Salesforce’s 3rd Quarter Earnings: Let’s Dive into the Details

The leader of the customer relationship management software market, Salesforce.com (NYSE: CRM) announced its third-quarter earnings on November 21, 2017. And I must say even after another quarter of rapid growth, management had made a point to visit its full-year guidance, raising its expectations for total fiscal 2018 revenue for the fourth time in a row. 

Salesforce reported earnings per share of 39 cents, two cents better than Wall Street’s expectation, and revenue of $2.68 billion, which was $30 million more than what the market was expecting. Salesforce has now beaten estimates for the last eight quarters and continues to be a mystery for Wall Street analysts in terms of revenue and earnings numbers. 

In the following post, I would like to mention a few key takeaways from the earnings call. 

AI remains key to Salesforce's growth story

Even after the completion of the third quarter, Artificial Intelligence (AI) remains key to its plans especially when it comes to reinforcing its leadership position in CRM. They believe that over the past few years, AI’s adoption with its customers has been tremendous.

“I think the artificial intelligence in the features we're launching with Einstein perfectly capture the power of the cloud. Our customers don't need to buy new hardware. With every release, they get these new capabilities automatically. And that is the power of the cloud. We are constantly rearchitecting our systems to incorporate the latest and greatest technologies that our customers can use to transform their businesses.” -Salesforce's new chief product officer, Bret Taylor

Salesforce's momentum with new customers

With the continuous launch of products to specific industries, the company has been emerging across the globe at a rapid scale. This approach, which Salesforce refers to as "speaking the language of our customers," is giving Salesforce "incredible momentum" with customer acquisition, explained COO Keith Block. "In fact, 57% of customers who buy our industry products are brand new to Salesforce,"

Gaining ground in big pharma

One industry that highlights how Salesforce is acquiring new customers and how it can evolve into the go-to cloud solution for CRM in a given industry is pharmaceuticals.

What's driving Salesforce's Marketing Cloud?

Over a year, subscription and support revenue has increased by 25%. The growth is purely organic. But do you know what's driving such rapid growth in Salesforce's marketing cloud? Taylor said Salesforce's unique ability to provide marketing platforms that simultaneously serve scalable business-to-business and business-to-consumer CRM solutions is key.

According to him- The reason our vendors -- the reason our partners are choosing us as their vendor is that we offer a platform that can do both now and also grow them in the future. And it's really unique in these capabilities to truly provide that single view of the customer whether or not you -- they bought their product directly or indirectly. And it's something I think is a real strategic advantage for our product line and the area that we're investing in primarily.

Conclusion:

As the company demonstrates strong growth in various segments, prowess in customer acquisition and well-timed investments in growth opportunities such as AI and marketing cloud enhancements, the CRM giant looks poised to maintain its leadership position -- and probably continue to gain market share. 

So that’s all for now! Keep watching the space to know more regarding latest salesforce development updates.