Salesforce.com Announces Record Fiscal Third Quarter Results
SAN FRANCISCO, Calif. – November 20, 2008
First Enterprise Cloud Computing Company to Exceed $1.1 Billion Annual Revenue Run Rate
- Record Revenue of $276 Million, up 43% Year-Over-Year
- GAAP EPS of $0.08, up 60% Year-Over-Year
- 4,100 New Customer Additions
- Total Customers at 51,800, up 36% Year-Over-Year
- GAAP Operating Margin Nearly Doubles Year-over-Year to 6%
- Company Issues FY10 Revenue Guidance of $1.350 - $1.360 Billion
(NYSE: CRM), the enterprise cloud computing company, today announced results for its fiscal third
quarter ended October 31, 2008.
“In times like these, our value proposition of low start up cost, low risk, and fast results
is resonating like never before,” said Marc Benioff, Chairman and CEO, salesforce.com. “In the
third quarter, we continued to add customers at the same record level we did last quarter, at a
time when the traditional enterprise software world was retrenching.”
Salesforce.com delivered the following results for its third quarter fiscal year 2009:
Revenue: Total Q3 revenue was $276.5 million, an increase
of 43% on a year-over-year basis and an increase of 5% on a quarter-over-quarter basis.
Subscription and support revenues were $253.4 million, an increase of 44% on a year-over-year basis
and an increase of 6% on a quarterover-quarter basis. Professional services and other revenues
were $23.1 million, an increase of 41% on a year-over-year basis and a decrease of 1% on a
Earnings per Share: Q3 GAAP diluted earnings per share were
approximately $0.08, including approximately $19 million in stock based compensation and
approximately $2.5 million in amortization of purchased intangibles related to previously announced
acquisitions. For the purpose of this Q3 GAAP EPS calculation, there was an average of
approximately 125 million diluted shares outstanding during the quarter.
Deferred Revenue: Deferred revenue was approximately $470
million as of October 31, 2008, an increase of 38% on a year-over-year basis and down approximately
2% on a quarter-over-quarter basis. Excluding a negative foreign currency impact of approximately
$14M during the quarter, deferred revenue grew by approximately $4 million in constant currency
terms from Q2.
Cash: Cash from operations for the fiscal third quarter was
approximately $17 million, compared to $52 million in the year-ago period and $53 million in Q2.
Total cash, cash equivalents and marketable securities finished the quarter at approximately $805
million, a decrease of approximately $19 million from Q2 and up approximately $234 million from
October 31, 2007
. The sequential decrease in cash and marketable securities was primarily due to
the company’s previously announced acquisition of InStranet and to the purchase of shares in
salesforce.com’s Japanese majority-owned joint venture. Together these items reduced cash by
approximately $44 million during the quarter.
Customer Additions: During the quarter net paying customers
rose approximately 4,100, and total customer count stands at approximately 51,800. Compared with
the year ago quarter, net paying customers have grown by approximately 13,700.
As of November 20, 2008, salesforce.com is
initiating guidance for its fourth quarter, fiscal year 2009. In addition, the company is
initiating revenue guidance for its full fiscal year 2010.
Q4 FY09: Revenue for the company’s fourth fiscal quarter is
projected to be in the range of approximately $284 million to approximately $285 million. The
company expects fully diluted GAAP EPS to be in the range of $0.06 to $0.07. The GAAP EPS estimate
includes the effects of stock based compensation and the amortization of purchased intangibles. For
the fourth fiscal quarter, stock based compensation expense is expected to be approximately $22
million, and the expense associated with amortization of purchased intangibles, including that
associated with the acquisition of InStranet, is expected to be approximately $4.2 million. For
purposes of the Q4 GAAP fully diluted EPS calculation, the company is expecting an average diluted
shares count of approximately 127 million shares, and a GAAP tax rate of 48%.
Quarterly Conference Call
Fiscal FY10: The company is initiating revenue guidance for
its full fiscal year 2010 with projected revenue in the range of $1.350 billion to $1.360 billion.
The company expects to update this guidance, as well as provide its expectations for FY10 GAAP EPS
when it announces its fourth quarter, fiscal year 2009 results planned for February, 2009.
Salesforce.com will host a conference call to discuss its third quarter fiscal 2009 results
on November 20, 2008 at 2:00 p.m. Pacific Time. 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, passcode salesforce.com or 72989815. A replay will be available at (800) 642-1687
or (706) 645-9291, passcode 72989815, until midnight Eastern Time December 5, 2008.
Salesforce.com is the enterprise cloud computing company. The company's portfolio of SaaS
applications, including its award-winning CRM, available at http://www.salesforce.com/products/,
has revolutionized the ways that customers manage and share business information over the Internet.
The company’s Force.com PaaS enables customers, developers and partners to build powerful on-demand
applications that deliver the benefits of multi-tenancy across the enterprise. Applications built
on the Force.com platform, available at http://www.force.com/, can be easily shared, exchanged and
installed with a few simple clicks via salesforce.com's Force.com AppExchange marketplace available
As of October 31, 2008, salesforce.com manages customer information for approximately 51,800
customers including ABN AMRO, Dow Jones Newswires, Japan Post, Kaiser Permanente, KONE, Sprint
Nextel, 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 2009 and revenue for the full fiscal year 2010, 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 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 the acquisition of InStranet and 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; 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; regulatory 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, 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, 2008 and our Form 10-K for the fiscal year ended January 31,
2008. These documents are or will be 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.
Copyright (c) 2008 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
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.