Salesforce, Inc. · NYSE:CRM
Salesforce — Salesforce.Com — Investor Day (December 2020)
44 slides from Salesforce's investor day presentation, Dec 8, 2020
Slide 1: Generational Opportunity; Building on our Core Strength - Investor Day 2020
Generational Opportunity; Building on our Core Strength Investor Day 2020 Mark Hawkins President and CFO Evan Goldstein SVP, Investor Relations
Slide 2: Forward-Looking Statement
Forward-Looking Statement "Safe harbor" statement under the Private Securities Litigation Reform Act of 1995. This presentation contains forward-looking statements about the company's financial and operating results, which may include expected GAAP and non-GAAP financial and other operating and non-
Slide 3: Defining a Generational Opportunity
Defining a Generational Opportunity Name Job title Mark Hawkins President and CFO
Slide 4: Digital Transformation spend will reach an inflection point
2020 2022E 2023E ~$53 ~$45 ~$23 ~$49~$52 ~$63 Non-Digital GDP Digital GDP Digital Transformation spend will reach an inflection point The Future Enterprise Source: IDC, Business Resiliency: A Stop on the Way to the Future Enterprise, Aug 2020. Worldwide Nominal GDP Driven by Digitally Transformed vs
Slide 5: C-Suite Agenda Items Have Been Reprioritized
Source: IDC, Business Resiliency: A Stop on the Way to the Future Enterprise, Doc # US46760620, August 2020. IDC COVID-19 Impact on IT Spending Survey. Survey conducted during 7th May to 15th May 2020 period. Rating scale of 1 (lowest priority) to 4 (highest priority). N=908 global technology leader
Slide 6: Ambitious vision grounded in core values
Ambitious vision grounded in core values Values Drive Value Leading with our values, Salesforce is the trusted guide accelerating customer success in the new all-digital, work- anywhere economy with Customer 360. We are the #1 CRM #1 Analytics #1 Integration company. Our Vision
Slide 7: Slack
Placeholder Footer Placeholder Slack
Slide 8: Portfolio of Expanding TAMs
Portfolio of Expanding TAMs FY21 FY22 FY23 FY24 FY25 Analytics Integration Platform Marketing Commerce Service Sales Total Addressable Market growth from FY21-FY25 FY25 Total Addressable Market1 $175B 11% FY21-FY25 4YR CAGR2 3 4 5 $200B Calculations performed by Salesforce and graphics created by Sa
Slide 9: Sales Growth Opportunity
z System of Intelligence Evolution from system of record —> engagement —> intelligence Rep Productivity High Velocity Sales, Call Coaching and Territory Planning Revenue Cloud End-to-end revenue management; CPQ, Billing, Order Management, PRM Industry Products Improves customers’ time to value, beco
Slide 10: Service Growth Opportunity
z FY17 FY21 FY25 $32B 14% CAGR $20B $12B Omni-channel Engagement Unites voice, chat, messaging and bots Service Intelligence Real time recommendations + Resource optimization Industry Products Service Cloud is frequently customized via our Industry offerings Field Service Lightning ARR of >$400m gro
Slide 11: Marketing & Commerce Growth Opportunity
z Audiences 360 Customer Data Platform is the Single Source of Truth B2C+B2B Commerce Digital commerce expanding beyond retailers Payments Powered by Stripe New opportunity to further customer success GMV Growth 79% growth as of Q3 FY211 FY17 FY21 FY25 $41B 19% CAGR $24B $12B 14% CAGR 36% CAGR Marke
Slide 12: Platform Growth Opportunity
z Ecosystem Advantage World class AppExchange, ISVs, and SIs Modern Low Code App Dev Fastest application development technology for beginners to pro-coders Employee Experience & Automation Employee Experience is a strategic imperative Shield (Data and Security) ARR of >$500m growing 30%1 FY17 FY21 F
Slide 13: Analytics & Integration Growth Opportunity
z Solving Universal Challenge Pervasive customer issue with integrating disparate systems and driving actionable insights Proven Products Broadest + deepest platforms, unrivaled communities, industry recognition and successful customers Democratizing Technology Making it easier and faster for busine
Slide 14: Portfolio Recognition
Portfolio Recognition Tableau is a Leader in the Gartner Magic Quadrant for Analytics and Business Intelligence Platforms in 2020. Mulesoft is a Leader in the Gartner Magic Quadrant for Enterprise Integration Platform as a Service in 2020. Gartner does not endorse any vendor, product or service depi
Slide 15: Vertical Software Coverage Map by Industry
z FINS HLS PubSec Manufacturing Retail & CG Comms & Media TT&H Capital Markets National Defense Oil & Gas Auto Retail H o sp itality Trave l Tran sp o rtatio n Wealth Banking Medical Device Pharma Providers Discrete Process Consumer Goods State & Local National Civilian Media Comms Utilities Insuran
Slide 16: Differentiation: ISVs and AppExchange
z Differentiation Most Robust Enterprise Software AppExchange Customer Success ISVs solve incremental business challenges our customers face Financial Benefits ISV solutions improve customer retention and expansion rates Salesforce Analyst view of TAM Coverage based on TAM divided by # of ISVs in ea
Slide 17: Einstein Predictions
Einstein Predictions AI powered predictions fuels customer growth 80B+ predictions per day published as of November 2020. FY19 FY21 1B predictions per day 80B+ predictions per day Product Recommendations for Marketing and Commerce Best Response for Customer Service Proactive Outreach and Next Best A
Slide 18: Competitive Advantage
Competitive Advantage Large and Growing Market Values Driven M&A Execution Best in Class GTM Customer Success Stakeholder Capitalism Digital Transformation Imperative Trailblazer Community Ecosystem Advantage Culture Entrepreneurial Spirit Innovation
Slide 19: Gaining share driven by customer success
Gaining share driven by customer success The Global Leader in CRM 2015 2016 2017 2018 2019 2020H1 3.8% 4.8% 5.3% 3.9% 19.8% Ranked #1 for CRM Applications based on IDC 2020H1 Revenue Market Share Worldwide. Source: IDC, Worldwide Semiannual Software Tracker, October 2020. CRM market includes the fol
Slide 20: Revenue growth and FY26 target
$13.3B FY19 $10.5B FY18 $6.7B FY16 $8.4B FY17 FY23 FY24 $17.1B FY20 ~$21.1B FY211 ~$24.8B Core FY221 ~$50B+ FY26 Target Including Slack1 Generational Opportunity FY25 ~$0.6B Slack Stub FY221 ~$46B Core FY26 Target1 ~$4B Slack FY26 Target1 ~19% FY21 - FY26 CAGR ~17% FY22 - FY26 CAGR ~38% FY22 - FY26
Slide 21: Capturing the Opportunity
Capturing the Opportunity Name Job title Evan Goldstein SVP, Investor Relations
Slide 22: Positioned for success across regions, end markets and products
Positioned for success across regions, end markets and products Note: for illustration purposes only. Diverse Growth Portfolio Enterprise Commercial Small Business Industries APAC EMEA AMER JAPAN LATAM Essentials Who Where What Sales Service Platform Marketing & Commerce Analytics & Integration
Slide 23: Key growth metrics tracking favorably
Key growth metrics tracking favorably Executing Go-To-Market Playbook FY19 77% 23% FY21 Land and Expand FY20 76% 24% New Logos Existing Logos 77% 23% 9% 91% Multi-Cloud Adoption 8% 92% Multi-Cloud Single Cloud 7% 93% 69% 31%International Expansion 67% 33% International Americas 66% 34% % of Incremen
Slide 24: Cohorts increase ARR via new clouds and expansion
Cohorts increase ARR via new clouds and expansion of existing ones Cohort for each fiscal year defined as new logos in that year. Data graphed represents annualized recurring revenue for each fiscal year shown for the trailing twelve months as of July 31 (fiscal Q2). Consistent Land and Expand Succe
Slide 25: New clouds become part of customer expansion strategy
FY06 FY21 New clouds become part of customer expansion strategy Enterprise Land and Expand Example $2M $70M A n n u al iz e d R e cu rr in g R ev e n u e Started with Sales Cloud in FY06 Added Marketing Cloud in FY13 Customer Example starting with their first purchase in FY’06. Annualized Recurring
Slide 26: Evolution of FY15 SMB Cohort shows land and expand success
Evolution of FY15 SMB Cohort shows land and expand success Small Businesses Grow With Salesforce C o h o rt C u st o m e r C o u n t A R R p e r C u sto m e r 36% Beginning ARR FY15 FY20 Beginning ARR represents annualized recurring revenue as of February 1, 2014 (beginning of FY15) for new logos to
Slide 27: A portfolio of unique unit economic margins
A portfolio of unique unit economic margins Managing the Business Note: for illustration purposes only. Enterprise Commercial Small Business Industries APAC EMEA AMER JAPAN LATAM Essentials Who Where What Sales Service Platform Marketing & Commerce Analytics & Integration
Slide 28: Subscription economics offer valuable view of business performance
Subscription economics offer valuable view of business performance Driving Long Term Success COS S&M G&A R&D Subscription Economics Non-GAAP P&L Lifetime Revenue Cost to Book2 Cost to Serve3 $1 of ARR/ Attrition Costs to acquire ARR / Incremental ARR (Costs to support LTR) / LTR Less Unit Economic M
Slide 29: Unit Economic Margin Improving
FY17 FY20 Attrition improvement > CTB increase Unit Economic Margin Improving Cost to Book Cost to Serve Attrition Unit Economic Margin $0.75 $1.25 40% 60% 20% 50% 5% 15% Pro tip: don’t use a ruler. Note: Axis labels are illustrative.
Slide 30: Investing in our generational opportunity
Investing in our generational opportunity Cost To Book Reflects Sophisticated GTM… International ARR1 International Sales HC2 FY17 FY20 Enterprise ARR3 Product Clouds4 Industry Offerings 28% 43% 33% 7 8 59% 66% 1Represents % of total annualized recurring revenue coming from outside of the U.S. and C
Slide 31: CTB investments produce higher quality ARR
FY17 FY20 CTB investments produce higher quality ARR …Which Drives Attrition Improvement… Numbers are illustrative. 1Represents approximate attrition rate from accounts with $1 million in annual spend (“Enterprise”) as of January 31, 2020. 2Represents approximate attrition rate from accounts with 2
Slide 32: Improves Unit Economic Margins
Improves Unit Economic Margins FY17 FY20 Lower attrition outweighs higher cost to book profile …And Improves Unit Economic Margins Attrition5% 15% Lower Attrition Broader Business Portfolio Higher Quality ARR Incremental Go-To-Market Investments 1CAGR calculated between ending Salesforce cost to boo
Slide 33: Validate growth strategy while applying near term P&L pressure
…validate growth strategy while applying near term P&L pressure Improving Unit Economic Margins… FY17 Subscription Economics Unit Economic Margin1 Mid-30s 40% Income Statement FY20 FY17 Non-GAAP S&M %2 39% FY20 39% 1 Unit Economic margin in this and subsequent slides are calculations based on assump
Slide 34: Wrapping Up
Wrapping Up Name Job title Mark Hawkins President and CFO
Slide 35: Track Record of Execution
FY16 FY17 FY18 FY19 FY20 FY21E FY22E GAAP Operating Margin % Non-GAAP Operating Margin % Revenue $s 0% 30% $6.7B ~$25.6B High End of FY22E revenue guide of $25.45B to $25.55B as of December 1st 2020. FY21E GAAP Operating Margin, Non-GAAP Operating Margin, and OCF Margin based on guidance provided De
Slide 36: Range of outcomes framed by operating efficiencies and M&A dilution
Range of outcomes framed by operating efficiencies and M&A dilution FY22 Non-GAAP Op Margin Dynamics 17.6% FY21 Guide FY22 Core Expansion FY22 Slack Dilution FY22 Bridge Range of Net Expansion + Dilution 16.6% 18.6% Pro tip: don’t use a ruler. Includes T&E and Real Estate savings offset by growth in
Slide 37: Fastest to $5B, $10B, $20B; FY26 target
Subtitle text Footer Placeholder $28.4B 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 $5BFastest to Years Since Company Founded Note: Salesforce revenue of $5.4B in FY15 and $10.5B in FY19. Source for Microsoft, Oracle and SAP revenues: FactSet. $10B Fastest to $20B Fastest to ~$50B+ FY26 Ta
Slide 38: Thank You
Thank |
Slide 39: Appendix
Appendix
Slide 40: Salesforce + Slack Customer
+ Salesforce Customer 360 *Subject to the closing of the proposed acquisition of Slack, anticipated in the fiscal quarter ending July 31, 2021.
Slide 41: Gartner Content Details
Gartner Content Details The Gartner content described herein (the “Gartner Content”) represent(s) research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. ("Gartner"), and are not representations of fact. Gartner Content speaks as of its original publi
Slide 42: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes information about non-GAAP income from operations, non-GAAP operating margin, non-GAAP sales and marketing expense and non-GAAP sales and marketing expense as a percentage of revenue (collectively the “non-GAAP financial measures”). These non-GA
Slide 43: Non-GAAP Reconciliation Table
Non-GAAP Reconciliation Table (in millions) ASC 606 ASC 605 Non-GAAP income from operations FY20 FY19 FY18 FY17 FY16 GAAP income from operations $297 $535 $454 $64 $115 Plus: Amortization of purchased intangibles $792 $447 $287 $225 $158 Stock-based expenses $1,785 $1,283 $997 $820 $594 Less: Operat
Slide 44: salesforce
salesforce