Salesforce.com Gets Sharp Rise In 2Q Net Income - InformationWeek

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Salesforce.com Gets Sharp Rise In 2Q Net Income

Most of Salesforce.com's customers continue to come from the Americas, which represented 72% of its customer base.

Salesforce.com on Wednesday announced second-quarter earnings that show a sharp rise in net income and consistently solid revenue growth.

Salesforce.com reported net income of $10 million for its fiscal quarter ended July 31, more than double the $3.74 million it earned in the same quarter last year. Net income for the first six months was $19.6 million, more than triple the net income during the first half of last year.

Revenues were $263.1 million, up 49% from last year's second quarter. Salesforce.com said it signed on 4,100 customers in the quarter, to a customer base of about 47,700 companies and organizations.

The company also provided guidance for the current quarter, and indicated incremental revenue growth will slow a bit. It predicts revenues of $273 to $274 million for its third quarter ending Oct. 31, which would be less than a 4% increase in revenue from the second quarter. It second-quarter revenues, by comparison, were up 6% over its first fiscal quarter.

Most of Salesforce.com's customers continue to come from the Americas, which represented 72% of its customer base in the second quarter. But it's made some strides in Europe, which now makes up 19% of its customer base, compared with 16% for the same quarter last year. The Asia Pacific rose just slightly, to 9% of its customer base compared with 8% a year ago.

CEO Marc Benioff has long had his eye on achieving $1 billion in annual revenue. Salesforce.com has done that this quarter -- at least when considering its quarterly results as an annual run rate.

"By becoming the first ever software as a service company to achieve an annualized revenue run rate of one billion dollars, our second quarter performance is a milestone for Salesforce.com, and for the cloud computing industry," Benioff said in a statement.

Meanwhile, Salesforce.com has never broken out financial details for Force.com, its fledgling platform and portal for building and distributing on-demand applications based on Salesforce.com's technologies and infrastructure. Force.com is intended to help Salesforce.com grow beyond the market for sales-force automation and customer-relationship management software.

After a strong April for new on-demand applications made available via Force.com, new application growth was flat in May and June, notes investment firm Lazard Capital Markets in a recent report.

"If Force.com were to become the de-facto Web platform, we would look for an acceleration in total applications offered," the report said.

Salesforce.com also recently restructured its pricing to allow for single users to sign on to its service for $99 a year. That's to attract small businesses, and help keep competitor Microsoft Dynamics CRM at bay.

Earlier Wednesday, Salesforce.com announced its largest acquisition to date: InStranet, a customer-service software provider, for $31.5 million.

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