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August 23, 2017

Salesforce hits $10bn annual run rate in impressive quarter results

Salesforce just keeps going from strength to strength, with the CRM giant posting yet another successful quarter with revenues jumping 26% year-over-year.

By Ellie Burns

CEO Marc Benioff was his usual confident self in saying that the company was on track to hit a milestone never before reached by any other enterprise software company. The Salesforce CEO said:

“We had a phenomenal quarter of growth, reaching a huge milestone for the company, becoming the first enterprise cloud software company to break the $10 billion revenue run rate.”

“We did this faster than any other enterprise software company in history. Our continued momentum as the leader in CRM, the fastest-growing segment of our industry, combined with more than $15 billion in billed and unbilled deferred revenue, puts us well on the path to $20 billion and beyond.”

Read more: Salesforce Service Cloud update pitches for simplicity

There were significant jumps across the board in the company’s Q2, with total revenue standing at $2.56 billion, an increase of 26% year-over-year, and 25% in constant currency. Subscription and support revenues were $2.37 billion, an increase of 26% year-over-year. Professional services and other revenues were $193 million, an increase of 28% year-over-year. Salesforce Einstein

Deferred revenue on the balance sheet as of July 31, 2017 was $4.82 billion, an increase of 26% year-over-year, and 25% in constant currency. Unbilled deferred revenue, representing business that is contracted but unbilled and off balance sheet, ended the second quarter at approximately $10.4 billion, up 30% year-over-year. This includes approximately $625 million related to unbilled deferred revenue from Demandware.

The successful quarter saw Salesforce raise its FY18 revenue guidance by a staggering $100 million, to $10.35 billion.

However, despite the raised guidance and impressive quarter, Salesforce stock dropped almost 3% before trading flat in after hours.

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Salesforce has been regularly releasing new software and updates to its existing portfolio throughout the year, with the CRM company increasingly focused on adding artificial intelligence to its arsenal.

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