[caption id="attachment_95124" align="aligncenter" width="700"] Source: Company reports/Coresight Research[/caption]   2Q20 Results Salesforce reported fiscal 2Q20 revenues of $4.00 billion, up 21.8% (up 23% in constant currency) and in line with the $3.96 billion consensus estimate. Adjusted EPS was $0.66,down 6.9% year over year and beating the $0.47 consensus estimate. This figure includes adjustments for stock compensation expense, amortization of intangibles and the resulting income-tax effects. GAAP EPS was $0.11, compared with $0.39 in the year-ago quarter. Results by Segment By type:

• Subscription and support revenues were $3.75 billion, up 22.4% year over year.
• Professional services and other revenues were $252 million, up 14.0% year over year.

By service offering:

• Sales cloud revenues were $1.13 billion, up 12.5% year over year.
• Service cloud revenues were $1.09 billion, up 2.19% year over year.
• Salesforce platform and other revenues were $912 million, up 28.1% year over year.
• Marketing and commerce cloud revenues were $616 million, up 36.3% year over year.

By geography:

• Americas revenues were $2.82 billion, up 20.4% year over year.
• Europe revenues were $786 million, up 25.0% year over year.
• Asia Pacific revenues were $395 million, up 25.8% year over year.

Details from the Quarter

• Management commented that an enormous wave of digital transformation is sweeping every industry, and Salesforce aims to help propel that growth.
• New customers in the quarter include AXA, FedEx and UniCredit. Other notable customers were Union Pacific Railroad and Airbnb.
• Salesforce believes its Customer 360 platform forms the heart of the Fourth Industrial Revolution, in which everyone and everything will be connected.
• The Customer 360 platform supports sales, service, marketing, commerce, communities, integration and apps, with services such as artificial intelligence and support for vision and voice, mobility and security, available to every customer, every app and everywhere.
• Product milestones include four million sales opportunities, 4.3 million leads generated, 77 million service-case interactions logged, 4.1 billion messages and e-mails sent, 4.2 million orders processed, 53 million reports and dashboards and 700 million e-commerce pages created every day.
• Salesforce’s AI offerings include Einstein, Salesforce Einstein and Customer 360, and the platform now generates 8.6 billion Einstein predictions a day, and Einstein Voice and Einstein Vision are available to every Salesforce app.

Implications for Retail Salesforce offers a broad suite of solutions for retail, aimed at personalizing shopper marketing through awareness and acquisition, as well as engagement and advocacy; connecting commerce everywhere through enhancing the experience and transaction process; digitizing the store; delivering any-channel service; and, using customer relationship management (CRM) software to transform b2b relationships. In the quarter, marketing and commerce cloud (which includes the acquired Demandware) was the fastest-growing segment, growing 36.3% year over year. Outlook Salesforce aims to organically double revenue over the next four years, targeting revenues of $26-28 billion in fiscal 2023. Due to organic growth and the acquisitions of Tableau, Salesforce.org and Click Software, the company raised FY2020 revenue guidance as follows.

• Revenues of $16.75-16.90 billion (up 26%-27% year over year).
• Adjusted EPS of $2.82-2.84 (up 5% year over year) and down from the previous $2.88-2.90 guidance.

The company offered the following guidance for fiscal 3Q20:

• Revenues of $4.44-4.45 billion (up 31%).
• Adjusted EPS of $0.65-0.66 (up 7-8%).

Related Coresight Research

• ClickSoftware Acquisition

• Partnership with Alibaba