Salesforce.com reported better-than-expected first quarter results and raised its outlook for the next three months and fiscal year. Growth for the company is accelerating and it's on track for a $2 billion revenue run rate.
The company broke even in the first quarter on revenue of $504 million, up 34 percent from a year ago. Non-GAAP earnings were 28 cents a share. Wall Street was expecting earnings of 27 cents a share on revenue of $482.5 million.
As for the outlook, Salesforce.com said second quarter revenue would be between $526 million and $528 million. Non-GAAP earnings will be 29 cents a share to 30 cents a share. Net loss will be about a penny a share. Wall Street was looking for earnings of 26 cents a share on $506 million.
For fiscal 2012, Salesforce.com projected revenue between $2.15 billion and $2.17 billion with non-GAAP earnings of $1.30 a share to $1.32 a share. Salesforce.com will report a net loss for the year largely due to costs of acquisitions. Wall Street was expecting earnings of $1.27 a share on revenue of $2.11 billion.
On a conference call with analysts, Salesforce.com CEO Marc Benioff touted key wins at GE and other large companies. He also cited Groupon as a customer. Groupon is also using NetSuite for its ERP globally.
Today we see customers buying more. There is definitely a higher buying environment going on and more kinds of our products. In fact, one-third of new business in the first quarter came from non-Sales Cloud services. A couple of great examples are two of our marquee transactions in the quarter which are Groupon which is the nouveau riche company in Chicago and Bank of America. Groupon is the world's fastest growing company, offering daily deals on events and food and services in 44 countries. And while they initially talked to us about the Sales Cloud which has been the heart of their growth, of their sales and marketing efforts, we showed them how the platform Force.com and a full range of services could supercharge their businesses and deliver the quality and scale they need to maintain their phenomenal growth rate. And now the Force.com platform will touch nearly every aspect of Groupon's business whether it is their management of merchants, the core of their business, their city planning and merchandising efforts, their customer service and consumer support, whether it's the development of their coupons, Force.com will help them to re-architect their company for the future.
By the numbers:
- Subscription and support revenue was $474 million, up 35 percent from a year ago. Services revenue was $31 million, up 18 percent from a year ago.
- The company had 97,700 customers as of April 30, up 5,400 from the previous quarter.
- Deferred revenue was $915 million at the end of the first quarter.
- R&D spending was $65.3 million, up from $40.1 million a year ago.
- The company had 5,513 employees at the end of the quarter, up from 5,306 three months earlier.
- Cash and equivalents were $1.52 billion.
- Americas revenue accounted for 67 percent of total sales with Europe representing 19 percent and Asia Pacific at 14 percent.