SAN FRANCISCO, May 29, 2018 /PRNewswire/ -- Salesforce (NYSE:
CRM), the global leader in CRM, today announced results for its
fiscal first quarter ended April 30,
2018. The company adopted ASC 6061, ASC
340-402 and ASU 2016-013 in the first
quarter, and these results reflect the impact of these standards.
The company also provided re-casted financial results under ASC 606
and ASC 340-40.
"Salesforce delivered more than $3
billion in revenue in the first quarter, surpassing a
$12 billion annual revenue run rate,"
said Marc Benioff, chairman and CEO,
Salesforce. "Our relentless focus on customer success is yielding
incredible results, including delivering nearly two billion AI
predictions per day with Einstein."
Salesforce delivered the following results for its fiscal first
quarter:
Revenue: Total first
quarter revenue was $3.01 billion, an
increase of 25% year-over-year, and 22% in constant currency.
Subscription and support revenues were $2.81
billion, an increase of 27% year-over-year. Professional
services and other revenues were $196
million, an increase of 4% year-over-year.
Earnings per Share: First
quarter GAAP diluted earnings per share was $0.46, and non-GAAP diluted earnings per share
was $0.74. Mark-to-market accounting
of the company's strategic investments, required by ASU 2016-01,
benefitted GAAP diluted earnings per share by $0.25 and non-GAAP diluted earnings per share by
$0.22.
Cash: Cash generated from
operations for the first quarter was $1.47
billion, an increase of 19% year-over-year. Total cash, cash
equivalents and marketable securities finished the first quarter at
$7.16 billion.
Unearned Revenue: Unearned
revenue, representing ASC 605 deferred revenue less the cumulative
timing differences of recognized revenue from ASC 606 adoption, on
the balance sheet as of April 30,
2018 was $6.20 billion, an
increase of 25% year-over-year, and 23% in constant currency.
Remaining Transaction
Price: Remaining transaction price, representing future
revenues that are under contract but have not yet been recognized,
ended the first quarter at approximately $20.4 billion, an increase of 36% year-over-year.
Current remaining transaction price, which represents the future
revenues under contract expected to be recognized over the next 12
months, ended the first quarter at approximately $9.6 billion, an increase of 26%
year-over-year.
As of May 29, 2018, the company is
initiating revenue, earnings per share, and unearned revenue
guidance for its second quarter of fiscal year 2019. In addition,
the company is raising its full fiscal year 2019 revenue guidance
and non-GAAP earnings per share guidance, and updating its GAAP
earnings per share guidance and operating cash flow guidance for
its full fiscal year 2019, previously provided on April 2, 2018. The guidance below does not
reflect the future impact of ASU 2016-01 and is based on estimated
GAAP tax rates that reflect the company's currently available
information, including the anticipated impact of the new Tax Act
and interpretations thereof, as well as other factors and
assumptions. The GAAP tax rates may fluctuate due to recent
acquisitions.
|
Q2 FY19
Guidance
|
|
Full Year FY19
Guidance
|
Revenue
|
$3.22 - $3.23
billion
|
|
$13.075 - $13.125
billion
|
Y/Y
Growth
|
25%
|
|
24% -
25%
|
GAAP
EPS
|
($0.09) –
($0.08)
|
|
$0.49 -
$0.51
|
Non-GAAP
EPS
|
$0.46 -
$0.47
|
|
$2.29 -
$2.31
|
Unearned
Revenue
Growth (y/y)
|
22% -
23% (excluding
MuleSoft)
|
|
N/A
|
Operating Cash
Flow
Growth (y/y)
|
N/A
|
|
14% - 15%
|
The following is a per share reconciliation of GAAP earnings per
share to non-GAAP diluted earnings per share guidance for the next
quarter and the full year:
|
Fiscal
2019
|
|
Q2
|
FY2019
|
|
|
|
GAAP (loss) EPS
range*
|
($0.09) -
($0.08)
|
$0.49 -
$0.51
|
Plus
|
|
|
Amortization of
purchased intangibles
|
$
0.18
|
$
0.61
|
Stock-based
expense
|
$
0.45
|
$
1.66
|
Amortization of debt
discount, net
|
$
0.00
|
$
0.01
|
Less
|
|
|
Income tax effects
and adjustments**
|
$
(0.08)
|
$
(0.48)
|
Non-GAAP diluted
EPS***
|
$0.46 -
$0.47
|
$2.29 -
$2.31
|
|
|
|
Shares used in
computing basic net income per share (millions)
|
745
|
747
|
Shares used in
computing diluted net income per share (millions)
|
770
|
771
|
|
* The Company's GAAP
tax provision is expected to be (195.0%) for the three months ended
July 31, 2018 and 23.0% for the twelve months ended January 31,
2019. The GAAP tax rates may fluctuate due to recent acquisitions.
The Company's projected GAAP basic EPS excludes potential future
impacts of ASU 2016-01.
|
|
** The Company's
Non-GAAP tax provision uses a long-term projected tax rate of
21.5%, which reflects currently available information and could be
subject to change.
|
|
*** The Company's
projected Non-GAAP diluted EPS excludes potential future impacts of
ASU 2016-01.
|
For additional information regarding non-GAAP financial measures
see the reconciliation of results and related explanations
below.
Quarterly Conference Call
Salesforce will host a
conference call at 2:00 p.m. (PT) /
5:00 p.m. (ET) today to discuss its
financial results with the investment community. A live web
broadcast of the event will be available on the Salesforce Investor
Relations website at www.salesforce.com/investor. A live
dial-in is available domestically at 866-901-SFDC or 866-901-7332
and internationally at 706-902-1764, passcode 9492699. A
replay will be available at (800) 585-8367 or (855) 859-2056 until
midnight (ET) June 28, 2018.
About Salesforce
Salesforce, the global leader in CRM,
empowers companies to connect with their customers in a whole new
way. 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 about Salesforce,
visit: www.salesforce.com.
"Safe harbor" statement under the Private Securities
Litigation Reform Act of 1995: This press release
contains forward-looking statements about our financial results,
which may include expected GAAP and non-GAAP financial and other
operating and non-operating results, including revenue, net income,
diluted earnings per share, operating cash flow growth, operating
margin improvement, unearned revenue (previously referred to as
deferred revenue) growth, expected revenue growth, expected tax
rates, stock-based compensation expenses, amortization of purchased
intangibles, amortization of debt discount and shares
outstanding. The achievement or success of the matters
covered by such forward-looking statements involves risks,
uncertainties and assumptions. If any such risks or
uncertainties materialize or if any of the assumptions prove
incorrect, the company's 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 the effect of general
economic and market conditions; the impact of foreign currency
exchange rate and interest rate fluctuations on our results; our
business strategy and our plan to build our business, including our
strategy to be the leading provider of enterprise cloud computing
applications and platforms; the pace of change and innovation in
enterprise cloud computing services; the competitive nature of the
market in which we participate; our international expansion
strategy; our service performance and security, including the
resources and costs required to prevent, detect and remediate
potential security breaches; the expenses associated with new data
centers and third-party infrastructure providers; additional data
center capacity; real estate and office facilities space; our
operating results and cash flows; new services and product
features; our strategy of acquiring or making investments in
complementary businesses, joint ventures, services, technologies
and intellectual property rights; the performance and fair value of
our investments in complementary businesses through our strategic
investment portfolio; our ability to realize the benefits from
strategic partnerships and investments; our ability to successfully
integrate acquired businesses and technologies, including the
operations of MuleSoft, Inc.; our ability to continue to grow and
maintain unearned revenue and remaining transaction price
(previously referred to as deferred revenue and unbilled deferred
revenue); our ability to protect our intellectual property rights;
our ability to develop our brands; our reliance on third-party
hardware, software and platform providers; our dependency on the
development and maintenance of the infrastructure of the Internet;
the effect of evolving domestic and foreign government regulations,
including those related to the provision of services on the
Internet, those related to accessing the Internet, and those
addressing data privacy and import and export controls; the
valuation of our deferred tax assets; the potential availability of
additional tax assets in the future; the impact of new accounting
pronouncements and tax laws, including the U.S. Tax Cuts and Jobs
Act, and interpretations thereof; uncertainties affecting our
ability to estimate our non-GAAP tax rate; the impact of expensing
stock options and other equity awards; the sufficiency of our
capital resources; factors related to our outstanding debt,
revolving credit facility, term loan and loan associated with 50
Fremont; compliance with our debt covenants and capital lease
obligations; current and potential litigation involving us; and the
impact of climate change.
Further information on these and other factors that could affect
the company's 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. These documents
are available on the SEC Filings section of the Investor
Information section of the company's 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.
© 2018 salesforce.com, inc. All rights
reserved. Salesforce and other marks are trademarks
of salesforce.com, inc. Other brands featured herein may
be trademarks of their respective owners.
Non-GAAP Financial Measures: This press release
includes information about non-GAAP diluted earnings per share,
non-GAAP tax rates, non-GAAP free cash flow, and constant currency
revenue and constant currency unearned revenue growth rates
(collectively the "non-GAAP financial measures"). These non-GAAP
financial measures are measurements of financial performance that
are not prepared in accordance with U.S. generally accepted
accounting principles and computational methods may differ from
those used by other companies. Non-GAAP financial measures are not
meant to be considered in isolation or as a substitute for
comparable GAAP measures and should be read only in conjunction
with the company's consolidated financial statements prepared in
accordance with GAAP. Management uses both GAAP and non-GAAP
measures when planning, monitoring, and evaluating the company's
performance.
The primary purpose of using non-GAAP measures is to provide
supplemental information that may prove useful to investors and to
enable investors to evaluate the company's results in the same way
management does. Management believes that supplementing GAAP
disclosure with non-GAAP disclosure provides investors with a more
complete view of the company's operational performance and allows
for meaningful period-to-period comparisons and analysis of trends
in the company's business. Further, to the extent that other
companies use similar methods in calculating non-GAAP measures, the
provision of supplemental non-GAAP information can allow for a
comparison of the company's relative performance against other
companies that also report non-GAAP operating results.
Non-GAAP diluted earnings per share excludes, to the extent
applicable, the impact of the following items: stock-based
compensation, amortization of acquisition-related intangibles, and
the net amortization of debt discount on the company's convertible
senior notes, as well as income tax adjustments. These items
are excluded because the decisions that give rise to them are not
made to increase revenue in a particular period, but instead for
the company's long-term benefit over multiple periods.
Specifically, management is excluding the following items from
its non-GAAP earnings per share, as applicable, for the periods
presented in the Q1 FY19 financial statements and for its non-GAAP
estimates for Q2 and FY19:
- Stock-Based Expenses: The company's compensation strategy
includes the use of stock-based compensation to attract and retain
employees and executives. It is principally aimed at aligning their
interests with those of our stockholders and at long-term employee
retention, rather than to motivate or reward operational
performance for any particular period. Thus, stock-based
compensation expense varies for reasons that are generally
unrelated to operational decisions and performance in any
particular period.
- Amortization of Purchased Intangibles and Acquired Leases: The
company views amortization of acquisition- and building-related
intangible assets, such as the amortization of the cost associated
with an acquired company's research and development efforts, trade
names, customer lists and customer relationships, and acquired
lease intangibles, as items arising from pre-acquisition activities
determined at the time of an acquisition. While these intangible
assets are continually evaluated for impairment, amortization of
the cost of purchased intangibles is a static expense, one that is
not typically affected by operations during any particular
period.
- Amortization of Debt Discount: Under GAAP, certain convertible
debt instruments that may be settled in cash (or other assets) on
conversion are required to be separately accounted for as liability
(debt) and equity (conversion option) components of the instrument
in a manner that reflects the issuer's non-convertible debt
borrowing rate. Accordingly, for GAAP purposes we are required to
recognize imputed interest expense on the company's $1.15 billion of convertible senior notes due in
April 2018 that were issued in a
private placement in March 2013. The
imputed interest rate was approximately 2.5% for the convertible
notes due 2018, while the actual coupon interest rate of the notes
was 0.25%. The difference between the imputed interest expense and
the coupon interest expense, net of the interest amount
capitalized, is excluded from management's assessment of the
company's operating performance because management believes that
this non-cash expense is not indicative of ongoing operating
performance.
- Gains on Strategic Investments, net: Upon adoption of 2016-01,
the company is required to record all fair value adjustments to its
equity securities held within the strategic investment portfolio
through the statement of operations. As a result of potential and
unknown market volatility, the company excludes any potential
future gains or losses on its strategic investment portfolio from
its GAAP and non-GAAP estimates for future periods.
- Income Tax Effects and Adjustments: The company utilizes a
fixed long-term projected non-GAAP tax rate in order to provide
better consistency across the interim reporting periods by
eliminating the effects of items such as changes in the tax
valuation allowance and tax effects of acquisitions-related costs,
since each of these can vary in size and frequency. When projecting
this long-term rate, the company evaluated a three-year financial
projection that excludes the direct impact of the following
non-cash items: stock-based expenses, amortization of purchased
intangibles, and amortization of debt discount. The projected rate
also assumes no new acquisitions in the three-year period, and
considers other factors including the company's expected tax
structure, its tax positions in various jurisdictions and key
legislation in major jurisdictions where the company operates. For
fiscal 2019, the company uses a projected non-GAAP tax rate of 21.5
percent, which reflects currently available information, including
the anticipated impact of the Tax Act and interpretations thereof,
as well as other factors and assumptions. The non-GAAP tax rate
could be subject to change for a variety of reasons, including the
company's ongoing analysis of the Tax Act over the measurement
period, the rapidly evolving global tax environment, significant
changes in the company's geographic earnings mix including due to
acquisition activity, or other changes to the company's strategy or
business operations. The company will re-evaluate its long-term
rate as appropriate.
The company defines the non-GAAP measure free cash flow as GAAP
net cash provided by operating activities, less capital
expenditures. For this purpose, capital expenditures does not
include our strategic investments, nor does it include any costs or
activities related to our purchase of 50 Fremont land and building,
and building - leased facilities.
|
|
|
1
Accounting Standards Codification ("ASC") 606 "Revenue from
Contracts with Customers"
|
2 ASC
340-40 "Other Assets and Deferred Costs – Contracts with
Customers"
|
3
Accounting Standards Update 2016-01 "Financial
Instruments"
|
salesforce.com,
inc.
|
Consolidated
Statements of Operations
|
(in millions,
except per share data)
|
(Unaudited)
|
|
|
Three Months Ended
April 30,
|
|
2018
|
|
2017 (as
adjusted)*
|
Revenues:
|
|
|
|
Subscription and
support
|
$
|
2,810
|
|
|
$
|
2,209
|
|
Professional services
and other
|
196
|
|
|
188
|
|
Total
revenues
|
3,006
|
|
|
2,397
|
|
Cost of revenues
(1)(2):
|
|
|
|
Subscription and
support
|
573
|
|
|
463
|
|
Professional services
and other
|
194
|
|
|
188
|
|
Total cost of
revenues
|
767
|
|
|
651
|
|
Gross
profit
|
2,239
|
|
|
1,746
|
|
Operating expenses
(1)(2):
|
|
|
|
Research and
development
|
424
|
|
|
376
|
|
Marketing and
sales
|
1,329
|
|
|
1,106
|
|
General and
administrative
|
295
|
|
|
260
|
|
Total operating
expenses
|
2,048
|
|
|
1,742
|
|
Income from
operations
|
191
|
|
|
4
|
|
Investment
income
|
16
|
|
|
5
|
|
Interest
expense
|
(34)
|
|
|
(22)
|
|
Gains on strategic
investments, net
|
211
|
|
|
3
|
|
Other
income
|
1
|
|
|
0
|
|
Income (loss) before
(provision for) benefit from income taxes
|
385
|
|
|
(10)
|
|
(Provision for)
benefit from income taxes
|
(41)
|
|
|
11
|
|
Net income
|
$
|
344
|
|
|
$
|
1
|
|
Basic net income per
share
|
$
|
0.47
|
|
|
$
|
0.00
|
|
Diluted net income
per share
|
$
|
0.46
|
|
|
$
|
0.00
|
|
Shares used in
computing basic net income per share
|
729
|
|
|
706
|
|
Shares used in
computing diluted net income per share
|
754
|
|
|
722
|
|
_______________
|
(1) Amounts include
amortization of intangible assets acquired through business
combinations, as follows:
|
|
|
Three Months Ended
April 30,
|
|
2018
|
|
2017
|
Cost of
revenues
|
$
|
39
|
|
|
$
|
44
|
|
Marketing and
sales
|
30
|
|
|
31
|
|
|
(2)
Amounts include stock-based expense, as follows:
|
|
|
Three Months Ended
April 30,
|
|
2018
|
|
2017
|
Cost of
revenues
|
$
|
34
|
|
|
$
|
32
|
|
Research and
development
|
66
|
|
|
64
|
|
Marketing and
sales
|
120
|
|
|
119
|
|
General and
administrative
|
32
|
|
|
37
|
|
|
* Prior period
information has been adjusted for the adoption of Accounting
Standards Update No. 2014-09, "Revenue from Contracts with
Customers (Topic 606)", which the Company adopted on February 1,
2018.
|
salesforce.com,
inc.
|
Consolidated
Statements of Operations
|
(As a percentage
of Total revenues)
|
(Unaudited)
|
|
|
Three Months Ended
April 30,
|
|
2018
|
|
2017 (as
adjusted)*
|
Revenues:
|
|
|
|
Subscription and
support
|
93
|
%
|
|
92
|
%
|
Professional services
and other
|
7
|
|
|
8
|
|
Total
revenues
|
100
|
|
|
100
|
|
Cost of revenues
(1)(2):
|
|
|
|
Subscription and
support
|
19
|
|
|
19
|
|
Professional services
and other
|
7
|
|
|
8
|
|
Total cost of
revenues
|
26
|
|
|
27
|
|
Gross
profit
|
74
|
|
|
73
|
|
Operating expenses
(1)(2):
|
|
|
|
Research and
development
|
14
|
|
|
16
|
|
Marketing and
sales
|
44
|
|
|
46
|
|
General and
administrative
|
10
|
|
|
11
|
|
Total operating
expenses
|
68
|
|
|
73
|
|
Income from
operations
|
6
|
|
|
0
|
|
Investment
income
|
1
|
|
|
0
|
|
Interest
expense
|
(1)
|
|
|
0
|
|
Gains on strategic
investments, net
|
7
|
|
|
0
|
|
Other
income
|
0
|
|
|
0
|
|
Income (loss) before
(provision for) benefit from income taxes
|
13
|
|
|
0
|
|
(Provision for)
benefit from income taxes
|
(2)
|
|
|
0
|
|
Net income
|
11
|
%
|
|
0
|
%
|
_______________
|
(1) Amounts include
amortization of intangible assets acquired through business
combinations, as follows:
|
|
|
Three Months Ended
April 30,
|
|
2018
|
|
2017
|
Cost of
revenues
|
1
|
%
|
|
2
|
%
|
Marketing and
sales
|
1
|
|
|
1
|
|
|
(2) Stock-based expense as a
percentage of total revenues, as follows:
|
|
|
Three Months Ended
April 30,
|
|
2018
|
|
2017
|
Cost of
revenues
|
1
|
%
|
|
1
|
%
|
Research and
development
|
2
|
|
|
3
|
|
Marketing and
sales
|
4
|
|
|
5
|
|
General and
administrative
|
1
|
|
|
2
|
|
|
* Prior period
information has been adjusted for the adoption of Topic
606.
|
salesforce.com,
inc.
|
Consolidated
Balance Sheets
|
(in
millions)
|
(Unaudited)
|
|
|
April
30, 2018
|
|
January 31,
2018 (as adjusted)*
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
5,922
|
|
|
$
|
2,543
|
|
Marketable
securities
|
1,237
|
|
|
1,978
|
|
Accounts receivable,
net
|
1,763
|
|
|
3,921
|
|
Costs capitalized to
obtain revenue contracts, net
|
667
|
|
|
671
|
|
Prepaid expenses and
other current assets
|
562
|
|
|
471
|
|
Total current
assets
|
10,151
|
|
|
9,584
|
|
Property and
equipment, net
|
1,950
|
|
|
1,947
|
|
Costs capitalized to
obtain revenue contracts, noncurrent, net
|
1,038
|
|
|
1,105
|
|
Capitalized software,
net
|
149
|
|
|
146
|
|
Strategic
investments
|
1,024
|
|
|
677
|
|
Goodwill
|
7,444
|
|
|
7,314
|
|
Intangible assets
acquired through business combinations, net
|
815
|
|
|
827
|
|
Other assets,
net
|
392
|
|
|
384
|
|
Total
assets
|
$
|
22,963
|
|
|
$
|
21,984
|
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable,
accrued expenses and other liabilities
|
$
|
1,691
|
|
|
$
|
2,047
|
|
Unearned
revenue
|
6,201
|
|
|
6,995
|
|
Current portion of
debt
|
3
|
|
|
1,025
|
|
Total current
liabilities
|
7,895
|
|
|
10,067
|
|
Noncurrent
debt
|
3,172
|
|
|
695
|
|
Other noncurrent
liabilities
|
836
|
|
|
846
|
|
Total
liabilities
|
11,903
|
|
|
11,608
|
|
Stockholders'
equity:
|
|
|
|
Common
stock
|
1
|
|
|
1
|
|
Additional paid-in
capital
|
10,123
|
|
|
9,752
|
|
Accumulated other
comprehensive loss
|
(33)
|
|
|
(12)
|
|
Retained
earnings
|
969
|
|
|
635
|
|
Total stockholders'
equity
|
11,060
|
|
|
10,376
|
|
Total liabilities and
stockholders' equity
|
$
|
22,963
|
|
|
$
|
21,984
|
|
|
* Prior period
information has been adjusted for the adoption of Topic
606.
|
salesforce.com,
inc.
|
Consolidated
Statements of Cash Flows
|
(in
millions)
|
(Unaudited)
|
|
|
Three Months Ended
April 30,
|
|
2018
|
|
2017 (as
adjusted)*
|
Operating
activities:
|
|
|
|
Net income
|
$
|
344
|
|
|
$
|
1
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
181
|
|
|
185
|
|
Amortization of debt
discount and issuance costs
|
16
|
|
|
8
|
|
Amortization of costs
capitalized to obtain revenue contracts, net
|
188
|
|
|
141
|
|
Expenses related to
employee stock plans
|
252
|
|
|
252
|
|
Gains on strategic
investments, net
|
(211)
|
|
|
(3)
|
|
Changes in assets and
liabilities, net of business combinations:
|
|
|
|
Accounts receivable,
net
|
2,162
|
|
|
1,759
|
|
Costs capitalized to
obtain revenue contracts, net
|
(118)
|
|
|
(133)
|
|
Prepaid expenses and
other current assets and other assets
|
(90)
|
|
|
(185)
|
|
Accounts payable,
accrued expenses and other liabilities
|
(456)
|
|
|
(297)
|
|
Unearned
revenue
|
(802)
|
|
|
(498)
|
|
Net cash provided by
operating activities
|
1,466
|
|
|
1,230
|
|
Investing
activities:
|
|
|
|
Business combination,
net of cash acquired
|
(182)
|
|
|
(20)
|
|
Purchases of
strategic investments
|
(147)
|
|
|
(12)
|
|
Sales of strategic
investments
|
4
|
|
|
12
|
|
Purchases of
marketable securities
|
(263)
|
|
|
(699)
|
|
Sales of marketable
securities
|
938
|
|
|
104
|
|
Maturities of
marketable securities
|
48
|
|
|
4
|
|
Capital
expenditures
|
(122)
|
|
|
(157)
|
|
Net cash provided by
(used in) investing activities
|
276
|
|
|
(768)
|
|
Financing
activities:
|
|
|
|
Proceeds from
issuance of debt, net
|
2,470
|
|
|
0
|
|
Proceeds from
employee stock plans
|
201
|
|
|
160
|
|
Principal payments on
capital lease obligations
|
(19)
|
|
|
(9)
|
|
Payments on
debt
|
(1,027)
|
|
|
(200)
|
|
Net cash provided by
(used in) financing activities
|
1,625
|
|
|
(49)
|
|
Effect of exchange
rate changes
|
12
|
|
|
5
|
|
Net increase in
cash and cash equivalents
|
3,379
|
|
|
418
|
|
Cash and cash
equivalents, beginning of period
|
2,543
|
|
|
1,607
|
|
Cash and cash
equivalents, end of period
|
$
|
5,922
|
|
|
$
|
2,025
|
|
|
* Prior period
information has been adjusted for the adoption of Topic 606. Total
net cash provided by operating activities for the three months
ended April 30, 2017 as adjusted did not change.
|
salesforce.com,
inc.
|
Additional
Metrics
|
(Unaudited)
|
|
|
Apr
30, 2018
|
|
Jan
31, 2018
|
|
Oct
31, 2017
|
|
Jul
31, 2017
|
|
Apr
30, 2017
|
|
Jan
31, 2017
|
Full Time
Equivalent Headcount
|
30,149
|
|
|
29,401
|
|
|
28,527
|
|
|
27,155
|
|
|
26,213
|
|
|
25,178
|
|
Financial data (in
millions):
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents and marketable securities (1)
|
$
|
7,159
|
|
|
$
|
4,521
|
|
|
$
|
3,629
|
|
|
$
|
3,501
|
|
|
$
|
3,220
|
|
|
$
|
2,209
|
|
Strategic investments
(2)
|
$
|
1,024
|
|
|
$
|
677
|
|
|
$
|
670
|
|
|
$
|
658
|
|
|
$
|
639
|
|
|
$
|
567
|
|
Unearned revenue
(3)
|
$
|
6,201
|
|
|
$
|
6,995
|
|
|
$
|
4,312
|
|
|
$
|
4,749
|
|
|
$
|
4,969
|
|
|
$
|
5,467
|
|
Principal due on the
Company's outstanding debt obligations (1)
|
$
|
3,200
|
|
|
$
|
1,727
|
|
|
$
|
1,850
|
|
|
$
|
1,850
|
|
|
$
|
1,850
|
|
|
$
|
2,050
|
|
|
(1) The Company's
outstanding debt obligations include the Company's 2023 Senior
Notes, 2028 Senior Notes, the loan assumed on 50 Fremont, and the
Term Loan. The Company raised approximately $2.5 billion in a
public offering of unsecured debt in April 2018 in connection with
the acquisition of MuleSoft, Inc. which closed in May 2018.
Total cash paid in May 2018 in connection with the acquisition was
approximately $4.9 billion.
|
|
(2) The strategic
investment balance as of April 30, 2018 includes the fair value
adjustments of the Company's publicly traded and privately held
equity investments as the Company adopted Accounting Standards
Update No. 2016-01, "Financial Instruments-Overall (Subtopic
825-10)" on February 1, 2018. See discussion below for
further details on the fair value adjustments.
|
|
(3) Prior period
information has been adjusted for the adoption of Topic 606, which
the Company adopted on February 1, 2018. Topic 606 introduced
unearned revenue, which is substantially similar to deferred
revenue under previous accounting guidance, except for the removal
of the limitation on contingent revenue.
|
Supplemental Revenue Analysis
Remaining Transaction Price
Topic 606 introduced remaining transaction price, which is
different than unbilled deferred revenue under previous accounting
guidance. Transaction price allocated to the remaining performance
obligations represents contracted revenue that has not yet been
recognized, which includes unearned revenue and unbilled amounts
that will be recognized as revenue in future periods. Transaction
price allocated to the remaining performance obligation is
influenced by several factors, including seasonality, the timing of
renewals, average contract terms and foreign currency exchange
rates. Unbilled portions of the remaining transaction price
denominated in foreign currencies are revalued each period based on
the period end exchange rates.
As with unbilled deferred revenue under previous accounting
guidance, the portion of the remaining transaction price that is
unbilled is not recorded on the balance sheet. Remaining
transaction price consisted of the following (in billions):
|
Current
|
|
Noncurrent
|
|
Total
|
As of April 30,
2018
|
$
|
9.6
|
|
|
$
|
10.8
|
|
|
$
|
20.4
|
|
As of April 30,
2017
|
$
|
7.6
|
|
|
$
|
7.4
|
|
|
$
|
15.0
|
|
Disaggregation
of Revenue
|
|
Subscription and
support revenue by cloud service offering (in
millions):
|
Three Months Ended
April 30,
|
|
2018
|
|
2017 (as
adjusted)*
|
Sales
Cloud
|
$
|
965
|
|
|
$
|
830
|
|
Service
Cloud
|
848
|
|
|
656
|
|
Salesforce Platform
and Other
|
575
|
|
|
424
|
|
Marketing and
Commerce Cloud
|
422
|
|
|
299
|
|
|
$
|
2,810
|
|
|
$
|
2,209
|
|
|
|
|
|
Total revenues by
geography (in millions):
|
Three Months Ended
April 30,
|
|
2018
|
|
2017 (as
adjusted)*
|
Americas
|
$
|
2,101
|
|
|
$
|
1,765
|
|
Europe
|
606
|
|
|
409
|
|
Asia
Pacific
|
299
|
|
|
223
|
|
|
$
|
3,006
|
|
|
$
|
2,397
|
|
|
|
|
|
Total revenues by
geography as a percentage of total revenues:
|
Three Months Ended
April 30,
|
|
2018
|
|
2017 (as
adjusted)*
|
Americas
|
70
|
%
|
|
74
|
%
|
Europe
|
20
|
|
|
17
|
|
Asia
Pacific
|
10
|
|
|
9
|
|
|
100
|
%
|
|
100
|
%
|
|
* Prior period
information has been adjusted for the adoption of Topic
606.
|
Constant Currency Growth Rates
The Company presents constant currency information to provide a
framework for assessing how the Company's underlying business
performed excluding the effect of foreign currency rate
fluctuations. To present this information, current and comparative
prior period results for entities reporting in currencies other
than United States dollars are
converted into United States
dollars at the weighted average exchange rate for the quarter being
compared to for growth rate calculations presented, rather than the
actual exchange rates in effect during that period.
Revenue constant currency growth rates (as compared to the
comparable prior periods as adjusted for Topic 606) were as
follows:
|
Three Months Ended April 30,
2018 compared to Three Months Ended
April 30, 2017
|
|
Three Months Ended
January 31,
2018 compared to Three Months Ended
January 31, 2017
|
|
Three Months Ended April 30,
2017 compared to Three Months Ended
April 30, 2016
|
Americas
|
19%
|
|
18%
|
|
24%
|
Europe
|
31%
|
|
30%
|
|
31%
|
Asia
Pacific
|
30%
|
|
27%
|
|
26%
|
Total
growth
|
22%
|
|
21%
|
|
26%
|
The Company presents constant currency information for unearned
revenue to provide a framework for assessing how the Company's
underlying business performed excluding the effects of foreign
currency rate fluctuations. To present the information, the
Company converted the unearned revenue balances in local currencies
in previous comparable periods using the
United States dollar currency exchange rate as of the most
recent balance sheet date.
Unearned revenue constant currency growth rates (as compared to
the comparable prior periods as adjusted for Topic 606) were as
follows:
|
April 30,
2018 compared to April 30, 2017
|
|
January 31,
2018 compared to January 31,
2017
|
|
April 30,
2017 compared to April 30, 2016
|
Total
growth
|
23%
|
|
25%
|
|
26%
|
Supplemental Cash
Flow Information
|
Free cash flow
analysis, a non-GAAP measure
|
(in
millions)
|
|
|
Three Months Ended
April 30,
|
|
2018
|
|
2017 (as
adjusted)
|
Operating cash
flow
|
|
|
|
GAAP net cash
provided by operating activities
|
$
|
1,466
|
|
|
$
|
1,230
|
|
Less:
|
|
|
|
Capital
expenditures
|
(122)
|
|
|
(157)
|
|
Free cash
flow
|
$
|
1,344
|
|
|
$
|
1,073
|
|
Supplemental
Strategic Investment Information
|
Gains on strategic
investments, net
|
(in
millions)
|
|
Upon adoption of ASU
2016-01 in the first fiscal quarter, the Company is now required to
record all fair value adjustments of the Company's publicly traded
and privately held equity investments through the statement of
operations. As such the Company anticipates additional
volatility to the Company's statements of operations in future
periods, due to changes in market prices of the Company's
investments in publicly held equity investments and the valuation
and timing of observable price changes and impairments of the
Company's investments in privately held securities. These changes
could be material based on market conditions and events. The
results for the current fiscal period are not indicative of the
results to be expected for any subsequent quarter or the fiscal
year ending January 31, 2019.
|
|
Net realized and
unrealized gains on strategic investments were as follows (in
millions):
|
|
|
Three Months Ended
April 30,
|
|
2018
|
|
2017
|
Net unrealized gains
recognized on publicly traded equity securities
|
$
|
211
|
|
|
$
|
0
|
|
Net unrealized losses
recognized on privately held equity securities
|
(9)
|
|
|
0
|
|
Net realized gains
recognized on strategic investments
|
9
|
|
|
3
|
|
|
$
|
211
|
|
|
$
|
3
|
|
Supplemental Debt
Information
|
(in
millions)
|
|
The carrying values
of the Company's borrowings were as follows:
|
|
Instrument
|
|
Date of
issuance
|
|
Maturity
date
|
|
Effective interest
rate for the three months ended April 30,
2018
|
|
April 30,
2018
|
|
January 31,
2018
|
2023 Senior
Notes
|
|
April 2018
|
|
April 2023
|
|
3.25%
|
|
$
|
991
|
|
|
$
|
0
|
|
2028 Senior
Notes
|
|
April 2018
|
|
April 2028
|
|
3.70%
|
|
1,487
|
|
|
0
|
|
2019 Term
Loan
|
|
July 2016
|
|
July 2019
|
|
2.71%
|
|
498
|
|
|
498
|
|
Loan assumed on 50
Fremont
|
|
February
2015
|
|
June 2023
|
|
3.75%
|
|
199
|
|
|
199
|
|
0.25% Convertible
Senior Notes
|
|
March 2013
|
|
April 2018
|
|
2.53%
|
|
0
|
|
|
1,023
|
|
Total carrying value
of debt
|
|
|
|
|
|
|
|
3,175
|
|
|
1,720
|
|
Less current portion
of debt
|
|
|
|
|
|
|
|
(3)
|
|
|
(1,025)
|
|
Total non-current
debt
|
|
|
|
|
|
|
|
$
|
3,172
|
|
|
$
|
695
|
|
Selected Balance
Sheet Accounts (in millions):
|
|
|
April
30, 2018
|
|
January 31,
2018
(as adjusted)*
|
Prepaid
Expenses and Other Current Assets
|
|
|
|
Prepaid income
taxes
|
$
|
18
|
|
|
$
|
33
|
|
Other taxes
receivable
|
34
|
|
|
33
|
|
Prepaid expenses and
other current assets
|
510
|
|
|
405
|
|
|
$
|
562
|
|
|
$
|
471
|
|
Property and
Equipment, net
|
|
|
|
Land
|
$
|
184
|
|
|
$
|
184
|
|
Buildings and
building improvements
|
631
|
|
|
626
|
|
Computers, equipment
and software
|
1,667
|
|
|
1,629
|
|
Furniture and
fixtures
|
147
|
|
|
139
|
|
Leasehold
improvements
|
862
|
|
|
825
|
|
|
3,491
|
|
|
3,403
|
|
Less accumulated
depreciation and amortization
|
(1,541)
|
|
|
(1,456)
|
|
|
$
|
1,950
|
|
|
$
|
1,947
|
|
Intangible
Assets Acquired Through Business Combinations,
net
|
|
|
|
Acquired developed
technology
|
$
|
328
|
|
|
$
|
350
|
|
Customer
relationships
|
482
|
|
|
472
|
|
Other
|
5
|
|
|
5
|
|
|
$
|
815
|
|
|
$
|
827
|
|
Other Assets,
net
|
|
|
|
Deferred income
taxes, noncurrent, net
|
$
|
39
|
|
|
$
|
36
|
|
Long-term
deposits
|
23
|
|
|
24
|
|
Domain names and
patents, net
|
21
|
|
|
23
|
|
Customer contract
assets resulting from business combinations
|
138
|
|
|
159
|
|
Other
|
171
|
|
|
142
|
|
|
$
|
392
|
|
|
$
|
384
|
|
Accounts
Payable, Accrued Expenses and Other Liabilities
|
|
|
|
Accounts
payable
|
$
|
134
|
|
|
$
|
76
|
|
Accrued
compensation
|
596
|
|
|
1,001
|
|
Accrued income and
other taxes payable
|
213
|
|
|
306
|
|
Capital lease
obligation, current
|
100
|
|
|
103
|
|
Other current
liabilities
|
648
|
|
|
561
|
|
|
$
|
1,691
|
|
|
$
|
2,047
|
|
Other
Noncurrent Liabilities
|
|
|
|
Deferred income taxes
and income taxes payable
|
$
|
123
|
|
|
$
|
121
|
|
Financing obligation
- leased facility
|
197
|
|
|
198
|
|
Long-term lease
liabilities and other
|
516
|
|
|
527
|
|
|
$
|
836
|
|
|
$
|
846
|
|
|
* Prior period
information has been adjusted for the adoption of Topic
606.
|
Comprehensive
Income
|
(in
millions)
|
(Unaudited)
|
|
|
Three Months Ended
April 30,
|
|
2018
|
|
2017 (as
adjusted)
|
Net income
|
$
|
344
|
|
|
$
|
1
|
*
|
Other comprehensive
income (loss), before tax and net of reclassification
adjustments:
|
|
|
|
Foreign currency
translation and other gains (losses)
|
(10)
|
|
|
14
|
|
Unrealized gains
(losses) on marketable securities and strategic
investments
|
(4)
|
|
|
71
|
|
Reclassification of
unrealized gains upon adoption of ASU 2016-01
|
(13)
|
|
|
0
|
|
Other comprehensive
income (loss), before tax
|
(27)
|
|
|
85
|
|
Tax effect upon
adoption of ASU 2016-01
|
6
|
|
|
0
|
|
Other comprehensive
income (loss), net of tax
|
(21)
|
|
|
85
|
|
Comprehensive
income
|
$
|
323
|
|
|
$
|
86
|
|
|
* Prior period
information has been adjusted for the adoption of Topic
606.
|
Supplemental
Diluted Share Count Information
|
(share data in
millions)
|
|
|
Three Months Ended
April 30,
|
|
2018
|
|
2017
|
Weighted-average
shares outstanding for basic earnings per share
|
729
|
|
|
706
|
|
Effect of dilutive
securities:
|
|
|
|
Convertible senior
notes
|
4
|
|
|
4
|
|
Employee stock
awards
|
17
|
|
|
12
|
|
Warrants
|
4
|
|
|
0
|
|
Weighted-average
shares outstanding for diluted earnings per share
|
754
|
|
|
722
|
|
salesforce.com,
inc.
|
GAAP Results
Reconciled to non-GAAP Results
|
The following table
reflects selected GAAP results reconciled to non-GAAP
results.
|
(in millions, except
per share data)
|
(Unaudited)
|
|
|
Three Months Ended
April 30,
|
|
2018
|
|
2017 (as
adjusted)*
|
Non-GAAP gross
profit
|
|
|
|
GAAP gross
profit
|
$
|
2,239
|
|
|
$
|
1,746
|
|
Plus:
|
|
|
|
Amortization of
purchased intangibles (a)
|
39
|
|
|
44
|
|
Stock-based expense
(b)
|
34
|
|
|
32
|
|
Non-GAAP gross
profit
|
$
|
2,312
|
|
|
$
|
1,822
|
|
Non-GAAP operating
expenses
|
|
|
|
GAAP operating
expenses
|
$
|
2,048
|
|
|
$
|
1,742
|
|
Less:
|
|
|
|
Amortization of
purchased intangibles (a)
|
(30)
|
|
|
(31)
|
|
Stock-based expense
(b)
|
(218)
|
|
|
(220)
|
|
Non-GAAP operating
expenses
|
$
|
1,800
|
|
|
$
|
1,491
|
|
Non-GAAP income
from operations
|
|
|
|
GAAP income from
operations
|
$
|
191
|
|
|
$
|
4
|
|
Plus:
|
|
|
|
Amortization of
purchased intangibles (a)
|
69
|
|
|
75
|
|
Stock-based expense
(b)
|
252
|
|
|
252
|
|
Non-GAAP income from
operations
|
$
|
512
|
|
|
$
|
331
|
|
Non-GAAP
non-operating income (loss) (c)
|
|
|
|
GAAP non-operating
income (loss)
|
$
|
194
|
|
|
$
|
(14)
|
|
Plus:
|
|
|
|
Amortization of debt
discount, net
|
4
|
|
|
7
|
|
Non-GAAP
non-operating income (loss)
|
$
|
198
|
|
|
$
|
(7)
|
|
Non-GAAP net
income
|
|
|
|
GAAP net
income
|
$
|
344
|
|
|
$
|
1
|
|
Plus:
|
|
|
|
Amortization of
purchased intangibles (a)
|
69
|
|
|
75
|
|
Stock-based expense
(b)
|
252
|
|
|
252
|
|
Amortization of debt
discount, net
|
4
|
|
|
7
|
|
Less:
|
|
|
|
Income tax effects
and adjustments
|
(112)
|
|
|
(123)
|
|
Non-GAAP net
income
|
$
|
557
|
|
|
$
|
212
|
|
|
Three Months Ended
April 30,
|
|
2018
|
|
2017 (as
adjusted)*
|
Non-GAAP diluted
earnings per share
|
|
|
|
GAAP diluted net
income per share
|
$
|
0.46
|
|
|
$
|
0.00
|
|
Plus:
|
|
|
|
Amortization of
purchased intangibles
|
0.09
|
|
|
0.10
|
|
Stock-based
expense
|
0.33
|
|
|
0.35
|
|
Amortization of debt
discount, net
|
0.01
|
|
|
0.01
|
|
Less:
|
|
|
|
Income tax effects
and adjustments
|
(0.15)
|
|
|
(0.17)
|
|
Non-GAAP diluted
earnings per share
|
$
|
0.74
|
|
|
$
|
0.29
|
|
Shares used in
computing Non-GAAP diluted net income per share
|
754
|
|
|
722
|
|
|
* Prior period
information has been adjusted for the adoption of Topic
606.
|
|
a) Amortization of purchased
intangibles were as follows:
|
|
|
Three Months Ended
April 30,
|
|
2018
|
|
2017
|
Cost of
revenues
|
$
|
39
|
|
|
$
|
44
|
|
Marketing and
sales
|
30
|
|
|
31
|
|
|
$
|
69
|
|
|
$
|
75
|
|
|
b) Stock-based expense was as
follows:
|
|
Three Months Ended
April 30,
|
|
2018
|
|
2017
|
Cost of
revenues
|
$
|
34
|
|
|
$
|
32
|
|
Research and
development
|
66
|
|
|
64
|
|
Marketing and
sales
|
120
|
|
|
119
|
|
General and
administrative
|
32
|
|
|
37
|
|
|
$
|
252
|
|
|
$
|
252
|
|
|
c) GAAP non-operating income
(loss) consists of investment income, interest expense, gains on
strategic investments, net and other income.
|
salesforce.com,
inc.
|
Computation of
Basic and Diluted GAAP and non-GAAP Net Income (Loss) Per
Share
|
(in millions, except
per share data)
|
(Unaudited)
|
|
|
Three Months Ended
April 30,
|
|
2018
|
|
2017 (as
adjusted)*
|
GAAP Basic Net
Income Per Share
|
|
|
|
Net income
|
$
|
344
|
|
|
$
|
1
|
|
Basic net income per
share
|
$
|
0.47
|
|
|
$
|
0.00
|
|
Shares used in
computing basic net income per share
|
729
|
|
|
706
|
|
|
|
|
|
|
Three Months Ended
April 30,
|
|
2018
|
|
2017 (as
adjusted)*
|
Non-GAAP Basic Net
Income Per Share
|
|
|
|
Non-GAAP net
income
|
$
|
557
|
|
|
$
|
212
|
|
Basic Non-GAAP net
income per share
|
$
|
0.76
|
|
|
$
|
0.30
|
|
Shares used in
computing basic Non-GAAP net income per share
|
729
|
|
|
706
|
|
|
|
|
|
|
Three Months Ended
April 30,
|
|
2018
|
|
2017 (as
adjusted)*
|
GAAP Diluted Net
Income Per Share
|
|
|
|
Net income
|
$
|
344
|
|
|
$
|
1
|
|
Diluted net income
per share
|
$
|
0.46
|
|
|
$
|
0.00
|
|
Shares used in
computing diluted net income per share
|
754
|
|
|
722
|
|
|
|
|
|
|
Three Months Ended
April 30,
|
|
2018
|
|
2017 (as
adjusted)*
|
Non-GAAP Diluted
Net Income Per Share
|
|
|
|
Non-GAAP net
income
|
$
|
557
|
|
|
$
|
212
|
|
Diluted Non-GAAP net
income per share
|
$
|
0.74
|
|
|
$
|
0.29
|
|
Shares used in
computing diluted Non-GAAP net income per share
|
754
|
|
|
722
|
|
|
* Prior period
information has been adjusted for the adoption of Topic
606.
|
salesforce.com, inc.
Select Adjusted Financial
Information
Adoption of New Accounting Pronouncement
In May 2014, the Financial
Accounting Standards Board ("FASB") issued Accounting Standards
Update No. 2014-09, "Revenue from Contracts with Customers (Topic
606)" ("ASU 2014-09"), which amended the existing FASB Accounting
Standards Codification, replaces existing revenue recognition
guidance with a comprehensive revenue measurement and recognition
standard and expanded disclosure requirements. The standard also
provides guidance on the recognition of costs related to obtaining
customer contracts. ASU 2014-09, as amended, was effective for the
beginning of fiscal 2019, including interim periods within that
reporting period.
The Company adopted the requirements of the new standard as of
February 1, 2018, utilizing the full
retrospective method of transition. Adoption of the new standard
resulted in changes to the Company's accounting policies for
revenue recognition and costs capitalized to obtain revenue
contracts, net. The Company applied the new standard using a
practical expedient where the consideration allocated to the
remaining performance obligations or an explanation of when it
expects to recognize that amount as revenue for all reporting
periods presented before the date of the initial application is not
disclosed.
Refer to the Company's Form 10-K filed with the SEC on
March 9, 2018 for additional
information.
The following select financial information is on a basis
consistent with the new standard for fiscal year 2018 and 2017 and
the first, second, third and fourth fiscal quarters of 2018.
salesforce.com,
inc.
|
Select Adjusted
Financial Information
|
Condensed
Consolidated Statements of Operations for Fiscal 2018
Quarters
|
(in millions,
except per share data)
|
(Unaudited)
|
|
|
First
Quarter Fiscal 2018
|
|
Second
Quarter Fiscal 2018
|
|
Third
Quarter Fiscal 2018
|
|
Fourth
Quarter Fiscal 2018
|
|
Fiscal
2018
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Subscription and
support
|
$
|
2,209
|
|
|
$
|
2,383
|
|
|
$
|
2,506
|
|
|
$
|
2,668
|
|
|
$
|
9,766
|
|
Professional services
and other
|
188
|
|
|
194
|
|
|
195
|
|
|
197
|
|
|
774
|
|
Total
revenues
|
2,397
|
|
|
2,577
|
|
|
2,701
|
|
|
2,865
|
|
|
10,540
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
Subscription and
support
|
463
|
|
|
494
|
|
|
528
|
|
|
548
|
|
|
2,033
|
|
Professional services
and other
|
188
|
|
|
176
|
|
|
186
|
|
|
190
|
|
|
740
|
|
Total cost of
revenues
|
651
|
|
|
670
|
|
|
714
|
|
|
738
|
|
|
2,773
|
|
Gross
profit
|
1,746
|
|
|
1,907
|
|
|
1,987
|
|
|
2,127
|
|
|
7,767
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
Research and
development
|
376
|
|
|
387
|
|
|
394
|
|
|
396
|
|
|
1,553
|
|
Marketing and
sales
|
1,106
|
|
|
1,153
|
|
|
1,167
|
|
|
1,245
|
|
|
4,671
|
|
General and
administrative
|
260
|
|
|
283
|
|
|
271
|
|
|
275
|
|
|
1,089
|
|
Total operating
expenses
|
1,742
|
|
|
1,823
|
|
|
1,832
|
|
|
1,916
|
|
|
7,313
|
|
Income from
operations
|
4
|
|
|
84
|
|
|
155
|
|
|
211
|
|
|
454
|
|
Income (loss) before
benefit from (provision for) income taxes
|
(10)
|
|
|
63
|
|
|
146
|
|
|
221
|
|
|
420
|
|
Benefit from
(provision for) income taxes
|
11
|
|
|
(17)
|
|
|
(39)
|
|
|
(15)
|
|
|
(60)
|
|
Net income
|
$
|
1
|
|
|
$
|
46
|
|
|
$
|
107
|
|
|
$
|
206
|
|
|
$
|
360
|
|
Basic net income per
share
|
$
|
0.00
|
|
|
$
|
0.06
|
|
|
$
|
0.15
|
|
|
$
|
0.28
|
|
|
$
|
0.50
|
|
Diluted net income
per share
|
$
|
0.00
|
|
|
$
|
0.06
|
|
|
$
|
0.14
|
|
|
$
|
0.28
|
|
|
$
|
0.49
|
|
Shares used in
computing basic net income per share
|
706
|
|
|
712
|
|
|
717
|
|
|
724
|
|
|
715
|
|
Shares used in
computing diluted net income per share
|
722
|
|
|
729
|
|
|
738
|
|
|
749
|
|
|
735
|
|
The following table reflects GAAP results reconciled to non-GAAP
results:
|
First
Quarter Fiscal 2018
|
|
Second
Quarter Fiscal 2018
|
|
Third
Quarter Fiscal 2018
|
|
Fourth
Quarter Fiscal 2018
|
|
Fiscal
2018
|
Non-GAAP diluted
earnings per share
|
|
|
|
|
|
|
|
|
|
GAAP diluted net
income per share
|
$
|
0.00
|
|
|
$
|
0.06
|
|
|
$
|
0.14
|
|
|
$
|
0.28
|
|
|
$
|
0.49
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
Amortization of
purchased intangibles
|
0.10
|
|
|
0.10
|
|
|
0.10
|
|
|
0.09
|
|
|
0.39
|
|
Stock-based
expense
|
0.35
|
|
|
0.35
|
|
|
0.34
|
|
|
0.32
|
|
|
1.36
|
|
Amortization of debt
discount, net
|
0.01
|
|
|
0.01
|
|
|
0.01
|
|
|
0.01
|
|
|
0.04
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Income tax effects
and adjustments
|
(0.17)
|
|
|
(0.16)
|
|
|
(0.17)
|
|
|
(0.23)
|
|
|
(0.74)
|
|
Non-GAAP diluted
earnings per share
|
$
|
0.29
|
|
|
$
|
0.36
|
|
|
$
|
0.42
|
|
|
$
|
0.47
|
|
|
$
|
1.54
|
|
Shares used in
computing Non-GAAP diluted net income per share
|
722
|
|
|
729
|
|
|
738
|
|
|
749
|
|
|
735
|
|
salesforce.com,
inc.
|
Select Adjusted
Financial Information
|
Condensed
Consolidated Statements of Operations for Fiscal 2017 and
2018
|
(in millions,
except per share data)
|
(Unaudited)
|
|
|
As
adjusted
|
|
As
reported
|
|
Change
|
|
Fiscal
2018
|
|
Fiscal
2017
|
|
Fiscal
2018
|
|
Fiscal
2017
|
|
Fiscal
2018
|
|
Fiscal
2017
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and
support
|
$
|
9,766
|
|
|
$
|
7,799
|
|
|
$
|
9,711
|
|
|
$
|
7,756
|
|
|
$
|
55
|
|
|
$
|
43
|
|
Professional services
and other
|
774
|
|
|
638
|
|
|
769
|
|
|
636
|
|
|
5
|
|
|
2
|
|
Total
revenues
|
10,540
|
|
|
8,437
|
|
|
10,480
|
|
|
8,392
|
|
|
60
|
|
|
45
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Subscription and
support
|
2,033
|
|
|
1,617
|
|
|
2,033
|
|
|
1,617
|
|
|
0
|
|
|
0
|
|
Professional services
and other
|
740
|
|
|
617
|
|
|
740
|
|
|
617
|
|
|
0
|
|
|
0
|
|
Total cost of
revenues
|
2,773
|
|
|
2,234
|
|
|
2,773
|
|
|
2,234
|
|
|
0
|
|
|
0
|
|
Gross
profit
|
7,767
|
|
|
6,203
|
|
|
7,707
|
|
|
6,158
|
|
|
60
|
|
|
45
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
1,553
|
|
|
1,208
|
|
|
1,553
|
|
|
1,208
|
|
|
0
|
|
|
0
|
|
Marketing and
sales
|
4,671
|
|
|
3,811
|
|
|
4,829
|
|
|
3,918
|
|
|
(158)
|
|
|
(107)
|
|
General and
administrative
|
1,089
|
|
|
966
|
|
|
1,089
|
|
|
968
|
|
|
0
|
|
|
(2)
|
|
Total operating
expenses
|
7,313
|
|
|
5,985
|
|
|
7,471
|
|
|
6,094
|
|
|
(158)
|
|
|
(109)
|
|
Income from
operations
|
454
|
|
|
218
|
|
|
236
|
|
|
64
|
|
|
218
|
|
|
154
|
|
Income before benefit
from (provision for) income taxes
|
420
|
|
|
179
|
|
|
202
|
|
|
25
|
|
|
218
|
|
|
154
|
|
Benefit from
(provision for) income taxes
|
(60)
|
|
|
144
|
|
|
(75)
|
|
|
155
|
|
|
15
|
|
|
(11)
|
|
Net income
|
$
|
360
|
|
|
$
|
323
|
|
|
$
|
127
|
|
|
$
|
180
|
|
|
$
|
233
|
|
|
$
|
143
|
|
Basic net income per
share
|
$
|
0.50
|
|
|
$
|
0.47
|
|
|
$
|
0.18
|
|
|
$
|
0.26
|
|
|
$
|
0.32
|
|
|
$
|
0.21
|
|
Diluted net income
per share
|
$
|
0.49
|
|
|
$
|
0.46
|
|
|
$
|
0.17
|
|
|
$
|
0.26
|
|
|
$
|
0.32
|
|
|
$
|
0.20
|
|
Shares used in
computing basic net income per share
|
715
|
|
|
688
|
|
|
715
|
|
|
688
|
|
|
|
|
|
Shares used in
computing diluted net income per share
|
735
|
|
|
700
|
|
|
735
|
|
|
700
|
|
|
|
|
|
The following table reflects GAAP results reconciled to non-GAAP
results:
|
As
adjusted
|
|
As
reported
|
|
Change
|
|
Fiscal
2018
|
|
Fiscal
2017
|
|
Fiscal
2018
|
|
Fiscal
2017
|
|
Fiscal
2018
|
|
Fiscal
2017
|
Non-GAAP diluted
earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net
income per share
|
$
|
0.49
|
|
|
$
|
0.46
|
|
|
$
|
0.17
|
|
|
$
|
0.26
|
|
|
$
|
0.32
|
|
|
$
|
0.20
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
purchased intangibles
|
0.39
|
|
|
0.32
|
|
|
0.39
|
|
|
0.32
|
|
|
0.00
|
|
|
0.00
|
|
Stock-based
expense
|
1.36
|
|
|
1.17
|
|
|
1.36
|
|
|
1.17
|
|
|
0.00
|
|
|
0.00
|
|
Amortization of debt
discount, net
|
0.04
|
|
|
0.04
|
|
|
0.04
|
|
|
0.04
|
|
|
0.00
|
|
|
0.00
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
Gains from
acquisition of strategic investments
|
0.00
|
|
|
(0.02)
|
|
|
0.00
|
|
|
(0.02)
|
|
|
0.00
|
|
|
0.00
|
|
Income tax effects
and adjustments
|
(0.74)
|
|
|
(0.82)
|
|
|
(0.61)
|
|
|
(0.76)
|
|
|
(0.13)
|
|
|
(0.06)
|
|
Non-GAAP diluted
earnings per share
|
$
|
1.54
|
|
|
$
|
1.15
|
|
|
$
|
1.35
|
|
|
$
|
1.01
|
|
|
$
|
0.19
|
|
|
$
|
0.14
|
|
Shares used in
computing Non-GAAP diluted net income per share
|
735
|
|
|
700
|
|
|
735
|
|
|
700
|
|
|
|
|
|
salesforce.com,
inc.
|
Select Adjusted
Financial Information
|
Consolidated
Balance Sheets for Fiscal 2017 and 2018
|
(in
millions)
|
(Unaudited)
|
|
|
As
adjusted
|
|
As
reported
|
|
Change
|
|
January
31, 2018
|
|
January
31, 2017
|
|
January
31, 2018
|
|
January
31, 2017
|
|
January
31, 2018
|
|
January
31, 2017
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
2,543
|
|
|
$
|
1,607
|
|
|
$
|
2,543
|
|
|
$
|
1,607
|
|
|
$
|
0
|
|
|
$
|
0
|
|
Marketable
securities
|
1,978
|
|
|
602
|
|
|
1,978
|
|
|
602
|
|
|
0
|
|
|
0
|
|
Accounts receivable,
net
|
3,921
|
|
|
3,201
|
|
|
3,918
|
|
|
3,197
|
|
|
3
|
|
|
4
|
|
Costs capitalized to
obtain revenue contracts, net (1)
|
671
|
|
|
491
|
|
|
461
|
|
|
312
|
|
|
210
|
|
|
179
|
|
Prepaid expenses and
other current assets
|
471
|
|
|
318
|
|
|
390
|
|
|
279
|
|
|
81
|
|
|
39
|
|
Total current
assets
|
9,584
|
|
|
6,219
|
|
|
9,290
|
|
|
5,997
|
|
|
294
|
|
|
222
|
|
Property and
equipment, net
|
1,947
|
|
|
1,788
|
|
|
1,947
|
|
|
1,788
|
|
|
0
|
|
|
0
|
|
Costs capitalized to
obtain revenue contracts, noncurrent, net (1)
|
1,105
|
|
|
721
|
|
|
413
|
|
|
227
|
|
|
692
|
|
|
494
|
|
Capitalized software,
net
|
146
|
|
|
142
|
|
|
146
|
|
|
142
|
|
|
0
|
|
|
0
|
|
Strategic
investments
|
677
|
|
|
567
|
|
|
677
|
|
|
567
|
|
|
0
|
|
|
0
|
|
Goodwill
|
7,314
|
|
|
7,264
|
|
|
7,314
|
|
|
7,264
|
|
|
0
|
|
|
0
|
|
Intangible assets
acquired through business combinations, net
|
827
|
|
|
1,113
|
|
|
827
|
|
|
1,113
|
|
|
0
|
|
|
0
|
|
Other assets,
net
|
384
|
|
|
472
|
|
|
396
|
|
|
487
|
|
|
(12)
|
|
|
(15)
|
|
Total
assets
|
$
|
21,984
|
|
|
$
|
18,286
|
|
|
$
|
21,010
|
|
|
$
|
17,585
|
|
|
$
|
974
|
|
|
$
|
701
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable,
accrued expenses and other liabilities
|
$
|
2,047
|
|
|
$
|
1,765
|
|
|
$
|
2,010
|
|
|
$
|
1,752
|
|
|
$
|
37
|
|
|
$
|
13
|
|
Unearned revenue
(2)
|
6,995
|
|
|
5,467
|
|
|
7,095
|
|
|
5,543
|
|
|
(100)
|
|
|
(76)
|
|
Current portion of
debt
|
1,025
|
|
|
0
|
|
|
1,025
|
|
|
0
|
|
|
0
|
|
|
0
|
|
Total current
liabilities
|
10,067
|
|
|
7,232
|
|
|
10,130
|
|
|
7,295
|
|
|
(63)
|
|
|
(63)
|
|
Noncurrent
debt
|
695
|
|
|
2,008
|
|
|
695
|
|
|
2,008
|
|
|
0
|
|
|
0
|
|
Other noncurrent
liabilities
|
846
|
|
|
816
|
|
|
796
|
|
|
782
|
|
|
50
|
|
|
34
|
|
Total
liabilities
|
11,608
|
|
|
10,056
|
|
|
11,621
|
|
|
10,085
|
|
|
(13)
|
|
|
(29)
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
0
|
|
|
0
|
|
Additional paid-in
capital
|
9,752
|
|
|
8,040
|
|
|
9,752
|
|
|
8,040
|
|
|
0
|
|
|
0
|
|
Accumulated other
comprehensive loss
|
(12)
|
|
|
(86)
|
|
|
(27)
|
|
|
(76)
|
|
|
15
|
|
|
(10)
|
|
Retained earnings
(accumulated deficit)
|
635
|
|
|
275
|
|
|
(337)
|
|
|
(465)
|
|
|
972
|
|
|
740
|
|
Total stockholders'
equity
|
10,376
|
|
|
8,230
|
|
|
9,389
|
|
|
7,500
|
|
|
987
|
|
|
730
|
|
Total liabilities and
stockholders' equity
|
$
|
21,984
|
|
|
$
|
18,286
|
|
|
$
|
21,010
|
|
|
$
|
17,585
|
|
|
$
|
974
|
|
|
$
|
701
|
|
|
|
(1)
|
Previously referred
to as Deferred Commissions
|
(2)
|
Previously referred
to as Deferred Revenue
|
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SOURCE Salesforce