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 http://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% === === === ===
http://www.newscom.com/cgi-bin/prnh/20050216/SFW105LOGO
http://photoarchive.ap.org/ DATASOURCE: salesforce.com CONTACT:
David Havlek, Investor Relations, +1-415-536-2171, , or Jane Hynes,
Public Relations, +1-415-901-5079, , both of salesforce.com Web
Site: http://www.salesforce.com/
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