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Salesforce Beats the Street, Raises Revenue Guidance

Still more growth in the cloud.


Cloud sales software company reported second-quarter results that were better than what analysts expected and said it anticipates that sales for the year will be higher than it previously thought. Shares rose about two percent in after-hours trading.

Salesforce now says it expects sales to be as high as $5.4 billion for the year ending in January 2015, higher than the $5.3 billion that analysts had previously forecast. The 2015 fiscal year will mark Salesforce’s first year above the $5 billion annual revenue mark.

It said it expects to bring in revenue of nearly $1.4 billion in the current quarter and to earn between 12 cents and 13 cents a share on a non-GAAP basis.

It reported a per-share profit of 13 cents on a non-GAAP basis on sales of $1.32 billion, up 38 percent from the year-ago period. Deferred revenue, a key metric for cloud software companies because it indicates contracts for services yet to be delivered, was $2.35 billion, up 34 percent.

On a GAAP basis, Salesforce still loses money. Its loss was 10 cents a share in Q2 and will be 12 cents to 13 cents in the third quarter, it said.

Salesforce President Keith Block, the former Oracle exec who joined the company last year, said deals with international customers had been picking up recently. In an interview, he described a deal with an unnamed European company in which Salesforce replaced software from SAP and Microsoft in one swoop. “When we sign deals like that, we kind of like our playbook,” he said in the interview.

Microsoft may be a competitor, but it’s also a customer. Speaking on CNBC a little while ago, CEO Marc Benioff said that Microsoft is the biggest customer of ExactTarget, the email marketing firm Salesforce acquired for $2.5 billion last year.

The next big batch of Salesforce news will be at its Dreamforce conference in San Francisco in October. Benioff said on a conference call with analysts that a “major new product” will be announced at the event.

This article originally appeared on

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