Almost immediately after Salesforce achieved a $10 billion run rate earlier this fiscal year, CEO Marc Benioff told the world his sights were firmly set on becoming a $20 billion business. Financials disclosed Wednesday reveal that milestone might not be so far off.
The CRM leader closed the quarter ended January 31 with total bookings already exceeding $20 billion, Benioff told investors during a Q4 earnings call that reported a beat on Wall Street's projections.
"I've never seen a quarter like this. This was a blowout quarter," Benioff said.
Salesforce, headquartered in San Francisco, ended its 2018 fiscal year with $10.48 billion in sales—year-over-year growth of 25 percent. Fourth quarter revenue came in at $2.85 billion for 24 percent year-over-year growth, with non-GAAP earnings-per-share of $0.35.
"Now our vision has never been bigger or more exciting as we have a very clear trajectory to $20 billion in revenue," Benioff said. "It's our dream to get to $20 billion faster than anyone else."
Salesforce, which derives revenue through subscriptions as a cloud services provider, has deferred $7.09 billion in revenue, and has almost double that amount ($13.3 billion) in bookings yet to be billed.
"When you have $20 billion already on and off the balance sheet, you know we're already a huge step of the way there," he said.
That 40 percent growth in bookings "exceeded our expectations," Benioff said. It's the reason Salesforce again raised guidance, from $12.60 billion to $12.65 billion, for the new fiscal year.
President and COO Keith Block attributed the backlog of subscription business to ever-more strategic relationships with customers that are yielding larger deals, longer contracts and more renewals.
"We're selling solutions, and not so much features and functions," Block said.
More than half of new business is coming through partners, which include industry heavyweights like Dell, IBM and Amazon, he said.
Responding to an investor's question, Benioff elaborated on Salesforce's process for selecting cloud infrastructure, a combination of relying on services from hyper-scale providers and its own proprietary infrastructure.
The Software-as-a-Service giant takes a "comprehensive, integrated approach" to choosing where it hosts its many applications and development platforms, he said.
IBM also became a "preferred" cloud provider for Salesforce earlier this year. And Salesforce still operates its own data centers throughout the United States.
"We we will use the correct provider at the correct time, whether that's us or whether that's Amazon, Google or IBM," Benioff said.
Salesforce's work to drive artificial intelligence had a lot to do with growth beyond investor expectations, he said.
The Einstein artificial intelligence platform is making more predictions than, well, had been predicted.
Einstein makes more than one billion predictions a day and its machine learning and deep learning capabilities have become a critical part of Salesforce's CRM portfolio, he said. Einstein's quality and scale differentiate Salesforce from its competition.
"We will continue to enhance and extend our artificial intelligence capability," he said.
Benioff, who sat down to dinner last night in New York City with many Fortune 100 CEOs, said demand in the market for comprehensive IT solutions is unprecedented.
"Every CEO is using the positive economic environment, the domestic tax cuts, as ways to accelerate their digital transformations," Benioff told investors.
That's a sign that the Fourth Industrial Revolution is well underway.
"We've moved into a new world," Benioff said.
Salesforce stock closed trading Wednesday at $116.25 per share. At publication time, shares rose to $117.74 in after-hours trading.