Between the Lines

Larry Dignan, Andrew Nusca and Rachel King

Salesforce.com raises fiscal year outlook

By Rachel King | August 18, 2011, 1:33pm PDT

Summary: Salesforce.com posted a minor net loss, but it’s still less than the same figure a year ago and the outlook remains positive.

Salesforce.com upped its outlook for the fiscal year and said it has 104,000 paying customers.

The company reported a second quarter net loss of $4.3 million, or three cents a share (statement). Non-GAAP earnings were 30 cents a share on a revenue of $546 million, which is a 38 percent increase on a year-over-year basis. Wall Street was looking for earnings of 30 cents a share on revenue of $528.8 million.

Despite a minor loss, Salesforce.com continues to grow as net paying customers increased by approximately 6,300 subscribers during Q2, making for a grand total of 104,000 — a quarterly record for the company. However, don’t expect many updates on this statistic in the future as Salesforce doesn’t plan to provide the customer metric on a quarterly basis anymore.

The employee base is also set to grow. Chairman and CEO Marc Benioff said during the investors call on Thursday that Salesforce has “very agressive plans” to take “onboard a huge number of employees in the next two quarters” with a 30 percent increase in distribution this year.

To sum up, Benioff joked for everyone to send him their resumes.

Additionally, Salesforce closed a number of eight-figure deals recently, including one with the U.S. General Services Administration as well as another with a “large telecommunications company” that will be revealed at Dreamforce in San Francisco in eight days.

Benioff touched on several of Salesforce’s successful products, namely Chatter. More than 150,000 companies are using Chatter, making it Salesforce’s most successful product it has introduced. Benioff went so far as to call it the “most actively used social network used in the world.”

Salesforce is actually raising its prior full fiscal year 2012 revenue outlook and updating its projected full fiscal year 2012 GAAP and non-GAAP EPS guidance that were previously provided on May 19.

For the outlook, Salesforce is predicting a revenue of $568 million to $570 million at the end of Q3 with non-GAAP earnings between 30 to 31 cents a share.

For the third quarter, Wall Street is looking for earnings of 31 cents a share on revenue of $556.56 million. For the fourth quarter, Wall Street is expecting earnings of 42 cents a share on revenue of $589.6 million.

For the year, Salesforce is expecting to produce a revenue between $2.22 billion to $2.23 billion with non-GAAP earnings between $1.30 to $1.32 a share. Analysts are expecting fiscal 2012 earnings to be $1.31 a share on revenue of $2.18 billion.

By the numbers:

Subscription and support revenues totaled $509 million, also a 38 percent on a year-over-year basis
Professional services and other revenues were $37 million, up 44 percent on a year-over-year basis
Total cash, cash equivalents and marketable securities equaled $1.3 billion