After just a year and a half sharing the workload with co-founder Marc Benioff, salesforce.com (NYSE:CRM) co-CEO Keith Block announced he was stepping down from the role and pursuing his "next chapter." Block will stay on as an advisor to Benioff, who's continuing once again as the lone CEO.  

All of the hubbub overshadowed the actual report card, though. And said report card -- the final one for Salesforce's fiscal 2020 (the 12 months ended Jan. 31, 2020) -- was a very good one. In spite of some question marks surrounding the company's especially aggressive acquisition spree in the last couple of years, results once again beat expectations.

Someone in a suit holding a tablet. A brain made of digital connections is illustrated hovering over the tablet screen.

Image source: Getty Images.

Besting the forecast like clockwork

It's the usual practice of cloud computing software-as-a-service companies to under-promise and over-deliver, and Salesforce leads in this practice in grand style. After calling for 32% fourth-quarter revenue growth, 28% to 29% first-quarter 2021 growth, and 22% to 23% full-year 2021 growth during its last update, the customer experience platform blew away those estimates. Q4 revenue was up 35% to $4.85 billion, and guidance for Q1 2021 was upgraded to 30% to 31% growth, as was the full-year expectation to about 23% growth. 2021 total revenue is on track to surpass $20 billion for the first time.  

Those are impressive numbers for a tech outfit of this size. Of course, detractors will say it's all thanks to Salesforce's spend-happy acquisitive practices -- which include Tableau (for $15.7 billion in 2019), Clicksoftware ($1.4 billion also in 2019), and MuleSoft ($6.5 billion in 2018). Add another to that list: Vlocity, a cloud and mobile software for digital transformation provider, that was built on Salesforce's platform that is getting scooped up for $1.3 billion.

Nevertheless, getting so many different disparate pieces to work together is no small task, but Salesforce is more than just making it work. Its legacy sales and service clouds are still growing by respectable percentages, and the newer marketing platform clouds are doing some serious heavy lifting. It's clear that this cloud platform has become an integral part of many organizations' software investment and operational strategy.

Segment

Revenue for 12 Months Ended Jan. 31, 2020

YOY Increase

Sales cloud

$4.60 billion

14%

Service cloud

$4.47 billion

23%

Platform and other

$4.47 billion

57%

Marketing and commerce cloud

$2.51 billion

32%

YOY = year over year. Data source: Salesforce.com.  

Still an attractive buy

Salesforce's top-line expansion is impressive, but it's the bottom line (and continued future potential of it) that I'm always interested in here. And on that front, Salesforce also continues to deliver. In spite of the spending and new share issuance in the last year to cover takeovers, free cash flow (what's left over after cash operating and capital expenses) per share still increased 5.6% in fiscal 2020. As it finishes lapping the effects of the especially large Tableau purchase, those numbers are likely to grow much faster. As of this writing, the stock trades for a premium 40.3 times trailing 12-month free cash generation, not an unreasonable price tag given the growth.  

Thus, with global digital transformation going strong and Salesforce really just one of a few companies built to handle all of a large organization's transformation needs, I'm still a buyer after the Q4 report.