EX-99.1 2 dex991.htm PRESS RELEASE DATED MAY 21, 2009 Press Release dated May 21, 2009

Exhibit 99.1

David Havlek

salesforce.com

Investor Relations

415-536-2171

dhavlek@salesforce.com

Jane Hynes

salesforce.com

Public Relations

415-901-5079

jhynes@salesforce.com

Salesforce.com Announces Fiscal First Quarter Results

First Enterprise Cloud Computing Company to Exceed $1.2B Annual Revenue Run Rate

 

   

Record Revenue of $305 Million, up 23% Year-Over-Year

 

   

Record GAAP EPS of $0.15, up 88% Year-Over-Year

 

   

Net Customers Increase 3,900 in the Quarter to 59,300

 

   

Record Operating Cash Flow of $98 Million, up 17% Year-Over-Year

 

   

Total Cash and Marketable Securities of $984 Million, up $233 Million Year-Over-Year

SAN FRANCISCO, Calif. – May 21, 2009 – Salesforce.com (NYSE: CRM), the enterprise cloud computing company, today announced results for its fiscal first quarter ended April 30, 2009.

“We are pleased to report record revenue, GAAP earnings per share, and cash flow for our fiscal first quarter,” said Marc Benioff, chairman and CEO, salesforce.com. “In a tough IT spending environment, we added a first quarter record 3,900 net new customers to bring our total to over 59,000, and strong cost controls enabled us to raise our full year earnings guidance.”

Salesforce.com delivered the following results for the first quarter:

Revenue: Total Q1 revenue was $304.9 million, an increase of 23% on a year-over-year basis and an increase of 5% on a quarter-over-quarter basis. Subscription and support revenues were $281.8 million, an increase of 25% on a year-over-year basis and an increase of 6% on a quarter-over-quarter basis. Professional services and other revenues were $23.1 million, an increase of 4% on a year-over-year basis and a decrease of 1% on a quarter-over-quarter basis.

Earnings per Share: Q1 GAAP diluted earnings per share were approximately $0.15, including approximately $21.7 million in stock based compensation expense and approximately $2.6 million in amortization of purchased intangibles related to previously announced acquisitions. For purposes of the Q1 GAAP EPS calculations, there was an average of approximately 125 million diluted shares outstanding during the quarter.

Customers: Net paying customers rose approximately 3,900 during the quarter to finish at approximately 59,300. Compared with the year ago quarter, net paying customers have grown by approximately 15,700.

Cash: Cash from operations for the fiscal first quarter was approximately $98 million, up from $76 million in the fourth quarter, and up 17% year-over-year. Total cash, cash equivalents and marketable securities finished the quarter at approximately $984 million, an increase of approximately $101 million from Q4 and approximately $233 million from the year prior.


Deferred Revenue: Deferred revenue on the balance sheet as of April 30, 2009 was $549 million, an increase of 17% on a year-over-year basis and a decline of 8% on a quarter-over-quarter basis.

As of May 21, 2009, salesforce.com is initiating guidance for its second quarter, fiscal year 2010. For its full fiscal year 2010, the company is updating its prior revenue guidance and EPS guidance.

Q2 FY10: Revenue for the company’s second fiscal quarter is projected to be in the range of approximately $312 million to approximately $313 million. GAAP diluted EPS is expected to be in the range of approximately $0.14 to approximately $0.15. Stock based compensation expense is expected to be approximately $22.1 million, and amortization of purchased intangibles of previously announced acquisitions is expected to be approximately $2.2 million. For purposes of the Q2 GAAP EPS calculation, the company is expecting an average diluted shares count of approximately 126 million shares, a GAAP tax rate of approximately 43% and a minority interest expense of approximately $500,000.

Full Year FY10: The company today is reducing the full year revenue guidance it provided on February 25, 2009, with revenue now expected to be approximately $1.25 billion to approximately $1.27 billion. The company is raising its earnings outlook for the full year, expecting GAAP diluted EPS to be in the range of approximately $0.59 to approximately $0.60. Stock based compensation expense is expected to be approximately $90 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 43%, and a minority interest expense of approximately $2 million.

Quarterly Conference Call

Salesforce.com will host a conference call to discuss its first 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 99074003, until midnight (EDT) June 12, 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 to run every part of the enterprise in the cloud. Based on salesforce.com <http://salesforce.com> ‘s real-time, multi-tenant architecture, Salesforce CRM and Force.com offer the fastest path to customer success with cloud computing.

As of April 30, 2009, salesforce.com manages customer information for approximately 59,300 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 second fiscal quarter of 2010 and for the full fiscal year 2010, and our expected tax rate, stock based compensation expense, amortization expense, 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 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 April 30, 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
April 30,
 
     2009     2008  

Revenues:

    

Subscription and support

   $ 281,768     $ 225,341  

Professional services and other

     23,156       22,281  
                

Total revenues

     304,924       247,622  

Cost of revenues (1):

    

Subscription and support

     37,028       28,710  

Professional services and other

     24,772       22,588  
                

Total cost of revenues

     61,800       51,298  

Gross profit

     243,124       196,324  

Operating expenses (1):

    

Research and development

     31,584       19,767  

Marketing and sales

     138,267       122,704  

General and administrative

     43,150       38,432  
                

Total operating expenses

     213,001       180,903  

Income from operations

     30,123       15,421  

Interest, net

     4,322       6,722  

Other income (expense)

     371       (763 )
                

Income before provision for income taxes and noncontrolling interest

     34,816       21,380  

Provision for income taxes

     (15,823 )     (10,311 )
                

Consolidated net income

     18,993       11,069  

Less: Net income attributable to noncontrolling interest

     (557 )     (1,514 )
                

Net income attributable to salesforce.com

   $ 18,436     $ 9,555  
                

Basic net income per share attributable to salesforce.com common shareholders

   $ 0.15     $ 0.08  

Diluted net income per share attributable to salesforce.com common shareholders

   $ 0.15     $ 0.08  

Shares used in computing basic net income per share

     123,206       119,778  

Shares used in computing diluted net income per share

     125,349       124,414  

 

(1)    Amounts include stock-based expenses, as follows:

    

Cost of revenues

   $ 3,156     $ 2,675  

Research and development

     3,084       2,099  

Marketing and sales

     9,942       8,121  

General and administrative

     5,481       5,170  
                

Total stock-based expenses

   $ 21,663     $ 18,065  
                


salesforce.com, inc.

Condensed Consolidated Statements of Operations

As a percentage of total revenues:

(Unaudited)

 

     Three Months Ended
April 30,
 
     2009     2008  

Revenues:

    

Subscription and support

   92 %   91 %

Professional services and other

   8     9  
            

Total revenues

   100     100  

Cost of revenues:

    

Subscription and support

   12     12  

Professional services and other

   8     9  
            

Total cost of revenues

   20     21  

Gross profit

   80     79  

Operating expenses:

    

Research and development

   10     8  

Marketing and sales

   46     50  

General and administrative

   14     15  
            

Total operating expenses

   70     73  

Income from operations

   10     6  

Interest, net

   1     3  

Other income (expense)

   0     0  
            

Income before provision for income taxes and noncontrolling interest

   11     9  

Provision for income taxes

   (5 )   (4 )
            

Consolidated net income

   6     5  

Less: Net income attributable to noncontrolling interest

   0     (1 )
            

Net income attributable to salesforce.com

   6 %   4 %
            

Stock-based expenses as a percentage of total revenues, as follows:

    

Cost of revenues

   1 %   1 %

Research and development

   1     1  

Marketing and sales

   3     3  

General and administrative

   2     2  
            

Total stock-based expenses

   7 %   7 %
            


salesforce.com, inc.

Condensed Consolidated Balance Sheets

(in thousands)

 

     April 30,
2009
    January 31,
2009
 
     (unaudited)        

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 341,705     $ 483,834  

Short-term marketable securities

     174,909       213,769  

Accounts receivable, net

     145,869       266,555  

Deferred commissions

     36,862       39,384  

Deferred income taxes

     27,273       31,900  

Prepaid expenses and other current assets

     36,242       33,115  
                

Total current assets

     762,860       1,068,557  

Marketable securities, noncurrent

     467,210       184,962  

Fixed assets, net

     88,479       77,027  

Deferred commissions, noncurrent

     16,144       17,699  

Deferred income taxes, noncurrent

     27,600       26,589  

Capitalized software, net

     28,948       29,989  

Goodwill

     44,872       44,872  

Other assets, net

     31,587       30,127  
                

Total assets

   $ 1,467,700     $ 1,479,822  
                

Liabilities and stockholders’ equity

    

Current liabilities:

    

Accounts payable

   $ 15,757     $ 16,379  

Accrued expenses and other current liabilities

     131,704       163,205  

Income taxes payable

     3,143       3,619  

Deferred revenue

     539,490       583,763  
                

Total current liabilities

     690,094       766,966  

Income taxes payable, noncurrent

     14,041       12,490  

Long-term lease liabilities and other

     14,879       7,616  

Deferred revenue, noncurrent

     9,883       10,263  
                

Total liabilities

     728,897       797,335  

salesforce.com stockholders’ equity:

    

Common stock

     124       123  

Additional paid-in capital

     687,503       648,724  

Accumulated other comprehensive loss

     (4,050 )     (2,905 )

Retained earnings

     44,278       25,842  
                

Total stockholders’ equity controlling interest

     727,855       671,784  

Total stockholders’ equity noncontrolling interest

     10,948       10,703  
                

Total salesforce.com stockholders’ equity

     738,803       682,487  
                

Total liabilities and stockholders’ equity

   $ 1,467,700     $ 1,479,822  
                


salesforce.com, inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 

     Three Months Ended
April 30,
 
     2009     2008  

Operating activities:

    

Net income attributable to salesforce.com

   $ 18,436     $ 9,555  

Adjustments to reconcile net income to net cash provided by operating activities:

    

Noncontrolling interest

     557       1,514  

Depreciation and amortization

     12,145       8,158  

Amortization of deferred commissions

     14,946       14,723  

Expenses related to stock-based awards

     21,663       18,065  

Excess tax benefits from employee stock plans

     (9,448 )     (12,698 )

Changes in assets and liabilities

     39,677       44,515  
                

Net cash provided by operating activities

     97,976       83,832  
                

Investing activities:

    

Changes in marketable securities

     (242,638 )     16,540  

Capital expenditures

     (13,428 )     (24,177 )
                

Net cash used in investing activities

     (256,066 )     (7,637 )
                

Financing activities:

    

Proceeds from the exercise of stock options

     9,168       11,485  

Excess tax benefits from employee stock plans

     9,448       12,698  

Principal payments on capital lease obligations

     (1,248 )     (5 )
                

Net cash provided by financing activities

     17,368       24,178  
                

Effect of exchange rate changes

     (1,407 )     (920 )
                

Net (decrease) increase in cash and cash equivalents

     (142,129 )     99,453  

Cash and cash equivalents, beginning of period

     483,834       279,095  
                

Cash and cash equivalents, end of period

   $ 341,705     $ 378,548  
                


salesforce.com, inc.

Additional Metrics

(Unaudited)

 

     Apr 30,
2009
   Jan 31,
2009
   Oct 31,
2008
   Jul 31,
2008
   Apr 30,
2008
   Jan 31,
2008

Full Time Equivalent Headcount

     3,607      3,566      3,318      3,046      2,864      2,606

Financial data (in thousands):

                 

Cash, cash equivalents and marketable securities

   $ 983,824    $ 882,565    $ 804,606    $ 823,417    $ 750,633    $ 669,800

Deferred revenue, current and noncurrent

   $ 549,373    $ 594,026    $ 469,534    $ 479,546    $ 470,297    $ 480,894

 

     Three Months Ended
April 30,
 
     2009     2008  

Revenues by geography (in thousands):

    

Americas

   $ 220,650     $ 178,371  

Europe

     51,602       45,164  

Asia Pacific

     32,672       24,087  
                
   $ 304,924     $ 247,622  
                
As a percentage of total revenues:     

Revenues by geography:

    

Americas

     72 %     72 %

Europe

     17       18  

Asia Pacific

     11       10  
                
     100 %     100 %