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Salesforce Stock Pops After Stealing Market Share from Oracle and SAP

Key Speakers At 2015 The Dreamforce ConferenceKey Speakers At 2015 The Dreamforce Conference
Marc Benioff, CEO of Salesforce.Photograph by David Paul Morris—Bloomberg via Getty Images

Salesforce.com is joining the ranks of the technology old-guard, but its 27% revenue growth last quarter still showed some startup zip.

The company also raised its full-year forecast, driven by higher demand for its web-based sales and marketing software.

Shares of the company, which is seen as a barometer for the cloud-computing sector, rose 5.9% in after-hours trading.

Salesforce has been gaining market share from Oracle and SAP in enterprise business applications as more companies choose cheaper and easier cloud-software services.

The company said it would continue to deliver strong growth. For the full year, Salesforce said it expects revenue of $8.16 billion-$8.20 billion and adjusted profit of $1.00-$1.02 per share.

The company had previously forecast revenue of $8.08 billion-$8.12 billion and profit of 99 cents-$1.01 per share for the period.

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Because Salesforce and other subscription-software companies generally book revenue in stages rather than as a onetime sale, investors keep a close eye on deferred revenue, meaning money it expects to earn in future quarters.

Deferred revenue in the quarter was $4.01 billion, up from $3.06 billion a year earlier.

Revenue from its sales cloud collection of software, which allows companies to track leads and forecast opportunities around sales, rose 14.9% to $724.6 million.

The San Francisco-based company said its app-cloud business, which allows third-party developers to create apps for its software platform, recorded a 45.5% jump in revenue growth.

The company’s net income rose to $38.8 million, or six cents per share, in the first quarter ended April 30 from $4.1 million, or one cent per share, a year earlier.

Excluding special items, the company earned 24 cents per share.

Revenue rose 26.8% to $1.92 billion.

Analysts on average had expected a profit of 23 cents per share on revenue of $1.89 billion, according to Thomson Reuters.

For the full year, Salesforce said it expects revenue of $8.16 billion-$8.20 billion and adjusted profit of $1.00-$1.02 per share.

The company had previously forecast revenue of $8.08 billion-$8.12 billion and profit of 99 cents-$1.01 per share for the period.