EX-99.1 2 d305106dex991.htm PRESS RELEASE Press Release

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 2012 Fourth Quarter and Full Year Results

 

   

Quarterly Revenue of $632 Million, up 38% Year-Over-Year

 

   

Full Year Revenue of $2.27 Billion, up 37% Year-Over-Year

 

   

Quarterly Operating Cash Flow of $240 Million, up 45% Year-Over-Year

 

   

Full Year Operating Cash Flow of $592 Million, up 29% Year-Over-Year

 

   

Deferred Revenue of $1.38 Billion, up 48% Year-Over-Year

 

   

Unbilled Deferred Revenue of $2.2 Billion, up from $1.5 Billion Year-Over-Year

 

   

Raises FY13 Revenue Guidance to $2.92 – $2.95 Billion

 

   

Initiates FY13 Non-GAAP EPS Guidance of $1.58-$1.62

SAN FRANCISCO, Calif. – February 23, 2012 – Salesforce.com (NYSE: CRM), the enterprise cloud computing (http://www.salesforce.com/cloudcomputing/) company, today announced results for its fiscal fourth quarter and full fiscal year ended January 31, 2012.

“Salesforce.com’s 38% revenue growth in the fourth quarter was a spectacular finish to our fiscal year, a year in which we delivered 37% revenue growth and added nearly 2,500 employees, including nearly 2,000 in the U.S.,” said Marc Benioff, Chairman and CEO, salesforce.com. “Given the strong customer response to the social enterprise, we’re excited to raise our guidance today, which puts us on pace to exceed the $3 billion revenue run rate during FY13.”

Salesforce.com delivered the following results for its fiscal fourth quarter:

Revenue: Total Q4 revenue was $632 million, an increase of 38% on a year-over-year basis. Subscription and support revenues were $594 million, an increase of 39% on a year-over-year basis. Professional services and other revenues were $38 million, an increase of 33% on a year-over-year basis.

For the full fiscal year 2012, the company reported revenue of $2.27 billion, an increase of 37% from the prior year. Subscription and support revenues were $2.13 billion, an increase of 37% on a year-over-year basis. Professional services and other revenues were $140 million, an increase of 32% on a year-over-year basis.

Earnings per Share: Q4 GAAP net loss per share was ($0.03), and non-GAAP diluted earnings per share was $0.43. The company’s non-GAAP results exclude the effects of approximately $70 million in stock-based compensation expense, approximately $20 million in amortization of purchased intangibles, and approximately $4 million in net non-cash interest expense related to the company’s convertible senior notes. Non-GAAP EPS calculations are based on approximately 142 million diluted shares outstanding during the quarter, including approximately 1.7 million shares associated with the


company’s convertible senior notes. GAAP EPS calculations are based on a basic share count of approximately 137 million shares.

For the full fiscal year 2012, GAAP net loss per share was ($0.09), and non-GAAP diluted earnings per share was $1.36. The company’s non-GAAP results exclude the effects of approximately $229 million in stock-based compensation, approximately $67 million in amortization of purchased intangibles, and approximately $12 million in net non-cash interest expense related to the convertible senior notes. Non-GAAP EPS calculations are based on approximately 142 million diluted shares outstanding during the year, including approximately 2.8 million shares associated with the company’s convertible senior notes. GAAP EPS calculations are based on a basic share count of approximately 135 million shares.

Cash: Cash generated from operations for the fiscal fourth quarter was $240 million, an increase of 45% on a year-over-year basis. For the full fiscal year 2012, operating cash flow totaled $592 million, up 29% year-over-year. Total cash, cash equivalents and marketable securities finished the quarter at approximately $1.4 billion.

Deferred Revenue: Deferred revenue on the balance sheet as of January 31, 2012 was approximately $1.38 billion, an increase of 48% on a year-over-year basis. Current deferred revenue increased by 41% to approximately $1.29 billion, benefited in part by longer invoice durations. Long term deferred revenue increased by 309% to approximately $89 million. Unbilled deferred revenue, representing business that is contracted but unbilled and off balance sheet, ended the fiscal year at approximately $2.2 billion, up from approximately $1.5 billion at the end of fiscal 2011.

As of February 23, 2012, salesforce.com is initiating revenue and EPS guidance for its first quarter of fiscal year 2013, and initiating EPS guidance for its full fiscal year 2013. In addition, the Company is raising its full fiscal year 2013 revenue guidance previously provided on November 17, 2011.

Q1 FY13 Guidance: Revenue for the company’s first fiscal quarter is projected to be in the range of $673 million to $678 million, an increase of 33% to 34%, year-over-year.

GAAP net loss per share is expected to be in the range of ($0.19) to ($0.18), while diluted non-GAAP EPS is expected to be in the range of $0.33 to $0.34. The non-GAAP estimate excludes the effects of stock-based compensation expense, expected to be approximately $79 million, amortization of purchased intangibles related to acquisitions, expected to be approximately $21 million, and net non-cash interest expense related to the convertible senior notes, expected to be approximately $5 million. EPS estimates assume a GAAP tax rate of approximately 3%, and a non-GAAP tax rate of approximately 38%. For the purpose of the non-GAAP EPS calculation, assume an average fully diluted share count of approximately 145 million shares, and for the GAAP EPS calculation, assume an average basic share count of approximately 138 million shares.

Full Year FY13 Guidance: The company is raising its projected full fiscal year 2013 revenue from guidance previously provided on November 17, 2011. Revenue for the company’s full fiscal year 2013 is projected to be in the range of $2.92 billion to $2.95 billion, an increase of 29% to 30%, year-over-year.

For the company’s full fiscal year 2013, GAAP net loss per share is expected to be in the range of ($0.55) to ($0.51) while diluted non-GAAP EPS is expected to be in the range of $1.58 to $1.62. The non-GAAP estimate excludes the effects of stock-based compensation expense, expected to be approximately $368 million, amortization of purchased intangibles related to acquisitions, expected to be approximately $80 million, and net non-cash interest expense related to the convertible senior notes, expected to be approximately $24 million. EPS estimates assume a GAAP tax rate of approximately 8%, and a non-GAAP tax rate of approximately 38%. For the


purpose of the non-GAAP EPS calculation, assume an average fully diluted share count of approximately 149 million shares, and for the GAAP EPS calculation, assume an average basic share count of approximately 142 million shares.

The following is a per share reconciliation of GAAP EPS to non-GAAP diluted EPS guidance for the first quarter and full fiscal year:

 

     Fiscal 2013  
     Q1     FY2013  

GAAP EPS Range*

   $ (0.19) - $(0.18   $ (0.55) - $(0.51

Plus

    

Amortization of purchased intangibles

   $ 0.15      $ 0.54   

Stock-based expense

   $ 0.54      $ 2.47   

Amortization of debt discount

   $ 0.03      $ 0.16   

Less

    

Income tax effect of certain Non-GAAP items

   $ (0.20   $ (1.04
  

 

 

   

 

 

 

Non-GAAP diluted EPS

   $ 0.33 - $0.34      $ 1.58 - $1.62   

Shares used in computing basic net income per share (millions)

     138        142   

Shares used in computing diluted net income per share (millions)

     145        149   

 

* For Q1 & FY13 GAAP EPS loss, basic number of shares used for calculation

Quarterly Conference Call

Salesforce.com will host a conference call to discuss its fourth quarter fiscal year 2012 results at 2:00 p.m. Pacific 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 at +1 706-902-1764, passcode salesforce.com or 48589774. A replay will be available at 800-642-1687 or +1 706-645-9291, passcode 48589774, until midnight (Eastern Time) March 23, 2012.

About Salesforce.com

With 100,000+ customers, salesforce.com is the enterprise cloud computing company that is leading the shift to the social enterprise. Social enterprises leverage social, mobile and open cloud technologies to put customers at the heart of their business. Based on salesforce.com’s real-time, multitenant architecture, the company’s platform and application services include:

 

   

Salesforce Chatter, a private social network for your business

 

   

Salesforce Sales Cloud, for sales force automation and contact management

 

   

Salesforce Service Cloud, for customer service and support solutions

 

   

Salesforce Radian6, for social media monitoring and engagement

 

   

Salesforce Data.com, the most complete source of accurate business data

 

   

AppExchange, the leading marketplace for enterprise cloud computing applications

 

   

Force.com, for custom application development

 

   

Heroku, for building social and mobile apps

 

   

Database.com, the world’s first enterprise cloud database


Any unreleased services or features referenced in this or other press releases or public statements are not currently available and may not be delivered on time or at all. Customers who purchase salesforce.com applications should make their purchase decisions based upon features that are currently available. Salesforce.com has headquarters in San Francisco, with offices in Europe and Asia, and trades on the New York Stock Exchange under the ticker symbol “CRM.” For more information please visit http://salesforce.com, or call 1-800-NO-SOFTWARE.

###

Non-GAAP Financial Measures: This press release includes information about non-GAAP EPS and non-GAAP tax rates (collectively the “non-GAAP financial measures”). Non-GAAP EPS estimates exclude the impact of the following non-cash 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 the tax consequences associated with these items. The purpose of the non-GAAP tax rate is to quantify the excluded tax consequences of the excluded expense items. These non-GAAP estimates are not measurements of financial performance prepared in accordance with U.S. generally accepted accounting principles. The method used to produce non-GAAP financial measures is not computed according to GAAP and may differ from the methods 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.

The primary purpose of these non-GAAP measures is to provide supplemental information that may prove useful to investors who wish to consider the impact of certain non-cash items on the company’s operating performance. Non-cash stock-based compensation, amortization of acquisition-related intangible assets, and the net amortization of debt discount on the company’s convertible senior notes are being excluded from the company’s FY12 financial results because the decisions which gave rise to these expenses were not made to increase revenue in a particular period, but were made for the company’s long-term benefit over multiple periods. While strategic decisions, such as those to issue stock-based compensation, acquire a company, or issue convertible senior notes, are made to further the company’s long-term strategic objectives and impact the company’s income statement under GAAP measures, these items affect multiple periods and management is not able to change or affect these items in any particular period. As such, supplementing GAAP disclosure with non-GAAP disclosure using the non-GAAP measures provides management with an additional view of operational performance by excluding expenses that are not directly related to performance in any particular period, and management uses both GAAP and non-GAAP measures when planning, monitoring, and evaluating the company’s performance.

In addition, the majority of the company’s industry peers report non-GAAP operating results that exclude certain non-cash or non-recurring items. Management believes that the provision of supplemental non-GAAP information will enable a more complete comparison of the company’s relative performance.

Specifically, management is excluding the following items from its non-GAAP EPS for Q4 and FY12 and its non-GAAP estimates for Q1 and FY13:

 

   

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: The company views amortization of acquisition-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, as items arising from pre-acquisition activities determined at the time of an acquisition. While it is continually viewed 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 $575 million of convertible subordinated notes that were issued in a private placement in January 2010. The imputed interest rate is approximately 5.9%, while the coupon interest rate is 0.75%. 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. Management believes that the exclusion of the non-cash interest expense provides investors an enhanced view of the company’s operational performance.

 

   

Income Tax Effects: The company’s estimated non-GAAP effective tax rate is lower than the estimated GAAP effective tax rate due to the exclusion of the expense items described above.

###

“Safe harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements about expected GAAP revenue and GAAP and non-GAAP EPS for the first fiscal quarter of 2013 and the full fiscal year, the company’s expected revenue run rate and revenues in fiscal 2013, the company’s expected tax rates, stock-based compensation expenses, amortization of purchased intangibles and 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 possible fluctuations in the company’s financial and operating results; the company’s rate of growth and anticipated revenue run rate, including the company’s ability to convert deferred revenue and unbilled deferred revenue into revenue and, as appropriate, cash flow, and the continued growth and ability to maintain deferred revenue and unbilled deferred revenue; errors, interruptions or delays in the company’s service or the company’s Web hosting; breaches of the company’s security measures; the financial impact of any previous and future acquisitions; the nature of the company’s business model; the company’s ability to continue to release, and gain customer acceptance of, new and improved versions of the company’s service; successful customer deployment and utilization of the company’s existing and future services; changes in the company’s sales cycle; competition; various financial aspects of the company’s subscription model; unexpected increases in attrition or decreases in new business; the emerging markets in which we operate; unique aspects of entering or expanding in international markets, the company’s ability to hire, retain and motivate employees and manage the company’s growth; changes in the company’s customer base; technological developments; regulatory developments; litigation related to intellectual property and other matters, and any related claims, negotiations and settlements; unanticipated changes in the company’s effective tax rate; fluctuations in the number of shares we have outstanding and the price of such shares; foreign currency exchange rates; collection of receivables; interest rates; the company’s plans to build and expand its campus in San


Francisco, California and the associated costs; and general developments in the economy, financial markets, and credit markets.

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, including the company’s Form 10-K that will be filed for the fiscal year ended January 31, 2012. 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.

Copyright © 2012 salesforce.com, inc. All rights reserved. Salesforce.com, Salesforce, Chatter, Sales Cloud, Service Cloud, Radian6, Jigsaw, AppExchange, Force.com, Heroku, and all associated logos are trademarks of salesforce.com, inc. in the United States and other countries. Salesforce.com offers its Siteforce products and services in Germany under the Force.com Sites trademark. 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 January 31,     Fiscal Year Ended January 31,  
             2012                     2011                     2012                     2011          

Revenues:

        

Subscription and support

   $ 594,269      $ 428,534      $ 2,126,234      $ 1,551,145   

Professional services and other

     37,644        28,333        140,305        105,994   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     631,913        456,867        2,266,539        1,657,139   

Cost of revenues (1)(2):

        

Subscription and support

     100,065        61,116        360,758        208,243   

Professional services and other

     36,280        31,195        128,128        115,570   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenues

     136,345        92,311        488,886        323,813   

Gross profit

     495,568        364,556        1,777,653        1,333,326   

Operating expenses (1)(2):

        

Research and development

     80,613        57,530        295,347        187,887   

Marketing and sales

     327,567        233,217        1,169,610        792,029   

General and administrative

     93,765        74,200        347,781        255,913   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     501,945        364,947        1,812,738        1,235,829   

Income (loss) from operations

     (6,377     (391     (35,085     97,497   

Investment income

     4,965        9,426        23,268        37,735   

Interest expense

     (5,669     (3,290     (17,045     (24,909

Other expense

     (454     (1,366     (4,455     (6,025
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before benefit (provision) for income taxes and noncontrolling interest

     (7,535     4,379        (33,317     104,298   

Benefit (provision) for income taxes

     3,457        6,491        21,745        (34,601
  

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated net income (loss)

     (4,078     10,870        (11,572     69,697   

Less: Net loss attributable to noncontrolling interest

     0        43        0        (5,223
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to salesforce.com

   $ (4,078   $ 10,913      $ (11,572   $ 64,474   
  

 

 

   

 

 

   

 

 

   

 

 

 

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

   $ (0.03   $ 0.08      $ (0.09   $ 0.50   

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

   $ (0.03   $ 0.08      $ (0.09   $ 0.47   

Shares used in computing basic net income (loss) per share

     136,720        132,344        135,302        130,222   

Shares used in computing diluted net income (loss) per share

     136,720        140,199        135,302        136,598   

 

(1)    Amounts include amortization of purchased intangibles from business combinations, as follows:

        

Cost of revenues

   $ 17,132      $ 5,721      $ 60,069      $ 15,459   

Marketing and sales

     2,751        1,146        7,250        4,209   

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

        

Cost of revenues

   $ 5,283      $ 3,541      $ 17,451      $ 12,158   

Research and development

     14,670        6,778        45,894        18,897   

Marketing and sales

     35,706        19,955        115,730        56,451   

General and administrative

     14,441        11,440        50,183        32,923   


salesforce.com, inc.

Condensed Consolidated Statements of Operations

As a percentage of total revenues:

(Unaudited)

 

     Three Months Ended January 31,     Fiscal Year Ended January 31,  
     2012     2011     2012     2011  

Revenues:

        

Subscription and support

     94     94     94     94

Professional services and other

     6        6        6        6   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     100        100        100        100   

Cost of revenues (1)(2):

        

Subscription and support

     16        13        16        13   

Professional services and other

     6        7        6        7   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenues

     22        20        22        20   

Gross profit

     78        80        78        80   

Operating expenses (1)(2):

        

Research and development

     12        13        13        11   

Marketing and sales

     52        51        52        48   

General and administrative

     15        16        15        15   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     79        80        80        74   

Income (loss) from operations

     (1     0        (2     6   

Investment income

     1        2        1        2   

Interest expense

     (1     (1     (1     (2

Other expense

     0        0        0        0   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before benefit (provision) for income taxes and noncontrolling interest

     (1     1        (2     6   

Benefit (provision) for income taxes

     0        1        1        (2
  

 

 

   

 

 

   

 

 

   

 

 

 

Consolidated net income (loss)

     (1     2        (1     4   

Less: Net loss attributable to noncontrolling interest

     0        0        0        0   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to salesforce.com

     (1 %)      2     (1 %)      4
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)    Amortization of purchased intangibles from business combinations as a percentage of total revenues, as follows:

        

Cost of revenues

     3     1     3     1

Marketing and sales

     0        0        0        0   

(2)    Stock-based expenses as a percentage of total

revenues, as follows:

       

  

Cost of revenues

     1     1     1     1

Research and development

     2        1        2        1   

Marketing and sales

     6        4        5        3   

General and administrative

     2        3        2        2   


salesforce.com, inc.

Condensed Consolidated Balance Sheets

(in thousands)

 

     January  31,
2012
     January  31,
2011
 
     
     (unaudited)         

Assets

     

Current assets:

     

Cash and cash equivalents

   $ 607,284       $ 424,292   

Short-term marketable securities

     170,582         72,678   

Accounts receivable, net

     683,745         426,943   

Deferred commissions

     98,471         67,774   

Deferred income taxes

     31,821         27,516   

Prepaid expenses and other current assets (see additional metrics)

     80,319         55,721   
  

 

 

    

 

 

 

Total current assets

     1,672,222         1,074,924   

Marketable securities, noncurrent

     669,308         910,587   

Property and equipment, net (see additional metrics)

     527,946         387,174   

Deferred commissions, noncurrent

     78,149         48,842   

Deferred income taxes, noncurrent

     87,587         41,199   

Capitalized software, net (see additional metrics)

     188,412         127,987   

Goodwill

     785,381         396,081   

Other assets, net (see additional metrics)

     155,149         104,371   
  

 

 

    

 

 

 

Total assets

   $ 4,164,154       $ 3,091,165   
  

 

 

    

 

 

 

Liabilities, temporary equity and stockholders’ equity

     

Current liabilities:

     

Accounts payable

   $ 33,258       $ 18,106   

Accrued expenses and other liabilities (see additional metrics)

     502,442         345,121   

Deferred revenue

     1,291,622         913,239   

Convertible senior notes, net

     496,149         0   
  

 

 

    

 

 

 

Total current liabilities

     2,323,471         1,276,466   

Convertible senior notes, net

     0         472,538   

Income taxes payable, noncurrent

     37,258         18,481   

Long-term lease liabilities and other

     48,651         25,487   

Deferred revenue, noncurrent

     88,673         21,702   
  

 

 

    

 

 

 

Total liabilities

     2,498,053         1,814,674   

Temporary equity

     78,741         0   

Stockholders’ equity:

     

Common stock

     137         133   

Additional paid-in capital

     1,415,077         1,098,604   

Accumulated other comprehensive income

     12,683         6,719   

Retained earnings

     159,463         171,035   
  

 

 

    

 

 

 

Total stockholders’ equity

     1,587,360         1,276,491   
  

 

 

    

 

 

 

Total liabilities, temporary equity and stockholders’ equity

   $ 4,164,154       $ 3,091,165   
  

 

 

    

 

 

 


salesforce.com, inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

 

     Three Months Ended January 31,     Fiscal Year Ended January 31,  
             2012                     2011                     2012                     2011          

Operating activities:

        

Consolidated net income (loss)

   $ (4,078   $ 10,870      $ (11,572   $ 69,697   

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

        

Depreciation and amortization

     45,901        23,738        157,286        75,746   

Amortization of debt discount and transaction costs

     3,877        1,982        10,347        19,621   

Amortization of deferred commissions

     30,742        22,605        107,195        80,159   

Expenses related to stock-based awards

     70,100        41,714        229,258        120,429   

Excess tax benefits from employee stock plans

     4,994        10,777        (6,018     (35,991

Changes in assets and liabilities:

        

Accounts receivable, net

     (365,099     (169,833     (244,947     (102,507

Deferred commissions

     (86,947     (56,004     (167,199     (121,247

Prepaid expenses and other current assets

     (777     8,464        (10,736     2,001   

Other assets

     2,816        (365     2,883        (9,770

Accounts payable

     3,716        (5,254     12,644        1,246   

Accrued expenses and other current liabilities

     72,628        36,684        67,692        132,004   

Deferred revenue

     462,474        240,384        444,674        227,693   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

     240,347        165,762        591,507        459,081   
  

 

 

   

 

 

   

 

 

   

 

 

 

Investing activities:

        

Business combinations, net of cash acquired

     (57,914     (247,994     (422,699     (403,331

Land activity and building improvements

     (6,565     (269,944     (19,655     (277,944

Strategic investments

     (2,647     (13,605     (37,370     (20,105

Changes in marketable securities

     (45,608     179,346        141,679        (270,287

Capital expenditures

     (44,602     (30,576     (151,645     (90,887
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (157,336     (382,773     (489,690     (1,062,554
  

 

 

   

 

 

   

 

 

   

 

 

 

Financing activities:

        

Purchase of subsidiary stock

     0        (19,721     0        (171,964

Proceeds from equity plans

     26,203        44,406        116,565        160,402   

Excess tax benefits from employee stock plans

     (4,994     (10,777     6,018        35,991   

Contingent consideration payment related to prior business combinations

     0        0        (16,200     0   

Principal payments on capital lease obligations

     (8,737     (3,198     (30,533     (10,355
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by financing activities

     12,472        10,710        75,850        14,074   
  

 

 

   

 

 

   

 

 

   

 

 

 

Effect of exchange rate changes

     8,814        290        5,325        2,385   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     104,297        (206,011     182,992        (587,014

Cash and cash equivalents, beginning of period

     502,987        630,303        424,292        1,011,306   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 607,284      $ 424,292      $ 607,284      $ 424,292   
  

 

 

   

 

 

   

 

 

   

 

 

 


salesforce.com, inc.

Additional Metrics

(Unaudited)

 

     Jan 31,
2012
    Oct 31,
2011
    Jul 31,
2011
    Apr 30,
2011
    Jan 31,
2011
     Oct 31,
2010
 
             

Full Time Equivalent Headcount

     7,785        6,953        6,352        5,513        5,306         4,758   

Financial data (in thousands):

             

Cash, cash equivalents and marketable securities

   $ 1,447,174      $ 1,296,693      $ 1,286,658      $ 1,522,285      $ 1,407,557       $ 1,802,440   

Deferred revenue, current and noncurrent

   $ 1,380,295      $ 917,821      $ 935,266      $ 915,133      $ 934,941       $ 694,557   

Selected Balance Sheet Accounts (in thousands):

             
     Jan 31,
2012
    Oct 31,
2011
    Jan 31,
2011
                    
             

Prepaid Expenses and Other Current Assets

             

Deferred professional services costs

   $ 10,399      $ 13,563      $ 17,908          

Prepaid income taxes

     12,785        13,137        720          

Prepaid expenses and other current assets

     57,135        52,728        37,093          
  

 

 

   

 

 

   

 

 

        
   $ 80,319      $ 79,428      $ 55,721          
  

 

 

   

 

 

   

 

 

        

Property and Equipment, net

             

Land

   $ 248,263      $ 248,263      $ 248,263          

Building improvements

     43,868        34,974        10,115          

Computers, equipment and software

     232,460        223,288        115,736          

Furniture and fixtures

     25,250        24,622        20,462          

Leasehold improvements

     137,587        125,838        100,380          
  

 

 

   

 

 

   

 

 

        
     687,428        656,985        494,956          

Less accumulated depreciation and amortization

     (159,482     (152,158     (107,782       
  

 

 

   

 

 

   

 

 

        
   $ 527,946      $ 504,827      $ 387,174          
  

 

 

   

 

 

   

 

 

        

Capitalized Software, net

             

Capitalized internal-use software development costs, net of accumulated amortization

   $ 41,442      $ 35,475      $ 29,154          

Acquired developed technology, net of accumulated amortization

     146,970        163,938        98,833          
  

 

 

   

 

 

   

 

 

        
   $ 188,412      $ 199,413      $ 127,987          
  

 

 

   

 

 

   

 

 

        

Other Assets, net

             

Deferred professional services costs, noncurrent portion

   $ 3,935      $ 5,707      $ 10,201          

Long-term deposits

     13,941        13,887        12,114          

Purchased intangible assets, net of accumulated amortization

     46,110        45,410        31,660          

Acquired intellectual property, net of accumulated amortization

     15,020        13,895        5,874          

Strategic investments

     53,949        55,035        27,065          

Other

     22,194        22,484        17,457          
  

 

 

   

 

 

   

 

 

        
   $ 155,149      $ 156,418      $ 104,371          
  

 

 

   

 

 

   

 

 

        

Accrued Expenses and Other Current Liabilities

             

Accrued compensation

   $ 228,466      $ 145,116      $ 148,275          

Accrued other liabilities

     121,957        134,741        112,840          

Accrued income and other taxes payable

     100,471        78,819        49,135          

Accrued professional costs

     21,993        22,836        12,548          

Accrued rent

     29,555        27,638        22,323          
  

 

 

   

 

 

   

 

 

        
   $ 502,442      $ 409,150      $ 345,121          
  

 

 

   

 

 

   

 

 

        

 

Select Off-Balance Sheet Accounts

 

Unbilled Deferred Revenue, a non-GAAP measure

 

Unbilled deferred revenue was approximately $2.2 billion as of January 31, 2012 and $1.5 billion as of January 31, 2011. Unbilled deferred revenue represents future billings under our non-cancelable subscription agreements that have not been invoiced and, accordingly, are not recorded in deferred revenue.

 

Supplemental Revenue Analysis

 

  

  

    

  

     Three Months Ended January 31,     Fiscal Year Ended January 31,               
             2012                     2011                     2012                     2011                       

Revenues by geography (in thousands):

             

Americas

   $ 436,237      $ 308,526      $ 1,540,289      $ 1,135,019        

Europe

     108,141        82,933        408,456        291,784        

Asia Pacific

     87,535        65,408        317,794        230,336        
  

 

 

   

 

 

   

 

 

   

 

 

      
   $ 631,913      $ 456,867      $ 2,266,539      $ 1,657,139        
  

 

 

   

 

 

   

 

 

   

 

 

      

As a percentage of total revenues:

             

Revenues by geography:

             

Americas

     69     68     68     68     

Europe

     17        18        18        18        

Asia Pacific

     14        14        14        14        
  

 

 

   

 

 

   

 

 

   

 

 

      
     100     100     100     100     
  

 

 

   

 

 

   

 

 

   

 

 

      

 

    Three Months  Ended
January 31, 2012
compared to Three Months
Ended January 31, 2011
    Three Months  Ended
October 31, 2011
compared to Three Months
Ended October 31, 2010
    Three Months  Ended
January 31, 2011
compared to Three Months
Ended January 31, 2010
 
     
     
     

Revenue constant currency growth rates (as compared to the comparable prior periods)

     

Americas

    41     36     26

Europe

    32     29     41

Asia Pacific

    28     31     35

Total growth

    38     34     30

We present constant currency information to provide a framework for assessing how our 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 exchange rates in effect at the end of each quarter for growth rate calculations presented, rather than the actual exchange rates in effect during that period.

Supplemental Diluted Sharecount Information

(in thousands)                            
     Three Months Ended January 31,      Fiscal Year Ended January 31,  
             2012                      2011                      2012                      2011          

Weighted-average shares outstanding for basic earnings per share

     136,720         132,344         135,302         130,222   

Effect of dilutive securities (1):

           

Convertible senior notes

     1,700         2,421         2,263         1,561   

Warrants associated with the convertible senior note hedges

     0         696         553         0   

Employee stock awards

     3,407         4,738         4,177         4,815   
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share

     141,827         140,199         142,295         136,598   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) The effects of these dilutive securities were not included in the GAAP calculation of diluted earnings/loss per share for the three and twelve months ended January 31, 2012 because the effect would have been anti-dilutive.

Supplemental Cash Flow Information

Free cash flow analysis, a non-GAAP measure

(in thousands)

 

     Three Months Ended January 31,     Fiscal Year Ended January 31,  
             2012                     2011                     2012                     2011          

Operating cash flow-

        

GAAP net cash provided by operating activities

   $ 240,347      $ 165,762      $ 591,507      $ 459,081   

Less:

        

Capital expenditures

     (44,602     (30,576     (151,645     (90,887
  

 

 

   

 

 

   

 

 

   

 

 

 

Free cash flow

   $ 195,745      $ 135,186      $ 439,862      $ 368,194   
  

 

 

   

 

 

   

 

 

   

 

 

 

Our free cash flow analysis includes GAAP net cash provided by operating activities less capital expenditures. The capital expenditures balance does not include any costs related to the purchase and activities related to the building of our campus and strategic investments.


salesforce.com, inc.

GAAP RESULTS RECONCILED TO NON-GAAP RESULTS

The following table reflects selected salesforce.com GAAP results reconciled to non-GAAP results

(in thousands, except per share data)

(Unaudited)

 

     Three Months Ended January 31,     Fiscal Year Ended January 31,  
             2012                     2011                     2012                     2011          

Gross profit

        

GAAP gross profit

   $ 495,568      $ 364,556      $ 1,777,653      $ 1,333,326   

Plus:

        

Amortization of purchased intangibles (b)

     17,132        5,721        60,069        15,459   

Stock-based expenses (c)

     5,283        3,541        17,451        12,158   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP gross profit

   $ 517,983      $ 373,818      $ 1,855,173      $ 1,360,943   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses

        

GAAP operating expenses

   $ 501,945      $ 364,947      $ 1,812,738      $ 1,235,829   

Less:

        

Amortization of purchased intangibles (b)

     (2,751     (1,146     (7,250     (4,209

Stock-based expenses (c)

     (64,817     (38,173     (211,807     (108,271
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating expenses

   $ 434,377      $ 325,628      $ 1,593,681      $ 1,123,349   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

        

GAAP income (loss) from operations

   $ (6,377   $ (391   $ (35,085   $ 97,497   

Plus:

        

Amortization of purchased intangibles (b)

     19,883        6,867        67,319        19,668   

Stock-based expenses (c)

     70,100        41,714        229,258        120,429   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP income from operations

   $ 83,606      $ 48,190      $ 261,492      $ 237,594   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-operating income (a)

        

GAAP non-operating income (loss)

   $ (1,158   $ 4,770      $ 1,768      $ 6,801   

Plus: Amortization of debt discount, net

     4,144        2,430        12,335        19,079   
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP non-operating income

   $ 2,986      $ 7,200      $ 14,103      $ 25,880   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to salesforce.com

        

GAAP net income (loss) attributable to salesforce.com

   $ (4,078   $ 10,913      $ (11,572   $ 64,474   

Plus:

        

Amortization of purchased intangibles

     19,883        6,867        67,319        19,668   

Stock-based expenses

     70,100        41,714        229,258        120,429   

Amortization of debt discount, net

     4,144        2,430        12,335        19,079   

Less:

        

Income tax effect of Non-GAAP items

     (28,419     (18,854     (103,730     (57,544
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income attributable to salesforce.com

   $ 61,630      $ 43,070      $ 193,610      $ 166,106   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share

        

GAAP diluted earnings (loss) per share (d)

   $ (0.03   $ 0.08      $ (0.09   $ 0.47   

Plus:

        

Amortization of purchased intangibles

     0.14        0.05        0.47        0.14   

Stock-based expenses

     0.49        0.30        1.62        0.88   

Amortization of debt discount, net

     0.03        0.01        0.09        0.14   

Less:

        

Income tax effect of Non-GAAP items

     (0.20     (0.13     (0.73     (0.41
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP diluted earnings per share attributable to salesforce.com

   $ 0.43      $ 0.31      $ 1.36      $ 1.22   
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in computing diluted net income per share

     141,827        140,199        142,295        136,598   

a)      Non-operating income consists of investment income, interest expense and other income (expense)

b)      Amortization of purchased intangibles were as follows:

         

         

     Three Months Ended January 31,     Fiscal Year Ended January 31,  
     2012     2011     2012     2011  

Cost of revenues

   $ 17,132      $ 5,721      $ 60,069      $ 15,459   

Marketing and sales

     2,751        1,146        7,250        4,209   
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 19,883      $ 6,867      $ 67,319      $ 19,668   
  

 

 

   

 

 

   

 

 

   

 

 

 

c)      Stock-based expenses were as follows:

        
     Three Months Ended January 31,     Fiscal Year Ended January 31,  
     2012     2011     2012     2011  

Cost of revenues

   $ 5,283      $ 3,541      $ 17,451      $ 12,158   

Research and development

     14,670        6,778        45,894        18,897   

Marketing and sales

     35,706        19,955        115,730        56,451   

General and administrative

     14,441        11,440        50,183        32,923   
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 70,100      $ 41,714      $ 229,258      $ 120,429   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

d) Reported GAAP loss per share was calculated using the basic share count.

Non-GAAP diluted earnings per share was calculated using the diluted share count.


salesforce.com, inc.

COMPUTATION OF BASIC AND DILUTED GAAP AND NON-GAAP NET INCOME (LOSS) PER SHARE

(in thousands, except per share data)

(Unaudited)

 

     Three Months Ended
January 31,
     Fiscal Year Ended
January 31,
 
     2012     2011      2012     2011  

GAAP Basic Net Income (loss) Per Share

         

Net income (loss) attributable to salesforce.com

   $ (4,078   $ 10,913       $ (11,572   $ 64,474   

Basic net income (loss) per share attributable to salesforce.com common stockholders

     (0.03     0.08         (0.09     0.50   

Shares used in computing basic net income (loss) per share attributable to salesforce.com common stockholders

     136,720        132,344         135,302        130,222   
     Three Months Ended
January 31,
     Fiscal Year Ended
January 31,
 
     2012     2011      2012     2011  

Non-GAAP Basic Net Income Per Share

         

Non-GAAP net income attributable to salesforce.com

   $ 61,630      $ 43,070       $ 193,610      $ 166,106   

Basic Non-GAAP net income per share attributable to salesforce.com common stockholders

     0.45        0.33         1.43        1.28   

Shares used in computing basic net income per share attributable to salesforce.com common stockholders

     136,720        132,344         135,302        130,222   
     Three Months Ended
January 31,
     Fiscal Year Ended
January 31,
 
     2012     2011      2012     2011  

GAAP Diluted Net Income (loss) Per Share

         

Net income (loss) attributable to salesforce.com

   $ (4,078   $ 10,913       $ (11,572   $ 64,474   

Diluted net income (loss) per share attributable to salesforce.com common stockholders

     (0.03     0.08         (0.09     0.47   

Shares used in computing diluted net income (loss) per share attributable to salesforce.com common stockholders

     136,720        140,199         135,302        136,598   
     Three Months Ended
January 31,
     Fiscal Year Ended
January 31,
 
     2012     2011      2012     2011  

Non-GAAP Diluted Net Income Per Share

         

Non-GAAP net income attributable to salesforce.com

   $ 61,630      $ 43,070       $ 193,610      $ 166,106   

Diluted Non-GAAP net income per share attributable to salesforce.com common stockholders

     0.43        0.31         1.36        1.22   

Shares used in computing diluted net income per share attributable to salesforce.com common stockholders

     141,827        140,199         142,295        136,598