Salesforce.com’s Finances Fail To Impress
Salesforce.com, a maker of CRM software, generated mostly disappointing financial news in the first quarter. Revenue rose by an impressive 63 percent, but the company’s bottom line weakened, and it gave disappointing guidance. Its stock dipped by 1.6 percent as the news was released.
The 63 percent increase in revenue corresponded to an overall sum of $104.7 million, but the on-demand software manufacturer still lost $229,000. On a per-share basis, this roughly broke even, but it represented a disappointing state of affairs. In the year-ago period, Salesforce.com earned about 4 cents per share, or $4.4 million, with only $64.2 million in revenue.
There is one major factor behind the sinking bottom line-a simple change in accounting. Last year, the company didn’t have to include the cost of stock options in its income statement. This year, it did. But even taking this difference into account, the company’s bottom line showed little improvement. Not counting the options cost, Salesforce.com would only have earned $5 million, which would still equal about 4 cents per share.
These numbers beat the company’s own expectations, though, and those of analysts. Expected revenue fell in the range of $99 to $102 million, with expected earnings per share of 2 to 4 cents.
In more mixed news, the company’s subscription rates were lower this year than one year ago, but still fell within analysts’ expectations. The company’s subscriber base of 444,000 is up roughly 66 percent from the same period last year, and the number of customers has increased by 46 percent.
These numbers seem to indicate an acceptable performance. Salesforce.com is not doing a booming business, but they’re hanging in there just fine.