Professional services are run at negative gross margins. In short, in 2022, on $2.33 billion in revenue from professional services, Salesforce reported a $208 million gross loss.
In short, Salesforce runs professional services at a loss to boost its subscription revenue over time since professional services are used to enhance the use and retention of the software.
The subscription revenue cost structure is quite effective.
In 2022 on a $29 billion in subscription revenue, the company reported $5.82B in cost of revenue (expenses related to delivering the service and providing support, including the costs of data center capacity), thus generating a $23.2 billion in gross profits, in 2023.
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Salesforce Revenue Per Employee
