Continues Revenue Surge

The hosted CRM services provider reports that revenues in its fiscal third quarter nearly doubled from year to year, but net income is down. also has snagged a deal with office-supply retailer Staples.

Hosted CRM services provider reported its fiscal third quarter earnings Wednesday, with revenues nearly doubling from year to year, but with net income down.

The San Francisco-based company, reporting quarterly earnings as a public company for only the second time since its June IPO, saw revenues of $46.4 million in the quarter ended Oct. 31, up from $25.4 million in the same period a year ago. Subscription and support revenues climbed from $22.5 million to $41.5 million year-over-year.

/zimages/2/28571.gifClick here to read about Salesforce.coms earnings in the previous quarter.

Net income fell, however, from $3.8 million to $2.2 million year-to-year, as expenses jumped across the board, particularly marketing, which climbed from $14.6 million in last years third quarter to $24.9 million in this years.

Research and development spending increased from $1.9 million to $2.5 million. reported 12,500 customers and 195,000 paying subscribers at the end of the quarter, increases of 62 percent and 81 percent respectively year-over-year.

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Also on Wednesday, reported a key customer takeaway, winning office-supply retailer Staples and its 1,500 seats from rival Salesnet Inc. Staples had been a Salesnet customer for the past four years and was one of Salesnets largest accounts. It now will turn to to manage its contract sales information.

Salesnet spokeswoman Donna Parent downplayed the defection of Staples as a "usual course of business."

"Our customer base is healthy and continues to grow—thats why is aggressively targeting us," said Parent, in Boston.

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