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Salesforce.com’s aggressive acquisition strategy and its dual emphasis on all things cloud and mobile appear to be paying off.
This quarter, the company weathered Hurricane Sandy, as well as the negative press surrounding its recent lay-offs. Just weeks after the media foresaw “signs of trouble” and referred to Buddy Media as a “money pit,” the cloud computing giant reported higher than expected revenues.
(Enterprise cloud computing is the focus of VentureBeat’s upcoming CloudBeat 2012 conference, November 28-29 in Redwood Shores, Calif.)
Salesforce beat the Wall Street Journal’s top and bottom line estimates with reported revenues of $788 million for its third quarter, up 35 percent year-over year and up 7.6 percent from the previous quarter. On average, analysts predicted revenue of $776.6 million.
In its earnings report, the company initiated its forecast for its 2014 fiscal year (which is the 2013 calendar year for the rest of humanity), projecting revenue between $3.8 billion and $3.85 billion for the year, in line with analysts’ $3.83 billion.
Shares rose 1.8 percent to $148.59 in after-hours trading. However, Reuters reported that share prices may have dropped in recent weeks due to concerns about IT budgets running dry, which would crimp IT managers’ ability to purchase Salesforce.com’s services. Overall, on a GAAP basis, however, Salesforce’s operations were down in the third quarter of 2012 — GAAP net loss per share was -$1.55. According to the company, this was due to a one-time, tax-related charge.
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Marc Benioff, the company’s CEO, has been pitching the company’s new suite of “social enterprise” technologies, which enable companies to track and monitor what their customers are saying about them on Facebook and Twitter. Salesforce projects a billion-dollar opportunity in software for marketers – and has made a spate of recent acquisitions to get ahead of the game. This year, Salesforce announced its new offering, Marketing Cloud, a new software suite created from Buddy Media, a recent buy up, and Radian6, the social media monitoring tool that was acquired in 2011.
Benioff claimed in an official statement that Salesforce is the first enterprise cloud computing company to exceed a $3 billion annual revenue run rate. I can almost see him in the company’s San Francisco headquarters fist-pumping employees.
“Given the strong customer response to our next generation social and mobile cloud technologies, I’m delighted to announce that we expect to surpass a $4 billion annual revenue run rate during our fiscal year 2014,” he said.
Salesforce’s goal is to prove that it is far more than a sales CRM tool, and to take on behemoths like Oracle and SAP.
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