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Cloud Stocks: Way to Go, Salesforce

Posted on Thursday, Aug 27th 2020

It has been another stellar quarter for Salesforce (NYSE: CRM). It announced its second quarter results this week, and what a blowout quarter it was. The company surpassed all market expectations and revised its fiscal year revenue targets upwards despite current pandemic conditions. Earlier this week, Salesforce was also added to the Dow Jones index. Post the result announcement, the stock climbed an impressive 13% in the after-hours trading session.

Salesforce’s Financials

Salesforce’s revenues for the second quarter grew 29% to $5.15 billion, above analyst estimates of $4.9 billion. Adjusted earnings of $1.44 per share was also better than the market’s forecast of $0.67 per share.

By segment, Subscription and support revenues grew 29% to $4.84 billion, Professional services and other revenues grew 23% to $310 million.

Among key metrics, remaining performance obligation grew 21% over the year to $30.6 billion. Current remaining performance obligation grew 26% to $15.2 billion.

For the third quarter, Salesforce forecast revenues of $5.24-$5.25 billion with an EPS of $0.73-$0.74. The market was looking for $5.01 billion with an EPS of $0.76. Salesforce expects to end the current fiscal with revenues of $20.8 billion and an EPS of $3.72-$3.74. The market was looking for revenues of $20.01 billion for the year with an EPS of $2.97.

Salesforce’s Growth Focus

Salesforce is focusing its efforts on addressing the current pandemic induced conditions. For instance, it recently introduced Salesforce Anywhere – an integrated platform service that will help organizations deliver productivity and customer success even in the current conditions. With Salesforce Anywhere, organizations can sell, service, and market from anywhere; collaborate from anywhere using the new Salesforce Anywhere app that embeds chat, alerts, comments and video into the Salesforce experience; work from anywhere with a new employee service solution and new employee data model ?that enable organizations to build, manage, and scale employee apps and services quickly and securely; analyze data from anywhere by leveraging its earlier acquisitions of MuleSoft and Tableau; and Skill up from anywhere by using Einstein Recommendations for Trailhead and its new learning content.

It also entered into a partnership with Siemens to help organizations manage the new normal. Together, the two companies will develop a new workplace technology suite that will support businesses to safely reopen and manage physical workplaces under the new social distancing framework. As part of the tie-up, Salesforce’s will be integrated with Siemens’ Smart Infrastructure solutions, including Comfy and Enlighted, to help workplaces create and manage processes essential to creating safe, connected workplaces. Its solutions will include a touchless office that grants safe access into buildings and elevators, an occupancy management system to allow conference room reservation and even emergency response and contact tracing capabilities.

Last quarter, Salesforce also announced the release of Government Cloud Plus, a dedicated instance of Salesforce’s cloud infrastructure isolated for U.S. federal, state, and local government customers. Government Cloud Plus has achieved a FedRAMP Provisional Authority to Operate status at the High Security Impact Level.

Salesforce’s PaaS Strategy

I think Salesforce’s PaaS strategy has been its mantra to its success. I count Salesforce as the leader of the PaaS pack because of its successful developer ecosystem. Salesforce fuels innovation among developers and, in return, is able to expand not only the capabilities of its platform, but also offer industry-specific solutions.

Salesforce had launched its AppExchange back in 2006. By 2018, the company had recorded over 3,400 apps on the platform recording over 5.6 million installs. Today, the AppExchange has over 5,000 apps with more than 6.5 million installs. It has a wide array of over a thousand consultants building apps on the platform. Salesforce reports that 95% of the Fortune 100 companies have installed a solution from its AppExchange and nearly 88% of its customers have installed Salesforce apps.  

The AppExchange has helped empower companies like Vlocity to build industry-specific solutions and build sustainable businesses that translate to billion-dollar valuations and exits.

Another stellar example is that of Veeva, that has a very close relationship with Salesforce. Veeva was founded by former Salesforce SVP of Technology Peter Gassner, and it built its CRM platform powered by Veeva has continuously integrated and expanded these offerings, all on Today, Veeva has become a $30+ billion-dollar company in a very capital-efficient way.

Then there was MapAnything that Salesforce acquired last year. MapAnything was also built on Force was available through Salesforce’s AppExchange store and was both a Salesforce SI Partner and an ISV Premier Partner. The acquisition helped Salesforce add location-based intelligence solutions to its services that were already integrated with its offerings.

Vlocity and Veeva are illustrations of how Salesforce continued to focus on building a platform that catered to the omni-channel and multi-industry requirements while Vlocity and Veeva leveraged the platform to build vertical specific, niche offerings. MapAnything illustrates how Salesforce was able to add significant capabilities to its services without building them out on its own.

Its stock is trading at $208.46 with a market capitalization of $194.7 billion. It had touched a record high of $218.35 earlier this month. The stock fell to a 52-week low of $115.29 in March due to the global crisis.

Photo Credit: Open Grid Scheduler / Grid Engine /

This segment is a part in the series : Cloud Stocks

. Smartsheet Acquiring Bootstrapped Startups to Drive Growth
. Bootstrapped Unicorn Atlassian is Acquiring Capital Efficient Startups
. Netflix Price Hike Ruffles Competition
. How Will Carbon Black Differentiate?
. ServiceNow Grows Through Addition of Capital-Efficient Startups
. Zendesk and Freshworks Follow Different Acquisition Strategies
. Tableau Grows Through Small Acquisitions
. Open Platform Strategy Stands Intuit in Good Stead
. Will GoDaddy Follow the PaaS Route?
. Adobe Delivers Via PaaS
. A Look at Oracle’s 2018 M&A Activity
. What Apps Will Drive More Traction for Cloudera?
. Slack's App Focus Will Be Key to Post-IPO Success
. IBM Counts on its Cloud and Platform for the Turnaround
. Atlassian Acquires From its PaaS Marketplace
. What Should SAP Acquire to Triple its Value by 2023?
. Expect ServiceNow to Acquire From App Marketplace
. Should Follow a PaaS Strategy?
. How Upwork Can Leverage the Virtual Company Trend
. Qualys Scouting For Acquisitions
. Should SAP Acquire Zendesk or Freshworks?
. HubSpot Counts on its API Strategy
. SurveyMonkey Eyes Acquisitions for Growth
. Workday Wants to Disrupt Cloud Computing Using Machine Learning
. Einstein and Open-Source Platform Lead the Charge for Salesforce
. DocuSign Prepares to Beat Rival Adobe
. Veeva Soars, But Dassault Acquires Medidata for $5.8 Billion
. Tableau Acquisition Signals Massive Analytics Push for Salesforce
. Oracle Joins Hands with Microsoft to Take on Amazon
. GoDaddy is Making Strategic Acquisitions for the Next Level of Growth
. Alteryx Sees Strong Momentum
. Adobe Leveraging Magento and Marketo to Deliver Blockbuster Performance
. Is Slack Overvalued?
. How Will Cloudera Address the Competition?
. Zoom is Not Bothered by Cisco or Microsoft
. Domo Counts on Enterprise Revenue for Growth
. Netflix Plays with Pricing and Games to Attract Subscribers
. CrowdStrike Has a Successful IPO
. Atlassian Crosses the Billion Dollar Revenue Milestone
. ServiceNow Believes Strength Lies in Tie-ups
. Partnerships are the Mantra for BlackLine
. SurveyMonkey Counts on Enterprise Segment for Growth
. HubSpot Soars to a New High
. Intuit Pushes AI to Simplify Tax Filing
. Splunk Sees Strong Cloud Momentum
. Forescout Partners with Big Names
. Smartsheet Tapping into the Government Sector
. Salesforce Continues its Shopping Spree
. Palo Alto Networks Targets the IoT Security Market
. DocuSign Focuses on the Mortgage Sector
. Oracle Brags About Autonomous Database
. Blackbaud Acquires YourCause to Grow Addressable Market
. The Market Expects a Lot More from Adobe
. Anaplan Makes its First Acquisition Post IPO
. Activist Investor Drives Market Interest in Box
. MongoDB's Formula for Success
. Coupa Aims for $1B Revenue
. Dropbox on a Rocky Road
. Medallia Banks on Acquisitions
. IBM Banks on AI
. Time For Skepticism with Netflix
. SAP Riding High on the Cloud
. Amazon's Faster Shipping Hurting its Earnings
. ServiceNow CEO Change Signals Focus on Acquisitions
. Will Google Acquire Fitbit?
. HubSpot Focuses on Its Platform
. BlackLine Partners with Google Cloud
. Rapid7’s Focus on Cloud SIEM Pays Off
. Splunk Bets Big on Data Streaming
. Intuit's QBO Scores Big
. VMware Builds Up With Acquisitions
. Palo Alto Targets $5B Revenue by 2022
. Workday Targeting Procure-to-Pay Cycle
. Will Salesforce Acquire DocuSign?
. Okta Targets Enterprise Customers
. MongoDB Eyeing China With Alibaba Partnership
. Twilio Counts on API Upgrades for Growth
. Adobe Revs up its Experience Platform
. Top 20 for 2020
. Anaplan Sees Expanding Use Cases
. Dropbox Gears Up to Regain Lost Valuation
. Forescout Fails to Deliver
. Enterprise Bet Pays Off for SurveyMonkey
. SAP Bets Big on Experience Management
. Twilio Steps up Investment in 2020 to Preserve Growth Momentum
. Zendesk, Freshworks Focus on Marketplaces and Integrations
. Proofpoint Targets Insider Threats Through Acquisition
. RingCentral's Powerful Partner Strategy Would Augment with PaaS
. Qualys Counts on Google and Microsoft for Growth
. Shopify Soars on Improved Merchant Offerings
. HubSpot Believes in the Importance of PaaS
. BlackLine Remains Focused on SAP Integration
. Recently Public Cloudflare has New Edge
. GoDaddy is on a Shopping Spree
. Intuit Targets Online User Base Through Acquisition
. Should Palo Alto Networks Acquire ZScaler?
. Why Salesforce Buying Vlocity Proves the Growing Importance of PaaS
. Datadog Performing Well Post Recent IPO
. Workday Should Open Up About its PaaS Success
. Anaplan Focuses on API Connectors for its Platform
. Veeva
. Five9 Strengthens its PaaS Focus
. RealPage Brings AI and SaaS to Real Estate
. Splunk Should Open up About its PaaS Metrics
. Okta Benefiting from App Diversity
. Oracle Sees Growth Momentum
. Xero Focuses on a PaaS Strategy
. DocuSign Resilient to COVID-19
. Smartsheet Looking up to Enterprise Customers for Growth
. Paylocity Delivers Solid Results
. Q2 Holdings Expands TAM with Acquisitions
. New Relic Focuses on PaaS
. AppFolio Leverages AI for Product Enhancement
. Will Adobe Open Up About its PaaS Statistics?
. Change Healthcare Pushes APIs
. Dropbox Needs to Share API Metrics
. Upwork Improves Monetization
. MongoDB has Miles to go
. Nutanix Needs to Define a PaaS Strategy
. Cloudera Focuses on Hybrid Cloud
. Atlassian Gears Up for Growth, Unfazed by Covid-19
. Shopify Helps Merchants Pivot to Online Stores
. ServiceNow Steady in Turbulent Seas
. RingCentral Sees Strong Traction
. Twilio Hits 52-Week High Amidst COVID Crisis
. HubSpot Lowers Outlook Amidst Virus Concerns
. Proofpoint Acquiring Even Amidst Crisis
. BlackLine Looks Solid At The Face of Covid-19
. GoDaddy Continues to Acquire
. Qualys Expands Cloud Offerings to Soar to New Highs
. Zendesk Struggling Amidst the Downturn
. Alteryx Bounces Back Despite Low Outlook
. Palo Alto Networks Continues to Acquire
. Workday Extends its PaaS Strategy
. Splunk Rides High on Cloud Initiatives
. Salesforce Partners with Workday to Address the New Normal
. Veeva Scales New Highs
. Is Smartsheet’s Pullback a Buying Opportunity?
. MongoDB Soars Even in the Crisis
. Okta Reiterates Outlook
. Is Anaplan a Prospect for Oracle, SAP?
. Oracle Relies on Autonomous Offerings
. Adobe Shifts its Focus
. Paycom Confident Under Current Conditions
. DocuSign Soars to Record Highs
. Paylocity Acquires Amid Crisis
. Datadog's Integrations and Upgrades Help it Soar
. AppFolio Improves Offerings for Current Conditions
. SurveyMonkey Should Get Into PaaS
. Model N Soars to a Record High
. Appian Focuses on RPA for Growth
. Slack Beefs up its Portfolio
. Coupa Expands into Treasury Services
. CrowdStrike Soars to Record Highs
. Guidewire Expands Cloud Offerings
. Dropbox Should Focus on PaaS
. Talend Expands Data Offering Through Partners
. IBM Expands Cloud Partners
. One Medical Supports COVID-19 Care Digitally
. Microsoft Rides High on Teams and Gaming
. Investors Say Yes to nCino’s IPO
. Nutanix Focuses on Government and Media Verticals
. SAP Rethinks Qualtrics Acquisition
. Tenable Expands Into Industrial Cyber-Security
. ServiceNow Expands Ties with Zoom
. Cloudera Powers its Data Platform with Partnerships
. Atlassian Continues to Acquire from PaaS Ecosystem
. Shopify Soars to an All-Time High
. The PaaS Landscape
. HubSpot Focuses on the Enterprise Segment
. GoDaddy Restructures During COVID
. Akamai's Security Solutions Thriving
. Blackline Needs a PaaS Strategy
. Twilio - A Successful PaaS Story
. Zendesk Invests in the Future
. Qualys Continues to Acquire Indian Startups
. ZoomInfo Lists Despite COVID-19
. Analysis of Alteryx PaaS Strategy
. Fastly Needs to Diversify from TikTok
. Way to Go, Salesforce
. Intuit Continues to Acquire
. VMware Continues Buying Spree
. Analysis of Five9's PaaS Strategy
. Okta Expands Alliances to Attract Enterprises
. Palo Alto Continues to Acquire
. Analysis of Splunk's PaaS Strategy
. BigCommerce Goes Big with IPO
. Analysis of Workday's PaaS Strategy
. Analysis of Anaplan's PaaS Strategy
. Sees Strong Demand
. Analysis of MongoDB's PaaS Strategy
. Analysis of Wix's Platform Strategy
. New Relic Product Upgrades Deliver Growth
. What Should Proofpoint Acquire?
. Smartsheet Should Follow Atlassian’s Example
. Adobe's Relentless Growth Continues
. SurveyMonkey's PaaS Prospects
. DocuSign Acquires Amid COVID
. Paylocity Counts on Video
. The Unstoppable Veeva
. Magic Software Acquires to Expand in Europe
. What Can Cloud Startups Do To Raise Seed Capital in 2021?
. Guardant Seeks to Disrupt Oncology Testing
. Dropbox Adds Security Capabilities
. Domo Growing Steadily
. Nutanix Focuses on the Hybrid Cloud
. IBM Fails to Impress
. Microsoft’s Partnership with Tom Siebel’s C3 AI is Intriguing

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Cloud Stocks: Way to Go, Salesforce | Sramana Mitra - gigminds Monday, September 7, 2020 at 10:44 PM PT