Salesforce co-CEO Keith Block steps down
Salesforce on Tuesday announced some major leadership changes, as well as a $1.33 billion acquisition of an industry cloud player.
Co-CEO Keith Block is stepping down, Salesforce said, leaving Marc Benioff to serve as chair and CEO of the company. Block will remain on as an advisor to the CEO.
Block joined Salesforce in 2013 and became operating chief in 2016. He was named Benioff's co-CEO in August 2018. Block's strengths in growth and operations were expected to complement the Salesforce co-founder's focus on vision and innovation. Prior to joining Salesforce, Block had a 26-year career at Oracle that ended seemingly contentiously.
"It's been my greatest honor to lead the team with Marc that has more than quadrupled Salesforce from $4 billion of revenue when I joined in 2013 to over $17 billion last year," Block said in a statement. "We are now a global enterprise company, focused on industries, and have an ecosystem that is the envy of the industry, and I'm so grateful to our employees, customers, and partners."
In a conference call, Benioff called Block "an incredible leader and close friend, who has helped position us as a global leader and deeply strengthened our company."
Benioff added, "I'm his biggest supporter. I am his close friend. I am here to help him on his journey."
Separately, Salesforce announced its plans to acquire Vlocity, an industry cloud and mobile software provider, for approximately $1.33 billion. The deal is expected to close in the second quarter of fiscal 2021.
Vlocity was built natively on the Salesforce platform and serves a range of industries, including communications, media and entertainment, energy, utilities, insurance, health and government.
On Tuesday's conference call, Block said that Salesforce has "had a huge focus on speaking the language of the customer" and expanding its industry-specific offerings such as its Financial Services Cloud and Health Cloud.
The acquisition, he said, "will strengthen and accelerate and broaden the capabilities Salesforce has in verticals."
In a statement, Salesforce said, "Vlocity's feature set will continue to enhance and complement Salesforce's industry capabilities and product knowledge, open up new industry capabilities built on the Salesforce platform and provide customers with even more tools and expert guidance to digitally transform."
Salesforce also on Tuesday released its fourth quarter financial results, beating market expectations.
Non-GAAP diluted earnings per share was 66 cents, while revenue was $4.85 billion, up 35 percent year-over-year.
Analysts were looking for earnings of 55 cents on revenue of $4.75 billion.
For the full fiscal year, non-GAAP diluted earnings per share was $2.99 on revenue of $17.1 billion, up 29 percent year-over-year.
Breaking down Q4 results, subscription and support revenues came to $4.56 billion, an increase of 35 percent year-over-year. Professional services and other revenues for the quarter were $288 million, an increase of 26 percent year-over-year.
For the full year, subscription and support revenues for the year were $16 billion, an increase of 29 percent year-over-year. Professional services and other revenues for the year were $1.1 billion, an increase of 21 percent year-over-year.
Salesforce raised its revenue guidance for the first quarter of FY 2021 to a range of $4.875 billion to $4.885 billion.
Revenue guidance for the full FY21 was increased by $200 million to a range of $21.0 billion to $21.1 billion. The anticipated financial impact of the Vlocity acquisition is reflected in the company's guidance for the full FY 2021.
In other leadership news, Salesforce said that Gavin Patterson will serve as the new president and CEO of Salesforce International. Patterson joined Salesforce in September as Chair of Europe, the Middle East and Africa (EMEA). He previously was CEO of the multinational telco BT Group.