• JUser: :_load: Unable to load user with ID: 66
 COVID-19 Update
Subscribe Reports Strong Q3 Results, Expects To Hit $4B Revenue In 2014

  • Written by 
  • Published in News Briefs
reported yesterday that it beat Wall Street expectations for its Q3 2012 earnings, and that it is on track to become the first cloud computing company with a $4 billion revenue run rate.

The CRM vendor reported revenue of $788 million, or 33 cents a share, an increase of 35 percent from Q3 of 2011. The company also reported a net loss of $220 million, or $1.55 a share, mostly due to a one-time tax-related charge. Excluding the charge, the company would have reported earnings of 33 cents a share.

During yesterday's conference call, Salesforce CEO Marc Benioff said that he was extremely optimistic about the company's 2014 earnings guidance.

" is the first enterprise cloud computing company to exceed a $3 billion annual revenue run rate, with outstanding third quarter revenue growth at 35% in dollars," Benioff said. "Given the strong customer response to our next generation social and mobile cloud technologies, I'm delighted to announce that we expect to surpass a $4 billion annual revenue run rate during our fiscal year 2014."

For Q4 of 2012, Salesforce predicted revenue of $825 million to $830 million, with earnings of 38-40 cents per share.

The strong earnings report countered reports earlier this year about layoffs and losses at Radian6 and Buddy Media, two companies acquired as part of Salesforce's "Marketing Cloud" strategy. The company's 30% year over year growth rate continues to outperform the cloud computing sector as a whole.

For the broader cloud-based application market, and for marketing automation vendors in particular, the Salesforce results are encouraging. First, there's the direct impact of Salesforce's growth on its partner ecosystem, which includes virtually every significant player in the marketing automation and demand generation technology space. As the tide continues to rise for Salesforce, it's likely to lift a lot of other boats in the process.

The Salesforce results also indicate continued strong growth for the cloud application model – the same model followed by all of the leading marketing automation vendors. While some analysts have warned that tight IT budgets could lead to some pullback from subscription-based software, yesterday's numbers suggest that exactly the opposite is happening.