(Adds analyst commentary, valuation statistics.)
By Salvador Rodriguez and Pushkala Aripaka
May 29 (Reuters) - Salesforce.com Inc reported quarterly earnings on Tuesday that topped analysts' expectations and raised its full-year forecast as demand for its cloud-based sales and marketing software continues to propel rapid growth.
Salesforce has been a key beneficiary of so-called digital transformations - a growing trend in which companies move their operations onto lower cost cloud-based services that offer more scalability.
The San Francisco-based company's shares rose more than 4.5 percent in trading after the bell.
Fueling shareholder confidence was the company's raised forecast for full-year profit between $2.29 and $2.31 per share, and revenue of $13.08 billion to $13.13 billion. Analysts on average were expecting profit of $2.12 per share on revenue of $12.76 billion.
"You can see the implied growth rate is very, very strong," said Salesforce Chief Financial Officer Mark Hawkins on a call, citing the company's organic revenue growth and additional revenue from Salesforce's acquisition of software maker MuleSoft. "That's growth at scale that is hard to find."
On an adjusted basis, the company earned 74 cents per share, beating analysts’ average estimate of 46 cents per share.
Revenue from the company's flagship product, Sales Cloud, rose 16.3 percent to $965 million.
The company's unearned revenue - a key metric used to measure future business for subscription-based software vendors - rose 25 percent to $6.20 billion.
Analysts on average expected $6.27 billion, according to financial and data analytics firm FactSet.
"We see strong demand for digital transformation in areas including customer support and marketing, so it’s unsurprising Salesforce is seeing high growth," said Blair Hanley Frank, principal analyst at research and advisory firm ISG.
Salesforce accounted for about 20 percent of the 2017 global customer relationship management software market, up from 18.1 percent in 2016, according to research firm IDC.
Oracle Corp is the company's closest rival with 7.1 percent of the market. However, Microsoft Corp's Dynamics enterprise software is emerging as a major competitor after nearly tripling its market share to 4 percent in 2017.
"What we need to do is stay confident in our ability to deliver success for our customers," said Salesforce Chief Operating Officer Keith Block when asked about Microsoft's growing market share.
Salesforce is trading at about 53 times expected earnings over the next twelve months, according to Thomson Reuters data. By comparison, Microsoft is trading at about 24 and Oracle is at about 14.
"Microsoft is a legitimate CRM player, but the depth and breadth of its portfolio continues to put it at a disadvantage to Salesforce in enterprise CRM competitions," Wedbush Securities analyst Steve Koenig said.
Salesforce reported net income of $344 million, or 46 cents per share, in the first quarter ended April 30, compared with $1 million, or breakeven per share, a year earlier. Total revenue rose 25.4 percent to $3.01 billion, beating analysts' average estimate of $2.94 billion, according to Thomson Reuters I/B/E/S. (Reporting by Salvador Rodriguez in San Francisco and Pushkala Aripaka in Bengaluru; editing by Anil D'Silva, Lisa Shumaker and Diane Craft)