Updated from 8:36 a.m. to include thoughts from Oppenheimer analyst.
NEW YORK (TheStreet) –– Salesforce.com (CRM) continued to show there is life in the software-as-a-service (SaaS) business, as fiscal second-quarter revenue rose 38% year over year, curbing some doubt on Wall Street.
Salesforce.com earned an adjusted 13 cents a share on the quarter on $1.29 billion in revenue, as subscription and support revenue rose 37% year over year to $1.23 billion. Analysts surveyed by Thomson Reuters were expecting an adjusted profit of 12 cents a share on $1.29 billion in revenue.Shares of the San Francisco-based company were higher in early trading on Friday, gaining 8.1% to $60.24.
The Marc Benioff-led company boosted its fiscal 2015 revenue guidance, saying it now expects to generate between $5.34 billion and $5.37 billion. Adjusted earnings are projected to be between 50 cents and 52 cents a share. Analysts expect the company to earn 51 cents a share on $5.34 billion in revenue.
For the third quarter, Salesforce expects to post adjusted earnings between 12 cents and 13 cents a share, with revenue ranging between $1.365 billion and $1.37 billion. Analysts expect adjusted earnings of 13 cents on revenue of $1.37 billion.
Following the report and the earnings call, analysts were largely positive on Salesforce. Here's what a few of them had to say:
Barclays Capital analyst Raimo Lenschow (Overweight, $63 PT)
"Salesforce.com reported Q2 FY15 results that were better than consensus, with revenue of $1.32bn coming in above expectations of $1.29bn. Billings of $1.35bn on a reported basis was ahead of consensus estimates and backlog growth (32% y/y) also remains healthy. Generally speaking, we feel as though the quarter was fine. Shares showed modest upward price movement in after-hours trading, however, with SaaS stocks still under pressure and investor sentiment towards high-valuation names remaining tentative, we do not think this result will cause a big move to the upside in the near term for Salesforce.com."