Salesforce.com (NYSE:CRM) is set to announce its Q2 results on August 23. For the last quarter, it reported revenues of $695 million, up 30% y-o-y led by strong revenues for subscription and support services which increased 38% to $655 million, while professional services and other revenues increased 30% to $40 million. Salesforce competes with SAP (NYSE:SAP), Oracle (NASDAQ:ORCL) and Microsoft (NASDAQ:MSFT) in the ERP segment. We expect Chatter to drive sales and its focus on social media marketing and analytics to yield results in the coming quarters.
See our full analysis for Salesforce.com
Q2 And Full Year Guidance
The company expects Q2 revenue in the range of $724 to $728 million, an increase of 33% y-o-y. It expects GAAP net loss per share of $0.10-$0.09 and non- GAAP diluted EPS of $0.38 -$0.39 for the quarter.
Its guidance for the full year revenues are in the range of $2.97 to $3 billion, an increase of 31-32%.
Buddy Media Powered Social Analytics And Chatter To Drive Revenues
Salesforce takes inspiration from Facebook and is pushing clients to adopt a model it calls ‘the Social Enterprise’ where decision support tools have a social aspect that is enabled by Chatter. There are about 150,000 Chatter networks currently supporting clients. Though Chatter itself is offered as a free add-on, it is definitely driving sales for the other products and services used by clients such as Burberry Group Plc and Kimberly-Clark (NYSE:KMB). These two contracts are valued at around $10 million and $100 million, respectively. Chatter and other cloud-based software currently make up 37% of our current Trefis price estimate. ((Chatter may boost Salesforce.com products: Barron’s, Chicago Tribune))
To improve its analytics offerings, Salesforce has entered into an agreement with Twitter to access its daily tweet feed. Twitter’s public tweet data registers more than 400 million tweets a day and Radian6 will allow its clients to access these tweets to monitor the effectiveness of their social media campaigns. This will greatly improve Radian6′s social listening ability, which will directly result in better social media campaign management and measurement for its ~100K clients.
Salesforce has also beefed up its social media offerings by acquiring Buddy Media, a social enterprise software that enables clients to listen, engage, gain insight, publish, advertise and measure social marketing programs.
We currently have a $130 Trefis price estimate for Salesforce.com, which is about 15% lower than current market price.
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