First Enterprise Cloud Computing Company to Exceed $1.3 Billion
Annual Revenue Run Rate - Record Revenue of Approximately $331
Million, up 20% Year-Over-Year - GAAP EPS of $0.16, up 100%
Year-Over-Year - Operating Cash Flow of $36M, up 107%
Year-Over-Year - Record 4,700 Net New Customers During the Quarter
- Total Customers at 67,900, up 31% Year-Over-Year - Total Cash and
Marketable Securities of $1.07 Billion, up $265 Million
Year-Over-Year - Company Raising Full Year Revenue Guidance to
Approximately $1.29 Billion - Company Raising Full Year GAAP EPS
Guidance to Approximately $0.62 to $0.63 SAN FRANCISCO, Nov. 17
/PRNewswire-FirstCall/ -- Salesforce.com (NYSE: CRM), the
enterprise cloud computing company, today announced results for its
fiscal third quarter ended October 31, 2009. (Logo:
http://www.newscom.com/cgi-bin/prnh/20050216/SFW105LOGO) "We are
pleased to report record revenue, profit, and customer additions in
Q3," said Marc Benioff, chairman and CEO, salesforce.com. "This
gives us fantastic momentum as we head into Dreamforce, where we
will announce our biggest product news of the year." Salesforce.com
delivered the following results for its third quarter, fiscal year
2010: Revenue: Total Q3 revenue was $330.5 million, an increase of
20% on a year-over-year basis. Subscription and support revenues
were $306.9 million, an increase of 21% on a year-over-year basis.
Professional services and other revenues were $23.7 million, an
increase of 3% on a year-over-year basis. Earnings per Share: Q3
GAAP diluted earnings per share were approximately $0.16, including
approximately $20.4 million in stock-based compensation expense and
approximately $2.6 million in amortization of purchased intangibles
related to previously announced acquisitions. For purposes of the
Q3 GAAP EPS calculation, there was an average of approximately 129
million diluted shares outstanding during the quarter. Customers:
Net paying customers rose approximately 4,700 during the quarter to
finish at approximately 67,900. Compared with the year ago quarter,
net paying customers have grown by approximately 16,100 or 31%.
Cash: Cash generated from operations for the fiscal third quarter
was approximately $36 million, up approximately 107%
year-over-year. Total cash, cash equivalents and marketable
securities finished the quarter at approximately $1.07 billion, an
increase of approximately $265 million from the year prior.
Deferred Revenue: Deferred revenue on the balance sheet as of
October 31, 2009 was $545 million, an increase of 16% on a
year-over-year basis. As of November 17, 2009, salesforce.com is
initiating guidance for its fourth quarter, fiscal year 2010. For
its full fiscal year 2010, the company is raising its prior revenue
and EPS guidance. In addition, the company is initiating revenue
guidance for its full fiscal year 2011. Q4 FY10: Revenue for the
company's fourth fiscal quarter is projected to be in the range of
approximately $340 million to approximately $342 million. GAAP
diluted EPS is expected to be in the range of approximately $0.14
to approximately $0.15. Stock-based compensation expense is
expected to be approximately $26 million, and amortization of
purchased intangibles of previously announced acquisitions is
expected to be approximately $2.6 million. For purposes of the Q4
GAAP EPS calculation, the company is expecting an average diluted
share count of approximately 132 million shares, a GAAP tax rate of
approximately 40% and a noncontrolling interest charge of
approximately $1.5 million. Full Year FY10: The company today is
raising the full year revenue guidance it provided on August 20,
2009 with revenue now expected to be approximately $1.292 billion
to approximately $1.294 billion. The company is also raising its
earnings outlook for the full year, expecting GAAP diluted EPS to
be in the range of approximately $0.62 to approximately $0.63.
Stock-based compensation expense is expected to be approximately
$89 million, and amortization of purchased intangibles of
previously announced acquisitions is expected to be approximately
$9.9 million. For purposes of the full fiscal year 2010 GAAP EPS
calculation, the company is expecting an average diluted share
count of approximately 127 million shares, a GAAP tax rate of
approximately 42%, and a noncontrolling interest charge of
approximately $3.5 million. Full Year FY11: The company is
initiating revenue guidance for its full fiscal year 2011 with
projected revenue growth in the range of approximately 15% to 16%
when compared to projected fiscal year 2010. The company expects to
update this guidance, as well as provide its expectations for FY11
GAAP EPS when it announces its fourth quarter, fiscal year 2010
results planned for February, 2010. Quarterly Conference Call
Salesforce.com will host a conference call to discuss its third
quarter fiscal 2010 results at 2:00 p.m. Pacific Standard Time
today. A live audio webcast of the conference call, together with
detailed financial information, can be accessed through the
company's Investor Relations Web site at
http://www.salesforce.com/investor. In addition, an archive of the
webcast can be accessed through the same link. Participants who
choose to call in to the conference call can do so by dialing
domestically 866-901-SFDC or 866-901-7332 and internationally at
706-902-1764. A replay will be available at (800) 642-1687 or (706)
645-9291, passcode 39679783, until midnight (EST) December 8, 2009.
About salesforce.com Salesforce.com is the enterprise cloud
computing company. The company's portfolio of Salesforce CRM
applications, available at http://www.salesforce.com/products/, has
revolutionized the ways that companies collaborate and communicate
with their customers across sales, marketing and service. The
company's Force.com Platform (http://www.salesforce.com/platform/)
enables customers, partners and developers to quickly build
powerful business applications to run every part of the enterprise
in the cloud. Based on salesforce.com's real-time, multi-tenant
architecture, Salesforce CRM and Force.com offer the fastest path
to customer success with cloud computing. As of October 31, 2009,
salesforce.com manages customer information for approximately
67,900 customers including Allianz Commercial, Dell, Dow Jones
Newswires, Japan Post, Kaiser Permanente, KONE, and SunTrust Banks.
Any unreleased services or features referenced in this or other
press releases or public statements are not currently available and
may not be delivered on time or at all. Customers who purchase
salesforce.com applications should make their purchase decisions
based upon features that are currently available. Salesforce.com
has headquarters in San Francisco, with offices in Europe and Asia,
and trades on the New York Stock Exchange under the ticker symbol
"CRM". For more information please visit
http://www.salesforce.com/, or call 1-800-NO-SOFTWARE. "Safe
harbor" statement under the Private Securities Litigation Reform
Act of 1995: This press release contains forward-looking statements
about expected revenue and GAAP earnings per share for the fourth
fiscal quarter of 2010 and the full fiscal year, expected revenue
for fiscal year 2011, and our expected tax rate, stock-based
compensation expense, amortization expense, noncontrolling interest
charge, and shares outstanding, the achievement of which involve
risks, uncertainties and assumptions. If any such risks or
uncertainties materialize or if any of the assumptions prove
incorrect, our results could differ materially from the results
expressed or implied by the forward-looking statements we make. The
risks and uncertainties referred to above include - but are not
limited to - risks associated with possible fluctuations in our
financial and operating results, rate of growth and anticipated
revenue run rate; errors, interruptions or delays in our service or
our Web hosting; breaches of our security measures; the financial
impact of any future acquisitions; the nature of our business
model; our ability to continue to release, and gain customer
acceptance of, new and improved versions of our service; successful
customer deployment and utilization of our existing and future
services; changes in our sales cycle; competition; various
financial aspects of our subscription model; unexpected increases
in attrition or decreases in new business; the emerging market in
which we operate; our ability to hire, retain and motivate our
employees and manage our growth; changes in our customer base;
technological developments; regulatory developments; litigation;
unanticipated changes in our effective tax rate; and fluctuations
in the number of shares we have outstanding, the price of such
shares, foreign currency exchange rates, interest rates, and
general developments in the economy, financial markets, and credit
markets. Further information on these and other factors that could
affect our financial results is included in the reports on Forms
10-K, 10-Q and 8-K and in other filings we make with the Securities
and Exchange Commission from time to time, including our Form 10-Q
that will be filed for the quarter ended October 31, 2009 and our
Form 10-K for the fiscal year ended January 31, 2009. These
documents are available on the SEC Filings section of the Investor
Information section of our website at
http://www.salesforce.com/investor. Salesforce.com, inc. assumes no
obligation and does not intend to update these forward-looking
statements, except as required by law. Copyright (c) 2009
salesforce.com, inc. All rights reserved. Salesforce and the "no
software" logo are registered trademarks of salesforce.com, inc.,
and salesforce.com owns other registered and unregistered
trademarks. Other names used herein may be trademarks of their
respective owners. salesforce.com, inc. Condensed Consolidated
Statements of Operations (in thousands, except per share data)
(Unaudited) Three Months Ended Nine Months Ended October 31,
October 31, 2009 2008 2009 2008 ---- ---- ---- ---- Revenues:
Subscription and support $306,870 $253,403 $882,078 $718,464
Professional services and other 23,679 23,084 69,456 68,722 ------
------ ------ ------ Total revenues 330,549 276,487 951,534 787,186
Cost of revenues (1): Subscription and support 40,745 32,424
116,744 91,802 Professional services and other 24,825 23,924 73,122
69,935 ------ ------ ------ ------ Total cost of revenues 65,570
56,348 189,866 161,737 Gross profit 264,979 220,139 761,668 625,449
Operating expenses (1): Research and development 32,763 26,270
95,450 70,070 Marketing and sales 152,166 136,452 436,647 389,930
General and administrative 49,909 41,284 139,818 117,797 ------
------ ------- ------- Total operating expenses 234,838 204,006
671,915 577,797 Income from operations 30,141 16,133 89,753 47,652
Interest, net 7,211 3,840 18,987 17,270 Other income (expense)
(336) 534 (1,037) (1,069) ---- --- ------ ------ Income before
provision for income taxes and noncontrolling interest 37,016
20,507 107,703 63,853 Provision for income taxes (15,573) (8,824)
(45,426) (29,693) ------- ------ ------- ------- Consolidated net
income 21,443 11,683 62,277 34,160 Less: Net income attributable to
noncontrolling interest (752) (1,559) (1,952) (4,485) ---- ------
------ ------ Net income attributable to salesforce.com $20,691
$10,124 $60,325 $29,675 ======= ======= ======= ======= Earnings
per share - basic and diluted: Basic net income per share
attributable to salesforce.com common shareholders $0.17 $0.08
$0.49 $0.25 Diluted net income per share attributable to
salesforce.com common shareholders $0.16 $0.08 $0.48 $0.24 Shares
used in computing basic net income per share 124,561 121,635
123,871 120,759 Shares used in computing diluted net income per
share 128,596 125,133 126,993 125,173 (1) Amounts include
stock-based expenses, as follows: Cost of revenues $2,995 $2,817
$9,322 $8,149 Research and development 2,707 2,494 8,741 6,852
Marketing and sales 9,055 9,235 28,314 26,105 General and
administrative 5,650 4,730 16,570 15,119 salesforce.com, inc.
Condensed Consolidated Statements of Operations As a percentage of
total revenues: (Unaudited) Three Months Nine Months Ended Ended
October 31, October 31, 2009 2008 2009 2008 ---- ---- ---- ----
Revenues: Subscription and support 93% 92% 93% 91% Professional
services and other 7 8 7 9 --- --- --- --- Total revenues 100 100
100 100 Cost of revenues: Subscription and support 12 12 12 12
Professional services and other 8 8 8 9 --- --- --- --- Total cost
of revenues 20 20 20 21 Gross profit 80 80 80 79 Operating
expenses: Research and development 10 10 10 9 Marketing and sales
46 49 46 49 General and administrative 15 15 15 15 --- --- --- ---
Total operating expenses 71 74 71 73 Income from operations 9 6 9 6
Interest, net 2 1 2 2 Other income (expense) 0 0 0 0 --- --- ---
--- Income before provision for income taxes and noncontrolling
interest 11 7 11 8 Provision for income taxes (5) (3) (5) (4) ---
--- --- --- Consolidated net income 6 4 6 4 Less: Net income
attributable to noncontrolling interest 0 0 0 0 --- --- --- --- Net
income attributable to salesforce.com 6% 4% 6% 4% === === === ===
Stock-based expenses as a percentage of total revenues, as follows:
Cost of revenues 1% 1% 1% 1% Research and development 1 1 1 1
Marketing and sales 3 3 3 3 General and administrative 1 2 2 2
salesforce.com, inc. Condensed Consolidated Balance Sheets (in
thousands) October 31, January 31, 2009 2009 ---- ---- (unaudited)
Assets Current assets: Cash and cash equivalents $242,888 $483,834
Short-term marketable securities 202,446 213,769 Accounts
receivable, net 191,297 266,555 Deferred commissions 37,065 39,384
Deferred income taxes 26,992 31,900 Prepaid expenses and other
current assets 62,227 33,115 ------ ------ Total current assets
762,915 1,068,557 Marketable securities, noncurrent 624,758 184,962
Fixed assets, net 95,598 77,027 Deferred commissions, noncurrent
17,077 17,699 Deferred income taxes, noncurrent 30,695 26,589
Capitalized software, net 32,780 29,989 Goodwill 45,402 44,872
Other assets, net 33,976 30,127 ------ ------ Total assets
$1,643,201 $1,479,822 ========== ========== Liabilities and
stockholders' equity Current liabilities: Accounts payable $15,617
$16,379 Accrued expenses and other current liabilities 174,309
163,205 Income taxes payable 3,050 3,619 Deferred revenue 533,502
583,763 ------- ------- Total current liabilities 726,478 766,966
Income taxes payable, noncurrent 19,298 12,490 Long-term lease
liabilities and other 14,952 7,616 Deferred revenue, noncurrent
11,933 10,263 ------ ------ Total liabilities 772,661 797,335
salesforce.com stockholders' equity: Common stock 125 123
Additional paid-in capital 775,838 648,724 Accumulated other
comprehensive loss (3,239) (2,905) Retained earnings 86,167 25,842
------ ------ Total stockholders' equity controlling interest
858,891 671,784 Total stockholders' equity noncontrolling interest
11,649 10,703 ------ ------ Total stockholders' equity 870,540
682,487 ------- ------- Total liabilities and stockholders' equity
$1,643,201 $1,479,822 ========== ========== salesforce.com, inc.
Condensed Consolidated Statements of Cash Flows (in thousands)
(Unaudited) Three Months Ended Nine Months Ended October 31,
October 31, 2009 2008 2009 2008 ---- ---- ---- ---- Operating
activities: Consolidated net income $21,443 $11,683 $62,277 $34,160
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization 13,601 7,910
37,890 24,938 Amortization of deferred commissions 15,698 14,784
45,959 43,414 Expenses related to stock- based awards 20,407 19,276
62,947 56,225 Excess tax benefits from employee stock plans (7,401)
(17,706) (32,536) (42,247) Loss on securities - 2,052 - 2,052
Changes in assets and liabilities: Accounts receivable, net
(22,515) (9,002) 75,355 64,077 Deferred commissions (18,013)
(13,682) (43,018) (40,564) Prepaid expenses and other current
assets (12,892) (6,313) (14,711) (12,406) Other assets (506)
(2,943) (624) (429) Accounts payable 2,228 6,621 (762) 12,951
Accrued expenses and other current liabilities 27,045 14,733 35,165
23,497 Deferred revenue (3,575) (10,292) (48,591) (11,640) ------
------- ------- ------- Net cash provided by operating activities
35,520 17,121 179,351 154,028 ------ ------ ------- -------
Investing activities: Purchase of subsidiary stock - (16,693) -
(16,693) Business combinations, net of cash acquired (4,500)
(27,344) (4,500) (27,344) Purchase of marketable securities
(218,056) (123,476) (980,519) (323,415) Sales of marketable
securities 121,413 26,656 438,679 84,187 Maturities of marketable
securities 55,400 66,557 119,566 200,387 Capital expenditures
(14,089) (11,614) (46,845) (48,827) ------- ------- ------- -------
Net cash used in investing activities (59,832) (85,914) (473,619)
(131,705) ------- ------- -------- -------- Financing activities:
Proceeds from the exercise of stock options 18,559 6,595 32,866
40,605 Excess tax benefits from employee stock plans 7,401 17,706
32,536 42,247 Principal payments on capital lease obligations
(2,398) (286) (5,904) (291) ------ ---- ------ ---- Net cash
provided by financing activities 23,562 24,015 59,498 82,561 ------
------ ------ ------ Effect of exchange rate changes (2,531) 49
(6,176) (1,665) ------ --- ------ ------ Net (decrease) increase in
cash and cash equivalents (3,281) (44,729) (240,946) 103,219 Cash
and cash equivalents, beginning of period 246,169 427,043 483,834
279,095 ------- ------- ------- ------- Cash and cash equivalents,
end of period $242,888 $382,314 $242,888 $382,314 ======== ========
======== ======== salesforce.com, inc. Additional Metrics
(Unaudited) Oct 31, Jul 31, April 30, Jan 31, Oct 31, Jul 31, 2009
2009 2009 2009 2008 2008 ---- ---- ---- ---- ---- ---- Full Time
Equivalent Headcount 3,814 3,653 3,607 3,566 3,318 3,046 Financial
data (in thousands): Cash, cash equivalents and marketable
securities $1,070,092 $1,030,406 $983,824 $882,565 $804,606
$823,417 Deferred revenue, current and noncurrent $545,435 $549,010
$549,373 $594,026 $469,534 $479,546 Three Months Ended Nine Months
Ended October 31, October 31, 2009 2008 2009 2008 ---- ---- ----
---- Revenues by geography (in thousands): Americas $232,802
$200,143 $679,460 $567,076 Europe 60,761 48,076 168,355 142,597
Asia Pacific 36,986 28,268 103,719 77,513 ------ ------ -------
------ $330,549 $276,487 $951,534 $787,186 ======== ========
======== ======== As a percentage of total revenues: Revenues by
geography: Americas 70% 72% 71% 72% Europe 18 17 18 18 Asia Pacific
12 11 11 10 --- --- --- --- 100% 100% 100% 100% === === === ===
http://www.newscom.com/cgi-bin/prnh/20050216/SFW105LOGO
http://photoarchive.ap.org/ DATASOURCE: salesforce.com CONTACT:
David Havlek, Investor Relations, +1-415-536-2171, , or Jane Hynes,
Public Relations, +1-415-901-5079, , both of salesforce.com Web
Site: http://www.salesforce.com/
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