Salesforce.com posts 82 percent rise in revenue
Subscription software maker reports jump in third-quarter sales, but sees growth slowing next year.
For the quarter that ended Oct. 31, the San Francisco company posted $2.2 million in net income on $46.4 million in revenue, compared to $3.8 million in net income on $25.4 million in revenue in the same quarter last year. Earnings per share were 2 cents for the quarter, compared to 4 cents last year. Analysts surveyed by First Call had expected the company to report earnings of 1 cent per share.
The decline in net income was the result of a one-time noncash gain of $4.3 million in the third quarter of last year related to the cancellation of office space leases. Excluding that gain, the company had lost $100,000 in that quarter.
Salesforce supplies businesses with customer information systems via the Web for a monthly fee. The young company is among the best-known in a promising new market that sells subscription software. Others include Siebel Systems, SalesNet and NetSuite.
During a teleconference, the Salesforce executives said the company's sales growth was remarkable considering it occurred in what is typically a slow sales period for business software. Among the major accounts Salesforce.com signed during the quarter were Nextel, Quintiles Transnational and Staples.
"We are seeing increasing signs that our on-demand model is going more mainstream than ever before," Salesforce CEO Marc Benioff said. "Our company and business model continues to grow and thrive, and the third quarter was no exception."
While Salesforce forecast continued growth for next year, it expects the rate of growth to slow. The company said that it will increase revenue by 66 percent at the most in its next fiscal year, which begins Feb. 1. It expects earnings per share to double or triple.
The forecast appeared to disappoint after-hours traders. Salesforce's shares fell 5.5 percent to $19.70 after the markets closed. Nevertheless, Salesforce shares are still nearly double what they were worth when the company began trading publicly at $11 a share in June.