Announces Record Fiscal Third Quarter Results

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


SAN FRANCISCO, Calif. – November 20, 2008 – (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, “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.” 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 quarter-over-quarter basis.

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’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.

Guidance: As of November 20, 2008, 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%.

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.

Quarterly Conference Call 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 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 or 72989815. A replay will be available at (800) 642-1687 or (706) 645-9291, passcode 72989815, until midnight Eastern Time December 5, 2008.


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