By Alorie Gilbert, 18 November 2004 08:45
NEWS
Salesforce.com reported an 82 per cent rise in quarterly revenue on Wednesday, attributing growth to the addition of 1,400 new customers during the quarter.
For the quarter that ended 31 October, the San Francisco-based company posted $2.2m in net income on $46.4m in revenue, compared to $3.8m in net income on $25.4m in revenue in the same quarter last year. Earnings per share were two cents for the quarter, compared to four cents last year. Analysts surveyed by First Call had expected the company to report earnings of one cent per share.
The decline in net income was the result of a one-time non-cash gain of $4.3m 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.com 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 NetSuite, SalesNet and Siebel Systems.
During a teleconference, the Salesforce.com 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.
Salesforce.com CEO Marc Benioff said: "We are seeing increasing signs that our on-demand model is going more mainstream than ever before. Our company and business model continues to grow and thrive, and the third quarter was no exception."
While Salesforce.com forecast continued growth for next year, it expects the rate of growth to slow. The company said that it will increase revenue by 66 per cent at the most in its next fiscal year, which begins 1 February. It expects earnings per share to double or triple.
The forecast appeared to disappoint after-hours traders. Salesforce.com's shares fell 5.5 per cent to $19.70 after the markets closed. Nevertheless, Salesforce.com shares are still nearly double what they were worth when the company began trading publicly at $11 a share in June.
Alorie Gilbert writes for CNET News.com.
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