- Q4 Revenue soars 82% to $54.6 million year-over-year
- Q4 Paying Subscribers rise 32,000 to 227,000, up 79% year-over-year and up 16% sequentially
- Q4 Net Income rises to $3.6 million, from a prior-year Q4 loss of $765,000
- Q4 Earnings per Share rise to $0.03, a significant increase from a loss of $0.02 in the prior year period
- Q4 Cash from Operations rises to $21.1 million, an increase of 244% compared to the prior year period
- Raising Fiscal 2006 revenue and earnings guidance range
Salesforce.com (NYSE: CRM), the market and technology leader in on-demand customer relationship management, today announced results for its fiscal fourth quarter ended January 31, 2005.
“The results indicate a breakout moment: salesforce.com has become the standard for delivering CRM on demand,” said Marc Benioff, chairman and CEO of salesforce.com. “Gartner Group has predicted that salesforce.com will become the third largest provider of CRM by the end of 2005, surpassing Oracle and PeopleSoft combined. Customers are recognizing the benefits of on-demand success. The next stage of the on-demand revolution, which is the End of Software, is upon us.”
Salesforce.com delivered the following results for the fourth quarter of fiscal year 2005:
Revenue: Total revenue was $54.6 million, an increase of 82% on a year-over-year basis and an increase of 18% on a quarter-to-quarter basis. Subscription and support revenues were $49.4 million, an increase of 84% on a year-over-year basis and an increase of 19% on a quarter-to-quarter basis. Professional services and other revenues were $5.2 million, an increase of 60% on a year-over-year basis and an increase of 7% on a quarter-to-quarter basis.
Customers and Paying Subscribers: During the fourth quarter, the company added approximately 1,400 customers and approximately 32,000 paying subscribers. As of the end of the fiscal fourth quarter, the company had approximately 13,900 customers and approximately 227,000 paying subscribers.
Net Income: Net income was $3.6 million, a significant improvement from a loss of $765,000 in the year ago period, which included a one-time non-cash $897,000 charge in the year ago period. Fiscal fourth quarter 2005 net income grew 67% on a quarter-to-quarter basis.
Earnings per Share: Earnings per diluted share were $0.03, a significant increase from a loss of $0.02 in the year ago period, which included the one-time charge described above. Excluding the one-time charge in the fourth quarter of fiscal 2004, earnings per diluted share in the year ago period were approximately break-even.
Cash: Cash from operations for the fiscal fourth quarter was $21.1 million, an increase of 244% compared to the prior year period.
Deferred Revenue: Deferred revenue for the fiscal fourth quarter was $95.9 million, an increase of 93% on a year-over-year basis and 29% on a quarter-to-quarter basis.
Salesforce.com is raising guidance for the fiscal year 2006, ending January 31, 2006 and initiating guidance for its fiscal first quarter 2006 based on information as of February 17, 2005:
FY06 Revenue: Expected to be in the range of approximately $282 million to approximately $287 million, up from prior guidance of approximately $275 million to approximately $285 million.
FY06 Diluted EPS: Expected to be in the range of approximately $0.11 to approximately $0.13 based on an estimated average of 123 million diluted shares and an estimated effective tax rate of 25%. This represents an increase from prior guidance of approximately $0.10 to approximately $0.12.
The full year earnings per share guidance does not include the incremental impact of the recently issued Financial Accounting Standards Board (FASB) stock option expense requirement that will become effective in salesforce.com’s fiscal third quarter 2006.
Salesforce.com is providing, for the first time, first quarter fiscal year 2006 guidance based on information as of February 17, 2005:
Q1 FY06 Revenue: Expected to be in the range of approximately $58 million to approximately $60 million.
Q1 FY06 Diluted EPS: Expected to be in the range of approximately $0.01 to approximately $0.03 based on an estimated average of 119 million diluted shares and an estimated effective tax rate of 25%.
Quarterly Conference Call
Salesforce.com will host a conference call to discuss fourth quarter results at 2:00 p.m. Pacific Standard 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 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 (719) 457-2630 or (800) 967-7141. A replay will be available until midnight on February 19, 2005 and can be accessed by dialing, (719) 457-0820 or (888) 203-1112, passcode: 8244550.
About salesforce.com
Salesforce.com is the market and technology leader in on-demand customer relationship management (CRM). Through its award-winning salesforce.com family of products including Salesforce.com (www.salesforce.com) and Supportforce.com (www.supportforce.com), the company provides a comprehensive suite of CRM applications to help enterprises of all sizes, industries and geographies meet the complex challenge of sharing and managing information on-demand. Salesforce.com and Supportforce.com are built on the sforce client/service integration platform and include the Customforce.com tool for complete on-demand customization. Sforce (www.sforce.com) and Customforce.com (www.customforce.com) allow customers and independent software vendors to customize and integrate salesforce.com’s products, as well as build their own on-demand enterprise applications. As of January 31, 2005, salesforce.com manages customer information for approximately 13,900 customers and approximately 227,000 paying subscribers including Advanced Micro Devices (AMD), America Online (AOL), Automatic Data Processing (ADP), Avis/Budget Rent A Car (Cendant Rental Car Group), Dow Jones Newswires, Nokia, Polycom and SunTrust Banks. 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 www.salesforce.com, or call 1-800-NO-SOFTWARE.
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Salesforce.com is a registered trademark of salesforce.com, inc., San Francisco, California. Other names used may be trademarks of their respective owners.
“Safe harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements about expected revenue and earnings for the first fiscal quarter of 2006 and the full fiscal year 2006, the growing acceptance of the company’s on-demand business model and possible future market share for salesforce.com in the CRM market, that involve risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions proves 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 our new business model, our history of operating losses, the possibility that we will not remain profitable, possible fluctuations in our operating results and rate of growth, errors, interruptions or delays in our service or our Web hosting, breach of our security measures, the immature market in which we operate, our relatively limited operating history, our ability to hire, retain and motivate our employees and manage our growth, competition, our ability to continue to release new and improved versions of our service, successful customer deployment and utilization of our services, our ability to sell to larger enterprise customers, changes in our effective tax rate, fluctuations in the number of shares outstanding, and the negative financial statement impact of new accounting rules such as the requirement to expense stock options. Further information on these and other factors that could affect our financial results is included in the reports on Form 10-Q and 8-K and in other filings we make with the Securities and Exchange Commission from time to time, including factors in our report on Form 10-Q for the period ended October 31, 2004 filed with the SEC on November 22, 2004. 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.
For further press information, please contact: Kim van Bokhoven or Joost Galema at LEWIS:
Tel: +31 (0)40 235 46 00
Fax: +31 (0)40 235 46 01
kimv@lewispr.com
www.lewispr.com
joostg@lewispr.com
For other information, please contact Amanda Fennell, marketing manager, salesforce.com EMEA:
Tel: +44 870 351 4698
afennell@salesforce.com
www.salesforce.com