The Channel logo


By | Kat Hall 21st August 2015 13:18

Salesforce back in the red, reviews future black ink orders

But hey, at least overall profit ratio is up to 0.1 per cent of sales

After a brief interlude in the black, Salesforce is back in more familiar loss-making territory, according to the financials for its second financial quarter this year.

The giant CRM provider posted total revenue of $1.63bn (£1bn) for the period, an increase of 24 per cent year-on-year.

Operating profit remained above water at $19.8m (£12.6m). However, overall cash in the bank dipped back into the red, with $852,000 (£543,000) net loss.

Last quarter the biz recorded an overall net income of $4m (£2.5m), the first profit recorded in 18 consecutive quarters.

This means that for the first six months of 2015, Salesforce is still in profit to the tune of $3.2m (£1.9m), in return for shifting nearly $3bn (£1.84bn) of cloudy goods. So its profit-to-sales ratio currently amounts to 0.1 per cent of revenue.

In an earnings call chief exec Marc Benioff said the company was "very deeply committed to improving profitability".

He added the company was raising its revenue estimate for the year to $6.6bn (£4.2bn) but did not say how much profit it was expecting, or even if the company would make a profit at all.

Angela Eager, analyst at TechMarketView, said Benioff was delivering a better bottom line for the year "although sustaining them is the challenge and he has previously predicted a small full year loss".

She added: "However, with Benioff looking at enough growth to generate $7bn this year and targeting $10bn before too long, the growth/profit question will persist for some time yet. While is continuing to take market share from SAP and Oracle, the costly task will become trickier as they continue to (slowly) build their SaaS businesses." ®

comment icon Read 6 comments on this article or post a comment alert Send corrections


Frank Jennings

What do you do? Use manual typwriters or live in a Scottish croft? Our man advises
A rusty petrol pump at an abandoned gas station. Pic by Silvia B. Jakiello via shutterstock

Trevor Pott

Among other things, Active Directory needs an overhaul
Baby looks taken aback/shocked/affronted. Photo by Shutterstock

Kat Hall

Plans for 2 million FTTP connections in next four years 'not enough'
Microsoft CEO Satya Nadella


League of gentlemen poster - Tubbs and Edward at the local shop. Copyright BBC
One reselling man tells his tale of woe