The cloud-based provider of CRM, e-commerce and other business software said fiscal 2017 revenue increased 26% to $8.4 billion. Inc. is on its way to being a $10 billion-plus company by this time next year, chairman and CEO Marc Benioff says.

“I can tell you I’ve never been more excited about the future, and we are really well positioned to take advantage of this very, very fast-growing CRM market,” he said on a conference call with stock analysts yesterday, according to a transcript from Seeking Alpha.

For the fiscal fourth quarter year ended Jan. 31, Salesforce said revenue increased 27% year over year to $2.29 billion, bringing full-year revenue up 26% to $8.39 billion. It cited strength in sales across its multiple cloud software suites, with revenue from Sales Cloud—its salesforce automation and CRM software—leading the way with full-year sales topping $3 billion, up 13% from a year earlier. But it also noted positive developments in other areas as well, including growth in its Commerce Cloud e-commerce software and increasing demand for its new Einstein analytics software.

Going forward, Benioff and other executives say they expect Commerce Cloud and Einstein to play an important role in helping Salesforce reach between $10.15 billion and $10.20 billion for the current fiscal year ending Jan. 31, 2018.

Salesforce launched Commerce Cloud last year as the new brand for Demandware, a cloud-based retail e-commerce platform popular with branded manufacturers and retailers that it acquired last July for about $2.8 billion. Commerce Cloud contributed about $63 million in revenue for the fourth fiscal quarter and $120 million for the full fiscal year.


Although the ongoing cost of integrating Demandware into the Salesforce technology platform will “slightly pressure our operating margin in fiscal 2018,” chief financial officer Mark Hawkins said on the conference call, Commerce Cloud is already recognized as a strong contributor to future revenue. Salesforce notes that it had $9.0 billion in “unbilled deferred revenue” from subscription contracts as of Jan. 31, including $450 million from Commerce Cloud. Unbilled deferred revenue pertains to business that Salesforce has contracted but not yet billed.

Salesforce executives also say the company’s new Einstein analytics and artificial intelligence technology—which is already embedded in Commerce Cloud, Sales Cloud and the customer service-based Service Cloud—is already attracting attention from customers. Keith Block, vice chairman, president and chief operating officer, said Salesforce’s largest deal in the fourth quarter was a “massive expansion” by a major international consumer products company based in Europe that is gearing up to use the marketing, sales and service cloud suites to deliver “personalized consumer experiences” to its customers.

Block declined to name that client, but added that Salesforce “expanded our relationships in Q4 with three of the five largest CPG companies in the world, all of them running on Salesforce.”

Benioff added that he and other Salesforce executives are in talks with a CPG company, explaining how it can use Einstein’s artificial intelligence technology to better monitor and control how their products appear in client retail stores. The CPG company wants to know if and when competitors’ products are appearing on retail shelf space supposed to be dedicated to its own brands, Benioff said.


Salesforce demonstrated to the CPG company how it can use a cell phone camera and an app built with Einstein technology to routinely capture images of store shelves, and automatically send alerts to sales reps and forward orders to their distribution centers to replenish shelves as needed with the pertinent brands. “So this vision of the future that artificial intelligence is going to make our customers more successful … is playing out now,” Benioff said.

For the fourth fiscal quarter ended Jan. 31, Salesforce reported:

● Revenue of $2.294 billion, up 26.8% from $1.809 billion;

● Gross profit of $1.668 billion, up 22.1% from $1.366 billion;


● A net loss of $51.44 million, compared with a year-earlier net loss of $25.51 million.

For the fiscal year ended Jan. 31, it reported:

● Revenue of $7.766 billion, up 25.1% from $6.206 billion;

● Gross profit of $6.158 billion, up 22.8% from $5.013 billion;


● Net income of $179.63 million, compared with a year-earlier net loss of $47.42 million. The difference in income levels was largely due to changes in tax benefits, investment income and “other” income.

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