Salesforce.com Inc. lifted its forecast for the year on the heels of a stronger-than-expected to start to its fiscal year.
Continue Reading Below
Shares in the company gained 5.6% in after hours trading Wednesday. The stock had risen 7% this year through Wednesday's close.
The San Francisco-based company, a pioneer in cloud computing, supplies software that helps salespeople keep track of their customers. Its results are considered a bellwether for the slice of the cloud-computing industry known as software as a service, a highflying sector that offers access to software applications over the Internet.
For the year, Salesforce expects to earn $1 to $1.02 in adjusted per-share earnings, up from an earlier range of 99 cents to a dollar. The company projects 22% to 23% revenue growth from a year earlier, to a range of $8.16 billion to $8.20 billion. In February, Salesforce said it expected revenue to climb 21% to 22%.
The guidance boost came after the company topped analysts' expectations for the first three months of its fiscal year. The company reported 24 cents in adjusted per-share profit, a penny above estimates, on $1.92 billion in sales. Analysts anticipated $1.89 billion in revenue, according to Thomson Reuters. Net income rose to $38.8 million from $4.1 million a year earlier, and per-share earnings rose to 6 cents from a penny.
Chief Operating Officer Keith Block said Salesforce drove larger and more strategic transactions during the period, and the company logged 26% growth in subscription and support revenue.
Deferred revenue jumped 31% to $4.01 billion, while unbilled deferred revenue -- representing business that is contracted but not yet billed -- rose 27% to end the quarter at $7.6 billion.