Salesforce beats Q2 targets, subscription revenue up 26 percent
Salesforce reported better-than-expected second quarter earnings on Tuesday but its stock still slipped after hours.
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The CRM giant delivered non-GAAP earnings of 33 cents per share on revenue of $2.56 billion, up 26 percent year over year.
Wall Street was looking for earnings of 32 cents per share with revenue of $2.51 billion. Salesforce stock was down roughly 3 percent in late trading.
Salesforce CEO Marc Benioff said the second quarter was "phenomenal" in terms of growth and personally crowned the company as the first cloud software vendor to break the $10 billion revenue run rate.
"We did this faster than any other enterprise software company in history," Benioff said. "Our continued momentum as the leader in CRM, the fastest-growing segment of our industry, combined with more than $15 billion in billed and unbilled deferred revenue, puts us well on the path to $20 billion and beyond."
The company's Q2 net income was $17.7 million, or 2 cents per share. Subscription and support revenues increased 26 percent annually to $2.37 billion. Professional services and other revenues totaled $193 million, up 28 percent year over year.
Breaking subscription revenues down by segment, Sales Cloud revenue was $886.4 million, Service Cloud revenue was $698.5 million, Marketing and Commerce Cloud revenue was $317.1 million, and Salesforce platform and other revenue was $466.5 million.
As for the outlook, analysts are looking for earnings of 36 cents a share on revenue of $2.61 billion for the current quarter. Salesforce responded with a revenue range of $2.64 billion to $2.65 billion with earnings between 36 and 37 cents per share.