Salesforce jumps on rosy revenue forecast after acquisitions

Bloomberg

Salesforce.com Inc. gave a revenue forecast that topped analysts’ estimates, signalling the company’s expensive efforts to expand its software products and customer base may be paying off. Sales will be as much as $3.23 billion in the current quarter, the San Francisco-based company said in a statement. Analysts on average projected $3.1 billion, according to data compiled by Bloomberg. The company also raised its full-year revenue forecast. Shares climbed about 4.5 percent on the report.
Chief Executive Officer Marc Benioff has expanded Salesforce’s ambitions beyond software for managing customer relationships, the business that made it an early leader in corporate cloud computing. The company bought MuleSoft Inc. for $6.5 billion — its largest-ever purchase — in May to chip away at Oracle Corp. in integration software that connects various systems. That deal, following forays into marketing and e-commerce products, is aimed at turning Salesforce into the top source of internet-based software for companies looking to replace all kinds of traditional programs once hosted in on-site servers.
The acquisitions have bolstered revenue, which Salesforce said climbed 25 percent to $3.01 billion in the fiscal first quarter. The company has promoted its expanding product portfolio to a bevy of new large and foreign clients in a bid to rival Oracle and Microsoft Corp. The result is Salesforce will reach its $20 billion sales goal “faster than imagined,” Benioff said on a conference call. The company has also spent rapidly on its international expansion, pledging to invest $2.2 billion in its French business and $2 billion in its Canadian operations over the next five years.
“We signed several deals, including the largest transaction in the history of the company, and the biggest public-sector deal,” Chief Operating Officer Keith Block said in an interview. “The revenue for the quarter was over $3 billion.”