Company also announces $1.33 billion acquisition of Vlocity
Salesforce has reported fourth quarter earnings of $4.85 Billion, up 35 percent year-on-year, announced the appointment of former BT CEO Gavin Patterson as President and CEO of Salesforce International – based in London – and made yet another cash-based acquisition, in an action-packed close to its fiscal 2020 this week.
The flurry of activity was announced on an earnings call late Tuesday, that saw Salesforce return subscription and support revenues for FY2019 of a healthy $16.0 billion; with overall annual earnings coming in at $17 billion.
Patterson was sacked in 2019 by BT chairman Jan du Plessis after six years at the company, when he lost the confidence of top investors.
He has been chairman of Salesforce Europe’s board since September 2019. Describing him as a “very close friend”, Salesforce CEO Marc Benioff said “Gavin is an incredible global leader [and] a member of many groups that we have been associated with for many years including the World Economic Forum.”
The company also announced that co-CEO Keith Block would be stepping down after seven years at the company, offering a warm goodbye on the call.
Meanwhile, fresh from the $15.7 billion buy-out of data visualisation specialist Tableau (which CEO Marc Benioff admitted on the call resulted in an integration that “was a little bumpy”) Benioff revealed another cash deal: a $1.33 billion acquisition of Vlocity, a fellow customer relationship management (CRM) provider.
Vlocity, founded in March 2014, is built on Salesforce, which has also been an early investor in the company. It provides CRM systems specifically targeting communications, energy and utilities, health, insurance and financial services, government and nonprofits, and media and entertainment.
Benioff, pressed on the logic of the acquisition, admitted that “we strongly believe that we need an acquisition pause after Tableau… [but] we have acquired it at a very attractive price because we have been partners with them from the very beginning.”
Referring back to Tableau, he added: “I have never had so many customers come to me on an acquisition and immediately tell me that they want to go enterprise-wide with it. This was slowed down a little bit last year because the integration was a little bumpy.”
He did not offer further details on the integration challenges.
In other highlights, the company said its AI-powered “Einstein” tool, built into its CRM offering, in Q4 powered more than 11 billion predictions per day, up six billion from just a year ago. As an ebullient Benioff put it: “No other company is delivering this level of intelligence and it’s absolutely critical for us as we head to our own Holy Grail the single source of truth for all of our customers, the knowledge of their customers connecting with their customers in a whole new way.”
Salesforce is raising its fiscal year 2021 revenue guidance to $21.1 billion at the high end of its range, representing about 23 percent projected growth year-over-year.