Salesforce.com Announces Record Fiscal Fourth Quarter Results
SAN FRANCISCO, Calif. - February 27, 2008
First Ever On-Demand Software Company to Exceed $850 Million Annual Revenue Run Rate
- Record Revenue of $217 Million, up 50% Year-Over-Year
- Record Operating Cash Flow of $81 Million, up 112% Year-Over-Year
- GAAP EPS of 6 cents, up from Breakeven Year-Over-Year
- Net Customers Increase 11,200 Year-Over-Year to 41,000
- Net Paying Subscribers Increase to Nearly 1.1 Million
- Total Cash and Marketable Securities Increase to $670 Million, up $257 Million
- Company Raises FY09 Revenue Guidance to $1.030 - $1.035 Billion
(NYSE: CRM), the market and technology leader in Software-as-a-Service (SaaS) and
Platform-as-a-Service (PaaS), today announced results for its fiscal fourth quarter and full fiscal
year ended January 31, 2008.
"Our fourth quarter and full-year results show that businesses are selecting the Force.com
Platform-as-a-Service and cloud computing over failed client-server alternatives," said Marc
Benioff, chairman and CEO, salesforce.com. "There's only one way to describe both the consolidation
of the industry and the growing number of companies choosing innovation, not infrastructure: The
End of Software."
Salesforce.com delivered the following results for the fourth quarter and full fiscal year
Revenue: Total Q4 revenue was $216.9 million, an increase
of 50% on a year-over-year basis and an increase of 13% on a quarter-over-quarter basis.
Subscription and support revenues were $196.5 million, an increase of 49% on a year-over-year basis
and an increase of 11% on a quarter-over-quarter basis. Professional services and other
revenues were $20.4 million, an increase of 68% on a year-over-year basis and an increase of 24% on
a quarter-over-quarter basis.
For the full fiscal year 2008, the company reported revenue of approximately $748.7 million,
an increase of 51% from the prior year. Subscription and support revenues were $680.6 million
for the year, an increase of 51%, while professional services revenue rose 50% to finish at $68.1
Earnings per Share: Q4 GAAP diluted earnings per
share were approximately $0.06, including approximately $16 million in stock based compensation and
approximately $1.3 million in amortization of purchased intangibles related to previously announced
acquisitions. For the basis of Q4 GAAP EPS calculations, there was an average of
approximately124 million diluted shares outstanding during the quarter.
For the full year, GAAP diluted earnings per share were approximately $0.15, including
approximately $55 million in stock based compensation and approximately $5.0 million in
amortization of purchased intangibles related to previously announced acquisitions. For the
basis of full year GAAP EPS calculations, there was an average of approximately122 million diluted
shares outstanding during the year.
Customers and Paying Subscribers: Net paying customers rose
approximately 2,900 during the quarter and approximately 11,200 during the year to finish at
approximately 41,000. Net paying subscribers rose to nearly 1.1 million, an increase of more
than 450,000 year over year.
Cash: Cash from operations for the fiscal fourth quarter
was a record at approximately $81 million, up 55% sequentially, and up 112% year-over-year.
For the full year, operating cash flow totaled more than $204 million, an increase of 84% from the
prior year. Total cash, cash equivalents and marketable securities finished the year at
approximately $670 million, an increase of approximately $99 million from Q3 and up approximately
$257 million from the year prior.
Deferred Revenue: Deferred revenue on the balance sheet as
of January 31, 2008 was $481 million at year end, an increase of 69% on a year-over-year basis and
41% on a quarter-over-quarter basis.
As of February 27, 2008, salesforce.com is initiating guidance for its first quarter, fiscal
year 2009. For its full fiscal year 2009, the company is raising its prior revenue guidance
and initiating EPS guidance.
Q1 FY09: Revenue for the company's first fiscal
quarter is projected to be in the range of approximately $233 million to approximately $235
million. GAAP diluted EPS is expected to be in the range of approximately $0.06 to $0.07.
This estimate includes the effects of stock based compensation and the amortization of purchased
intangibles. For the first fiscal quarter FY09, stock based compensation expense is expected
to be approximately $17 million, and the expense associated with the amortization of purchased
intangibles is now expected to be approximately $1.3 million. For purposes of the Q1 GAAP EPS
calculation, the company is expecting an average diluted shares count of 124 million shares, and a
GAAP tax rate of 48%.
Quarterly Conference Call
Full Year FY09: The company today is raising the full year
revenue guidance it provided on November 15, 2007, with revenue now expected to be approximately
$1.030 billion to approximately $1.035 billion. The company is also initiating its earnings
outlook for the full year, expecting GAAP diluted EPS to be in the range of approximately $0.32 to
$0.33. GAAP EPS estimates include the effects of stock based compensation and the
amortization of purchased intangibles. For the full fiscal year '09, stock based compensation
expense is expected to be approximately $82 million, and the expense associated with the
amortization of purchased intangibles is currently expected to be approximately $5.3 million.
For purposes of the full fiscal year 2009 GAAP EPS calculation, the company is expecting an average
diluted shares count of 125 million shares, and a GAAP tax rate of 48%.
Salesforce.com will host a conference call to discuss its fourth quarter fiscal 2008 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 706-902-1764. A replay
will be available at (800) 642-1687 or (706) 645-9291, passcode 34062469, until midnight (EST)
March 7, 2008.
"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 first fiscal quarter of 2009 and the full fiscal year 2009, and our expected tax
rate, stock based compensation expense, amortization rate, 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 proves 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 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; competition; various
financial aspects of our subscription model; 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; 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
and interest rates.
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 Form 10-Q for the quarter ended
October 31, 2007 and our Form 10-K for the fiscal year ended January 31, 2007. These
documents are available on the SEC Filings section of the Investor Information section of our
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.
Salesforce.com is the world’s largest provider of customer relationship management (CRM) software. For more information about salesforce.com (NYSE: CRM), visit: www.salesforce.com/ap/.
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://salesforce.com/ap/, or call 800 1301 448 (Singapore) or 800 967 655 (Hong Kong) or +65 6302 5700.