Pawan Verma joins Foot Locker as its new chief information officer.
But an aggressive spending on marketing and research and development contributed to an operating loss of $286.07 million for the year. CEO Marc Benioff projects strong growth ahead in the company’s web-based products for sales force automation, customer service, marketing and mobile apps.
Salesforce.com Inc., the provider of Internet-hosted technology and services for managing sales staffs and customer data, continues to spend heavily on its future, leading to double-digit percentage increases in both net revenue and operating loss.
For the fiscal year 2014 ended Jan. 31, the company says net revenue rose 33% to $4.07 billion, while its operating loss came in at $286.07 million as the company aggressively increased spending on sales and marketing and research and development. Overall operating expenses increased 36.7% to $3.39 billion from $2.48 billion. Thanks to less interest expense and an increase in investment income, its net loss for the year narrowed to $232.18 million from $270.45 million.
In an earnings call with stock analysts last week, Salesforce executives sounded upbeat about the company’s future and said the growth-oriented expenditures in R&D and sales and marketing would produce fast growth. “I’m delighted to announced that we are raising our fiscal year 2015 revenue guidance by $100 million, to reach $5.3 billion,” chairman and CEO Marc Benioff said. If those numbers materialize, the company’s revenue would rise another 30% by next Jan. 31.
Part of its revenue growth—$96 million—last year came from ExactTarget, the provider of e-mail marketing services that Salesforce acquired last July for $2.5 billion. Indeed, Benioff said Salesforce.com’s marketing technology and services, which it calls Marketing Cloud, is on course to be one of four business units he expects to become “multibillion-dollar” product lines, he said in the earnings call, according to a transcript from Seeking Alpha.
Benioff described the other three major growth segments as Sales Cloud, for managing company sales forces and customer relationships; Service Cloud, for customer service; and the Salesforce1 technology platform, on which he said there are more than 250 independent software developers building mobile applications for business. Those developers have already released more than 30 Salesforce1 apps for such tasks as connecting Salesforce.com applications with the business-oriented social media site LinkedIn and the business management application Evernote, which lets users record and organize information ranging from personal notes to saved web pages and reports compiled in projects with co-workers.
For its fourth fiscal quarter ended Jan. 31, Salesforce reported:
● Net revenue of $1.15 billion, up 37.8% from $834.68 million a year earlier;
● Total operating expenses, including research and development, and marketing sales, of $975.46 million, up 45.1% from $672.13 million.
● An operating loss of $103.75 million, compared with a year-ago operating loss of $20.81 million;
● A net loss of $116.62 million, compared with a net loss of $20.84 million a year earlier.
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