Salesforce (CRM) is trading modestly lower after the company reported strong third quarter results and offered mixed guidance for the fourth quarter.
Third quarter adjusted earnings per share grew 63% to $0.29 versus $0.36-0.37 guidance. Revenue rose 25% to $2.68 billion versus $2.64-2.65 bln guidance Deferred revenue rose 26% to $4.39 billion versus guidance for 18-19% growth.
"We had a phenomenal quarter of growth, reaching a huge milestone for the company, becoming the first enterprise cloud software company to break the $10 billion revenue run rate," said Marc Benioff, chairman and CEO, Salesforce. "We did this faster than any other enterprise software company in history. Our continued momentum as the leader in CRM, the fastest-growing segment of our industry, combined with more than $15 billion in billed and unbilled deferred revenue, puts us well on the path to $20 billion and beyond."
Fourth quarter guidance was mixed. Salesforce called for adjusted EPS of $0.32-0.33, just shy of estimates, with revenue up 22-23% to $2.80-8.81 billion, just above estimates.
Salesforce has good visibility in to its software-as-a-service (SaaS) business. The company's most recent (adjusted) earnings miss was in July 2008. The last revenue miss was in 2006.
Guidance for $12.45-12.5 billion in revenue next year was reaffirmed after the company set that target at its annual Dreamforce Conference in San Francisco earlier this month; that represents growth of almost 20%.
Most analysts were positive on the stock this morning.
The stock has been in an impressive uptrend since breaking out to new highs in the Spring. The stock is up 56% year-to-date.
The company's market cap is just under $80 billion. The stock trades at ~7.6x this year's sales and ~6.3x next year's sales.