* Q4 sales forecast slightly better than consensus
* ExactTarget acquisition going smoothly, sales goal lifted
* Shares trading near all-time highs
By Gerry Shih
SAN FRANCISCO, Nov 18 Salesforce.com Inc
forecast fourth-quarter revenue to come in slightly better than
analysts' projections, helped by a strong performance by newly
acquired email marketing firm ExactTarget.
The San Francisco-based cloud computing company paid $2.5
billion in June for ExactTarget, its most expensive acquisition
to date and a sum that has invited scrutiny from investors.
But Salesforce executives Monday said they had raised
ExactTarget's estimated revenue for the year from roughly $140
million to $180 million, alleviating concerns about the deal.
Brian Schwartz, an analyst at Oppenheimer and Co, said
ExactTarget's new revenue forecasts topped his own projections
by $20 million.
"They're starting to execute on their marketing strategy,"
Schwartz said. "They have traction in there."
For the fourth quarter ending Jan. 31, Salesforce predicted
revenue of between $1.12 billion and $1.13 billion, versus $1.12
billion expected by analysts.
It expects fiscal 2014 sales to come in between $4.05
billion to $4.06 billion. It also projected 2015 sales of
between $5.15 billion and $5.2 billion, in line with analysts'
estimates of $5.2 billion.
Chief Executive Marc Benioff has roughly quadrupled top-line
sales in four years and its shares are trading near all-time
Much like Amazon.com Inc's chief executive Jeff
Bezos, Benioff, who founded Salesforce in 1999, has for years
shrugged off calls from Wall Street to turn a bigger profit by
arguing that it was more important to re-invest earnings to
gobble up market share.
GETTING THE RIGHT BALANCE
For the quarter ended Oct. 31, Salesforce said revenue rose
36 percent to $1.08 billion, narrowly beating Wall Street
expectations, as its core sales software business held firm.
Excluding certain items, it earned 9 cents per share in the
third quarter, in line with a Thomson Reuters I/B/E/S analyst
Salesforce's unbilled deferred revenue, a critical measure
of contracts that have been closed with business customers but
remain off-balance sheet, rose to $4.2 billion, up 40 percent
from a year earlier.
Total operating expenses rose 38 percent from a year prior.
For the fourth quarter, Salesforce said it expects to earn 5
cents or 6 cents per share, slightly below the 7 cents expected.
Benioff said Monday that he would seek to balance "growth
and profitability" but stressed that he would not jeopardize his
company's "outrageous" pace of revenue expansion.
"We've got that balance right," he said. "There's more we
can do on profitability and we're absolutely committed to that.
The only time that gets slowed down is when we acquire something
or do one of these hiring surges."
The company's shares closed down 3.1 percent, or $1.80, at
$55.51 on Monday, after reaching an all-time closing high of
$57.87 on Friday. In after-hours trade on Monday, the shares
dipped less than 1 percent.
Salesforce this week kicked off its annual Dreamforce
conference held in San Francisco. At this year's conference,
which had roughly 130,000 registered attendees, Benioff is
expected to showcase "Salesforce 1," a comprehensive software
platform that ties together its various products in sales,
marketing, customer service, as well as third-party apps.
The company will also release an application programming
interface (API) for hardware makers, which will allow them to
connect their products to Salesforce's customer service software
so they can be alerted when a product breaks down.
Salesforce also announced on Monday a new partnership with
Hewlett-Packard Co, saying it would begin selling its
software on HP's enterprise business hardware units.