Salesforce.com Q4 surpasses revenue target, ups outlook

Although Salesforce.com posted a net loss for shareholders, the CRM and cloud solutions provider posted better numbers for revenue and the outlook.
Written by Rachel King, Contributor

Salesforce.com ended the fourth quarter and the year on a mixed note, but things are looking up going forward.

Salesforce reported a fiscal fourth quarter net loss attributable to common shareholders at $4.08 million, or 3 cents a share (statement). Non-GAAP earnings were 43 cents a share on a revenue of $632 million, up 38 percent year-over-year.

Wall Street was looking for fourth quarter non-GAAP earnings of 40 cents a share on revenue of $624.4 million.

For the full fiscal year 2012, Salesforce reported revenue of $2.27 billion, an increase of 37 percent from the prior year.

CEO and chairman Marc Benioff commented in prepared remarks:

Salesforce.com's 38% revenue growth in the fourth quarter was a spectacular finish to our fiscal year, a year in which we delivered 37% revenue growth and added nearly 2,500 employees, including nearly 2,000 in the U.S.

Given the strong customer response to the social enterprise, we're excited to raise our guidance today, which puts us on pace to exceed the $3 billion revenue run rate during FY13.

Benioff added during the quarterly conference call on Thursday afternoon that Salesforce had more than 100 seven-figure transactions and nine eight-figure transactions during the fourth quarter.

Beyond that, Benioff exclaimed that Salesforce.com and company "already topped ourselves" by signing its first nine-figure transaction during the first quarter. Although he identified the customer as a "very large insurance company," Benioff said that any further details would not be revealed until the next quarterly conference call.

More importantly, Benioff boasted that Salesforce.com displaced SAP as the number two CRM provider, "cloud or software," based on market share as of the end of Q4.

For the outlook, Salesforce is predicting a revenue of $673 million to $678 million at the end of fiscal Q1 2012 with non-GAAP earnings between 33 to 34 cents a share. Salesforce also upped its full fiscal year outlook to a revenue between $2.92 billion to $2.95 billion with non-GAAP earnings between $1.58 and $1.62 per share.

For the first quarter, Wall Street is looking for earnings of 36 cents a share on revenue of $663.1 million.

For fiscal 2013, Wall Street is expecting earnings of $1.62 a share on revenue of $2.9 billion.

By the numbers:

  • Subscription and support revenues in Q4 were $594 million, up by 39 percent year-over-year.
  • Professional services and other revenues in Q4 were $38 million, an increase of 33 percent year-over-year.


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