Quantcast

Salesforce Earnings: Company Beats Estimates

Full year revenue up 37%

Get the WebProNews Newsletter:


Salesforce Earnings: Company Beats Estimates
[ Business]

Salesforce released its earnings report for fiscal Q4 and full-year 2011, beating most estimates.

Quarterly revenue was $632 Million, up 38% YoY. Full-year revenue was $2.27 Billion, up 37% YoY.

“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 CEO Marc Benioff. “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.”

Here’s the release in its entirety:

SAN FRANCISCO, Feb. 23, 2012 /PRNewswire/ — 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.

(Logo:  http://photos.prnewswire.com/prnh/20050216/SFW105LOGO)

“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:

Click to view table full screen

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:

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 inEurope and Asia, and trades on the New York Stock Exchange under the ticker symbol “CRM.” For more information please visithttp://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.

Click to view table full screen
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
Click to view table full screen
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
Click to view table full screen
salesforce.com, inc. 
Condensed Consolidated Balance Sheets
(in thousands)
January 31, January 31,
2012 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
Click to view table full screen
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
Click to view table full screen
salesforce.com, inc.
Additional Metrics
 (Unaudited)
Jan 31, Oct 31, Jul 31, Apr 30, Jan 31, Oct 31,
2012 2011 2011 2011 2011 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, Oct 31, Jan 31,
  2012   2011   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
Selected 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 Three Months Ended Three Months Ended
January 31, 2012 October 31, 2011 January 31, 2011
compared to Three Months compared to Three Months compared to Three Months
Ended January 31, 2011 Ended October 31, 2010 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.
Click to view table full screen
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.  
Click to view table full screen
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
Salesforce Earnings: Company Beats Estimates
Comments Off
Top Rated White Papers and Resources

Comments are closed.

  • Join for Access to Our Exclusive Web Tools
  • Sidebar Top
  • Sidebar Middle
  • Sign Up For The Free Newsletter
  • Sidebar Bottom