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Salesforce Issues Guidance for 21% Revenue Growth in 2021

By Nicholas Rossolillo - Updated Feb 25, 2021 at 6:30PM

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The company's run of at least 20% annual revenue growth is poised to continue, with a little help from Slack.

Via a steady pace of acquisitions and its own organic growth, (CRM 1.62%) has managed yet another year of 20% or more in revenue growth. The customer relationship management (CRM) and general digital transformation platform posted fourth-quarter fiscal 2021 revenue of $5.82 billion, up 20% from the year-ago period and easily besting its previous call for 17% growth. (The company's fourth quarter ended Jan. 31, 2021.)

For full fiscal year 2021, Salesforce's revenue was $21.3 billion, up 24%. Free cash flow was $2.81 billion, including cash spent on acquisitions. Not bad given the company spent heavily during the pandemic to set itself up for the new digital era that's emerging.  

Three people in an office gathered around a computer monitor.

Image source: Getty Images.

It's all about the outlook

As with all growing tech companies, though, the outlook for the future is of prime importance here. And Salesforce's initial guidance for fiscal year 2022 didn't disappoint. The forecast for about $25.7 billion in revenue implies 21% growth over the just-completed year. The company habitually under promises and over delivers (plus it's beginning to lap the initial disruptive effects of the pandemic last spring), so there's a good shot Salesforce easily clears the bar it just set for itself.  

Included in this guidance is an expected $600 million in revenue from Slack (WORK) once the acquisition is complete, which is expected to be near the end of the second quarter. For reference, Slack reported revenue of $652 million through the first nine months of calendar year 2020, a 45% increase over 2019. Salesforce's inclusion of Slack assumes the remote-work software company will continue to grow at a rapid pace under its cloud computing umbrella.

Let's not take too much away from Salesforce, though. The $600 million expected contribution from Slack amounts to less than 2.5% of its total sales outlook for the year ahead. Slack carries a hefty price tag ($27.7 billion at the time the deal was announced), but Salesforce has a history of making the most of tie-ups like this as it expands its software ecosystem and makes steady progress toward becoming one of the largest tech companies on the planet.

Salesforce's acquisition-happy strategy may not sit well with all investors, but the company is poised to continue its long run of at least 20% annual growth this year.

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