Salesforce Announces Fiscal 2017 2Q Results

Salesforce yesterday reported its second quarter fiscal year 2017 results. Revenue for the quarter, which increased 25 percent year over year, was more than $2 billion revenue. The CRM giant pointed out that was the first time it has hit that milestone. Nonetheless, the company’s shares took a hit in after-hours trading due to downbeat guidance.

“We still believe this quarter won’t feel quite as robust as the last two quarters, but our long-term optimism remains unchanged,” a MarketWatch story quoted a J.P. Morgan analyst as saying.

Subscription and support revenues for Salesforce in the third quarter of fiscal year 2017 were $1.89 billion, a year-over-year increase of 24 percent. Professional services and other revenues contributed $141 million, a 33 percent a year-over-year increase

Cash generated from operations was $251 million, a 18 percent year-over-year decrease. Deferred revenue, which represents business that has been contracted but not yet billed, as of July 31 was $3.82 billion, an increase of 26 percent year over year. The acquisition of Demandware contributed to $300 million of deferred revenue.

Salesforce in June announced plans to acquire ecommerce platform provider Demandware for $2.8 billion. Demandware is the fifth most used ecommerce platform of the top 50,000 sites on the internet, according to a Hivemind analysis in April of 2015.

This acquisition is expected to enable Salesforce to offer its analytics, communities, IoT, marketing, platform, sales, and service solutions to the broad Demandware customer base. It will also help Salesforce to add a new arrow to its quiver in terms of product portfolio.

The company continues to expand its product portfolio both through acquisition and organically. At Dreamforce next month the company says it will officially launch a CRM artificial intelligent platform called Salesforce Einstein.

AI solutions are a hot new area as businesses move to automate systems so they can more quickly analyze and gain business intelligence and value from the massive amounts of structured and unstructured data they own and are available to them through sources like social media.