Salesforce increases full-year forecast for revenue
Salesforce.com
Inc.
lifted full-year revenue outlook after reporting record results in the last quarter, a positive sign of corporate technology spending as some companies flashed customer mood warnings in recent weeks .
The business software vendor said Thursday's revenue rose 22% to $ 4 billion for the three months ended July 31, beating analysts' consensus estimate of $ 3.96 billion and the company's internal guidance.
Salesforce's profit fell 70% to $ 91[ads1] million, or 11 cents a share, even though the company had said it expected a loss. The company recorded a $ 166 million accounting expense related to the $ 300 million purchase of Salesforce.org.
Excluding stock-based compensation and other items, the income was 66 cents per share, higher than the 47 cents a stock analyst surveyed by FactSet had predicted.
For the current year, the San Francisco company raised its revenue forecast to between $ 16.75 and $ 16.9 billion, up from $ 16.1 to $ 16.25 billion. The company also lowered its revenue outlook when it worked to digest a number of acquisitions. Salesforce said on Thursday it expects earnings per share of 28 øre to 30 øre, down from its previous guidance of 78 øre to 80 øre.
Stocks rose by around 7% in afternoon trading.
Salesforce is the fifth largest enterprise software company in the world after sales, with 5% of the market, according to
Gardener
Inc.
The research firm predicts that business application software spending will rise 8.8% this year to $ 210.69 billion, a slower pace than growth of nearly 13% last year.
Salesforce has made several acquisitions in recent years to provide customers with more tools and services. The latest was announced earlier this month when the company said a $ 1.35 billion cash and stock to buy ClickSoftware Technologies Ltd. The agreement is expected to be finalized during the current quarter.
In June, Salesforce agreed to purchase Tableau Software Inc.'s data analytics platform for more than $ 15 billion in stock, the largest purchase to date. Last year, the online service bought MuleSoft Inc. for a deal of $ 6.5 billion, and in 2016, the company purchased the e-commerce platform Demandware Inc. for $ 2.8 billion.
Write to Sarah E. Needleman at sarah.needleman@wsj.com
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