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Salesforce's A/NZ sales surge again, up nearly 50 per cent in 2021

Salesforce's A/NZ sales surge again, up nearly 50 per cent in 2021

Australian market supplied the scale, New Zealand delivered a growth premium.

Credit: Jonathan Weiss | Dreamstime.com

Enterprise software vendor Salesforce notched up a 46.2 per cent surge in sales across Australia and New Zealand for its financial year ended 31 January.

Total revenue from customer contracts in the region lifted from A$520.3 million in 2020 to $760.2 million.

Unsurprisingly, the Australian market delivered the bulk of regional revenue at $665.3 million, up from $464 million in 2020, a lift of 43.3 per cent.

However, New Zealand delivered a growth premium, with revenue from customers soaring 68.7 per cent year-on-year to $94.9 million from $56.3 million.

The San Francisco-based company reported income from subscription and support services in the region was up nearly 49.7 per cent from $461.8 million to $691.5 million.

In addition to revenue from customers, Salesforce A/NZ (registered as SFDC Australia Pty) received an additional $164.1 million in "other income", mainly intercompany service fees. That was also well up from $89.7 million in 2020.

Employee benefits were by far the company's biggest cost category, lifting from $443.8 million in 2020 to $591.9 million.

However, intercompany reseller fees paid during the year also rose to $193.1 million in 2021 from $32.1 million the year before.

After adjustments, SFDC Australia paid $8.6 million in tax in 2021, down from $9.1 million in 2020, on an accounting profit of $30.1 million.

For the first time this year, Salesforce also supplied a separate set of accounts for its New Zealand business, but the numbers do not easily marry with the geographical splits included n its A/NZ accounts, probably due to differences in where sales into NZ are considered made and billed.

The NZ branch of SFDC Australia reported sales of $33.2 million, up from $25.5 million and paid tax of $386,772, down from $1.1 million in 2020 due mainly to increased employee expenses.

Salesforce won a series of high-profile government contracts in New Zealand over the last couple of years, and not without controversy.

A system supplied to the NZ Ministry of Health to support a bowel cancer screening programme was redeployed last April in support of COVID-19 contact tracing. 

The ministry went on to roll out Salesforce again under an emergency exemption from an open procurement process, this time to support its COVID-19 immunisation register.

That award attracted strong blow-back from incumbent supplier Orion Health, with founder and CEO Ian McCrae alleging up to $35 million had been "squandered" and calling on the Auditor-General to investigate.

Industry group NZRise called for the removal of all such exemptions to government procurement rules and more transparency about contracts awarded.








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