Salesforce delivers strong Q3, closes in on $3 billion in annual revenue

Summary:While you can quibble about the fourth quarter earnings outlook, Salesforce.com appears to be firing on all cylinders.

Salesforce delivered strong third quarter results, issued a light earnings outlook for the fourth quarter and said it will push toward $3 billion in revenue for fiscal 2013.

While you can quibble about the fourth quarter earnings outlook, Salesforce.com appears to be firing on all cylinders.

The company reported a third quarter loss of $3.76 million, or 3 cents a share, on revenue of $584.3 million. Non-GAAP earnings for the quarter ended Oct. 31 were 34 cents a share.

Wall Street was looking for non-GAAP earnings of 31 cents a share on revenue of $571.5 million.

As for the outlook for the fourth quarter, Salesforce's earnings outlook looked light relative to expectations as sales surge. Salesforce projected fourth quarter revenue to be between $620 million to $624 million. Wall Street was looking for $609.8 million.

Here's the earnings outlook:

Wall Street was expecting non-GAAP earnings of 40 cents a share.

Analysts have been closely watching Salesforce's sales and marketing expenses. In the third quarter, operating expenses were $465.8 million, up from $311.8 million a year ago. Of that sum, sales and marketing expenses were $304 million in the quarter, up from $200.5 million a year ago.

For fiscal 2013, Salesforce projected revenue in the range of $2.88 billion to $2.92 billion.

By the numbers for the third quarter:

  • Deferred revenue was $918 million, up 32 percent from a year ago.
  • Salesforce had $1.3 billion in cash and equivalents as of Oct. 31.
  • Research and development spending was $76.05 million, up from $47.3 million a year ago.
  • Subscription and support revenue was $549.18 million.

Topics: Enterprise Software, Banking

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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