Salesforce.com Inc. easily topped $20 billion in revenue for the first time in its recently completed fiscal year, so now it’s time for a new goal: $25 billion.
Salesforce CRM, -3.90% reported fourth-quarter earnings of $267 million, or 28 cents a share Thursday, improving from a loss of $248 million in the same quarter a year ago. After adjusting for stock-based compensation and other factors, the cloud-software company reported earnings of $1.04 a share. Revenue increased to $5.82 billion from $4.85 billion a year prior, resulting in an annual revenue total that surpassed $20 billion, a key goal of co-founder and Chief Executive Marc Benioff.
Analysts on average expected Salesforce to report adjusted earnings of 75 cents a share on revenue of $5.68 billion, according to FactSet. Shares dipped more than 4% in after-hours trading after the results were announced, potentially due to earnings guidance for the coming year that was a hair lower than analysts’ estimates.
Beyond hitting Benioff’s $20-billion target, 2020 was a transformational year for Salesforce. The company’s stock was added to the blue-chip Dow Jones Industrial Average DJIA, -1.75%, and it agreed to acquire Slack Technologies Inc. WORK, -1.30% to better challenge software heavyweight Microsoft Corp. MSFT, -2.37%, a deal that is expected to close in Salesforce’s fiscal second quarter. Salesforce stock reacted positively to the events, rising 27.7% in the past 12 months, as the S&P 500 index SPX, -2.45% gained 25.5%.
For more: Salesforce’s deal for Slack creates a bigger threat to Microsoft
“We never could have predicted a year ago what was in store, which makes me incredibly proud of how well we pivoted our company to adapt to this pandemic world,” Benioff said in Thursday’s announcement.
For the coming year, Benioff has a new revenue target in mind: $25 billion. Salesforce projected 2021 adjusted earnings of $3.39 to $3.41 a share on sales of $25.65 billion to $25.75 billion, which was slightly lower than analyst estimates on the bottom line. Heading into the report, analysts on average expected 2021 adjusted earnings of $3.49, according to FactSet, on revenue of $25.42 billion.
The company’s first-quarter guidance beat analyst projections, however. Salesforce forecast first-quarter adjusted earnings of 88 cents to 89 cents a share on sales of $5.875 billion to $5.885 billion, while analysts on average expected adjusted earnings of 75 cents a share on revenue of $5.72 billion.
Slack also experienced a strong end to its fiscal year, reporting a record net addition of paying customers in preliminary results Thursday afternoon. The business-communications company reported the addition of 14,000 new paying customers, pushing its total to 156,000, and billings of $359.9 million, easily topping analyst estimates of $324.5 million. The company expects to fully report fourth-quarter earnings on March 4.
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