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Salesforce Ramps Up Expectations for End-of-Year Revenue
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Salesforce Ramps Up Expectations for End-of-Year Revenue

Cloud-based enterprise software vendor Salesforce has upgraded its expectations for revenue and share prices for the year ending January 31 2015.

Strong demand for the company’s marketing and customer relationship management solutions has led to predictions of 50-52 cents per share based on projected annual revenue of $5.34 - $5.37 billion. Previous forecasts had suggested a slightly lower set of readings, of between 49-51 cents per share and takings of $5.30 - $5.34 billion.

In Q2, Salesforce saw revenue generated by product subscriptions and support rise 37% year on year. With this accounting for 93% of the company’s total revenue, it explained how the group’s quarterly results rose to $1.32 billion from $957.1 million over the same period.     

Analysts at IDC have also given Salesforce reason to be optimistic. The research house predicts sales of programs with customer relationship management and enterprise resource management capabilities to rise 20% per year between 2013-2018.    

Bigger picture

Despite the huge uptick in new business, Salesforce fell way short of reporting a profit over the quarter ending July 31. The company recorded a net loss of $62.1 million for Q2 2014 - a far cry from the profit of $76.6 million reported last year.

A return to the black for Q3 may not be too much of an ask, though, as the company’s Q2 financials were hindered by last month’s $390 million buyout of data analytics firm RelateIQ Inc.

This marked Salesforce’s biggest purchase since the $2.5 billion deal for email marketing firm ExactTarget in June 2013.

Furthermore, the company has already shared ideas regarding where its future business will come from.

Future dealings

Last month saw Salesforce announce a strategic partnership with Dutch specialist technology firm Royal Philips to deliver real time, digital solutions to the healthcare industry.

The pair hoped that by joining forces, they could form a new open health platform and ecosystem to improve the standard of medical services around the world.

As for the company’s other operations, commenting before the financials were released, Susquehanna analyst J. Derrick Wood added that Salesforce has a number of “mega-deals” in the pipeline which were due to close.  

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Richard Towey

Richard Towey

Richard serves as head of content at PerformanceIN. After many years spent covering developments from the automotive, sports, travel and finance sectors, he eventually turned his full attention to reporting on stories from the fast-evolving world of digital marketing. Richard now heads up the editorial team at PerformanceIN: the performance marketing industry's leading publication.  

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