Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - SALESFORCE.COM, INC. | d8k.htm |
Exhibit 99.1
David Havlek
salesforce.com
Investor Relations
415-536-2171
dhavlek@salesforce.com
Jane Hynes
salesforce.com
Public Relations
415-901-5079
jhynes@salesforce.com
Salesforce.com Announces Fiscal Fourth Quarter and Full Year Results
First Enterprise Cloud Computing Company to Exceed $1.8 Billion Annual Revenue Run Rate
| • | Raises FY12 Revenue Guidance to $2.03 – $2.05 Billion |
| • | Record Quarterly Revenue of $457 Million, up 29% Year-Over-Year |
| • | Record Full Year Revenue of $1.657 Billion, up 27% Year-Over-Year |
| • | Q4 Operating Cash Flow of $166 Million, up 81% Year-Over-Year |
| • | Full Year Operating Cash Flow of $459 Million, up 69% Year-Over-Year |
| • | Deferred Revenue of $935 million, up 33% Year-Over-Year |
| • | 5,100 Net New Customers in the Quarter |
| • | Total Customers at 92,300 up 27% Year-Over-Year |
SAN FRANCISCO, Calif. – February 24, 2011 – Salesforce.com (NYSE: CRM), the enterprise cloud computing company, today announced results for its fiscal fourth quarter and full fiscal year ended January 31, 2011.
“Our current outlook puts salesforce.com on track to be the first enterprise cloud computing company to report more than $2 billion in revenue,” said Marc Benioff, chairman and CEO salesforce.com. “While it took us a decade to achieve our first billion dollars, we anticipate reaching $2 billion just three years later.”
Salesforce.com delivered the following results for its fiscal fourth quarter and full year 2011:
Revenue: Total Q4 revenue was $457 million, an increase of 29% on a year-over-year basis. Subscription and support revenues were $429 million, an increase of 31% on a year-over-year basis. Professional services and other revenues were $28 million, an increase of 6% on a year-over-year basis.
For the full fiscal year 2011, the company reported revenue of $1.657 billion, an increase of 27% from the prior year. Subscription and support revenues were $1.551 billion, an increase of 28% on a year-over-year basis. Professional services and other revenues were $106 million, an increase of 10% on a year-over-year basis.
Earnings Per Share: Q4 GAAP diluted earnings per share decreased 50% year-over-year to $0.08, and non-GAAP diluted earnings per share increased 3% year-over-year to $0.31. The company’s non-GAAP results exclude the effects of approximately $42 million in stock-based compensation expense, approximately $7 million in amortization of purchased intangibles, and approximately $2 million in non-cash interest expense related to the company’s convertible senior notes. All EPS calculations are based on 140 million diluted shares outstanding during the quarter.
All Q4 EPS results include a one-time tax benefit of approximately $8 million, associated with the extension of the Federal R&D tax credit.
For the full fiscal year 2011, GAAP diluted earnings per share decreased 25% year-over-year to $0.47, and non-GAAP diluted earnings per share increased 6% year-over-year to $1.22. The company’s non-GAAP results exclude the effects of approximately $120 million in stock-based compensation, approximately $20 million in amortization of purchased intangibles, and approximately $19 million in non-cash interest expense related to the convertible senior notes. All EPS calculations are based on 137 million diluted shares outstanding during the year.
Customers: Net paying customers, excluding customers from the Heroku and Dimdim acquisitions, rose approximately 5,100 during the quarter to finish at approximately 92,300, an increase of 27% for the full year. During FY2011, the company added approximately 19,800 net new customers.
Cash: Cash generated from operations for the fiscal fourth quarter was $166 million, up 81% year-over-year. For the full fiscal year 2011, operating cash flow totaled $459 million, up 69% year-over-year. Total cash, cash equivalents and marketable securities finished the year at approximately $1.4 billion, a decrease of approximately $319 million from the prior year.
Deferred Revenue: Deferred revenue on the balance sheet as of January 31, 2011 was $935 million, an increase of 33% on a year-over-year basis.
For fiscal year 2012, the company is raising its prior revenue guidance provided on November 18, 2010. As of February 24, 2011, salesforce.com is initiating guidance for its first quarter, fiscal year 2012, and initiating EPS guidance for fiscal year 2012.
Q1 FY12: Revenue for the company’s first fiscal quarter is projected to be in the range of approximately $480 million to approximately $482 million.
GAAP EPS is expected to be in the range of approximately negative ($0.01) to approximately negative ($0.02), while diluted non-GAAP EPS is expected to be in the range of approximately $0.26 to approximately $0.27. The non-GAAP estimate excludes the effects of stock-based compensation expense, expected to be approximately $48 million, amortization of purchased intangibles related to acquisitions, expected to be approximately $11 million, and non-cash interest expense related to the convertible senior notes, expected to be approximately $3 million. EPS estimates assume a GAAP tax rate of 70%, and a non-GAAP tax rate of 35%. For the purpose of the EPS calculation, assume an average basic share count of approximately 134 million shares, and an average fully diluted share count of approximately 142 million shares.
Full Year FY12 Guidance: The company is raising its projected full fiscal year 2012 revenue from guidance previously provided on November 18, 2010. Revenue for the company’s full fiscal year 2012 is projected to be in the range of approximately $2.03 billion to approximately $2.05 billion.
For the company’s full fiscal year 2012, diluted GAAP EPS is expected to be in the range of approximately $0.08 to approximately $0.11 while diluted Non-GAAP EPS is expected to be in the range of approximately $1.35 to approximately $1.38. The non-GAAP estimate excludes the effects of stock-based compensation expense, expected to be approximately $227 million, amortization of purchased intangibles related to acquisitions, expected to be approximately $40 million, and non-cash interest expense related to the convertible senior notes, expected to be approximately $11 million. EPS estimates assume a GAAP tax rate of 38%, and a non-GAAP tax rate of 35%. For the purpose of the EPS calculation, assume an average fully diluted share count of approximately 145 million shares.
The following is a per share reconciliation of GAAP diluted EPS to non-GAAP diluted EPS Guidance for the first quarter and full fiscal year:
| Fiscal 2012 | ||||||||
| Q1 | FY2012 | |||||||
| GAAP EPS Range* |
$ | (0.01) - $(0.02) | $ | 0.08-$0.11 | ||||
| Plus |
||||||||
| Amortization of purchased intangibles |
$ | 0.08 | $ | 0.28 | ||||
| Stock-based expense |
$ | 0.33 | $ | 1.57 | ||||
| Amortization of debt discount |
$ | 0.02 | $ | 0.08 | ||||
| Less |
||||||||
| Income tax effect of certain Non-GAAP items |
$ | (0.15) | $ | (0.66) | ||||
| Non-GAAP diluted EPS |
$0.26-$0.27 | $ | 1.35-$1.38 | |||||
| Shares used in computing basic net income per share (millions) |
134 | — | ||||||
| Shares used in computing diluted net income per share (millions) |
142 | 145 | ||||||
| * | For Q1 GAAP EPS loss, basic number of shares used for calculation |
Quarterly Conference Call
Salesforce.com will host a conference call to discuss its fourth quarter fiscal year 2011 results at 2:00 p.m. Pacific 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 +1 706-902-1764, passcode salesforce.com or 42391465. A replay will be available at 800-642-1687 or +1 706-645-9291, passcode 42391465, until midnight (Eastern Time) March 23, 2011.
About Salesforce.com
Salesforce.com is the enterprise cloud computing company that has transformed the way companies collaborate and communicate. Salesforce.com is leading the effort to bring Cloud 2, the next paradigm for computing, to the enterprise by offering its customers the social collaboration, mobility and openness that are the hallmark of this new world. The company’s platform and application services include:
| • | Salesforce Chatter, a private social network for your enterprise |
| • | The Sales Cloud, for sales force automation and contact management |
| • | The Service Cloud, for customer service and support solutions |
| • | The Jigsaw Data Cloud, for ensuring data integrity and quality |
| • | The Force.com platform, for custom application development |
| • | Heroku, for building social and mobile apps in Ruby |
| • | The AppExchange, the world’s leading marketplace for enterprise cloud computing applications |
Salesforce.com offers the fastest path to customer success with cloud computing. As of January 31, 2011, salesforce.com manages customer information for approximately 92,300 customers including Allianz Commercial, Dell, 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.
###
Non-GAAP Financial Measures: This press release includes information about non-GAAP earnings per share and non-GAAP tax rates (collectively the “non-GAAP financial measures”). Non-GAAP earnings estimates exclude the impact of the following non-cash items: stock-based compensation, amortization of acquisition-related intangibles, and the amortization of debt discount on the company’s convertible senior notes, as well as the tax consequences associated with these items. The purpose of the non-GAAP tax rate is to quantify the excluded tax consequences of the excluded expense items. These non-GAAP estimates are not measurements of financial performance prepared in accordance with U.S. generally accepted accounting principles. The method used to produce non-GAAP financial measures is not computed according to GAAP and may differ from the methods used by other companies. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with the company’s consolidated financial statements prepared in accordance with GAAP.
The primary purpose of these non-GAAP measures is to provide supplemental information that may prove useful to investors who wish to consider the impact of certain non-cash items on the company’s operating performance. Non-cash stock-based compensation, amortization of acquisition-related intangible assets, and the amortization of debt discount on the company’s convertible senior notes are being excluded from the company’s FY11 financial results because the decisions which gave rise to these expenses were not made to increase revenue in a particular period, but were made for the company’s long-term benefit over multiple periods. While strategic decisions, such as those to issue stock-based compensation, acquire a company, or issue convertible senior notes, are made to further the company’s long-term strategic objectives and impact the company’s income statement under GAAP measures, these items affect multiple periods and management is not able to change or affect these items in any particular period. As such, supplementing GAAP disclosure with non-GAAP disclosure using the non-GAAP measures provides management with an additional view of operational performance by excluding expenses that are not directly related to performance in any particular period, and management uses both GAAP and non-GAAP measures when planning, monitoring, and evaluating the company’s performance.
In addition, the majority of the company’s industry peers report non-GAAP operating results that exclude certain non-cash or non-recurring items. Management believes that the provision of supplemental non-GAAP information will enable a more complete comparison of the company’s relative performance.
Specifically, management is excluding the following items from its non-GAAP EPS for Q4 and FY11, and its estimated non-GAAP estimates for Q1 and FY12:
| • | Stock-Based Expenses: The company’s compensation strategy is to use stock-based compensation to attract and retain key employees and executives. It is principally aimed at aligning their interests with those of our stockholders and at long-term employee retention, rather than to motivate or reward operational performance for any particular period. Thus, stock-based compensation expense varies for reasons that are generally unrelated to operational decisions and performance in any particular period. |
| • | Amortization of Purchased Intangibles: The company views amortization of acquisition-related intangible assets, such as the amortization of an acquired company’s research and development efforts, customer lists and customer relationships, as items arising from pre-acquisition activities. These are costs that are determined at the time of an acquisition. While it is continually viewed for impairment, amortization of the cost is a static expense, one that are not typically affected by operations during any particular period. |
| • | Amortization of Debt Discount: Under GAAP, certain convertible debt instruments that may be settled in cash (or other assets) on conversion are required to be separately accounted for as liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer’s non-convertible debt borrowing rate. Accordingly, for GAAP purposes we are required to recognize imputed interest expense on the company’s $575 million of convertible subordinated notes that were issued in a private placement in January 2010. The imputed interest rate is approximately 5.9%, while the coupon interest rate is 0.75%. The difference between the imputed interest expense and the coupon interest expense is excluded from management’s assessment of the company’s operating performance because management believes that this non-cash expense is not indicative of ongoing operating performance. Management believes that the exclusion of the non-cash interest expense provides investors an enhanced view of the company’s operational performance. |
| • | Income Tax Effects: The company’s estimated non-GAAP effective tax rate is lower than the estimated GAAP effective tax rate due to the exclusion of the expense items described above. |
###
“Safe harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements about expected GAAP revenue and GAAP and non-GAAP earnings per share for the first fiscal quarter of 2012 and the full fiscal year, the company’s expected tax rates, stock-based compensation expenses, amortization expenses, and shares outstanding. The achievement or success of the matters covered by such forward-looking statements involve risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the company’s 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 the company’s financial and operating results; rate of growth and anticipated revenue run rate; errors, interruptions or delays in the company’s service or the company’s Web hosting; breaches of the company’s security measures; the financial impact of any previous and future acquisitions; the nature of the company’s business model; the company’s ability to continue to release, and gain customer acceptance of, new and improved versions of the company’s service; successful customer deployment and utilization of the company’s existing and future services; changes in the company’s sales cycle; competition; various financial aspects of the company’s subscription model; unexpected increases in attrition or decreases in new business; the emerging markets in which we operate; unique aspects of entering or expanding in international markets, the company’s ability to hire, retain and motivate employees and manage the company’s growth; changes in the company’s customer base; technological developments; regulatory developments; litigation related to intellectual property and other matters, and any related claims, negotiations and settlements; unanticipated changes in the company’s effective tax rate; fluctuations in the number of shares we have outstanding and the price of such shares; foreign currency exchange rates; interest rates; the company’s plans to build our new global headquarters in San Francisco, California and the associated costs; and general developments in the economy, financial markets, and credit markets.
Further information on these and other factors that could affect the company’s 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 the company’s Form 10-K that will be filed for the fiscal year ended January 31, 2011. These documents are available on the SEC Filings section of the Investor Information section of the company’s website at 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) 2011 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 January 31, |
Fiscal Year Ended January 31, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Revenues: |
||||||||||||||||
| Subscription and support |
$ | 428,534 | $ | 327,394 | $ | 1,551,145 | $ | 1,209,472 | ||||||||
| Professional services and other |
28,333 | 26,655 | 105,994 | 96,111 | ||||||||||||
| Total revenues |
456,867 | 354,049 | 1,657,139 | 1,305,583 | ||||||||||||
| Cost of revenues (1): |
||||||||||||||||
| Subscription and support |
61,116 | 42,428 | 208,243 | 159,172 | ||||||||||||
| Professional services and other |
31,195 | 25,631 | 115,570 | 98,753 | ||||||||||||
| Total cost of revenues |
92,311 | 68,059 | 323,813 | 257,925 | ||||||||||||
| Gross profit |
364,556 | 285,990 | 1,333,326 | 1,047,658 | ||||||||||||
| Operating expenses (1): |
||||||||||||||||
| Research and development |
57,530 | 36,447 | 187,887 | 131,897 | ||||||||||||
| Marketing and sales |
233,217 | 168,552 | 792,029 | 605,199 | ||||||||||||
| General and administrative |
74,200 | 55,472 | 255,913 | 195,290 | ||||||||||||
| Total operating expenses |
364,947 | 260,471 | 1,235,829 | 932,386 | ||||||||||||
| Income (loss) from operations |
(391 | ) | 25,519 | 97,497 | 115,272 | |||||||||||
| Investment income |
9,426 | 10,628 | 37,735 | 30,408 | ||||||||||||
| Interest expense |
(3,290 | ) | (1,207 | ) | (24,909 | ) | (2,000 | ) | ||||||||
| Other expense |
(1,366 | ) | (262 | ) | (6,025 | ) | (1,299 | ) | ||||||||
| Income before provision for income taxes and noncontrolling interest |
4,379 | 34,678 | 104,298 | 142,381 | ||||||||||||
| Benefit (provision) for income taxes |
6,491 | (12,263 | ) | (34,601 | ) | (57,689 | ) | |||||||||
| Consolidated net income |
10,870 | 22,415 | 69,697 | 84,692 | ||||||||||||
| Less: Net income (loss) attributable to noncontrolling interest |
43 | (2,021 | ) | (5,223 | ) | (3,973 | ) | |||||||||
| Net income attributable to salesforce.com |
$ | 10,913 | $ | 20,394 | $ | 64,474 | $ | 80,719 | ||||||||
| Basic net income per share attributable to salesforce.com common shareholders |
$ | 0.08 | $ | 0.16 | $ | 0.50 | $ | 0.65 | ||||||||
| Diluted net income per share attributable to salesforce.com common shareholders |
$ | 0.08 | $ | 0.16 | $ | 0.47 | $ | 0.63 | ||||||||
| Shares used in computing basic net income per share |
132,344 | 126,235 | 130,222 | 124,462 | ||||||||||||
| Shares used in computing diluted net income per share |
140,199 | 130,687 | 136,598 | 128,114 | ||||||||||||
|
(1) Amounts include stock-based expenses, as follows: |
| |||||||||||||||
| Cost of revenues |
$ | 3,541 | $ | 3,248 | $ | 12,158 | $ | 12,570 | ||||||||
| Research and development |
6,778 | 4,388 | 18,897 | 13,129 | ||||||||||||
| Marketing and sales |
19,955 | 11,408 | 56,451 | 39,722 | ||||||||||||
| General and administrative |
11,440 | 6,901 | 32,923 | 23,471 | ||||||||||||
salesforce.com, inc.
Condensed Consolidated Statements of Operations
As a percentage of total revenues:
(Unaudited)
| Three Months
Ended January 31, |
Fiscal Year Ended January 31, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Revenues: |
||||||||||||||||
| Subscription and support |
94 | % | 92 | % | 94 | % | 93 | % | ||||||||
| Professional services and other |
6 | 8 | 6 | 7 | ||||||||||||
| Total revenues |
100 | 100 | 100 | 100 | ||||||||||||
| Cost of revenues: |
||||||||||||||||
| Subscription and support |
13 | 12 | 13 | 12 | ||||||||||||
| Professional services and other |
7 | 7 | 7 | 8 | ||||||||||||
| Total cost of revenues |
20 | 19 | 20 | 20 | ||||||||||||
| Gross profit |
80 | 81 | 80 | 80 | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Research and development |
13 | 10 | 11 | 10 | ||||||||||||
| Marketing and sales |
51 | 48 | 48 | 46 | ||||||||||||
| General and administrative |
16 | 16 | 15 | 15 | ||||||||||||
| Total operating expenses |
80 | 74 | 74 | 71 | ||||||||||||
| Income (loss) from operations |
0 | 7 | 6 | 9 | ||||||||||||
| Investment income |
2 | 3 | 2 | 2 | ||||||||||||
| Interest expense |
(1 | ) | 0 | (2 | ) | 0 | ||||||||||
| Other expense |
0 | 0 | 0 | 0 | ||||||||||||
| Income before provision for income taxes and noncontrolling interest |
1 | 10 | 6 | 11 | ||||||||||||
| Benefit (provision) for income taxes |
1 | (4 | ) | (2 | ) | (5 | ) | |||||||||
| Consolidated net income |
2 | 6 | 4 | 6 | ||||||||||||
| Less: Net income (loss) attributable to noncontrolling interest |
0 | 0 | 0 | 0 | ||||||||||||
| Net income attributable to salesforce.com |
2 | % | 6 | % | 4 | % | 6 | % | ||||||||
|
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 |
4 | 3 | 3 | 3 | ||||||||||||
| General and administrative |
3 | 2 | 2 | 2 | ||||||||||||
salesforce.com, inc.
Condensed Consolidated Balance Sheets
(in thousands)
| January 31, 2011 |
January 31, 2010 |
|||||||
| (unaudited) | ||||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 424,292 | $ | 1,011,306 | ||||
| Short-term marketable securities |
72,678 | 230,659 | ||||||
| Accounts receivable, net |
426,943 | 320,956 | ||||||
| Deferred commissions |
67,774 | 47,388 | ||||||
| Deferred income taxes |
27,516 | 40,116 | ||||||
| Prepaid expenses and other current assets |
55,721 | 55,734 | ||||||
| Total current assets |
1,074,924 | 1,706,159 | ||||||
| Marketable securities, noncurrent |
910,587 | 485,083 | ||||||
| Property and equipment, net (see additional metrics) |
387,174 | 89,711 | ||||||
| Deferred commissions, noncurrent |
48,842 | 28,140 | ||||||
| Deferred income taxes, noncurrent |
41,199 | 27,579 | ||||||
| Capitalized software, net (see additional metrics) |
127,987 | 34,809 | ||||||
| Goodwill |
396,081 | 48,955 | ||||||
| Other assets, net (see additional metrics) |
104,371 | 39,765 | ||||||
| Total assets |
$ | 3,091,165 | $ | 2,460,201 | ||||
| Liabilities and stockholders’ equity |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 18,106 | $ | 14,791 | ||||
| Accrued expenses and other liabilities (see additional metrics) |
345,121 | 203,162 | ||||||
| Deferred revenue |
913,239 | 690,177 | ||||||
| Total current liabilities |
1,276,466 | 908,130 | ||||||
| 0.75% Convertible senior notes due 2015, net |
472,538 | 450,198 | ||||||
| Income taxes payable, noncurrent |
18,481 | 17,551 | ||||||
| Long-term lease liabilities and other |
25,487 | 13,485 | ||||||
| Deferred revenue, noncurrent |
21,702 | 14,171 | ||||||
| Total liabilities |
1,814,674 | 1,403,535 | ||||||
| salesforce.com stockholders’ equity: |
||||||||
| Common stock |
133 | 127 | ||||||
| Additional paid-in capital |
1,098,604 | 938,544 | ||||||
| Accumulated other comprehensive gain (loss) |
6,719 | (1,430 | ) | |||||
| Retained earnings |
171,035 | 106,561 | ||||||
| Total stockholders’ equity controlling interest |
1,276,491 | 1,043,802 | ||||||
| Total stockholders’ equity noncontrolling interest |
0 | 12,864 | ||||||
| Total stockholders’ equity |
1,276,491 | 1,056,666 | ||||||
| Total liabilities and stockholders’ equity |
$ | 3,091,165 | $ | 2,460,201 | ||||
salesforce.com, inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
| Three Months
Ended January 31, |
Fiscal Year Ended January 31, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Operating activities: |
||||||||||||||||
| Consolidated net income |
$ | 10,870 | $ | 22,415 | $ | 69,697 | $ | 84,692 | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||||||
| Depreciation and amortization |
23,738 | 15,287 | 75,746 | 53,177 | ||||||||||||
| Amortization of debt discount and transaction costs |
1,982 | 728 | 19,621 | 728 | ||||||||||||
| Amortization of deferred commissions |
22,605 | 17,932 | 80,159 | 63,891 | ||||||||||||
| Expenses related to stock-based awards |
41,714 | 25,945 | 120,429 | 88,892 | ||||||||||||
| Excess tax benefits from employee stock plans |
10,777 | (19,003 | ) | (35,991 | ) | (51,539 | ) | |||||||||
| Changes in assets and liabilities: |
||||||||||||||||
| Accounts receivable, net |
(169,833 | ) | (129,877 | ) | (102,507 | ) | (54,522 | ) | ||||||||
| Deferred commissions |
(56,004 | ) | (39,318 | ) | (121,247 | ) | (82,336 | ) | ||||||||
| Prepaid expenses and other current assets |
8,464 | 10,812 | 2,001 | (3,899 | ) | |||||||||||
| Other assets |
(365 | ) | (781 | ) | (9,770 | ) | (1,405 | ) | ||||||||
| Accounts payable |
(5,254 | ) | (826 | ) | 1,246 | (1,588 | ) | |||||||||
| Accrued expenses and other current liabilities |
36,684 | 29,333 | 132,004 | 64,498 | ||||||||||||
| Deferred revenue |
240,384 | 158,913 | 227,693 | 110,322 | ||||||||||||
| Net cash provided by operating activities |
165,762 | 91,560 | 459,081 | 270,911 | ||||||||||||
| Investing activities: |
||||||||||||||||
| Business combinations, net of cash acquired |
(247,994 | ) | (7,499 | ) | (403,331 | ) | (11,999 | ) | ||||||||
| Land activity and building improvements |
(269,944 | ) | 0 | (277,944 | ) | 0 | ||||||||||
| Strategic investments |
(13,605 | ) | 0 | (20,105 | ) | (4,400 | ) | |||||||||
| Changes in marketable securities |
179,346 | 109,558 | (270,287 | ) | (312,716 | ) | ||||||||||
| Capital expenditures |
(30,576 | ) | (7,056 | ) | (90,887 | ) | (49,501 | ) | ||||||||
| Net cash provided by (used in) investing activities |
(382,773 | ) | 95,003 | (1,062,554 | ) | (378,616 | ) | |||||||||
| Financing activities: |
||||||||||||||||
| Proceeds from borrowings on convertible debt |
0 | 567,094 | 0 | 567,094 | ||||||||||||
| Proceeds from issuance of warrants |
0 | 59,283 | 0 | 59,283 | ||||||||||||
| Purchase of convertible note hedge |
0 | (126,500 | ) | 0 | (126,500 | ) | ||||||||||
| Purchase of subsidiary stock |
(19,721 | ) | 0 | (171,964 | ) | 0 | ||||||||||
| Proceeds from the exercise of stock options |
44,406 | 60,990 | 160,402 | 93,856 | ||||||||||||
| Excess tax benefits from employee stock plans |
(10,777 | ) | 19,003 | 35,991 | 51,539 | |||||||||||
| Principal payments on capital lease obligations |
(3,198 | ) | (2,215 | ) | (10,355 | ) | (8,119 | ) | ||||||||
| Net cash provided by financing activities |
10,710 | 577,655 | 14,074 | 637,153 | ||||||||||||
| Effect of exchange rate changes |
290 | 4,200 | 2,385 | (1,976 | ) | |||||||||||
| Net increase (decrease) in cash and cash equivalents |
(206,011 | ) | 768,418 | (587,014 | ) | 527,472 | ||||||||||
| Cash and cash equivalents, beginning of period |
630,303 | 242,888 | 1,011,306 | 483,834 | ||||||||||||
| Cash and cash equivalents, end of period |
$ | 424,292 | $ | 1,011,306 | $ | 424,292 | $ | 1,011,306 | ||||||||
salesforce.com, inc.
Additional Metrics
(Unaudited)
| Jan 31, 2011 |
Oct 31, 2010 |
Jul 31, 2010 |
Apr 30, 2010 |
Jan 31, 2010 |
Oct 31, 2009 |
|||||||||||||||||||
| Full Time Equivalent Headcount |
5,306 | 4,758 | 4,447 | 4,106 | 3,969 | 3,814 | ||||||||||||||||||
| Financial data (in thousands): |
||||||||||||||||||||||||
| Cash, cash equivalents and marketable securities |
$ | 1,407,557 | $ | 1,802,440 | $ | 1,858,928 | $ | 1,901,548 | $ | 1,727,048 | $ | 1,070,092 | ||||||||||||
| Deferred revenue, current and noncurrent |
$ | 934,941 | $ | 694,557 | $ | 683,019 | $ | 664,529 | $ | 704,348 | $ | 545,435 | ||||||||||||
Selected Balance Sheet Accounts (in thousands):
| Jan 31, 2011 |
Oct 31, 2010 |
Jan 31, 2010 |
||||||||||
| Capitalized Software, net |
||||||||||||
| Capitalized internal-use software development costs, net of accumulated amortization |
$ | 29,154 | $ | 27,931 | $ | 22,675 | ||||||
| Acquired developed technology, net of accumulated amortization |
98,833 | 51,568 | 12,134 | |||||||||
| $ | 127,987 | $ | 79,499 | $ | 34,809 | |||||||
| Other Assets, net |
||||||||||||
| Deferred professional services costs, noncurrent portion |
$ | 10,201 | $ | 10,347 | $ | 5,639 | ||||||
| Long-term deposits |
12,114 | 12,372 | 11,084 | |||||||||
| Deposit related to land purchase |
0 | 8,000 | 0 | |||||||||
| Purchased intangible assets, net accumulated amortization |
31,660 | 8,716 | 6,746 | |||||||||
| Acquired intellectual property, net of accumulated amortization |
5,874 | 4,153 | 0 | |||||||||
| Strategic investments |
27,065 | 10,678 | 6,288 | |||||||||
| Other |
17,457 | 14,928 | 10,008 | |||||||||
| $ | 104,371 | $ | 69,194 | $ | 39,765 | |||||||
| Property and Equipment, net |
||||||||||||
| Land |
$ | 248,263 | $ | 0 | $ | 0 | ||||||
| Building improvements |
10,115 | 0 | 0 | |||||||||
| Computers, equipment and software |
115,736 | 104,773 | 87,608 | |||||||||
| Furniture and fixtures |
20,462 | 18,535 | 17,325 | |||||||||
| Leasehold improvements |
100,380 | 88,054 | 71,882 | |||||||||
| 494,956 | 211,362 | 176,815 | ||||||||||
| Less accumulated depreciation and amortization |
(107,782 | ) | (95,284 | ) | (87,104 | ) | ||||||
| $ | 387,174 | $ | 116,078 | $ | 89,711 | |||||||
| Accrued Expenses and Other Current Liabilities |
||||||||||||
| Accrued compensation |
$ | 148,275 | $ | 104,919 | $ | 90,223 | ||||||
| Accrued other liabilities |
112,840 | 114,134 | 46,188 | |||||||||
| Accrued other taxes payable |
41,355 | 30,885 | 27,757 | |||||||||
| Accrued professional costs |
12,548 | 15,837 | 10,740 | |||||||||
| Accrued rent |
22,323 | 21,852 | 19,830 | |||||||||
| Income taxes payable |
7,780 | 9,644 | 8,424 | |||||||||
| $ | 345,121 | $ | 297,271 | $ | 203,162 | |||||||
| Three Months
Ended January 31, |
Fiscal Year Ended January 31, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Revenues by geography (in thousands): |
||||||||||||||||
| Americas |
$ | 308,526 | $ | 244,362 | $ | 1,135,019 | $ | 923,823 | ||||||||
| Europe |
82,933 | 64,012 | 291,784 | 232,367 | ||||||||||||
| Asia Pacific |
65,408 | 45,675 | 230,336 | 149,393 | ||||||||||||
| $ | 456,867 | $ | 354,049 | $ | 1,657,139 | $ | 1,305,583 | |||||||||
| As a percentage of total revenues: |
||||||||||||||||
| Revenues by geography: |
||||||||||||||||
| Americas |
68 | % | 69 | % | 68 | % | 71 | % | ||||||||
| Europe |
18 | 18 | 18 | 18 | ||||||||||||
| Asia Pacific |
14 | 13 | 14 | 11 | ||||||||||||
| 100 | % | 100 | % | 100 | % | 100 | % | |||||||||
Supplemental Revenue Analysis (1)
| Three Months
Ended January 31, 2011 |
Three Months
Ended October 31, 2010 |
Three Months Ended July 31, 2010 |
||||||||||
| Revenue constant currency growth rates (as compared to the comparable quarter a year ago) |
||||||||||||
| Americas |
26 | % | 26 | % | 22 | % | ||||||
| Europe |
41 | % | 38 | % | 30 | % | ||||||
| Asia Pacific |
35 | % | 53 | % | 53 | % | ||||||
| Total growth |
30 | % | 31 | % | 26 | % | ||||||
| (1) | We present constant currency information to provide a framework for assessing how our underlying business performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the exchange rates in effect at the end of each quarter for growth rate calculations presented, rather than the actual exchange rates in effect during that period. |
Supplemental Cash Flow Information
Free cash flow analysis, a non-GAAP measure
(amounts in thousands)
| Three Months
Ended January 31, |
Fiscal Year Ended January 31, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Operating cash flow |
$ | 165,762 | $ | 91,560 | $ | 459,081 | $ | 270,911 | ||||||||
| GAAP net cash provided by operating activities |
||||||||||||||||
| Less: |
||||||||||||||||
| Capital expenditures |
(30,576 | ) | (7,056 | ) | (90,887 | ) | (53,901 | ) | ||||||||
| Free cash flow |
$ | 135,186 | $ | 84,504 | $ | 368,194 | $ | 217,010 | ||||||||
salesforce.com, inc.
GAAP RESULTS RECONCILED TO NON-GAAP RESULTS
The following table reflects selected salesforce.com GAAP results reconciled to non-GAAP results
(amounts in thousands, except per share data)
(unaudited)
| Three Months Ended January 31, |
Fiscal Year Ended January 31, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Gross profit |
||||||||||||||||
| GAAP gross profit |
$ | 364,556 | $ | 285,990 | $ | 1,333,326 | $ | 1,047,658 | ||||||||
| Plus: |
||||||||||||||||
| Amortization of purchased intangibles (b) |
5,721 | 2,328 | 15,459 | 8,010 | ||||||||||||
| Stock-based expenses (c) |
3,541 | 3,248 | 12,158 | 12,570 | ||||||||||||
| Non-GAAP gross profit |
$ | 373,818 | $ | 291,566 | $ | 1,360,943 | $ | 1,068,238 | ||||||||
| Operating expenses |
||||||||||||||||
| GAAP operating expenses |
$ | 364,947 | $ | 260,471 | $ | 1,235,829 | $ | 932,386 | ||||||||
| Less: |
||||||||||||||||
| Amortization of purchased intangibles (b) |
(1,146 | ) | (796 | ) | (4,209 | ) | (3,241 | ) | ||||||||
| Stock-based expenses (c) |
(38,173 | ) | (22,697 | ) | (108,271 | ) | (76,322 | ) | ||||||||
| Non-GAAP operating expenses |
$ | 325,628 | $ | 236,978 | $ | 1,123,349 | $ | 852,823 | ||||||||
| Income from operations |
||||||||||||||||
| GAAP income (loss) from operations |
$ | (391 | ) | $ | 25,519 | $ | 97,497 | $ | 115,272 | |||||||
| Plus: |
||||||||||||||||
| Amortization of purchased intangibles (b) |
6,867 | 3,124 | 19,668 | 11,251 | ||||||||||||
| Stock-based expenses (c) |
41,714 | 25,945 | 120,429 | 88,892 | ||||||||||||
| Non-GAAP income from operations |
$ | 48,190 | $ | 54,588 | $ | 237,594 | $ | 215,415 | ||||||||
| Non-operating income (a) |
||||||||||||||||
| GAAP non-operating income |
$ | 4,770 | $ | 9,159 | $ | 6,801 | $ | 27,109 | ||||||||
| Plus: Amortization of debt discount |
2,430 | 728 | 19,079 | 728 | ||||||||||||
| Non-GAAP non-operating income |
$ | 7,200 | $ | 9,887 | $ | 25,880 | $ | 27,837 | ||||||||
| Net income attributable to salesforce.com |
||||||||||||||||
| GAAP net income attributable to salesforce.com |
$ | 10,913 | $ | 20,394 | $ | 64,474 | $ | 80,719 | ||||||||
| Plus: |
||||||||||||||||
| Amortization of purchased intangibles |
6,867 | 3,124 | 19,668 | 11,251 | ||||||||||||
| Stock-based expenses |
41,714 | 25,945 | 120,429 | 88,892 | ||||||||||||
| Amortization of debt discount |
2,430 | 728 | 19,079 | 728 | ||||||||||||
| Less: |
||||||||||||||||
| Income tax effect of Non-GAAP items |
(18,854 | ) | (10,714 | ) | (57,544 | ) | (34,582 | ) | ||||||||
| Non-GAAP net income attributable to salesforce.com |
$ | 43,070 | $ | 39,477 | $ | 166,106 | $ | 147,008 | ||||||||
| Diluted earnings per share |
||||||||||||||||
| GAAP diluted earnings per share |
$ | 0.08 | $ | 0.16 | $ | 0.47 | $ | 0.63 | ||||||||
| Plus: |
||||||||||||||||
| Amortization of purchased intangibles |
0.05 | 0.02 | 0.14 | 0.09 | ||||||||||||
| Stock-based expenses |
0.30 | 0.20 | 0.88 | 0.69 | ||||||||||||
| Amortization of debt discount |
0.01 | 0.00 | 0.14 | 0.00 | ||||||||||||
| Less: |
||||||||||||||||
| Income tax effect of Non-GAAP items |
(0.13 | ) | (0.08 | ) | (0.41 | ) | (0.26 | ) | ||||||||
| Non-GAAP diluted earnings per share attributable to salesforce.com |
$ | 0.31 | $ | 0.30 | $ | 1.22 | $ | 1.15 | ||||||||
| Shares used in computing diluted net income per share |
140,199 | 130,687 | 136,598 | 128,114 | ||||||||||||
| a) | Non-operating income consists of investment income, interest expense and other expense |
| b) | Amortization of purchased intangibles were as follows: |
| Three Months
Ended January 31, |
Fiscal Year Ended January 31, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Cost of revenues |
$ | 5,721 | $ | 2,328 | $ | 15,459 | $ | 8,010 | ||||||||
| Marketing and sales |
1,146 | 796 | 4,209 | 3,241 | ||||||||||||
| $ | 6,867 | $ | 3,124 | $ | 19,668 | $ | 11,251 | |||||||||
| c) | Stock-based expenses were as follows: |
| Three Months
Ended January 31, |
Fiscal Year Ended January 31, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Cost of revenues |
$ | 3,541 | $ | 3,248 | $ | 12,158 | $ | 12,570 | ||||||||
| Research and development |
6,778 | 4,388 | 18,897 | 13,129 | ||||||||||||
| Marketing and sales |
19,955 | 11,408 | 56,451 | 39,722 | ||||||||||||
| General and administrative |
11,440 | 6,901 | 32,923 | 23,471 | ||||||||||||
| $ | 41,714 | $ | 25,945 | $ | 120,429 | $ | 88,892 | |||||||||
salesforce.com, inc.
COMPUTATION OF BASIC AND DILUTED GAAP AND NON-GAAP NET INCOME PER SHARE
The following reflects the calculation of Basic and Diluted Net Income Per Share
(amounts in thousands, except per share data)
| Three Months Ended January 31, |
Year
Ended January 31, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| GAAP Basic Net Income Per Share |
||||||||||||||||
| Net income attributable to salesforce.com |
$ | 10,913 | $ | 20,394 | $ | 64,474 | $ | 80,719 | ||||||||
| Basic net income per share attributable to salesforce.com common stockholders |
0.08 | 0.16 | 0.50 | 0.65 | ||||||||||||
| Shares used in computing basic net income per share attributable to salesforce.com common stockholders |
132,344 | 126,235 | 130,222 | 124,462 | ||||||||||||
| Three Months Ended January 31, |
Year
Ended January 31, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Non-GAAP Basic Net Income Per Share |
||||||||||||||||
| Non-GAAP net income attributable to salesforce.com |
$ | 43,070 | $ | 39,477 | $ | 166,106 | $ | 147,008 | ||||||||
| Basic Non-GAAP net income per share attributable to salesforce.com common stockholders |
0.33 | 0.31 | 1.28 | 1.18 | ||||||||||||
| Shares used in computing basic net income per share attributable to salesforce.com common stockholders |
132,344 | 126,235 | 130,222 | 124,462 | ||||||||||||
| Three Months Ended January 31, |
Year Ended January 31, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| GAAP Diluted Net Income Per Share |
||||||||||||||||
| Net income attributable to salesforce.com |
$ | 10,913 | $ | 20,394 | $ | 64,474 | $ | 80,719 | ||||||||
| Diluted net income per share attributable to salesforce.com common stockholders |
0.08 | 0.16 | 0.47 | 0.63 | ||||||||||||
| Shares used in computing diluted net income per share attributable to salesforce.com common stockholders |
140,199 | 130,687 | 136,598 | 128,114 | ||||||||||||
| Three Months Ended January 31, |
Year Ended January 31, |
|||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Non-GAAP Diluted Net Income Per Share |
||||||||||||||||
| Non-GAAP net income attributable to salesforce.com |
$ | 43,070 | $ | 39,477 | $ | 166,106 | $ | 147,008 | ||||||||
| Diluted Non-GAAP net income per share attributable to salesforce.com common stockholders |
0.31 | 0.30 | 1.22 | 1.15 | ||||||||||||
| Shares used in computing diluted net income per share attributable to salesforce.com common stockholders |
140,199 | 130,687 | 136,598 | 128,114 | ||||||||||||