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    Salesforce Revenue Up 36 Percent, Gets Closer to Profitability

    By
    Chris Preimesberger
    -
    November 19, 2013
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      Salesforce.com may be the first enterprise cloud computing company to deliver a $1 billion quarter, but as surprising as it seems, it’s still not breaking into profitability.

      For the third fiscal quarter that ended Oct. 31, Salesforce reported that its revenue rose a solid 36 percent to $1.08 billion, exceeding Wall Street expectations. Excluding certain items, it amounted to 9 cents per share in the third quarter, which was in line with a Thomson Reuters analyst consensus.

      For the quarter, Salesforce.com reported a loss of $124.4 million, or 21 cents a share, compared with $220.3 million, or 39 cents a share, a year ago.

      CEO and Chairman Marc Benioff said on the conference call to analysts and journalists that Salesforce benefited by the acquisition of ExactTarget, which closed in July. Salesforce paid $2.5 billion for ExactTarget, its most expensive acquisition to date and one that incurred scrutiny from some investors.

      Benioff said the company had raised ExactTarget’s estimated revenue for the year from roughly $140 million to $180 million. ExactTarget provides digital marketing software for the Fortune 500 and small businesses through email marketing, social media marketing and other methods.

      Professional services and other revenues were $72 million, an increase of 50 percent year-over-year.

      The San Francisco-based cloud service company’s unbilled deferred revenue, an important measure of contracts that have been closed with business customers but remain off the balance sheet, rose to $4.2 billion, up 40 percent from a year earlier.

      The company’s outlook is rosy. 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.

      The company’s shares closed down 3.1 percent, or $1.80, at $55.51 on Nov. 18, after reaching an all-time closing high of $57.87 at the end of the previous week. In after-hours trade on Nov. 18, the shares dipped less than 1 percent.

      Salesforce on Nov. 18 also announced a cloud-computing partnership with Hewlett-Packard, which will create a multi-tenant cloud product called Salesforce Superpod. It will be powered by HP’s software and managed within Salesforce’s data centers, Benioff said.

      The product will be available for an additional fee to Salesforce’s biggest customers, and HP is looking to be the first customer deployed on it, according to the companies.

      Chris Preimesberger
      https://www.eweek.com/author/cpreimesberger/
      Chris J. Preimesberger is Editor Emeritus of eWEEK. In his 16 years and more than 5,000 articles at eWEEK, he distinguished himself in reporting and analysis of the business use of new-gen IT in a variety of sectors, including cloud computing, data center systems, storage, edge systems, security and others. In February 2017 and September 2018, Chris was named among the 250 most influential business journalists in the world (https://richtopia.com/inspirational-people/top-250-business-journalists/) by Richtopia, a UK research firm that used analytics to compile the ranking. He has won several national and regional awards for his work, including a 2011 Folio Award for a profile (https://www.eweek.com/cloud/marc-benioff-trend-seer-and-business-socialist/) of Salesforce founder/CEO Marc Benioff--the only time he has entered the competition. Previously, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. He has been a stringer for the Associated Press since 1983 and resides in Silicon Valley.
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