Salesforce.com Announces Fiscal Fourth Quarter and Full Year Results

First Enterprise Cloud Computing Company to Exceed $1.4 Billion Annual Revenue Run Rate

  • Record Quarterly Revenue of $354 Million, up 22% Year-Over-Year
  • Record Full Year Revenue of $1,306 Million, up 21% Year-Over-Year
  • Q4 GAAP EPS of $0.16, up 41% Year-Over-Year
  • Full Fiscal Year GAAP EPS of $0.63, up 82% Year-Over-Year
  • Q4 Operating Cash Flow of $92 Million, up 21% Year-Over-Year
  • Full Year Operating Cash Flow of $271 Million, up 18% Year Over Year
  • Deferred Revenue of $704 Million, up 19% Year-Over-Year
  • Total Customers Grow 4,600 in quarter to 72,500, up 31% Year-Over-Year
  • Company Raises FY11 Revenue Growth Guidance to 16-17%

SAN FRANCISCO, Calif. – February 24, 2010 – Salesforce.com (NYSE: CRM), the enterprise cloud computing company, today announced results for its fiscal fourth quarter and full fiscal year ended January 31, 2010.

“As our full year results demonstrate, the movement to Cloud Computing is driving exceptional growth for salesforce.com,” said Marc Benioff, chairman and CEO, salesforce.com.  “Our Sales Cloud, Service Cloud, and Custom Cloud businesses all delivered outstanding results.  And the story is getting better: last week we launched a private beta program for Salesforce Chatter, allowing customers to experience first hand the next generation business collaboration model -- a powerful alternative to legacy products such as Lotus Notes and Microsoft SharePoint -- by delivering on the social models made popular by Facebook and Twitter.”

Salesforce.com delivered the following results for its fourth quarter and full fiscal year 2010:

Revenue: Total Q4 revenue was $354.0 million, an increase of 22% on a year-over-year basis.  Subscription and support revenues were $327.4 million, an increase of 23% on a year-over-year basis.  Professional services and other revenues were $26.7 million, an increase of 14% on a year-over-year basis. 

For the full fiscal year 2010, the company reported revenue of $1.306 billion, an increase of 21% from the prior year. Subscription and support revenues were $1.209 billion, an increase of 23% on a year-over-year basis.  Professional services and other revenues were $96.1 million, an increase of 4% on a year-over-year basis.

Earnings per Share:  Q4 GAAP diluted earnings per share rose 41% year-over-year to $0.16, including $25.9 million in stock-based compensation expense and approximately $2.9 million in amortization of purchased intangibles related to previously announced acquisitions.  For purposes of the Q4 GAAP EPS calculation, there was an average of 131 million diluted shares outstanding during the quarter.

For the full fiscal year 2010, GAAP diluted earnings per share rose 82% year-over-year to $0.63, including $88.9 million in stock-based compensation and approximately $10.2 million in amortization of purchased intangibles related to previously announced acquisitions.  For purposes of the GAAP EPS calculation, there was an average of approximately 128 million diluted shares outstanding during the year.

Customers: Net paying customers rose approximately 4,600 during the quarter to finish at approximately 72,500, an increase of 31% for the full year.  During FY2010, the company added approximately 17,100 net new customers. 

Cash: Cash generated from operations for the fiscal fourth quarter was $92 million, up 21% year-over-year.  For the full year, operating cash flow totaled $271 million, up 18% year-over-year.  Total cash, cash equivalents and marketable securities finished the year at $1.7 billion, an increase of approximately $844 million from the year prior and includes approximately $500 million in net proceeds from the company’s convertible senior note financing in January 2010.

Deferred Revenue: Deferred revenue on the balance sheet as of January 31, 2010 was $704 million, an increase of 19% on a year-over-year basis.

As of February 24, 2010, salesforce.com is initiating guidance for its first quarter, fiscal year 2011.  For fiscal year 2011, the company is raising its prior revenue guidance and initiating EPS guidance.   Furthermore, beginning with the announcement of its first quarter, fiscal year 2011 results, the company will be reporting selected non-GAAP financial results along with its GAAP results. 

Q1 FY11:  Revenue for the company’s first fiscal quarter is projected to be in the range of approximately $365 million to approximately $367 million. GAAP diluted EPS is expected to be in the range of approximately $0.12 to approximately $0.13.  Non-GAAP diluted EPS is expected to be in the range of approximately $0.29 to approximately $0.30. Excluded from non-GAAP EPS guidance are stock-based compensation expense, expected to be approximately $26.4 million, amortization of purchased intangibles related to acquisitions, expected to be approximately $2.5 million, and non-cash interest expense related to the convertible senior notes, expected to be approximately $5.5 million.  For purposes of the Q1 GAAP and non-GAAP EPS calculation, the company is expecting an average diluted share count of approximately 133 million shares, a GAAP tax rate of approximately 40%, a non-GAAP tax rate of approximately 38%, and a non-controlling interest charge of approximately $2.0 million.

Full Year FY11:  The company is raising the full year revenue guidance it provided on November 17, 2009, with revenue growth now expected to be approximately 16% to 17%.  GAAP diluted EPS is expected to be in the range of approximately $0.58 to approximately $0.60.  Non-GAAP diluted EPS is expected to be in the range of approximately $1.25 to approximately $1.27.  Excluded from non-GAAP EPS guidance are stock-based compensation expense, expected to be approximately $109.5 million, amortization of purchased intangibles related to acquisitions, expected to be approximately $9.4 million, and non-cash interest expense related to the convertible senior notes, expected to be approximately $22.4 million.  For purposes of the full fiscal year 2011 GAAP and non-GAAP EPS calculation, the company is expecting an average diluted share count of approximately 136 million shares, a GAAP tax rate of approximately 40%, a non-GAAP tax rate of approximately 38%, and a non-controlling interest charge of approximately $9.0 million. 

The following is a per share reconciliation of GAAP diluted EPS to non-GAAP diluted EPS Guidance:

  Q1 FY2011
GAAP diluted EPS Range $0.12-$0.13 $0.58-$0.60
Plus    
Amortization of purchased intangibles $0.02 $0.07
Stock-based expense $0.20 $0.81
Amortization of debt discount $0.04 $0.17
Less    
Income tax effect of certain Non-GAAP items ($0.09) ($0.38)
Non-GAAP diluted EPS Range $0.29-$0.30 $1.25-$1.27
     
Shares used in computing diluted net income per share (millions) 133 136

Quarterly Conference Call

Salesforce.com will host a conference call to discuss its fourth quarter and full fiscal year 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 54774224, until midnight (ET) March 19, 2010.

About Salesforce

Salesforce, the Customer Success Platform and world's #1 CRM, empowers companies to connect with their customers in a whole new way. For more information about Salesforce (NYSE: CRM), visit: www.salesforce.com.

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 applications should make their purchase decisions based upon features that are currently available. Salesforce 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.