Company Raises FY2010 Revenue and EPS Guidance
SAN FRANCISCO, Aug. 20 /PRNewswire-FirstCall/ —
- Record Revenue of $316 Million, up 20% Year-Over-Year
- Record GAAP EPS of $0.17, up 113% Year-Over-Year
- GAAP Operating Margin of 9.3%, up from 6.1% a Year Ago
- 3,900 Net New Customers During the Quarter
- Total Customers at 63,200, up 32% Year-Over-Year
- Total Cash and Marketable Securities of $1.03 Billion, up $207 Million Year-Over-Year
- Company Raises FY2010 Revenue Guidance to $1.27 Billion to $1.28 Billion
- Company Raises FY2010 EPS Guidance to $0.60 to $0.61
Salesforce.com (NYSE: CRM), the enterprise cloud computing company, today announced results for its fiscal second quarter ended July 31, 2009.
(Logo: http://www.newscom.com/cgi-bin/prnh/20050216/SFW105LOGO)
“We are pleased to report record revenue and GAAP earnings per share for our fiscal second quarter,” said Marc Benioff, chairman and CEO, salesforce.com. “We added 3,900 net new customers, bringing our total to more than 63,000, with our Service Cloud turning in its best quarter ever.”
Salesforce.com delivered the following results for the second quarter:
Revenue: Total Q2 revenue was $316.1 million, an increase of 20% on a year-over-year basis. Subscription and support revenues were $293.4 million, an increase of 22% on a year-over-year basis. Professional services and other revenues were $22.6 million, a decrease of 3% on a year-over-year basis.
Earnings per Share: Q2 GAAP diluted earnings per share were approximately $0.17, including approximately $20.9 million in stock based compensation expense and approximately $2.2 million in amortization of purchased intangibles related to previously announced acquisitions. For purposes of the Q2 GAAP EPS calculations, there was an average of approximately 127 million diluted shares outstanding during the quarter.
Customers: Net paying customers rose approximately 3,900 during the quarter to finish at approximately 63,200. Compared with the year ago quarter, net paying customers have grown by approximately 15,500 or 32%.
Cash: Cash from operations for the fiscal second quarter was approximately $45.9 million, down 14% year-over-year. Total cash, cash equivalents and marketable securities finished the quarter at approximately $1.03 billion, an increase of approximately $207 million from the year prior.
Deferred Revenue: Deferred revenue on the balance sheet as of July 31, 2009 was $549 million, an increase of 14% on a year-over-year basis.
As of August 20, 2009, salesforce.com is initiating guidance for its third quarter, fiscal year 2010. For its full fiscal year 2010, the company is raising its prior revenue guidance and EPS guidance.
Q3 FY10: Revenue for the company’s third fiscal quarter is projected to be in the range of approximately $323 million to approximately $324 million. GAAP diluted EPS is expected to be in the range of approximately $0.15 to approximately $0.16. Stock based compensation expense is expected to be approximately $20 million, and amortization of purchased intangibles of previously announced acquisitions is expected to be approximately $2.2 million. For purposes of the Q3 GAAP EPS calculation, the company is expecting an average diluted shares count of approximately 128 million shares, a GAAP tax rate of approximately 42% and a noncontrolling interest expense of approximately $600,000.
Full Year FY10: The company today is raising the full year revenue guidance it provided on May 21, 2009, with revenue now expected to be approximately $1.27 billion to approximately $1.28 billion. The company is also raising its earnings outlook for the full year, expecting GAAP diluted EPS to be in the range of approximately $0.60 to approximately $0.61. Stock based compensation expense is expected to be approximately $86 million, and amortization of purchased intangibles of previously announced acquisitions 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 approximately 127 million shares, a GAAP tax rate of approximately 42%, and a noncontrolling interest expense of approximately $2.8 million.
Quarterly Conference Call
Salesforce.com will host a conference call to discuss its second quarter fiscal 2010 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 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 23838830, until midnight (EDT) September 10, 2009.
About salesforce.com
Salesforce.com is the enterprise cloud computing company. The company’s portfolio of Salesforce CRM applications, available at http://www.salesforce.com/products/, has revolutionized the ways that companies collaborate and communicate with their customers across sales, marketing and service. The company’s Force.com Platform (http://www.salesforce.com/platform/) enables customers, partners and developers to quickly build powerful business applications to run every part of the enterprise in the cloud. Based on salesforce.com’s (http://salesforce.com) real-time, multi-tenant architecture, Salesforce CRM and Force.com offer the fastest path to customer success with cloud computing.
As of July 31, 2009, salesforce.com manages customer information for approximately 63,200 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.
“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 third fiscal quarter of 2010 and for the full fiscal year 2010, and our expected tax rate, stock based compensation expense, amortization expense, noncontrolling 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 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; changes in our sales cycle; competition; various financial aspects of our subscription model; unexpected increases in attrition or decreases in new business; 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; litigation; 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 our Form 10-Q that will be filed for the quarter ended July 31, 2009 and our Form 10-K 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.
salesforce.com, inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Three Months Ended Six Months Ended
July 31, July 31,
------------------ -----------------
2009 2008 2009 2008
---- ---- ---- ----
Revenues:
Subscription and support $293,440 $239,720 $575,208 $465,061
Professional services and other 22,621 23,357 45,777 45,638
------ ------ ------ ------
Total revenues 316,061 263,077 620,985 510,699
Cost of revenues (1):
Subscription and support 38,971 30,668 75,999 59,378
Professional services and other 23,525 23,423 48,297 46,011
------ ------ ------ ------
Total cost of revenues 62,496 54,091 124,296 105,389
Gross profit 253,565 208,986 496,689 405,310
Operating expenses (1):
Research and development 31,103 24,033 62,687 43,800
Marketing and sales 146,214 130,774 284,481 253,478
General and administrative 46,759 38,081 89,909 76,513
------ ------ ------ ------
Total operating expenses 224,076 192,888 437,077 373,791
Income from operations 29,489 16,098 59,612 31,519
Interest, net 7,454 6,708 11,776 13,430
Other expense (1,072) (840) (701) (1,603)
------ ---- ---- ------
Income before provision for income
taxes and noncontrolling interest 35,871 21,966 70,687 43,346
Provision for income taxes (14,030) (10,558) (29,853) (20,869)
------- ------- ------- -------
Consolidated net income 21,841 11,408 40,834 22,477
Less: Net income attributable to
noncontrolling interest (643) (1,412) (1,200) (2,926)
---- ------ ------ ------
Net income attributable to
salesforce.com $21,198 $9,996 $39,634 $19,551
======= ====== ======= =======
Earnings per share - basic
and diluted:
Basic net income per share
attributable to salesforce.com
common shareholders $0.17 $0.08 $0.32 $0.16
Diluted net income per share
attributable to salesforce.com
common shareholders $0.17 $0.08 $0.31 $0.16
Shares used in computing basic net
income per share 123,846 120,863 123,526 120,321
Shares used in computing diluted
net income per share 126,566 125,626 125,894 125,091
(1) Amounts include stock-based
expenses, as follows:
Cost of revenues $3,171 $2,657 $6,327 $5,332
Research and development 2,950 2,259 6,034 4,358
Marketing and sales 9,317 8,749 19,259 16,870
General and administrative 5,439 5,219 10,920 10,389
salesforce.com, inc.
Condensed Consolidated Statements of Operations
As a percentage of total revenues:
(Unaudited)
Three Months Ended Six Months Ended
July 31, July 31,
-------- --------
2009 2008 2009 2008
---- ---- ---- ----
Revenues:
Subscription and support 93% 91% 93% 91%
Professional services and other 7 9 7 9
--- --- --- ---
Total revenues 100 100 100 100
Cost of revenues:
Subscription and support 12 12 12 12
Professional services and other 8 9 8 9
--- --- --- ---
Total cost of revenues 20 21 20 21
Gross profit 80 79 80 79
Operating expenses:
Research and development 10 9 10 8
Marketing and sales 46 50 46 50
General and administrative 15 14 14 15
--- --- --- ---
Total operating expenses 71 73 70 73
Income from operations 9 6 10 6
Interest, net 2 2 2 2
Other expense 0 0 (1) 0
--- --- --- ---
Income before provision for
income taxes and
noncontrolling interest 11 8 11 8
Provision for income taxes (4) (3) (5) (3)
--- --- --- ---
Consolidated net income 7 5 6 5
Less: Net income attributable to
noncontrolling interest 0 (1) 0 (1)
--- --- --- ---
Net income attributable
to salesforce.com 7% 4% 6% 4%
=== === === ===
Stock-based expenses as a
percentage of total revenues,
as follows:
Cost of revenues 1% 1% 1% 1%
Research and development 1 1 1 1
Marketing and sales 3 3 3 3
General and administrative 2 2 2 2
salesforce.com, inc.
Condensed Consolidated Balance Sheets
(in thousands)
July 31, January 31,
2009 2009
---- ----
(unaudited)
-----------
Assets
Current assets:
Cash and cash equivalents $246,169 $483,834
Short-term marketable securities 173,957 213,769
Accounts receivable, net 168,842 266,555
Deferred commissions 36,370 39,384
Deferred income taxes 26,827 31,900
Prepaid expenses and other current
assets 49,153 33,115
------ ------
Total current assets 701,318 1,068,557
Marketable securities, noncurrent 610,280 184,962
Fixed assets, net 96,470 77,027
Deferred commissions, noncurrent 15,457 17,699
Deferred income taxes, noncurrent 29,865 26,589
Capitalized software, net 28,981 29,989
Goodwill 44,872 44,872
Other assets, net 29,284 30,127
------ ------
Total assets $1,556,527 $1,479,822
========== ==========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $13,389 $16,379
Accrued expenses and other current
liabilities 157,604 163,205
Income taxes payable 2,759 3,619
Deferred revenue 538,836 583,763
------- -------
Total current liabilities 712,588 766,966
Income taxes payable, noncurrent 16,579 12,490
Long-term lease liabilities and other 14,796 7,616
Deferred revenue, noncurrent 10,174 10,263
------ ------
Total liabilities 754,137 797,335
salesforce.com stockholders' equity:
Common stock 124 123
Additional paid-in capital 727,533 648,724
Accumulated other comprehensive loss (2,016) (2,905)
Retained earnings 65,476 25,842
------ ------
Total stockholders' equity
controlling interest 791,117 671,784
Total stockholders' equity
noncontrolling interest 11,273 10,703
------ ------
Total stockholders' equity 802,390 682,487
------- -------
Total liabilities and stockholders'
equity $1,556,527 $1,479,822
========== ==========
salesforce.com, inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
Three Months Ended Six Months Ended
July 31, July 31,
------------------- -----------------
2009 2008 2009 2008
---- ---- ---- ----
Operating activities:
Consolidated net income $21,841 $11,408 $40,834 $22,477
Adjustments to reconcile net
income to net
cash provided by operating
activities:
Depreciation and amortization 12,144 8,870 24,289 17,028
Amortization of deferred
commissions 15,315 13,907 30,261 28,630
Expenses related to stock-
based awards 20,877 18,884 42,540 36,949
Excess tax benefits from
employee
stock plans (15,687) (11,843) (25,135) (24,541)
Changes in assets and
liabilities:
Accounts
receivable, net (22,816) (3,073) 97,870 73,079
Deferred commissions (14,136) (14,232) (25,005) (26,882)
Prepaid expenses and other
current assets 1,308 (978) (1,819) (6,093)
Other assets 2,683 1,738 (118) 2,514
Accounts payable (2,368) (5,507) (2,990) 6,330
Accrued expenses and other
current liabilities 27,057 24,652 8,120 8,764
Deferred revenue (363) 9,249 (45,016) (1,348)
------ ------ ------- -------
Net cash provided by
operating activities 45,855 53,075 143,831 136,907
------ ------ ------- -------
Investing activities:
Changes in marketable securities (138,393) (25,118) (381,031) (8,578)
Capital expenditures (19,328) (13,036) (32,756) (37,213)
-------- ------- -------- -------
Net cash used in investing
activities (157,721) (38,154) (413,787) (45,791)
-------- ------- -------- -------
Financing activities:
Proceeds from the exercise of
stock options 5,139 22,525 14,307 34,010
Excess tax benefits from employee
stock plans 15,687 11,843 25,135 24,541
Principal payments on capital
lease obligations (2,258) - (3,506) (5)
-------- --- -------- ---
Net cash provided by
financing activities 18,568 34,368 35,936 58,546
------ ------ ------ ------
Effect of exchange rate changes (2,238) (794) (3,645) (1,714)
------ ---- ------ ------
Net (decrease) increase in cash
and cash equivalents (95,536) 48,495 (237,665) 147,948
Cash and cash equivalents,
beginning of period 341,705 378,548 483,834 279,095
------- ------- ------- -------
Cash and cash equivalents,
end of period $246,169 $427,043 $246,169 $427,043
======== ======== ======== ========
salesforce.com, inc.
Additional Metrics
(Unaudited)
July 31, April 30, Jan 31, Oct 31, Jul 31, Apr 30,
2009 2009 2009 2008 2008 2008
---- ---- ---- ---- ---- ----
Full Time
Equivalent
Headcount 3,653 3,607 3,566 3,318 3,046 2,864
Financial data
(in thousands):
Cash, cash
equivalents
and
marketable
securities $1,030,406 $983,824 $882,565 $804,606 $823,417 $750,633
Deferred
revenue,
current and
noncurrent $549,010 $549,373 $594,026 $469,534 $479,546 $470,297
Three Months Ended Six Months Ended
July 31, July 31,
---------------- ----------------
2009 2008 2009 2008
---- ---- ---- ----
Revenues by geography
(in thousands):
Americas $226,008 $188,563 $446,658 $366,934
Europe 55,992 49,356 107,594 94,520
Asia Pacific 34,061 25,158 66,733 49,245
------ ------ ------ ------
$316,061 $263,077 $620,985 $510,699
======== ======== ======== ========
As a percentage of
total revenues:
Revenues by geography:
Americas 72% 72% 72% 72%
Europe 18 19 17 19
Asia Pacific 10 9 11 9
--- --- --- ---
100% 100% 100% 100%
=== === === ===
CONTACT: David Havlek, Investor Relations, +1-415-536-2171, [email protected], or Jane Hynes, Public Relations, +1-415-901-5079, [email protected], both of salesforce.com
