There was a lot to like when Salesforce.com (NYSE:CRM) reported its first-quarter financial results. The company delivered another impressive quarter, exceeding expectations and increasing its forecast for the full year.
Revenue of $3.01 billion grew 25% year over year, exceeding analysts' consensus estimates of $2.94 billion and the high end of the company's own forecast. Other metrics exceeded guidance, with adjusted earnings per share of $0.74 blasting past analysts' expectations for $0.46 per share and the company's own outlook for $0.44.
Even in light of the broad-based earnings beat, Salesforce still provided a wealth of additional information on the conference call to discuss the results. Read on to find out what Salesforce executives had to say about its work in artificial intelligence (AI), recent developments in the competitive landscape, the increasing calls for customer privacy, and the growing need for stringent data security.
As brilliant as Einstein
It was only about two months ago that Salesforce announced it would acquire MuleSoft, a tech platform that helps companies unlock data from a variety of sources like on-premises legacy systems, private cloud and public cloud, and "connect enterprise apps, data, and devices."
Salesforce believes this acquisition is of strategic importance, and chief product officer Brett Taylor states that the insight derived from "AI is only as powerful as data it has access to." The ability to bring together data from disparate sources and integrate it so that it can be subjected to the analytical power of AI "unlocks the clock speed of innovation."
The company also revealed that its Einstein AI platform was currently delivering "two billion AI predictions per day," and it believed that the data unlocked by MuleSoft would accelerate that number.
The competitive landscape
Adobe Systems (NASDAQ:ADBE), a competitor of Salesforce, announced late last month that it was acquiring Magento Commerce, a company that brings together digital commerce, order management, and predictive intelligence into a unified platform. Many believe that Adobe's moves to broaden its enterprise offerings will put the company on a collision course with Salesforce.
When an analyst on the call asked CEO Marc Benioff about this development, he said, "I think that as we've expanded our vision of what the customer experiences and where the market is going, of course, we've inspired other competitors to think about the future as well. And that's our job too -- to create followers." He went on to remind investors that Salesforce was the "No. 1 sales cloud ... No. 1 service cloud ... No. 1 marketing cloud ... and we're well positioned as the No. 1 CRM provider in the world."
It was as if he was saying to the competition, "Bring it on."
The issue of trust
Salesforce management spent a great deal of time on the conference call talking about the importance of trust -- referencing the subject on 23 separate occasions. Benioff said "Our No. 1 value at Salesforce is trust." He went on to talk about the recent implementation of far-reaching privacy regulations enacted by the European Union -- the General Data Protection Regulation (GDPR) -- which focuses on the privacy rights of its citizens and protecting their data.
Benioff went on to say that in the technology industry, "We've been going through a crisis of trust," and the implementation of the GDPR was the result of the issue. He believes that the European perspective, which says the data belongs to the consumer, will likely be the basis for future privacy laws enacted "by the rest of the regulators in the world." Taylor believes that Salesforce is uniquely positioned to benefit from the evolving regulatory landscape, and the "different regulatory frameworks in different regions," saying these issues "really amplify the value" of Salesforce, as trust is "our No. 1 value."
Where Salesforce is headed
These discussions reveal that Salesforce is looking to the future, embracing competition, and focusing on the customer -- and in doing so believes it will maintain its No. 1 position in all of the major markets it serves. It also appears that by focusing on key areas like these, the company's goal of achieving $20 billion in annual revenue by 2022 is well within reach.