Salesforce Reports Profit, Customer GainsSalesforce Reports Profit, Customer Gains

Unlike most of the dot-coms of yesteryear, Salesforce.com Inc. is on track to prove that its recently issued public stock will retain value. The sales-force-automation applications vendor Wednesday posted earnings that indicate growing demand for its software-as-a-service approach.

For its third fiscal quarter ended Oct. 31, Salesforce reported a profit of $2.2 million, or 2 cents a share, on revenue of $46.4 million, compared with a profit of $3.8 million, or 4 cents a share, on revenue of $25.4 million a year earlier. While last year's quarterly profit was higher, it included a onetime gain of $4.3 million associated with a lease on office space it had abandoned. The recent earnings represent significant sequential gains over the previous quarter ended July 31, when the company posted a profit of $1.2 million, or 1 cent per share, on revenue of $40.6 million.

The quarter also brought significant customer gains. Total customers numbered 12,500 at the end of the quarter, up from 11,500 in the previous quarter and 9,800 in the quarter ended April 30. Salesforce reports that the number of paying subscribers rose to 195,000, up from 168,000 at the end of the previous quarter and 147,000 from April 30. Year-ago customer and subscriber counts stood at 7,700 and 107,000, respectively.

Salesforce executives project revenue for the year ending Jan. 31, 2005, at between $172 million and $174 million, up slightly from the previous projection of $165 million to $170 million. For the year ending Jan. 31, 2006, Salesforce expects revenue to reach as high as $285 million.

This story was modified on Feb. 17, 2005, to correct the fiscal quarter.