The software services company grew revenue 64% during its second quarter, but its expenses overtook the sales growth and it posted a loss of $145,000, or nil cents a share.
Wall Street didn’t seem to mind. Shares in Salesforce.com rose nearly 13% to $32 in after-hours trading on the Nasdaq following the news.
A year ago, the San Francisco-based company made a profit of $5m, or 4 cents a share. Revenue in the most recent quarter totaled $118m, beyond analysts’ estimates of $114.2m.
The company’s professional services revenue grew 82% from a year ago to $11m, which was roughly the same rate as its subscription business, said CFO Steve Cakebread, who has reneged his earlier decision to retire at the end of the year, on a conference call.
During the quarter, Salesforce.com’s subscriber count reached 57,000, which included two deals that had more than 1,000 seats.
The company’s chief executive Marc Benioff dismissed the growing competitive threat from Microsoft. He noted Microsoft still did not have a URL for its on-demand services.
The difference between the software world and the on-demand world is URLs, Benioff said. I know they have a software product, but where is their on-demand product?
He also noted that Salesforce.com reports net subscriber numbers, while Microsoft reports gross figures.
Looking ahead, Salesforce.com projected a profit of between 4 cents and 5 cents, before items, on revenue of between $126m to $128m, which was in line with analysts’ forecasts.
