CRM giant Salesforce this afternoon posted revenue of $2 billion, up 25 percent year over year, and net income of $229.6 million for its FY2017 second quarter ended July 31. That compares with revenue of $1.6 billion and a net loss of $852 million in the same period last year.
Non-GAAP earnings per share was 24 cents, beating the average of 22 cents among 34 analysts surveyed by the Wall Street Journal. Revenues were in line with analyst estimates.
Despite the good news, shares were down 8 percent, or $6.82, in after-hours trading. That may have been because revised estimates for the current quarter were 20 to 21 cents per share, while analysts were expecting 24 cents.
The strong growth is “propelling Salesforce past the $2-billion quarterly revenue milestone,” said Marc Benioff, chairman and CEO, in prepared remarks. “No other enterprise software company of our size is growing at this pace.”
Research firm Forrester last week estimated that the “hundreds of thousands” of customers using Salesforce’s Platform as a Service (PaaS) App Cloud generated between $1 billion and $2 billion during the past year. Last quarter, App Cloud “and other” unspecified sources generated $353.4 million, compared with $247.2 million in the year-ago period — a 43-percent increase that made it the company’s fastest-growing segment.
Though best known for providing its customer-relations management software as a service (SaaS), the company’s public-cloud offering, called App Cloud, recently ranked sixth among eight providers preferred by general application developers, according to Forrester. AppCloud is primarily meant to serve developers building on Salesforce’s own products, but “many developers also build independent apps on it,” the research firm noted.
App Cloud offers strong identity- and access-management features, nicely insulates developers from infrastructure concerns and provides a rich environment for developing mobile apps, Forrester said. But it doesn’t allow much infrastructure control or offer data centers worldwide — it operates them, sometimes through co-location, in “the U.S., Europe and Asia,” according to its most recent annual report, which doesn’t provider further details. It’s not strong on data migration or cost-management tools, and because it’s exclusively cloud-based, it doesn’t offer any hybrid options.
Here’s a look at the stock over the past year.
[Editor’s Note: Salesforce is a GeekWire annual sponsor.]
