Salesforce CEO Marc Benioff
Photo courtesy: Bloomberg

Marc Benioff's cloud software company posted 26% revenue growth in the fourth quarter.

By Tom Huddleston, Jr.
February 25, 2015

Shares of Salesforce took off in after-hours trading after the cloud business software company reported that its fourth-quarter revenue grew 26%, spurred by improved sales from its subscriptions and professional services businesses. Here are the key points from Wednesday’s quarterly earnings report.

What you need to know: CEO Marc Benioff’s San Francisco-based company met Wall Street’s expectations by reporting quarterly revenue of $1.44 billion, up from $1.2 billion during the same quarter a year earlier. The company’s deferred revenue — sales of future services that are already booked — increased 32% year-over-year at the end of the last quarter, to $3.3 billion.

Salesforce also posted a loss of $65.8 million, or 10 cents lost per share, for the quarter compared with a loss of $116.6 million during the previous year’s fourth quarter.

For the full fiscal year, Salesforce’s revenue improved nearly 32%, to $5.4 billion, while the company posted a full-year loss of $262.7 million, or 42 cents lost per share. Salesforce had lost a total of $232.2 million during the previous fiscal year.

“Salesforce reached $5 billion in annual revenue faster than any other enterprise software company and now it’s our goal to be the fastest to reach $10 billion,” CEO Benioff said in a statement.

The big number: Salesforce’s shares CRM jumped nearly 10% in after-hours trading following the release of the quarterly figures. The company’s stock actually dropped after its last quarterly earnings report, in November, when the company also reported a huge improvement in revenue but issued a disappointing outlook for the year.

In Wednesday’s earnings release, Salesforce forecasted as much as 21% revenue growth for the current fiscal year to as much as $6.52 billion in sales. Those predictions came in just above Salesforce’s previous forecasts.

What you might have missed: As usual, the bulk of Salesforce’s revenue came from its subscription-based software business, which accounted for 93% of the company’s overall sales. That unit’s fourth-quarter sales increased 25%, to $1.35 billion, while professional services and other businesses brought in $99.3 million, which was good for a 41% increase.

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