Amid better-than-expected earnings, Salesforce.com is closing in on the finish line in a race with rival Oracle.
The company expects to generate more than $10 billion in sales in the next fiscal year, Salesforce's intrepid CEO, Marc Benioff said in a statement. It comes after Oracle's chairman Larry Ellison set a goal be the first cloud company to reach $10 billion in software-as-a-service (SaaS) and platform-as-a-service (PaaS) revenue.
Oracle told CNBC there was no update available yet on its progress toward the goal.
"We gained market share, and we just continued to watch our competitors fall behind," chief financial officer Mark Hawkins told investors.
Salesforce helps businesses communicate with their customers and provides software for sales teams to manage their clients. Benioff attributed his optimistic view for the future on the company's diverse set of software offerings. He said his new goal is to double the company — reach $20 billion in annual sales — within the next three to four years.
"I'll tell you that I really think that in my core, I'll get back to my comment about that balanced portfolio," Benioff said. "We have an integrated platform. And that integrated platform is exciting, not only is it the number one sales cloud in the world…. But it has all these other capabilities: Mobility, AI, analytics, and so forth. And so I think that, when I look at the most incredible things our customers have done, they weave these things together in really smart and creative ways."
Salesforce.com also reported adjusted quarterly earnings that beat analysts' expectations and revenue that topped estimates on Thursday. Shares rose 5.6 percent after hours.
"I think it's a combination of relief after last quarter, and strong growth delivered," Crawford Del Prete, chief research officer at IDC, said of the stock move. "I think coming into the quarter the question was, 'For the large cap tech companies, if [Salesforce.com] can't grow, who can?' This decidedly answers that question."
The customer service and cloud technology company posted fiscal third-quarter earnings per share of 24 cents, excluding items, on revenue of $2.14 billion. Analysts had expected Salesforce.com to report adjusted earnings of 21 cents per share on revenue of $2.1 billion in the quarter, according to a Thomson Reuters consensus estimate.
That's compared to adjusted earnings of 21 cents a share on sales of $1.71 billion in the year-earlier period.
The Bay Area-company has been boosted by trends toward e-commerce. More consumers are expected to do holiday shopping online, and they becoming more comfortable with sharing their data in exchange for customer service, according to the company's research.
Still, shares of the company's stock have fallen nearly 4 percent so far this year, amid a slew of acquisitions, including Demandware and Quip. Shareholders were not happy with rumors that Benioff was also eyeing social media platform Twitter, sending shares on a rollercoaster this fall.
But executives defended their handling of deal-making during a conference call with investors.
"Of course, we've already bought some incredible things that are outside our core that we're integrating into our core," Benioff said, highlighting a surge in usership on Quip. On Demandware, one executive said the company has a plan and they "love what they see" so far.
The company had been plagued by foreign exchange pressures. In September, the company gave third-quarter earnings and revenue guidance that fell short of estimates, in part due to the post-Brexit vote fall of the British pound. The currency has fallen more than 15 percent against the dollar this year.
"We made a number of changes that led us to perform well in the third quarter, because we did see the market shift in the second quarter, and we told people that," Benioff said of the currency headwinds. "The selling motion has had to change [this year]."
Despite competition from a partnership between Microsoft and Adobe, and uncertainty surrounding the recent presidential election, Salesforce executives said they continue to believe their business is well-positioned, thanks to the speed of their platform and their opportunities to be in the board room with their clients.
"That is how we operate here — we are positive people," Benioff said. "We are moving forward. I have talked to now a number of customers this week, and I have met with CEOs of some of the largest companies in the world this week. And in each and every case, all of them are moving forward. We know what we have to do. And we need now to execute ...I've been optimistic about 2017 on growth. I've been counter to a lot of global economists and I'm going to continue to feel positive about growth in the coming years ... now that this election is behind us."