Salesforce cruises in Q1; Eyes $3 billion in annual revenue

Salesforce cruises in Q1; Eyes $3 billion in annual revenue

Summary: The results seem to indicate that Salesforce's cloud efforts are paying off and large enterprises are on the bandwagon.

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Salesforce.com delivered strong first quarter results and said it can hit $3 billion in revenue for its current fiscal year.

The company followed up a strong fourth quarter with solid first quarter results. Ahead of the first quarter report, analysts cautioned that Salesforce's growth rates would slow.

Salesforce reported a first quarter loss of $19.47 million, or 14 cents a share, on revenue of $695.5 million. Non-GAAP earnings were 37 cents a share. Wall Street was expecting non-GAAP earnings of 34 cents a share on revenue of $678.2 million.

On a conference call with analysts, Salesforce CEO Marc Benioff said that the company is "the fastest growing software company of its size." Benioff talked up everything from the company's standing in Gartner's magic quadrant as well as its No. 1 cloud CRM provider and No. 2 overall.

As for the outlook, Salesforce projected non-GAAP earnings of 38 cents a share to 39 cents a share on revenue of $724 million to $728 million. The company said its net loss will be 9 cents a share to 10 cents a share. Wall Street was expecting non-GAAP earnings of 38 cents a share on revenue of $713.8 million.

For fiscal 2013, Salesforce projected sales of $2.97 billion to $3 billion, up 31 percent to 32 percent from 2012. Non-GAAP earnings will be $1.60 a share to $1.63 a share. Wall Street was expecting earnings of $1.61 a share on revenue of $2.95 billion.

The results seem to indicate that Salesforce's cloud efforts are paying off and large enterprises are on the bandwagon.

By the numbers:

  • Deferred revenue as of April 30 was $1.33 billion, up 46 percent from a year ago.
  • Subscription and support revenue in the first quarter was $655.2 million.
  • R&D spending in the first quarter was $94.77 million, up from $65.3 million a year ago.
  • Marketing and sales expenses in the first quarter were $369.8 million, up from $254.5 million a year ago.
  • Salesforce had 8,335 employees.
  • The company ended the first quarter with $1.7 billion in cash and equivalents.

Topics: Banking, Enterprise Software

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