CEO Benioff expects to hit $4bn annual run rate in FY2014
Cloudy CRM vendor salesforce.com has seen revenues rise but losses widen during its third quarter. The company also reckons it is on course to hit $3bn in revenue for the fiscal year.
The firm, which has branched out into enterprise social software in recent years, recorded revenue of $788.4m, up 35% on the $584.3m recorded this quarter a year ago. The company said signing bigger deals than in previous quarters was behind the leap in revenue.
However losses at the San Francisco-based firm grew from $3.7m last year to $220.3m this quarter. The company said that was due to a one-off tax charge of $149m as well as $105m in stock-based compensation expense. Spending on sales and marketing rose 40%, the company added.
Salesforce.com generated $106m in cash during the quarter, a drop of 18% on the previous year. Total cash, cash equivalents and marketable securities now stand at $1.4bn, the company said.
The company is predicting to hit $3.041bn to $3.046bn for the fiscal year, and CEO Marc Benioff said the company has already broken that barrier on a run rate basis, meaning if this quarter's performance was repeated four times it would add up to over $3bn.
Similarly for fiscal year 2014 the company is predicting revenues of $3.8bn to $3.85bn. Benioff expects one quarter to break the billion dollar barrier, giving the company revenue on a run rate of $4bn.
"Salesforce.com is the first enterprise cloud computing company to exceed a $3 billion annual revenue run rate, with outstanding third quarter revenue growth at 35% in dollars and 37% in constant currency," he said. "Given the strong customer response to our next generation social and mobile cloud technologies, I'm delighted to announce that we expect to surpass a $4bn annual revenue run rate during our fiscal year 2014."
Salesforce.com has been on a bit of a spending spree over recent years as it fleshes out its Social Enterprise strategy. Acquisitions include HR firm Rypple, social media monitoring vendor Radian6 and Buddy Media, a supplier of social media marketing technology.