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Slack addition boosts Salesforce revenue forecast to $32B

Slack addition boosts Salesforce revenue forecast to $32B

Eight months after closing its acquisition of Slack, Salesforce is continuing to experience better than expected results, due in part to the collaboration platform’s ongoing popularity.

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Salesforce has exceeded all expectations with its fourth quarter 2022 financial results, boasting that its recent acquisition of enterprise messaging platform Slack can help the CRM giant reach US$32 billion in revenue next year.

Since its $27.7 billion acquisition of Slack in 2020, Salesforce has continued to benefit financially from the ongoing popularity of the messaging platform. This is a trend that looks set to continue, as organisations across the globe continue to have conversations about facilitating hybrid and remote work models.

Salesforce has not slowed down Slack’s product roadmap either, with the platform launching voice tools Slack Huddles and Clips in the second half of 2021, a Community Forum site — hosted on Salesforce’s Experience Cloud — and a redesign of its workflow engine. Salesforce said it expects $1.5 billion in sales from Slack in its fiscal year 2023.

Salesforce is also continuing to integrate Slack with its other products. In September 2021, it unveiled an initial set of integrations, offering users new ways to access Salesforce Sales, Service, and Marketing Clouds from the team collaboration app, as well analytics tool Tableau. On a call with analysts on Tuesday, the company reaffirmed its commitment to integrating its products with Slack.

Record results for Salesforce

Salesforce enjoyed a strong finish to the financial year across the board, generating total revenues of $7.3 billion in its final quarter of 2022, an increase of 26 per cent year-on-year. Every segment of its business — Sales, Service, Platform (which now includes Slack), Marketing Commerce, and Data — accounted for at least $1 billion revenues for the first time in company history.

Salesforce updated its guidance for the 2023 fiscal year to around $32 billion in revenue, which would be a 21 per cent increase on the $26.5 billion it made in 2022. This was also above consensus analyst estimates of $31.8 billion. Salesforce stock jumped more than three per cent in response.

On the same call, Bret Taylor, who was promoted to co-CEO of Salesforce in 2021, said no other big acquisitions are in the pipeline. “We don’t have plans for any material MA in the near term,” Taylor said. “Slack is our focus.”

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