

Salesforce.com Inc. ticked all the boxes today as it reported second-quarter earnings that beat forecasts and provided guidance for the next quarter that surpassed what was expected.
The company, which sells software for managing customer relationships, reported earnings before certain costs such as stock compensation of 66 cents per share on revenue of $4 billion, up 22% from the year-ago period.
That was well ahead of forecasts. Wall Street analysts had been looking for earnings of just 47 cents per share on revenue of $3.95 billion.
Salesforce also raised its guidance for the coming quarter, saying it expects to see earnings in the range of 65 to 66 cents per share, on revenue of $4.44 billion to $4.45 billion. Analysts had forecast third-quarter earnings per share of just 61 cents on revenue of $4.25 billion. As a result, Salesforce’s stock rose almost 7% in after-hours trading.
The company’s growth was strong across the board. Subscription and support revenue jumped 22% to $3.75 billion, while its Professional Services and other revenue rose 14% to $252 million. Breaking down those subscription and support numbers by segment, Salesforce said Sales Cloud revenue came to $1.13 billion, while Service Cloud revenue topped $1.09 billion. Marketing and Commerce Cloud sales totaled $616 million, and Salesforce platform and other revenue was $912 million.
Salesforce’s success is partly thanks to its ability to continue generating organic growth in its main business, as enterprises continue to move more business applications to the cloud. But it has also shown a willingness to spend big money in order to seize opportunities in new areas. Just this month, it closed on its $15.3 billion acquisition of Tableau Software Inc., a deal that means Salesforce effectively became the market leader in data visualization tools overnight.
The company is also venturing into the field service software space with its $1.35 billion acquisition of ClickSoftware Technologies Ltd., announced earlier this month.
“Salesforce keeps growing nicely across its traditional product lines, but its growth is also fueled by acquisitions,” said Holger Mueller, principal analyst and vice president of Constellation Research Inc. “The addition of Tableau will change the revenue mix further.” He added that will likely increase revenues in the Salesforce Platform & Other group even more after it overtook the Marketing & Commerce Cloud awhile ago, and it may soon surpass Service Cloud revenue.
“Going forward, it looks as though the future Salesforce will be a little less about sales and marketing, and more about platforms and services,” he said.
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