Salesforce Beats Estimates as Deferred Revenue Rises 26%

Salesforce.com Inc. beat revenue and profit estimates for its third quarter.

The company said that deferred revenue, a closely watched metric which consists primarily of billings received in advance for subscription services, totaled $4.39 billion in the quarter, up 26% from the same quarter last year. Analysts polled by Thomson Reuters had expected $4.22 billion in deferred revenue.

Since Salesforce relies on subscriptions of its web-based, on-demand software used by business customers, deferred revenue is a strong indicator of the company's prospects.

After the company announced third-quarter results Thursday, shares rose 1% in post-market trading.

Revenue from Sales Cloud, the company's sales-force automation business, rose 17% to $907 million. The Service Cloud business, which provides technology to help businesses run customer service operations, grew 25% to $738 million.

Revenue in the Marketing Cloud, the company's offering to manage customers' email and advertising campaigns, grew 40% to $346.2 million.

In all for the quarter, Salesforce posted a profit of $51.4 million, or 7 cents a share, compared with a loss of $37.3 million, or 5 cents a share, a year ago.

Excluding the impact of certain items, adjusted earnings were 39 cents.

Revenue rose 25% to $2.68 billion.

Analysts expected Salesforce to report adjusted earnings of 37 cents a share on revenue of $2.68 billion.

Write to Austen Hufford at Austen.Hufford@wsj.com

(END) Dow Jones Newswires

November 21, 2017 16:41 ET (21:41 GMT)