Salesforce.com (CRM, Financial) reported earnings that topped estimates after the close.
Revenues increased by 34% over the year-ago period, coming in at $504 million. The net number of paying customers rose by 5,400 to finish at 97,700. The company has added more than 20,000 customers since the end of April 2010.
In after hours trading, shares rose by 7%, further frustrating short sellers. On a day when euphoria for tech stocks caused the LinkedIn (LNKD, Financial) IPO to rise 122% investors were clearly in the mood for good results from CRM.
Value investors like Whitney Tilson have previously recommended Salesforce.com as a good short sale candidate.
Most investors have complained about the excessive spending as a reason to short Salesforce.com.
In the most recent quarter, cost of revenues increased by 44%, yet revenues only increased by 34%. Thus, expenses are growing at a faster rate than revenues. The company did not make a profit in the most recent quarter due to the rising expenses. However, investors only appear to be concerned with revenue growth rates.
The company has been criticized for wild spending and acquisitions. For example, Salesforce.com spent a fortune to acquire Heroku, and it’s spending $278 million to buy the real estate for a new corporate campus.
Disclosure: CRM Puts
Revenues increased by 34% over the year-ago period, coming in at $504 million. The net number of paying customers rose by 5,400 to finish at 97,700. The company has added more than 20,000 customers since the end of April 2010.
In after hours trading, shares rose by 7%, further frustrating short sellers. On a day when euphoria for tech stocks caused the LinkedIn (LNKD, Financial) IPO to rise 122% investors were clearly in the mood for good results from CRM.
Value investors like Whitney Tilson have previously recommended Salesforce.com as a good short sale candidate.
Most investors have complained about the excessive spending as a reason to short Salesforce.com.
In the most recent quarter, cost of revenues increased by 44%, yet revenues only increased by 34%. Thus, expenses are growing at a faster rate than revenues. The company did not make a profit in the most recent quarter due to the rising expenses. However, investors only appear to be concerned with revenue growth rates.
The company has been criticized for wild spending and acquisitions. For example, Salesforce.com spent a fortune to acquire Heroku, and it’s spending $278 million to buy the real estate for a new corporate campus.
Disclosure: CRM Puts
