Salesforce.com forecast current-quarter revenue above analysts' estimates, as more businesses use its cloud-based sales and marketing software.
The company's shares rose 5.7% to $79.46 in after-hours trading on Thursday.
Deferred revenue rose 23% to $3.50 billion in the third quarter.
Salesforce (crm) and other subscription-based software companies usually book revenue in stages rather than at the time of a sale, so investors keep a close eye on deferred revenue as a guide to future revenue.
Analysts on average had expected deferred revenue of $3.42 billion, according to research firm FactSet StreetAccount.
San Francisco-based Salesforce has been benefiting as more businesses choose to shift to cheaper and easier cloud-based products, away from software installed on their PCs.
"We expect to deliver our first $10 billion year during our fiscal year 2018," Chief Executive Marc Benioff said in a statement.
Benioff is now looking to broaden the company's cloud offerings through new features, especially focusing on artificial intelligence.
The company, which launched its artificial intelligence platform, Einstein, in October, has made a number of acquisitions to build up its machine learning and big data analysis capabilities. These include companies such as RelateIQ, MetaMind, Implicit [ ph ], and PredictionIO.
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However, Salesforce.com is yet to succeed in its attempts to make a truly big acquisition.
The company, which lost out to Microsoft in its bid to buy LinkedIn, abandoned its pursuit of Twitter (twtr) last month amid investor concerns over the strategic merits and valuation of the deal.
For the current quarter, Salesforce said it expected revenue of $2.27 billion-$2.28 billion, above analysts' average estimate of $2.24 billion.
Excluding items, the company earned 24 cents per share in the third quarter, beating the average analyst estimate of 21 cents, according to Thomson Reuters.
Revenue rose 25.3% to $2.14 billion. Analysts had expected revenue of $2.12 billion.
However, the company's net loss widened to $37.3 million, or five cents per share, in the three months ended Oct. 31 from $25.2 million, or four cents per share, a year earlier.
Up to Thursday's close of $75.19, Salesforce's shares had fallen 4.1% this year, underperforming the 7% gain in the broader S&P 500 index.