Salesforce.com Inc posted a quarterly profit that narrowly beat analysts’ estimates as it invested heavily to fend off competition in the cloud-based software sector.
(Reuters) – Salesforce.com Inc posted a quarterly profit that narrowly beat analysts’ estimates as it invested heavily to fend off competition in the cloud-based software sector.
Shares of the company fell 1 percent after the bell on Tuesday after closing at $92.95 on the New York Stock Exchange.
The San Francisco-based tech giant’s net income grew to $241 million, or 33 cents per share, from $170 million, or 24 cents per share, a year earlier.
Analysts were expecting net income of $229 million for the quarter.
The company also reported deferred revenue – a key metric for the subscription-based software business – of $4.82 billion for the quarter, up 26 percent on the year, beating expected revenue of $4.69 billion, according to financial and data analytics firm FactSet.
Revenue from Sales Cloud, the company’s flagship product, rose 17.4 percent to $886.4 billion, while total revenue jumped 25.8 percent to $2.6 billion.
« Salesforce’s growth is impressive, » said Joe Tenebruso, analyst for Motley Fool. « There aren’t many businesses that sizes that are growing so rapidly. »
The cloud-based software maker has boosted spending on research and development as well as marketing and sales as it faces intense competition from companies including Oracle Corp and Microsoft Corp.
« In the next few years, it’s going to be a tough battle in the cloud, » said Tom Taulli, InvestorPlace.com analyst. « Salesforce has done a great job so far, but the competition has gotten better. »
Total operating costs rose 19.7 percent to $1.84 million in the second quarter ended July 31.
On an adjusted basis, the company earned 33 cents per share.
Analysts on average had expected a profit of 32 cents and revenue of $2.51 billion, according to Thomson Reuters I/B/E/S.
