Salesforce.com Posts Solid Earnings, Raises Guidance

The San Francisco-based company, which sells customer relationship management software as a service over the Internet, said revenues for the fiscal quarter ended July 31 increased to $40.6 million from $21.6 million in the same period a year ago. Revenue from subscriptions and support rose 84 percent to $36 million from $19.6 million.

Net income in the period was up 859 percent to $1.2 million, or one cent a share, from $122,000 last year. Cash from operations was $14.9 million, compared with $4 million a year ago. The cash added to the $113.8 million the company raised through its public stock offering in June.

"We are delighted to have delivered strong results during a difficult period for the software industry," Marc Benioff, chairman and chief executive of Salesforce.com, said in a statement. "Our numbers speak for the growing acceptance of the on-demand computing model."

During the quarter, Salesforce.com added more than 21,000 paying subscribers, bringing the total to 168,000, the company said.

Salesforce.com raised its forecast for the fiscal year to revenues between $165 million to $170 million, and earnings from 2 cents to 4 cents a share. Revenue for the third quarter is expected to be from $43 million to $45 million.

The company's initial public offering was the best-performing tech IPO of the year at the time, posting a 56.4 percent gain in the first day of trading. The IPO, however, was delayed twice by the Securities and Exchange Commission to address concerns over the company's accounting methods and an interview Benioff gave to The New York Times.

The company, however, has attracted favorable attention from financial analysts. Earlier this month, Roth Capital Partners initiated coverage on its stock with a "strong buy" rating and a 12-month price target of $21, saying Salesforce.com had "proven its ability to reach profitability and is now gaining traction."

*This story courtesy of Techweb.com.