So the open question with any great SaaS business is the Rule of Large Numbers.  Most SaaS businesses will grow almost forever, but you do exhaust your customer base, and then your ability to upsell them, and then even your ability to effectively add and acquire other products and businesses.

At least most do.  And when you do, things change, and profits trump growth.

Salesforce seems to have finally gotten there — albeit at a stunning $31.4 Billion (!) in ARR.

For the first time, Salesforce is guiding to growth at just 10% — but also profit / operating margins of 30%.  30% is sort of the end state goal for operating margins for software businesses.

Some like Adobe are even higher, but 30% is the end state everyone plans to … some.

For Salesforce, that day in 2024.  30% margins, albeit with its slowest growth ever of 10%.  They still add together to the Rule of 40.

No one is bigger, or has done it better than Salesforce.  But time seems to have finally caught up with it and for now, the high growth phase is over.  At $31B+ in ARR.

And in fact, at least for now, it seems like a strong strategy.  Salesforce is the #1 performing SaaS stock of the year.  Up a stunning 64% (!).

(rule 40 image from here)

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