Retailers shift their ad spending from TV, radio and print ads to digital ads.
Based on the revenue it generated in the first half of the year, the customer relationship management software vendor also raised its outlook for the year to $5.37 billion.
Salesforce.com Inc., a provider of web-hosted technology and services for managing sales staffs and customer data, generated $1.32 billion in sales in the second quarter of its fiscal 2015, up 37.9% from $957.1 million a year ago.
But the sales came at a cost. The company swung from a net profit of $76.6 million in the same quarter a year ago to a loss of $61.1 million in the recent quarter. The company spent $246.4 million more on marketing and sales and research and development in its fiscal Q2 2015 than Q2 2014. Spending on marketing and sales increased $191.4 million, or 39.8%, and spending on research and development increased $55.0 million, up 37.1% from a year ago.
That extra spending contributed to a number of expanded client relationships and product developments in the quarter, the company said in a call with investors. It cited expanded relationships with companies including AIG, Cathay Pacific, General Motors, Procter & Gamble, and others. During Q2 it also updated its Salesforce Journey Builder product, which is part of the Salesforce ExactTarget Marketing Cloud service and meant to help marketers understand customer behavior across communication touch points and deliver cohesive marketing through them.
Regionally, sales in the Americas region grew 39%; in Europe, the Middle East and Africa, 42%; and Asia-Pacific, 25%. Based on the revenue it’s generated so far in its fiscal year, the customer relationship management software vendor also raised its revenue guidance for the year to $5.37 billion, up $170 million from its initial projections. “We’ve exceeded the $5 billion revenue run rate, the first enterprise cloud company to do that,” said Salesforce.com CEO Marc Benioff, in a call with investors.
For its Q2 2015 ended July 31, Salesforce reported:
● Net revenue of $1.32 billion, up 37.9% from $957.1 million a year ago;
● Total operating expenses of $1.04 billion, up 33.5% from $779.2 million.
● A net loss of $61.1 million, compared with a net income of $76.6 million a year earlier.
For the six months ended July 31, the company reported:
● Net revenue of $2.545 billion, up 37.6% from $1.850 billion
● Total operating expenses of $2.034 billion, up 35.0% from $1.507 billion;
● A net loss of $158.0 million, compared with a year-earlier net income of $8.9 million.
For a free subscription to B2BecNews, a weekly newsletter that covers technology and business trends in the growing B2B e-commerce industry, click here. B2BecNews is published by Vertical Web Media LLC, which also publishes the monthly trade magazine Internet Retailer.