Salesforce Eases Revenue Worries -- WSJ
19 Mai 2017 - 09:02AM
Dow Jones News
By Jay Greene
Salesforce.com Inc. posted a 26% jump in deferred revenue for
its fiscal first quarter, easing concerns after the company
provided a lukewarm forecast for billings three months ago.
Results were so much better than it had expected, Salesforce
lifted its outlook for revenue for the year by $100 million from
what it had anticipated just three months ago.
The San Francisco-based business-software company now expects
annual revenue of $10.25 billion to $10.30 billion, up 22% to 23%
from the prior year. Salesforce also bumped up its expectation for
per-share profit for the year by a penny to between 6 cents and 8
cents.
Salesforce attributed the higher forecast to its ability to grow
more quickly than it expected three months ago. It is doing so even
in the face of competition from Microsoft Corp., Oracle Corp. and
ServiceNow Inc.
Even though rivals are targeting Salesforce's stronghold in
customer-relationship management, the company said it is able to
grab significant pieces of new business in the growing field.
"We're absolutely taking share," Salesforce president and operating
chief Keith Block said in an interview.
Since Salesforce relies on subscriptions of its web-based,
on-demand software used by business customers, deferred revenue is
a strong indicator of the company's prospects. Deferred revenue,
which consists primarily of billings received in advance for
subscription services, totaled $5.04 billion in the quarter.
The company surprised Wall Street three months ago, forecasting
first-quarter deferred-revenue growth of 22% to 23%, a sign that
billings growth wouldn't be as robust as some analysts expected. In
the year-earlier quarter, deferred revenue grew 31%.
"It was a somewhat low hurdle," Stifel, Nicolaus & Co.
analyst Tom Roderick said of the earlier guidance. "They blew past
it."
After Salesforce reported its quarterly results Thursday, its
shares climbed 1.8% to $89.40 in recent after-hours trading.
Revenue from Sales Cloud, the company's sales-force automation
business, rose 15% to $829.6 million. Salesforce is facing
increased competition in the business from Microsoft's Dynamics
applications, which some analysts believe is luring small and
midsize customers with aggressive pricing.
"The worries about Microsoft Dynamics pressuring them isn't
showing up in the numbers yet," Mr. Roderick said.
Salesforce's Service Cloud business, which provides technology
to help businesses run customer-service operations, generated
$651.2 million in revenue, a 21% gain. That business is facing
increasing competition from ServiceNow Inc.
And revenue from Marketing Cloud, the company's offering to
manage customers' email and advertising campaigns, which was
bolstered by the July acquisition of Demandware Inc., grew 56% to
$289 million.
Salesforce posted a loss of $9.2 million, or a penny a share,
for the quarter ended April 30, compared with a profit of $38.8
million, or 6 cents a share, a year earlier.
Excluding the impact of items such as amortization and
stock-based compensation, adjusted earnings rose to 28 cents a
share from 24 cents a year earlier. Revenue gained 25% to $2.39
billion.
Analysts surveyed by S&P Global Market Intelligence expected
Salesforce to report adjusted earnings of 26 cents a share on
revenue of $2.35 billion.
Write to Jay Greene at Jay.Greene@wsj.com
(END) Dow Jones Newswires
May 19, 2017 02:47 ET (06:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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