WORKPLACES FOR BEST PLACES TO WORK FOR “CHANGE THE WORLD”LIST GIVING BACK WOMEN LGBTQ EQUALITY - FORTUNE MAGAZINE - FORTUNE MAGAZINE - FAIRYGODBOSS - HUMAN RIGHTS CAMPAIGN 1-1-1 Model #1 ON THE FORTUNE “THE BEST WORK
Slide 28: Continued Environmental Leadership
Continued Environmental Leadership Committed to creating a sustainable future for all Net-Zero Emissions & Carbon Neutral Cloud 100% Delivering an eco-friendly customer success platform Renewable Energy by FY22 Global Green Real Estate Strategy Tracking Progress on Salesforce Aligning with LEED and
Slide 29: Values Attract Top Talent
Values Attract Top Talent Unmatched scale focused on CRM 35,995 Hiring Growth Y/Y FY19 22% ~800 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Total Company Headcount 29
Slide 30: Partnerships Enhance Value Proposition
Partnerships Enhance Value Proposition Strategic relationships complement technology and product breadth and depth Redefining the mobile experience with new Empower CIOs to simplify how data and events iOS apps including Salesforce Mobile, are shared across AWS and Salesforce services Mytrailhead ap
Slide 31: The Advantage
The Advantage Customers and our ecosystem as evangelists 31
Slide 32: Autodesk Trailhead case study
Autodesk is a “Trailhead helps us reach more Autodesk depends on people, faster, and gives us a Trailhead to deliver sales deeper understanding of Salesforce capabilities.” onboarding and enablement. Damian O’Farrill, Product Manager AI, Sales Automation and Analytics, Autodesk. • Distributed workfo
Slide 33: Ecosystem Advantage
Ecosystem Advantage Extends our reach and value Consulting Partners Independent Software Vendors +41% ~3x Q4 Global Partner Growth in MuleSoft Certifications1 certified architects since the acquisition2 ~5,000 6M+ AppExchange Solutions3 AppExchange Installs3 1Growth rate compared to Q4 FY18. 2MuleSo
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Slide 35: Appendix
Appendix 35
Slide 36: Notes on Q4 Results
Notes on Q4 Results Adoption of New Accounting Standards • Salesforce retrospectively adopted new accounting standard Topic 606 on February 1, 2018 (Q1 FY19) • Topic 606 includes changes to accounting policies for revenue recognition and costs capitalized to acquire revenue contracts (primarily comm
Slide 37: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes information about non-GAAP diluted earnings per share, non-GAAP income from operations, and constant currency revenue and constant currency unearned revenue growth rates (collectively the “non-GAAP financial measures”). These non-GAAP financial
Slide 38: GAAP to Non-GAAP Financial Reconciliation
GAAP to Non-GAAP Financial Reconciliation (in thousands) Three Months Ended Fiscal Year Ended January 31, Non-GAAP income from operations April 30, 2017* July 31, 2017* October 31, 2017* January 31, 2018* April 30, 2018 July 31, 2018 October 31, 2018 January 31, 2019 2009 2018* 2019 GAAP income (los