Salesforce quarter on target

Salesforce quarter on target

Summary: reported fiscal second quarter earnings that were on target with Wall Street estimates.

SHARE: reported fiscal second quarter earnings that were on target with Wall Street estimates.

The company on Wednesday reported second quarter earnings (statement) of $9.99 million, or 8 cents a share, on revenue of $263 million, up 49 percent from a year ago. According to Thomson Reuters was expected to report earnings of 8 cents a share on revenue of $260.5 million.

The company touted that it is now on a $1 billion revenue run rate, 4,100 net paying customers to hit 47,700 and its InStranet acquisition announced earlier. also projected third quarter revenue of $273 million to $274 million with earnings between 8 cents a share to 9 cents a share, excluding costs from the InStranet purchase. Including InStranet costs, projected earnings of 6 cents a share to 7 cents a share for the third quarter. That outlook was roughly in line. Wall Street was expected earnings of 9 cents a share on revenue of $273 million.

For fiscal 2009, said revenue will bet $1.07 billion to $1.075 billion with earnings between 34 cents a share to 35 cents a share excluding InStranet costs. Including costs, fiscal 2009 earnings will be 29 cents a share to 30 cents a share.

By the numbers for the second quarter:

  • had 3,046 employees.
  • 72 percent of revenue came from the Americas with 19 percent from Europe. Asia Pacific revenue was 9 percent of the total for the quarter.
  • As of July 31, had $427 million in cash.

Topics: Banking, Enterprise Software

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  • Is the new ADP ... or the next Datapoint?

    This headline recently appeared in several places across the Web:

    " Passes $1 Billion Annual Revenue Mark"

    THIS IS NOT TRUE. I don't know whether this material misstatement arose from media manipulation or an honest mistake, but it's genesis is most likely this 20 August 2008 press release...

    " Announces Record Fiscal Second Quarter Results"

    ...the subheading of which claims:

    "First Ever Software as a Service Company to Exceed $1 Billion Annual Revenue Run Rate"

    THIS IS NOT TRUE, EITHER. "Software as a Service" is marketing technospin for "service bureau". And payroll processing giant ADP--another service bureau--exceeded not only a "run rate" but actual annual revenues of $1 billion in 1985:

    "The original outsourcer, Automatic Data Processing..."

    Yes, did report revenues of $263 million for their most recent quarter. And yes, they have raised "FY09 Revenue Guidance to $1.070 - $1.075 Billion". But NO, has NOT passed the "$1 Billion Annual Revenue Mark". And despite Cheerleader/CEO Marc Benioff's effusive exuberance, some like Tiernan Ray do not share his enthusiasm:

    "Salesforce's Deferred Revenue Debacle"

    Perhaps in an effort to meet ever-inflating investor expectations--a fire they themselves have fueled--Mr. Ray notes that Wedbush Morgan analyst Michael Nemeroff "...thinks Salesforce may be pushing customers to sign more multi-year subscription contracts by lower prices, which could be hitting deferred revenue." And reading that, for me, brought on a disturbing case of Datapoint deja vu:

    "By the early 1980s, Datapoint was a Fortune 500 company. Under immense pressure to increase sales figures, its sales representatives encouraged customers to place large orders at the end of the fiscal year, permitting the company to count the orders as revenue even though the money had not been received and, in some instances, the sold equipment had not yet even been produced.... When some of the customers went broke before paying their bills, Datapoint had to reverse sales or record substantial bad debts, which caused the company to lose $800 million of its market capitalization in a matter of a few months in early 1982. The U.S. Securities and Exchange Commission (SEC) ordered Datapoint to stop this practice."

    Is the new ADP ... or the next Datapoint? Some say their business model is to take your watch and then bill you for the time. If so, what will happen to all those watches if blue sky clears the cloud?

    Bruce Arnold, Web Design Miami Florida