Salesforce.com Announces Record Fiscal First Quarter Results

First on-demand business service provider to exceed $100-million in revenue in a single quarter

  • Record Revenue of $104.7M, up 63% year-over-year
  • Company Raises Full Year Fiscal 2007 Guidance
  • Paying Subscribers rise 45,000 to 444,000, up 66% year-over-year
  • Customers rise 2,200 to 22,700, up 46% year-over-year
  • Fully Diluted Non-GAAP EPS of $0.04
  • GAAP EPS approximately break-even
  • AppExchange exceeds 200 On-Demand Applications
  • Largest Enterprise Implementation Now at 7,500 Subscribers

SAN FRANCISCO, Calif. — May 17, 2006 — Salesforce.com (NYSE: CRM), the market and technology leader in on-demand business services, today announced results for its fiscal first quarter ended April 30, 2006.

"I am excited to announce that salesforce.com is the first on demand business services provider to exceed one hundred million dollars in a single quarter," said Marc Benioff, chairman and CEO of salesforce.com. "Over 22,000 customers and 444,000 subscribers have chosen our salesforce.com and AppExchange on demand business services instead of traditional enterprise software to create this important industry milestone. Our largest implementation is now 7,500 subscribers, demonstrating the unique ability of the on demand model to scale from the largest enterprises in the world to the smallest."

Salesforce.com delivered the following results for the first quarter of fiscal year 2007:

    Customers and Paying Subscribers: Net paying subscribers rose approximately 45,000 during Q1 to exit the quarter at approximately 444,000 total subscribers. This ending total represents an increase of 66% from Q1 of the prior year, and an increase of 11% from the prior quarter. Customers rose approximately 2,200 during the quarter and totaled approximately 22,700, an increase of 46% from Q1 of the prior year, and an increase of 11% from the prior quarter.

    Revenue: Total revenue was $104.7 million, an increase of 63% on a year-over-year basis and an increase of 15% on a quarter-to-quarter basis. Subscription and support revenues were $94.5 million, an increase of 62% on a year-over-year basis and an increase of 15% on a quarter-to-quarter basis. Professional services and other revenues were $10.2 million, an increase of 70% on a year-over-year basis and an increase of 18% on a quarter-to-quarter basis.

    Earnings per Share: GAAP earnings per share were approximately break-even. Non-GAAP earnings per diluted share, excluding the effects of stock based compensation and amortization of purchased intangibles related to acquisitions, were $0.04. For the basis of non-GAAP EPS calculations, a diluted share count of 120 million shares was used.

    Cash: Cash from operations for the fiscal first quarter was $12.4 million.

    Deferred Revenue: Deferred revenue on the balance sheet as of April 30, 2006 was $182 million, an increase of 74% on a year-over-year basis and 8% on a quarter-to-quarter basis.
Based on information as of May 17, 2006, Salesforce.com is initiating guidance for its second quarter fiscal 2007 ending July 31, 2006, and updating guidance for its full fiscal year 2007 ending January 31, 2007.
    Q2 FY07: Revenue for the company's second fiscal quarter is expected to be in the range of approximately $112 million to approximately $114 million. Non-GAAP earnings per diluted share, excluding the effects of stock based compensation and amortization of purchased intangibles associated with acquisitions, are expected to be in the range of approximately $0.03 to approximately $0.04. This further assumes an estimated average of 121 million diluted shares outstanding and an estimated non-GAAP effective tax rate of 45%. The company expects to report a GAAP loss of approximately $0.02 to $0.04 per share for the second quarter.

    Full Year FY07: The company today is raising its revenue outlook for its fiscal year 2007, and now expects full year revenue of approximately $478 million to approximately $483 million. Non-GAAP earnings per diluted share, excluding the effects of stock based compensation and amortization of purchased intangibles associated with acquisitions, are expected to be in the range of approximately $0.17 to $0.19. This estimate is in-line with the company's prior outlook. This outlook further assumes an estimated average of 122 million diluted shares outstanding and an estimated non-GAAP effective tax rate of 45%. The company expects to report a GAAP loss of approximately $0.05 to $0.08 per share for its full fiscal year 2007.

      Quarterly Conference Call
      Salesforce.com will host a conference call to discuss its first quarter and fiscal 2007 results at 2:00 p.m. Pacific Daylight 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 into the conference call can do so by dialing 866-901-SFDC or 866-901-7332. International participants may dial 706-758-3772. A replay will be available until midnight Eastern Daylight Time on June 2, 2006 and can be accessed by dialing, (800) 642-1687 or (706) 645-9291, passcode 8249998.

      About salesforce.com

      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.

      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/eu/, or call 00800 7253 3333.