Salesforce Beats Expectations Yet Again On Strength of Marketing And Service Clouds; Upgrades 2015 Projection

Another strong fiscal quarter, with solid growth across its major cloud services and development platform, gave Salesforce CEO Marc Benioff a chance to praise his company's joint efforts with Microsoft, mock some other rivals, and promote the upcoming Dreamforce convention.

Salesforce notched earnings in Q2 about a penny-per-share above expectations and raised guidance for the coming quarter, thanks to the strong performance of the Service Cloud, Marketing Cloud and the Salesforce1 platform.

Overall growth in deferred revenue of 29 percent year over year helped Salesforce shares recover from a bad day on Wall Street and encouraged Benioff's dream of guiding his company to $10 billion in revenue faster than any software developer that has come before.

[Related: Salesforce Tops Quarterly Earnings Forecasts; Benioff Jabs SAP And Oracle]

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Actual revenue for the quarter was $1.63 billion, up 24 percent from Q2 of 2014 -- profits of $304 million were the same percentage higher.

Salesforce now projects $6.6 billion to $6.62 billion in revenue this year -- a run rate upgraded by $75 million.

Benioff told investors Salesforce is the only vendor selling billions of dollars in CRM, and "that's the difference between us and the competition."

All other rivals, like Microsoft, Oracle and SAP, do CRM business measured in millions, he noted.

Benioff credited the Salesforce ecosystem for that strength in the market, with legions of systems integrators and ISVs that are matching the company's growth.

Reminiscent of a carnival barker, Benioff used the earnings call as an opportunity to hype the upcoming Dreamforce conference, dropping names of celebrities to be in attendance and promoting performances from Foo Fighters and John Legend.

Aside from the film and rock stars, Dreamforce will also be the forum for unveiling a new cloud, he said, without going into more detail about that upcoming offering.

The event, set for the middle of September in San Francisco, will showcase many of the company's strategic partnerships, and there's no better example than the relationship with Microsoft, Benioff said.

"We're working closer than ever before with Microsoft," Benioff said, citing integrations with Office, Outlook and Azure.

Microsoft CEO Satya Nadella will deliver a keynote at Dreamforce, and Microsoft Chairman John Thompson will participate in Benioff's keynote.

A question about customer migration from large traditional software companies gave Benioff his chance to maintain tradition and take some shots at two of his favorite targets: SAP and Oracle.

The Salesforce CEO described those two software giants by unfavorably comparing them to a third -- IBM.

Oracle and SAP offer "old technology bases that are kind of meandering along like mainframes," Benioff said. Like IBM, they're not innovating, just "running the same playbook," he said.

The new IT landscape is all about cloud, social, mobility, data science, Internet of Things, and the "integration of everything," Benioff said.

Companies that don't do that, he said, calling attention to the quarterly financials at Oracle and SAP, "meander around like big dinosaurs."

The key to being successful in the software industry is to "transform the innovator's dilemma." That means big companies must constantly think of themselves as starting from scratch and doing new things.

While Oracle has failed in the cloud, according to Benioff, founder and Chief Technology Officer Larry Ellison, his former boss who once scoffed at the prospect of wide-scale cloud adoption, still was worthy of praise.

"Larry is one of the most capable leaders in our industry, he's amazing. He's of course one of my mentors," Benioff said.

Keith Block, Salesforce's vice chairman and president, told investors that the CRM leader not only succeeded in growing revenue, but improved its bottom line as well through greater operational efficiencies.

For the fifth straight quarter, Block said, Salesforce has improved its operating margin, driving greater cash flow, which is expected to be about 25 percent higher this year than last.

Salesforce shares had fallen almost 6 percent, along with much of the market during Thursday's trading, but recovered most of the day's losses in after-hours trading after the Q2 financial disclosures.