Will Salesforce Ever Pay A Dividend?

Moreover, the company anticipates this strong growth trajectory will continue, forecasting that sales will hit $35 billion by fiscal year 2024. This would mean growth would slow to 20% annually, but this still exceptionally impressive coming off a larger and larger base.

Growth Prospects

To achieve this growth, Salesforce has a variety of large and growing markets:

Source: Q2 FY2021 Presentation

Not only is there a large addressable market to go after, but a variety of opportunities offer the potential for double-digit growth rates. This means that even if Salesforce keeps its share of the market constant, it could still have a long growth tailwind.

Here’s how Salesforce thinks about its growth in different stages:

Source: Dreamforce 2019, Company Presentation

In the beginning, growth was exceptional, but the numbers were quite a bit smaller. As the company became much larger, growth remained robust – an important aspect for the company and one of the reasons shareholder returns have been so exceptional.

Today we’re in the phase that management calls “Solidifying our Leadership,” with the expectation of $20+ billion in sales this year. As the company gets larger and larger, the rate of growth will slow, but it’s clear that there remains a significant tailwind at the company’s back.

Competitive Advantages

Source: Q2 FY2021 Presentation

Put simply, Salesforce is the dominant customer relationship management platform and has earned the CRM ticker. Moreover, the company’s share of the market has been growing, as the company solidifies its leadership and continues to outpace some of the most respected companies in the technology space.

This has allowed the company to generate an unmatched growth rate:

Source: Dreamforce 2019, Company Presentation

In conjunction with its impressive growth story over the last two decades, Salesforce also derives competitive advantages from its first-mover advantage, cementing itself as the “gold standard” in the industry and its financial position.

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Harry Goldstein 3 months ago Member's comment

I've often wondered about this myself.