Salesforce Revenue By Segment (2020)

Salesforce.com, Inc. is an American cloud-based software company which provides a comprehensive package of enterprise applications focused on customer services, marketing automation, analytics and application development. It competes with Oracle, Microsoft and SugarCRM. The company derives its revenue serving two segments: subscription and support and professional services. As of Q2 FY20, its revenues from each of the segments came in at. And let’s look into Salesforce Revenue by segment data here.

Salesforce Revenue by Segment

Segment

Revenue (in million USD)

Revenue Contribution

Subscription and support 3745 93.70%
Professional services and other 252 6.30%
Total Revenue 3997 100.00%

Subscription and Support

This comprises of subscription fees from customers accessing the Cloud Services on the company’s platform, from software licenses and from customers paying for additional support which is not included with the basic subscription fees. It contributed for nearly 94% of the total revenue for the company for the quarter ended July 31,2019. The factors driving this revenue stream are the number of paying subscribers, varying service types, their price and renewal charges.

Subscription and support revenue for the Cloud Services are recognized ratably over the contract terms beginning on the start date of each contract. However, for software licenses, it is recognized upfront when the software is actually made available to the customer. The typical subscription and support service term is ranging from 12 to 36 months, although the terms range from one to sixty months. These contracts are non-cancellable, but the customers have complete right to terminate their contracts if the company fails to perform or deliver the promised services. 

There is a 22% increase in the revenues from subscription and support compared to Q2, FY19. This is primarily caused by volume-driven increases from new business, which includes new customers, upgradation in the system and additional subscriptions from the existing customers. The company’s consistent attrition rate has also played a major role in the ability to maintain growth in revenues from this segment.

1 2
View single page >> |

Disclaimer: Investors are always reminded that before making any investment, you should do your own proper due diligence on any name directly or indirectly mentioned in this article. Investors should ...

more
How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.