Salesforce, Inc. · NYSE:CRM
Salesforce — Q4 2020 Earnings Presentation
35 slides from Salesforce's earnings presentation, Feb 25, 2020
Slide 1: Financial Update Q4 FY20
Financial Update Q4 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 the company's financial and operating results, which may include expected GAAP and non-GAAP financial and other operating and non-operating resu
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 Application Software (projected CAGR of 12% 2019 – 2023)2 - Consistently delivering durable revenue g
Slide 4: Financial Overview: Quarterly Results
Financial Overview Quarterly Results 4
Slide 5: Q4 FY20 Results Highlights
Q4 FY20 Results Highlights Durable top-line and operating cash flow growth • Fourth Quarter Revenue of $4.85 Billion, up 35% year-over-year, 34% in constant currency1 • FY20 Revenue of $17.1 Billion, up 29% year-over-year, 29% in constant currency1 • Fourth Quarter Operating Cash Flow of $1.63 Billi
Slide 6: Q4 FY20 Financial Summary
Q4 FY20 Financial Summary GAAP Non-GAAP1 Quarterly Results Increase (Decrease) Y/Y Quarterly Results Increase (Decrease) Y/Y Revenue $4,851M 35% $4,836M 34% Current Remaining Performance Obligation2 $15B 26% N/A 27% Total Remaining Performance Obligation2 $30.8B 20% N/A N/A Operating Margin (0.7)% (
Slide 7: Total Quarterly Revenue and Operating Margin
Total Quarterly Revenue and Operating Margin 18.1% $4,851 16.5% 15.4% Q4 FY20 Y/Y Growth $3,603 35% / +34% CC 7.4% $2,865 3.8% + 1 (0.7)% Revenue (450) bps GAAP Operating Margin Q418 Q119 Q219 Q319 Q419 Q120 Q220 Q320 Q420 (110) bps Quarterly Revenue Operating Margin Non-GAAP Operating Margin 2 Non-
Slide 8: Quarterly Subscription and Support Revenue by Cloud
Quarterly Subscription and Support Revenue by Cloud Complete portfolio of CRM products +17% Y/Y +26% Y/Y +74% Y/Y +28% Y/Y $1.43B $1.23B $1.22B $1.05B $0.96B $0.83B $0.69B $0.54B Q419 Q420 Q419 Q420 Q419 Q420 Q419 Q420 Sales Cloud Service Cloud Salesforce Marketing Cloud Platform & Other & Commerce
Slide 9: Q4 FY20 Revenue by Region
Q4 FY20 Revenue by Region Incremental investments in international markets driving growth $3,402M $1,009M $440M +32% Y/Y +49% Y/Y +28% Y/Y +32% Y/Y CC1 +47% Y/Y CC1 +28% Y/Y CC1 1 Non-GAAP revenue CC growth rates as compared to the comparable prior period. We present CC information for revenue to pr
Slide 10: Remaining Performance Obligation
Remaining Performance Obligation Represents future revenue under contract $30.8B Q4 FY20 $25.7B Y/Y Growth $20.6B $15.8B + 26% / +27% CC 2 $13.8B Current RPO (cRPO) 20% $11.0B + Total RPO $15.0B $11.9B Remaining Performance Obligation (RPO) is a metric disclosed $9.6B with the adoption of Topic 6061
Slide 11: Quarterly Operating Cash Flow
Quarterly Operating Cash Flow Q4 FY20 Y/Y Growth $1,632M 29% 23% $1,331M FCF1 OCF $1,052M Our fourth quarter has historically been our strongest quarter for new business and renewals and we generally invoice our customers annually. As a result, our first quarter and, increasingly, our fourth quarter
Slide 12: Cash, Cash Equivalents, and Marketable Securities
Cash, Cash Equivalents, and Marketable Securities Strengthening Cash Balances $7.9B Q4 FY20 Y/Y Growth 83% Total Cash and Marketable $4.5B $4.3B Securities Y/Y Growth Q418 Q119 Q219 Q319 Q419 Q120 Q220 Q320 Q420 Cash Marketable Securities 12
Slide 13: Financial Overview: Annual Results
Financial Overview Annual Results 13
Slide 14: FY20 Financial Summary
FY20 Financial Summary GAAP Non-GAAP1 Annual Results Increase (Decrease) Y/Y Annual Results Increase (Decrease) Y/Y Revenue 29% $17.2B 29% CC $17.1B Current Remaining Performance Obligation2 $15B 26% N/A 27% CC Total Remaining Performance Obligation2 $30.8B 20% N/A N/A Operating Margin 1.7% (230) bp
Slide 15: Annual Subscription and Support Revenue by Cloud
Annual Subscription and Support Revenue by Cloud Complete portfolio of CRM products + 14%Y/Y +23% Y/Y +57% Y/Y +32% Y/Y $4.60B $4.47B $4.47B $4.04B $3.62B $2.85B $2.51B $1.90B FY19 FY20 FY19 FY20 FY19 FY20 FY19 FY20 Sales Cloud Service Cloud Salesforce Marketing Cloud Platform & Other & Commerce Clo
Slide 16: Black Friday and Cyber Monday Momentum
Black Friday and Cyber Monday Momentum “A _& 31.6M commerce orders 64B instein engagement events i= $2.7B | 677M GMV shoppers Q 25B 1.56B emails sent SMS & push notifications VY 497M | 33M service cases chat messages $14.5B Holiday, Seaaon GMV 33% YoY Growth
Slide 17: FY20 Revenue by Region
FY20 Revenue by Region Incremental investments in international markets driving growth $12.05B $3.43B $1.62B +28% Y/Y +34% Y/Y +26% Y/Y +28% Y/Y CC1 +37% Y/Y CC1 +27% Y/Y CC1 1 Non-GAAP revenue CC growth rates as compared to the comparable prior period. We present CC information for revenue to provi
Slide 18: History of Declining Attrition S&S
History of Declining Attrition S&S Continuous improvement sustains growth and long term value Revenue Attrition Rate FY10 FY15 Note: Chart of dollar attrition as a percentage of revenue when compared to the year-ago period for Salesforce through FY16. Represents Q2 of the Fiscal Years Mentioned, exc
Slide 19: Business Overview
salesforce Business Overview
Slide 20: Secular Tailwind
Secular Tailwind Digital transformation is accelerating and capturing spend Worldwide Nominal GDP Driven by Digitally Transformed vs Other Enterprises (ST) Worldwide|DX'spending\vs\Other (8) ~$52 ~S44 ~$24 $998 ~$14 ~$68 $65 $2,696 aon ~$48 2018 2020 2022 2023E 2018 2020 2022 I Non-Digital GDP ll Di
Slide 21: Salesforce Customer 360
Salesforce Customer 360 Trusted - Smart - Flexible - Sustainable Q Sales wy) Sp & Success Service Platform Partners Marketing 6 F&F & & &F A =] Mobile Blockchain Al Vision Voice Industries Einstein Al Commerce X y Y) s é6 B ® Security Privacy Communities Builder Flow 2 & Identity Trailblazers & Resk
Slide 22: The Global Leader in CRM
The Global Leader in CRM Continuing to take share in a growing market 17.3% @2 5.5% ORACLE 5.3% BLY 5 005, BE Microsoft 3.5% /.\ Adobe 2014 2015 2016 2017 2018 2019H1 Ranked #1 for CRM Applications based on IDC 2019H1 Revenue Market Share Worldwide. Source: IDC, Worldwide Semiannual Software Tracker
Slide 23: Innovation Drives Growth
Innovation Drives Growth Serving customers with the most complete portfolio of products ys @2ooO 0 6 Sales Service Marketing eCommerce Communities Collaboration Platform Integration Industries © 90 © © © 060 I Inbox _ Field Service Social Studio B2B&B2C Self Service Slides &Sheets | Heroku Connectiv
Slide 24: Large and Growing Addressable Markets
Large and Growing Addressable Markets & Total $180B $120B $60B I Integration? i Commerce I Anaiytics* Bl Marketing Bl Service Il Platform & Other= I Sales Addressable Market growth from CY17-CY23 Total Addressable Market? - - - cy17 cy18 cy19 cy20 cy21 CcY22 CcY23 CY17-CY23 6YR CAGR?2 Calculations p
Slide 25: Core Values
CORE VALUES TRUS
Slide 26: Continued ESG Leadership
Continued ESG Leadership BARRONS MOST SUSTAINABLE COMPANIES Dow Jones _ . SUSTAINABLE Sustainability Indices Eas GALS $90M Public education Net-zero Emissions $10M Equal pay 100% Renewable 4.8M+ Hours $300M+ Grants 46K Non-profits . P 1M jobs “Pledge to energy by 2022 America’s Workers”
Slide 27: Values Attract Top Talent
Values Attract Top Talent 49,703 Unmatched scale focused on CRM Headcount Growth Y/Y Q4 FY20 38% ~800 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Q420 Total Company Headcount 27
Slide 28: Strategic Technology Partners
Strategic Technology Partners Extending the capabilities of the Salesforce Customer 360 28
Slide 29: Ecosystem Advantage: SIs
Ecosystem Advantage: SIs Partners and ISVs are aligned by industry Consulting Partners Y Pp = ij accenture Yofarririo — bluewolf @ ) (S) Capgemini ® ‘et . Cognizant Deloitte. Partner Certified Industry Focused Individuals Partners (1000+ Total Partners) +30% ~100 ems opt @ublicis dentsu he 1 Growth
Slide 30: Ecosystem Advantage: ISVs
Ecosystem Advantage: ISVs Largest B2B app exchange in the world supports our innovation Independent Software Vendors APTTUS Sc ne) MN AY ——< DocuSign @ FINANCIALFORCE ZIOVIAN 5,000+ +20% App Exchange FY20 Installs Listings ill ncino. veevad @Vlocity 1 Growth stats based on FY20 H1 compared to FY19.H
Slide 31: 31
31
Slide 32: Appendix
Appendix 32
Slide 33: 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 34: 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 35: GAAP to Non-GAAP Financial Reconciliation
GAAP to Non-GAAP Financial Reconciliation (in millions) Three Months Ended January 31, Fiscal Year Ended January 31, Non-GAAP income from operations 2018 2019 2020 2018 2019 2020 GAAP income (loss) from operations $ 211 $ 137 $ (36) $ 454 $ 535 $ 297 Plus: Amortization of purchased intangibles $ 69