Salesforce Posts Quarterly Loss After Closing Its Biggest Acquisition -- Update
December 03 2019 - 8:44PM
Dow Jones News
By Aaron Tilley
Salesforce.com Inc. posted a fiscal third-quarter net loss after
closing its biggest-ever acquisition even as its customer billings
remained on a growth track.
The provider of subscription-based business software said
Tuesday that it had a net loss of $109 million, compared with a
$105 million net profit a year earlier.
In August, Salesforce said it had completed the purchase of
Tableau Software, a data analytics platform, for more than $15
billion in stock. The addition, Salesforce has said, is expected to
help the company build out a new business in data analytics
software, though the deal's charges weighed on last quarter's
bottom line.
Shares fell 1.9% in after-hours trading as some projections for
billings growth in the current quarter disappointed investors. The
company said the figure reflected the Tableau acquisition and some
early renewal in the prior quarter.
Sales in the quarter ended Oct. 31 increased 33% to a record
$4.51 billion, compared with the $4.45 billion that analysts
surveyed by FactSet had expected. Salesforce's closely watched
anticipated billings for the coming months from its
subscription-based revenue model rose 28% year over year. It
previously promised growth of 24% to 25%.
Salesforce's co-chief executive officer, Marc Benioff, told
analysts that despite economic slowdowns in several important
markets, companies were continuing to invest in digital tools
underpinning growth prospects. In Europe, where tech spending is
slowing, sales rose 42% in the latest quarter on a
currency-adjusted basis, the company said.
The San Francisco company raised last month the top end of its
full-year sales guidance to $17 billion after boosting its outlook
over the summer. Salesforce also said it would increase sales to as
high as $35 billion in the fiscal year ended Jan. 31, 2024.
Salesforce's focus on rapidly boosting revenue has come with
acquisitions to maintain momentum. In addition to the Tableau deal,
Salesforce paid $6.5 billion last year for MuleSoft, a company that
makes software to help customers tap into data from legacy computer
systems as they migrate to the cloud. This year, Salesforce agreed
to buy ClickSoftware, a provider of field-service management
software, for $1.35 billion.
In keeping with the focus on growth, Salesforce said Tuesday
that revenue in the current quarter should reach $4.74 billion to
$4.75 billion. Analysts had forecast sales of $4.74 billion.
The company also said sales in the first quarter of the coming
fiscal year should rise as much as 29% to $4.84 billion compared
with the prior-year period.
Write to Aaron Tilley at Aaron.Tilley@wsj.com
(END) Dow Jones Newswires
December 03, 2019 20:29 ET (01:29 GMT)
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