Slide 1: Financial Update Q1 FY20
Financial Update Q1 FY20 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 and operating results, which may include expected GAAP and non-GAAP financial and other operating and non-operating results, inclu
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 20181 - CRM is the fastest growing segment in Enterprise Software (projected CAGR of 12% 2018 – 2022)2 - Consistently delivering durable revenue growth, more
Slide 4: Financial Overview
Financial Overview Quarterly Results 4
Slide 5: Q1 FY20 Results Highlights
Q1 FY20 Results Highlights Durable top-line and operating cash flow growth • Revenue of $3.74 billion, up 24% year-over-year, 26% in constant currency1 • Current Remaining Performance Obligation of approximately $11.8 Billion, up 23% Year-Over-Year, 24% in Constant Currency1 • Remaining Performance
Slide 6: Q1 FY20 Financial Summary
Q1 FY20 Financial Summary GAAP Non-GAAP1 Quarterly Results Increase Y/Y Quarterly Results Increase Y/Y Revenue $3,737M 24% $3,798M 26% CC Current Remaining Performance Obligation2 $11.8B 23% N/A 24% CC Total Remaining Performance Obligation2 $24.9B 22% N/A N/A Operating Margin 5.6% (73) bps 18.2%3 1
Slide 7: Total Quarterly Revenue and Operating Margin
Total Quarterly Revenue and Operating Margin $3,737 Q1 FY20 $3,006 Y/Y Growth $2,397 17.0% 18.2% +24% / +26% CC 1 Revenue 13.8% 6.4% 5.6% (73 bps) GAAP Operating Margin 122 bps 0.2% Non-GAAP Operating Margin2 Q118 Q218 Q318 Q418 Q119 Q219 Q319 Q419 Q120 Quarterly Revenue Operating Margin Non-GAAP Op
Slide 8: Quarterly Subscription and Support Revenue by Cloud
Quarterly Subscription and Support Revenue by Cloud Complete portfolio of CRM products +11% Y/Y +20% Y/Y +46% Y/Y +33% Y/Y $1.1B $1.0B $1.0B $0.8B $0.8B $0.6B $0.6B $0.4B Q119 Q120 Q119 Q120 Q119 Q120 Q119 Q120 Sales Cloud Service Cloud Salesforce Marketing Cloud Platform & Other1 & Commerce Cloud 1
Slide 9: Q1 FY20 Revenue by Region
Q1 FY20 Revenue by Region Incremental investments in international markets driving growth AMERICAS EMEA APAC $2,617M $755M $365M +25% Y/Y +25% Y/Y +22% Y/Y +25% Y/Y CC1 +32% Y/Y CC1 +27% Y/Y CC1 1Non-GAAP revenue CC growth rates as compared to the comparable prior period. We present CC information f
Slide 10: Remaining Performance Obligation
Remaining Performance Obligation Represents future revenue under contract $24.9B Q1 FY20 Y/Y Growth $20.4B $13.1B +23% / +24% CC 2 $15.0B Current RPO (CRPO) $10.8B $7.4B +22% Total RPO $11.8B Remaining Performance Obligation (RPO) is a new metric $9.6B $7.6B disclosed with the adoption of Topic 6061
Slide 11: Quarterly Operating Cash Flow
Quarterly Operating Cash Flow Delivered nearly $2 billion in operating cash flow in Q1 $1,965 Q1 FY20 Y/Y Growth $1,466 +34% +34% $1,230 FCF1 OCF Our fourth quarter has historically been our strongest quarter for new business and renewals and we generally invoice our customers annually. As a result,
Slide 12: Cash, Cash Equivalents, and Marketable Securities
Cash, Cash Equivalents, and Marketable Securities Rebuilding cash balances after MuleSoft acquisition $7,159 Q1 FY20 $6,379 (11%) Total Cash and Marketable Securities Y/Y Growth $3,220 MuleSoft Acquisition In Q1 FY19, the increase in cash was primarily due to $2.5 billion in debt raised in April 201
Slide 13: Business Overview
Business Overview 13
Slide 14: 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 15: The Only Complete Cloud CRM Platform
The Only Complete Cloud CRM Platform Uniquely positioned to help our customers drive digital transformation 15
Slide 16: Salesforce #1 in CRM
Salesforce #1 in CRM Worldwide CRM applications 2018 revenue market share by IDC 16.8% 5.7% 5.6% 3.5% 3.4% 2014 2015 2016 2017 2018 Source: IDC, Worldwide Semiannual Software Tracker, April 2019. CRM market includes the following IDC-defined functional markets: Sales Force Productivity and Managemen
Slide 17: 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 18: 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 19: Large and Growing Addressable Markets
Large and Growing Addressable Markets More products, more opportunities Total Addressable Market CY18 to CY22 $, Growth CAGR % Total TAM $142B Sales $19B, 12%1 Service $29B, 13%1 Marketing $20B, 13%1 Commerce $11B, 13%1 Platform & Other $31B, 6%2 Analytics $20B, 5%1 Integration $12B, 9%3 Calculation
Slide 20: Our Core Markets
Our Core Markets Increasing share across CRM and Platform Sales Service Marketing Commerce Platform & Other Market Share 32%1 21%1 12%1 7%1 12%1 CY18 Market Rank #11 #11 #21 #31 N/A CY18 Market Growth 12%2 13%2 13%2 13%2 6%3 CY18 - CY22 CAGR Revenue Growth 11%4 20%4 33%4 22%4 Fiscal Q120 Y/Y Calcula
Slide 21: 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 22: 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 WORLD’S MOST ETHICAL #2 ON THE M
Slide 23: Continued Environmental Leadership
Continued Environmental Leadership Committed to creating a sustainable future for all Targeting Net-Zero Emissions & Carbon Neutral Cloud 100% Renewable Delivering an eco-friendly customer success platform Energy by FY22 Global Green Real Estate Strategy Tracking Progress on Salesforce Aligning with
Slide 24: Values Attract Top Talent
Values Attract Top Talent Unmatched scale focused on CRM 37,485 Headcount Growth Y/Y Q1 FY20 24% ~800 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Q120 Total Company Headcount 24
Slide 25: Partnerships Enhance Value Proposition
Partnerships Enhance Value Proposition Extending our platform and bringing joint benefits to customers Mobility Trailhead Industry Apps Marketing Productivity Public Cloud Analytics Suite Provider Connected Contact Center Public Cloud Platform Transformation Provider Global SI Industry Watson + Solu
Slide 26: The Advantage
The Advantage Customers and our ecosystem as evangelists 26
Slide 27: 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 28: Ecosystem Advantage
Ecosystem Advantage Extends our reach and value Consulting Partners Independent Software Vendors ~5,000 6.5M+ AppExchange Solutions1 AppExchange Installs1 1AppExchange Solutions and Installs as of 4/31/2019. 28
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Slide 30: Appendix
Appendix 30
Slide 31: Notes on our Financial Results
Notes on our Financial Results Topic 606 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
Slide 32: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes information about non-GAAP diluted earnings per share, non-GAAP income from operations, non-GAAP operating margin, free cash flow, and constant currency revenue and constant currency current remaining performance obligation growth rates (collect
Slide 33: GAAP to Non-GAAP Financial Reconciliation
GAAP to Non-GAAP Financial Reconciliation (in thousands) Three Months Ended Non-GAAP income from operations April 30, 2017* April 30, 2018 April 30, 2019 GAAP income from operations 4 191 210 Plus: Amortization of purchased intangibles 75 69 129 Stock-based expense 252 252 343 Non-GAAP income from o