By Maria Armental
Salesforce.com Inc. said it expects revenue to nearly double in four years, benefiting from companies shifting more of their spending to technology innovation.
The San Francisco company on Monday said it expects about $16 billion in revenue this year and $26 billion to $28 billion by fiscal 2023.
Chief Financial Officer Mark Hawkins said on an earnings call Monday that financial-services companies used to direct about 90% of information-technology spending to maintenance. These days, he said, it is more evenly split along maintenance and innovation.
Executives at Salesforce, which will celebrate its 20th anniversary this week, have pointed to strong demand from cloud computing, artificial intelligence and other areas as part of what is being called a Fourth Industrial Revolution.
"Companies are continuing to make incredible investments in their customer experience," Co-Chief Executive Marc Benioff said Monday. "They know they need to invest in becoming more customer-centric, more efficient and more automated."
However Salesforce shares, which closed down 3.7% Monday, fell about 3% in extended trading after the business-software company delivered profit guidance for the current quarter and year below analysts' expectations.
Salesforce, which last year bought MuleSoft for about $6.5 billion, reported revenue of $13.28 billion in the year ended Jan. 31 while profit more than doubled to $1.11 billion. Strategic investments, which includes those in companies like DocuSign Inc. and Dropbox Inc., added $542 million to the company's bottom line in the most recent year compared with $19 million a year earlier.
Overall in the fourth quarter, the company reported a profit of $362 million, or 46 cents a share, compared with $206 million, or 28 cents a share, a year earlier. Excluding stock-based compensation and other items, profit rose to 70 cents a share from 47 cents a share.
Revenue rose to $3.6 billion from $2.87 billion a year earlier.
Salesforce had forecast 54 cents to 55 cents a share in adjusted profit, on $3.55 billion to $3.56 billion in revenue. Gross profit margin in the quarter narrowed to 73.7% from 74.2% as the increase in costs outpaced revenue growth.
The company expects profit this year to reach 66 cents to 68 cents a share, or $2.74 to $2.76 a share on an adjusted basis, compared with analysts' projected 84 cents a share, or $2.75 a share on an adjusted basis.
Salesforce said full-year revenue is expected to reach $15.95 billion to $16.05 billion, up from its earlier view of $15.9 billion to $16 billion.
Write to Maria Armental at email@example.com