Salesforce.com has posted a 97 per cent fall in profit since last year, showing the high cost of its acquisition blitz, and despite the fact that 97,000 companies now use its subscription-based CRM software.
In its first quarter financial results, the company reported net income of $530,000 (£328,805) down from $17.7m (£10.9m) a year earlier, with sales up by 34 per cent to $504m (£313m).
Users of the company’s subscription-based software-as-a-service products rose by 5,400 during the quarter, showing a 26 per cent increase from the same quarter in 2010. However, operating costs rose from $272m (£168m) in 2010 to $404m (£250m) in 2011.
Chief executive Marc Benioff said: “Salesforce.com has become the first enterprise cloud computing company to reach a $2bn annual revenue run rate.”
Graham Smith, chief financial officer at Salesforce, said: “Seven acquisitions in the past year, 1,400 additional employees and increased spending on things such as Super Bowl advertising are leading to higher expense.”
Professional services sales reached $31m (£19m), an increase of 18 per cent compared to the same period in 2010. Subscription and support sales rose 35 per cent.
Profit for the previous quarter ending 31 January 2011 was down to $10.9m (£6.8m), compared to $20.4m (£12.6m) in the same quarter the year before.
