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Summary:

Salesforce.com has been challenged on the profitability front, and that trend continued for its fourth quarter.

SaaS pioneer Salesforce.com posted a GAAP loss of $116.6 million or 19 cents a share for its fourth quarter ending January 31. That’s compared to a loss of $20.8 million or 4 cents a share this time last year. And Graham Smith, who has been CFO of the San Francisco–based company for six years, will resign in March, 2015.

Salesforce.com launched 15 years ago to focus on sales force automation and customer relationship management delivered from its servers, as opposed to running on customer premises. But in recent years the company has broadened its target market, spending billions of dollars to acquire companies like ExactTarget, Buddy Media, and others in marketing automation and social media analytics.

In those areas, Salesforce.com is locked in an arms race with Oracle, which has been on a buying binge of its own — acquiring Eloqua for $871 million in late 2012 and BlueKai just this week.

Profitability, in part because of its acquisitions, has proven elusive for Salesforce.com, which has posted a GAAP profit in only a few quarters of its existence.

But Nomura Securities analyst Rick Sherlund (who rates the company a buy) sees a silver lining. In a research note about the earnings results, he wrote:

“Like most SaaS companies, Salesforce continues to invest aggressively in driving new business, but unlike some of the smaller companies is profitable on a non-GAAP basis and cash flow positive. Non-GAAP EPS of $0.07 per share was essentially in line with the Street at $0.06.”

He and other observers said the addition of former Oracle North America sales chief Keith Block will drive more and bigger enterprise deals to Salesforce.com.

  1. So, Marc Benioff, would you like to offer some more comments about Microsoft’s inability to execute?

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    1. LLLLLLLLOOOOOOOOOOLLLLLLLLLLLLLL

      +116.6 million

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  2. I think you should make it clear that Graham Smith is retiring in March of 2015. (Not next month.)

    http://www.prnewswire.com/news-releases/salesforcecom-announces-fiscal-2014-fourth-quarter-and-full-year-results-247621601.html

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    1. i just had updated the story to reflect march 2015 when i read your comment. Done thanks.

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    2. Before I saw this comment I thought the 2015 itself was a mistake… damn… announcing over a year ahead of time that you’re retiring??

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      1. Yeah, that’s even longer notice than Steve Ballmer gave.

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  3. Interesting that profitability never came up when Jim Cramer interviewed Marc Benioff on Mad Money yesterday. It was all about growth growth growth. Reminds me of 2001.

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  4. They should hire a guy who has a total background in financial services selling equities to run a technology sales team.

    Oh wait a second…

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  5. Nitesh Agarwal Sunday, March 2, 2014

    Its about more profitable acquisitions that is required and the foresighted calculations on the projected profits should be made for the companies being acquired, on the basis of the use Salesforce will make of their resources.

    they should not just run for making more and more acquisitions to increase the market share, it should do wise acquisitions and should make use of more than 100% of their resources.

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  6. If you are going to report on profit and loss, you need to say what the top line revenue was. Financial reporting 101.

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