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Salesforce Shares Rise as Q1 Results Beat Street View

No hint of deal talk, but a lot of talk about big future goals.


Shares of rose by nearly 7 percent in after-hours trading as the company reported first-quarter results that beat Wall Street forecasts.

Salesforce reported non-GAAP earnings of 16 cents a share on revenue of $1.51 billion. The results were better than the Street consensus view of 14 cents on revenue of $1.5 billion.

The company also issued guidance that was in line with what analysts expected. Salesforce said it expects Q2 revenue in the range of $1.59 billion to $1.60 billion, which would amount to an increase of about 21 percent year-on-year. It boosted its earnings guidance for the year saying it expects to earn between 69 and 71 cents a share and to post revenue in the range of $6.52 billion to $6.55 billion.

In a statement, CEO Marc Benioff gave no hint about the rumors that Salesforce might be the target of a buyout attempt by another company. He said the company is on track to surpass its goal of more than $6 billion in revenue this year, and now has its sights set on reaching the $10 billion milestone.

In an interview with Re/code Salesforce President and vice chairman Keith Block said the company set a new record for the number of deals worth at least $1 million or more that were signed during the quarter. He also said that more than 30 percent of those deals were with “net new” customers who haven’t done business with Salesforce before. He declined to comment on the recent M&A rumors.

Among the new deals closed during the quarter, Block said, included one with Bouygues Telecome, a French telecom company, and expanded deal with Tyco and JP Morgan.

The quarter was also notable for the fact that Salesforce delivered a rare GAAP profit of one cent a share. The company typically reports a profit only on a non-GAAP basis or after accounting for special items. It still expects to lose as much as 12 cents a share for the year.

On a conference call with analysts, Benioff too declined to answer questions from analysts about the M&A rumors, but he certainly didn’t sound like a founding CEO on the verge of selling his company. He repeated his goal of being the fastest software company to hit $10 billion in annual revenue, which if the analysts are correct shouldn’t happen before 2018.

After that he has an even bigger goal: “I am personally committed to surpass SAP. That’s my goal. That’s my dream.” For the record SAP, the German business software giant and a perennial rival and the villain of many Salesforce earnings calls, posted $21.3 billion in revenue in the year ended Dec. 31.

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