gains 5,400 customers but profit slumps by 97%

News gains 5,400 customers but profit slumps by 97%

Jenny Williams posted a 97% profit slump since last year despite its subscription-based CRM software growing to be used by over 97,000 companies.

In its latest first quarter financial results, the cloud computing firm reported net income of $530,000, down from $17.7m a year earlier, with sales up by 34% to $504m.

" has become the first enterprise cloud computing company to reach a $2bn annual revenue run rate," said CEO Marc Benioff.

"We are delighted to see our revenue growth rate continue to accelerate."

Users of the company's subscription-based software-as-a-service products rose by 5,400 during the quarter, showing a 26% increase from the same quarter in 2010. However, operating costs rose from $272m in 2010 to $404m in 2011.

Graham Smith, chief financial officer at told Wall Street Journal, "Seven acquisitions in the past year, 1,400 additional employees and increased spending on things such as Super Bowl advertising are leading to higher expense."

Professional services sales reached $31m, an increase of 18% compared to the same period in 2010. Subscription and support sales rose 35%.

Profit for the previous quarter ending 31 January 2011 was down to $10.9m, compared to $20.4m in the same quarter the year before.

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