Salesforce.com Inc., a provider of customer relationship management and other business software applications hosted on the Internet, posted revenue of $1.63 billion for its fiscal 2016 second quarter ended July 31, up 24% from $1.32 billion in 2014.
“We’re seeing tremendous growth in the adoption and usage of our core platform,” CEO Mark Benioff told analysts on a recent earnings call, according to a transcript of the call provided by Seeking Alpha. “We delivered 234 billion transactions for our customers in the quarter, up 79% from a year ago. That’s an average of nearly 3.7 billion transactions every single business day.”
The company’s revenue increased across each of its main software lines for managing sales, services and marketing: Sales Cloud increased 10%; Service Cloud, 40%; and Marketing Cloud, 29%, In addition, revenue from companies using the Salesforce1 technology platform to build customized business applications, such as mobile apps for sharing contract information between sales reps and customers, increased 36%.
Salesforce increased its projected revenue for the fiscal year ending January 31, 2016, to $6.6 billion to $6.625 billion from about $6.55 billion following its strong performance in Q2, president and vice chairman Keith Block said on the earnings call. Salesforce says growth can be partially attributed to the company’s focus on Europe, where it is offering software tailored to the needs of companies in such countries as the United Kingdom, France and Germany.
Q2 sales increased 29% in the Europe, Middle East and Africa, or EMEA region; the Americas by 28%; and the Asia Pacific, or APAC region, by 25%.
An example of a client based in Europe that deployed Salesforce software in Q2 is Enel S.p.A, a Rome-based manufacturer and distributor of electricity and natural gas. Enel is using Salesforce software to operate a customer relationship management system that includes updated information on customer orders and billing records. “Salesforce is bringing all this data together, so Enel’s teams can get a 360-degree view of their customers,” Benioff said.
The U.S. Department of Agriculture also signed on to use Salesforce during Q2, and one of its largest agencies is using Salesforce technology to build and deploy mobile applications, he added. “Our public sector business is just growing off the charts,” Block said, adding: “Just a year after being FedRAMP-certified, we’re building huge momentum with federal, state and local governments. In fact, 15 out of 15 federal cabinet agencies now use Salesforce, as well as 45 of 50 state governments.” The Federal Risk and Authorization Management Program, or FedRAMP, is a government-wide program that provides a standardized approach to security assessment, authorization, and continuous monitoring for cloud products and services.
At the end of August, Salesforce launched a tailored platform for government departments, financial services, healthcare, life sciences, communications, retail, media, manufacturing, automotive and the higher education industry. As of the end of Q2, the number of Salesforce-certified consultants who help these industries deploy the software grew 44% year over year.
For the second quarter ended July 31, Salesforce also reported:
Subscription and support revenue of $1.52 billion, up 24% from $1.23 billion a year earlier;
Professional services revenue of $113.37 million, up 32% from $85.96 million
A net loss of $850,000, compared with a year-earlier net loss of $61.09 million.
For the six months ended July 31, the company reported:
Total revenue of $3.15 billion, up 24% from $2.55 billion a year earlier;
Subscription and support revenue of $2.93 billion, up 23% from $2.38 billion;
Professional services revenue of $219.25 million, up 33% from $165.43 million;
Net income of $3.240 million, compared with a year-earlier net loss of $157.999 million, when Salesforce absorbed a large expense related to tax payments.
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