Last week, salesforce.com (NYSE:CRM) pulled off another beat-and-raise quarter, reporting revenue and non-GAAP (adjusted) earnings per share well ahead of analysts' consensus forecasts and raising its full-year revenue outlook. The quarter highlighted strong growth across its cloud businesses as the software-as-a-service company capitalizes on the opportunity to help accelerate businesses' digital transformations.

The headline figures were impressive: Salesforce saw 23% year-over-year growth in constant currency revenue and management revised its full-year outlook for revenue of up to $16.9 billion. Non-GAAP earnings per share of $0.66 easily beat analysts' estimate for $0.47. But for those who want to go beyond these key figures, useful insights can be gleaned from the fiscal second-quarter earnings call.

A diagram of three laptops connected to a cloud

Image source: Getty Images.

Operational leverage

Salesforce has been benefiting from operational leverage. But you wouldn't know it by the 14.3% non-GAAP operating margin it reported in its fiscal second quarter. This figure was down 349 basis points compared to the year-ago quarter. However, this was due to a settlement of a reseller agreement the company made with Salesforce.org.

"We continue with our efforts to improve our operating efficiencies," explained CFO Mark Hawkins, "and we're pleased to deliver Q2 non-GAAP operating margin improvement excluding the Salesforce.org non-cash accounting charge..."

Excluding the impact of this noncash charge, Salesforce's non-GAAP operating margin would have improved 66 basis points year over year, management said.

Customer 360 platform: A key growth driver

In Salesforce's fiscal second quarter, the company's service cloud offering saw strong momentum, with its revenue growth rate accelerating. Service cloud revenue rose 22% year over year -- up from 20% growth in the prior quarter.

In the earnings call, management credited much of its service cloud's momentum to its Customer 360 platform, or a platform the company unveiled late last year that gives businesses a complete view of their customers.

Here's Benioff on the topic:

Now, with Customer 360, we've just never really been better positioned for the future. In fact, we're at the beginning of enormous wave of digital transformation. ... And Salesforce is at the center of this massive shift because every digital transformation of every single one of these companies that we're talking to begins and ends with the customer. In fact, IDC also forecast global spending on customer experience alone to reach $641 billion by 2022. 

A big target

Salesforce recently set an aggressive target to grow its annual revenue to $26 billion to $28 billion in fiscal 2023. This, of course, would be a huge jump from management's expectations for fiscal 2020 revenue to be between $16.75 billion and $16.90 billion. But given the tech company's recent aggressive buying spree, including ClickSoftware, Salesforce.org, and Tableau, some investors may be wondering if Salesforce is planning to cheat its way to this target with acquisitions.

But Hawkins asserts the company can achieve this target without the help of acquisitions. "[R]egarding our long-term FY '23 revenue target, we continue to be on track for this and to achieve our long-term revenue goals on an organic basis," he said.

Salesforce's quarterly results and management's commentary on its business reinforce the company's strong and durable growth.