FYQ2 Rev, Profit Beat, Outlook Tops Consensus — Salesforce.com Rising

Another strong fiscal quarter, with solid growth across its major cloud services and development platform, gave Salesforce CEO Marc Benioff a chance to praise his company’s joint efforts with Microsoft, mock some other rivals, and promote the upcoming Dreamforce convention.

Inc. (NYSE: CRM) reported second quarter 2016 results after the markets closed Thursday. Analysts expected Salesforce to report a loss of a penny a share on sales of $1.6 billion, with adjusted earnings of 18 cents a share.

Actual revenue for the quarter was $1.63 billion, up 24 percent from Q2 of 2014 – profits of $304 million were the same percentage higher.

CFO Mark Hawkins noted he company “expanded our year-over-year non-GAAP operating margin for the fifth consecutive quarter”, and “delivered more than $1 billion in operating cash flow in the first half of the year, an increase of 44% over last year”.

Subscription and support revenue surged 23 percent to $1.52 billion, while professional services and other revenue jumped 32 percent to $113 million. “That puts us on pace to reach a $7 billion run rate later this year, and our goal is to be the fastest to reach $10 billion in annual revenue”. GAAP loss per share is estimated in a range of $0.01 to $0.02 and adjusted EPS is estimated at $0.18 to $0.19. Excluding items, the company’s earnings came in at $0.19 per share. The company has bettered its own estimate of performance, but is still a bit short of what analysts were originally looking for.

The company saw deferred revenue of $3.03 billion, a 29% year over year increase or 33% in constant currency.

Beating on both expected revenues and earnings will give the stock a jolt that will be intensified somewhat by the improved guidance.

As of this writing, shares of Salesforce were up 2.85% at $69.75 per share in after-hours trades. The 12-month consensus target price on the stock is $80.63.