Salesforce.com Announces Record Fiscal Fourth Quarter Results

First Enterprise Cloud Computing Company to Achieve Fiscal Year Revenue of One Billion Dollars

  • Record Revenue of $290 Million, up 34% Year-Over-Year
  • GAAP EPS of $0.11, up 83% Year-Over-Year
  • Net Customers Increase 3,600 in the Quarter to 55,400
  • Net Paying Subscribers Increase 400K Year-Over-Year to Surpass 1.5 Million
  • Operating Cash Flow of $76 Million for Quarter; $230 Million for Fiscal Year
  • Total Cash and Marketable Securities of $883 Million, up $213 Million Year-Over-Year
  • Company Updates FY10 Revenue Guidance to $1.30 - $1.33 Billion

SAN FRANCISCO, Calif. – February 25, 2009 – Salesforce.com (NYSE: CRM), the enterprise cloud computing company, today announced results for its fiscal fourth quarter and full fiscal year ended January 31, 2009.

“Salesforce.com is proud to be the first billion dollar cloud computing company," said Marc Benioff, chairman and CEO, salesforce.com. "At a time when capital is precious, big-ticket software purchases just don’t make sense."

Salesforce.com delivered the following results for the fourth quarter and full fiscal year 2009:

Revenue: Total Q4 revenue was $289.6 million, an increase of 34% on a year-over-year basis and an increase of 5% on a quarter-over-quarter basis. Subscription and support revenues were $266.1 million, an increase of 35% on a year-over-year basis and an increase of 5% on a quarter-overquarter basis. Professional services and other revenues were $23.5 million, an increase of 15% on a year-over-year basis and an increase of 2% on a quarter-over-quarter basis.

For the full fiscal year 2009, the company reported revenue of approximately $1.077 billion, an increase of 44% from the prior year. Subscription and support revenues were $984.6 million for the year, an increase of 45%, while professional services revenue rose 35% to $92.2 million.

Earnings per Share: Q4 GAAP diluted earnings per share were approximately $0.11, including approximately $21.1 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 calculations, there was an average of approximately 125 million diluted shares outstanding during the quarter.

For the full year, GAAP diluted earnings per share rose approximately 130% year-over-year to $0.35, including approximately $77.4 million in stock based compensation and approximately $8.0 million in amortization of purchased intangibles related to previously announced acquisitions. For purposes of the GAAP EPS calculations, there was an average of approximately 125 million diluted shares outstanding during the year.

Customers and Paying Subscribers: Net paying customers rose approximately 3,600 during the quarter and approximately 14,400 during the year to finish at approximately 55,400. Net paying subscribers rose to greater than 1.5 million, an increase of approximately 400,000 from the prior fiscal year end.

Cash: Cash from operations for the fiscal fourth quarter was approximately $76 million, up from $17 million in the third quarter, and down 7% year-over-year. For the full year, operating cash flow totaled $230 million, an increase of 12% from the prior year. Total cash, cash equivalents and marketable securities finished the year at approximately $883 million, an increase of approximately $78 million from Q3 and approximately $213 million from the prior fiscal year end.

Deferred Revenue: Deferred revenue on the balance sheet as of January 31, 2009 was $594 million, an increase of 24% on a year-over-year basis and 27% on a quarter-over-quarter basis.

As of February 25, 2009, salesforce.com is initiating guidance for its first quarter, fiscal year 2010. For its full fiscal year 2010, the company is updating its prior revenue guidance and initiating EPS guidance.

Q1 FY10: Revenue for the company’s first fiscal quarter is projected to be in the range of approximately $304 million to approximately $305 million. GAAP diluted EPS is expected to be in the range of approximately $0.10 to approximately $0.11. Stock based compensation expense is expected to be approximately $22 million, and amortization of purchased intangibles is expected to be approximately $2.6 million. For purposes of the Q1 GAAP EPS calculation, the company is expecting an average diluted shares count of 126 million shares, a GAAP tax rate of approximately 43% and a minority interest expense of approximately $200,000.

Full Year FY10: The company today is updating the full year revenue guidance it provided on November 20, 2008, with revenue now expected to be approximately $1.30 billion to approximately $1.33 billion. The company is also initiating its earnings outlook for the full year, expecting GAAP diluted EPS to be in the range of approximately $0.54 to approximately $0.55. Stock based compensation expense is expected to be approximately $91 million, and amortization of purchased intangibles is currently expected to be approximately $9.3 million. For purposes of the full fiscal year 2010 GAAP EPS calculation, the company is expecting an average diluted shares count of 128 million shares, a GAAP tax rate of approximately 43%, and a minority interest expense of approximately $1 million.

Quarterly Conference Call

Salesforce.com will host a conference call to discuss its fourth quarter fiscal 2009 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 706-902-1764. A replay will be available at (800) 642-1687 or (706) 645-9291, passcode 84582465, until midnight (EST) March 13, 2009.

 

About salesforce.com

Salesforce.com is the enterprise cloud computing company. The company's portfolio of SaaS applications, including its award-winning CRM offering, 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 ondemand 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 at http://www.salesforce.com/appexchange/.

As of January 31, 2009, salesforce.com manages customer information for approximately 55,400 customers including Allianz Commercial, Dell, Dow Jones Newswires, Japan Post, Kaiser Permanente, KONE, 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.

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“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 first fiscal quarter of 2010 and for the full fiscal year 2010, and our expected tax rate, stock based compensation expense, amortization rate, reduction in minority interest expense, 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 of 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 Form 10-Q for the quarter ended October 31, 2008 and our Form 10-K that will be filed for the fiscal year ended January 31, 2009. These documents are 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) 2009 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 respective owners.

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/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.