Salesforce.com Announces Record Fiscal Second Quarter Results
SAN FRANCISCO, Calif. – August 20, 2008
First Ever Software as a Service Company to Exceed $1 Billion Annual Revenue Run Rate
- Record Revenue of $263 Million, up 49% Year-Over-Year
- Operating Cash Flow of $53 Million, up 53% Year-Over-Year
- GAAP EPS of $0.08, up 167% Year-Over-Year
- Record 4,100 New Customer Additions; Total Customers Now 47,700
- Total Cash and Marketable Securities Increases $326 Million Year-Over-Year to
- Company Announces Strategic Acquisition of InStranet, Inc. to Accelerate Growth
in Salesforce CRM Customer Service and Support
- Company Raises FY09 Revenue Guidance to $1.070 - $1.075 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 second quarter ended July 31, 2008.
"By becoming the first ever Software as a Service company to achieve an annualized revenue
run rate of one billion dollars, our second quarter performance is a milestone for salesforce.com,
and for the cloud computing industry, " said Marc Benioff, Chairman and CEO. "Our largest customers
are increasingly becoming the best examples of what is possible using the power of our growing
portfolio of Software as a Service applications and our emerging Platform as a Service."
Salesforce.com delivered the following results for its second quarter fiscal year 2009:
Revenue: Total Q2 revenue was $263.1 million, an increase
of 49% on a year-over-year basis and an increase of 6% on a quarter-over-quarter basis.
Subscription and support revenues were $239.7 million, an increase of 50% on a year-over-year basis
and an increase of 6% on a quarterover-quarter basis. Professional services and other revenues were
$23.4 million, an increase of 41% on a year-over-year basis and an increase of 5% on a
Earnings per Share: Q2 GAAP diluted earnings per share were
approximately $0.08, including approximately $19 million in stock based compensation and
approximately $1.3 million in amortization of purchased intangibles related to previously announced
acquisitions. For the basis of Q2 GAAP EPS calculations, there was an average of approximately 126
million diluted shares outstanding during the quarter.
Cash: Cash from operations for the fiscal second quarter
was approximately $53 million, up 53% year-over-year, and seasonally down 37% from Q1. Total cash,
cash equivalents and marketable securities finished the quarter at approximately $823 million, an
increase of approximately $73 million from Q1 and up approximately $326 million from July 31, 2007.
Deferred Revenue: Deferred revenue was approximately $480
million as of July 31, 2008, an increase of 49% on a year-over-year basis and up 2% on a
Customers Additions: During the quarter net paying
customers rose approximately 4,100, a company record, to approximately 47,700. Compared with the
year ago quarter, net paying customers have grown by approximately 12,400.
Earlier today, salesforce.com
announced the acquisition of InStranet, the leading provider of knowledge management technology for
business to consumer call centers. The addition of this innovative technology will increase the
momentum of Salesforce CRM Customer Service and Support in a growing market, which is currently
estimated at $3.4 billion by Gartner (Gartner, Market Trends: CRM Software, Worldwide, 2007-2012,
March 31, 2008). Salesforce.com’s acquisition of InStranet closed on August 4, 2008, for
approximately $31.5 million, which includes the assumption of $4.2 million in cash on InStranet’s
As of August 20, 2008, salesforce.com is
initiating guidance for its third quarter, fiscal year 2009. In addition, the company is updating
its revenue and earnings per share guidance for its full fiscal year 2009.
Q3 FY09: Revenue for the company’s third fiscal quarter is
projected to be in the range of approximately $273 million to approximately $274 million. Excluding
the effect of the InStranet acquisition, the company’s EPS outlook is $0.08 to $0.09. Including the
effect of the InStranet acquisition, estimated at $0.02 for the third quarter, the company is
issuing guidance that its GAAP fully diluted EPS will be in the range of $0.06 to $0.07. The GAAP
EPS estimate also includes the effects of stock based compensation and the amortization of
purchased intangibles. For the third fiscal quarter, stock based compensation expense is expected
to be approximately $20 million, and the expense associated with amortization of purchased
intangibles, including that associated with the acquisition of InStranet, is expected to be
approximately $2.0 million. For purposes of the Q3 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 FY09: The company is raising its full year revenue
guidance it provided on May 21, 2008, with revenue now expected to be in the range of approximately
$1.070 billion to approximately $1.075 billion. Excluding the effect of the InStranet acquisition
the company’s EPS outlook has improved to $0.34 to $0.35, from its prior guidance of $0.33 to
$0.34. Including the effect of the InStranet acquisition, estimated at $0.05 for the full year, the
company is updating its fiscal FY09 GAAP fully diluted EPS guidance to be in the range of $0.29 to
$0.30. The GAAP EPS estimate includes the effects of stock based compensation and the amortization
of purchased intangibles. For the full fiscal year 2009, stock based compensation expense is
expected to be approximately $83 million, and the expense associated with the amortization of
purchased intangibles, including that associated with InStranet, is currently expected to be
approximately $6.6 million. For purposes of the fiscal year 2009 GAAP fully diluted EPS
calculation, the company is expecting an average diluted share count of approximately 126 million
shares, and a GAAP tax rate of 48%.
Salesforce.com will host a conference call to discuss its second quarter fiscal 2009 results
today 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. A replay will
be available at (800) 642-1687 or (706) 645-9291, passcode 59172236, until midnight Eastern Time
September 5, 2008.
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/au/.
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/au/, or call 1800 667 638 (Australia) or 0800 450 064 (New Zealand).