(Adds forecast, analyst comment, shares, details)
By Soham Chatterjee
Aug 21 Salesforce.com Inc reported
better-than-expected quarterly revenue, helped by an increase in
demand for its web-based sales and marketing software, and
raised its full-year profit and revenue forecast.
Businesses are increasingly moving toward cloud software
services that cost less and are easier to manage, helping
companies such as Salesforce and human resource management
software provider Workday Inc.
Spending on enterprise resource management and customer
relationship management has been particularly strong. Research
firm IDC expects ERM and CRM software sales to grow 20 percent
at a compounded annual rate every year from 2013 to 2018. (bit.ly/1n8p3gF)
Salesforce said on Thursday it expects an adjusted profit of
50-52 cents per share on revenue of $5.34-$5.37 billion for the
year ending Jan. 31. It had previously forecast an adjusted
profit of 49-51 cents on revenue of $5.30-$5.34 billion.
Analysts were expecting a profit of 51 cents per share on
revenue of $5.34 billion, according to Thomson Reuters I/B/E/S.
The company said unbilled revenue rose by about a third to
$5 billion at the end of the second quarter.
"We continue to see greater upside potential in the second
half as our checks suggest there are mega-deals in the pipeline
that could close, aided by the maturing efforts of CRM's new
vertical-led strategy," Susquehanna analyst J. Derrick Wood said
in a pre-earnings note.
Salesforce, which competes with Germany's SAP SE
and Oracle Corp among others, is investing in software
targeted at specific sectors such as healthcare to boost growth.
In June, Dutch healthcare and lighting company Philips
said it was teaming up with Salesforce to offer online
management of chronic diseases.
Salesforce has also been buying providers of data analytics
and marketing software to boost growth.
The company bought data analytics firm RelateIQ Inc for
about $390 million last month, its largest deal since its $2.5
billion acquisition of e-mail marketing firm ExactTarget last
Salesforce reported net loss of $61.1 million, or 10 cents
per share, for the second quarter ended July 31, compared with a
profit of $76.6 million, or 12 cents per share, a year earlier.
On an adjusted basis, the company earned 13 cents per share.
Revenue rose to $1.32 billion from $957.1 million.
Subscription and support revenue, which accounts for 93
percent of total revenue, rose 37 percent. Professional services
revenue rose 58 percent.
Analysts on average had expected a profit of 12 cents per
share on revenue of $1.29 billion, according to Thomson Reuters
Salesforce's shares up slightly in extended trading on
Thursday after closing at $55.71 on the New York Stock Exchange.
The stock has gained 11 percent in the last three months.
(Reporting by Soham Chatterjee in Bangalore; Editing by Maju
Samuel and Saumyadeb Chakrabarty)