- Revenue soars 84% year-over-year to $64.2 million
- Earnings per diluted Share rise to $0.04, a significant increase from breakeven the prior year period
- Net Income rises to $4.4 million, up 902% year-over-year and up 22% sequentially
- Paying Subscribers rise 40,000 to 267,000, up 82% year-over-year and up 18% sequentially
- Raising Fiscal 2006 revenue guidance range
SAN FRANCISCO - Salesforce.com (NYSE: CRM), the market and technology leader in on-demand customer relationship management, today announced results for its fiscal first quarter ended April 30, 2005.
"We believe that the continuing strength of our business and results, in contrast to what proved to be another challenging quarter for traditional software vendors, is further evidence that we are in the next phase of the on-demand revolution," said Marc Benioff, chairman and CEO of salesforce.com. "We are on the verge of our Summer 05 release, through which we believe the combination of Multiforce, Customforce and Sforce will take the "End of Software" to a new level by creating a complete platform for customization and integration. This release will continue to expand interest in moving to the on-demand model and our clear market leadership position."
Salesforce.com delivered the following results for the first quarter of fiscal year 2006:
Revenue: Total revenue was $64.2 million, an increase of 84% on a year- over-year basis and an increase of 18% on a quarter-to-quarter basis. Subscription and support revenues were $58.2 million, an increase of 87% on a year-over-year basis and an increase of 18% on a quarter-to-quarter basis. Professional services and other revenues were $6.0 million, an increase of 61% on a year-over-year basis and an increase of 15% on a quarter-to-quarter basis.
Earnings per Share: Earnings per diluted share were $0.04, a significant increase from breakeven the year-ago period.
Net Income: Net income was $4.4 million, a significant improvement from $437,000 in the year ago period. Fiscal first quarter 2006 net income grew 22% on a quarter-to-quarter basis. The first quarter tax rate was 20% and average shares outstanding were 116.4 million.
Customers and Paying Subscribers: During the first quarter, the company added approximately 1,600 customers and approximately 40,000 paying subscribers. As of the end of the fiscal first quarter, the company had approximately 15,500 customers and approximately 267,000 paying subscribers.
Cash: Cash from operations for the fiscal first quarter was $17.9 million, an increase of 169% compared to the prior year period.
Deferred Revenue: Deferred revenue as of April 30, 2005 was $104.6 million, an increase of 100% on a year-over-year basis and 9% 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 second quarter 2006 based on information as of May 18, 2005:
FY06 Revenue: Expected to be in the range of approximately $297 million to approximately $302 million, up from prior guidance of approximately $282 million to approximately $287 million.
FY06 Diluted EPS: Expected to be in the range of approximately $0.11 to approximately $0.14, based on an estimated average of 123 million diluted shares outstanding and an estimated effective tax rate of 20%. This represents an increase from prior guidance of approximately $0.11 to approximately $0.13.
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 be adopted in salesforce.com's fiscal year 2007.
Salesforce.com is providing, for the first time, second quarter fiscal year 2006 guidance based on information as of May 18, 2005:
Q2 FY06 Revenue: Expected to be in the range of approximately $68 million to approximately $70 million.
Q2 FY06 Diluted EPS: Expected to be in the range of approximately $0.02 to approximately $0.04, based on an estimated average of 119 million diluted shares outstanding and an estimated effective tax rate of 20%.
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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 ( www.salesforce.com ) and Supportforce ( 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 and Supportforce are built on the Sforce client/service integration platform and include the Customforce tool for complete on-demand customization. Sforce ( www.sforce.com ) and Customforce ( 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 April 30, 2005, salesforce.com manages customer information for approximately 15,500 customers and approximately 267,000 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. 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 our services should make their purchase decisions based upon features that are currently available and not based on the forward looking statements made in this release. 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.
"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 second fiscal quarter of 2006 and the full fiscal year 2006, the growing acceptance of the company's on-demand business model and on demand services as well as uncertain market acceptance of our unreleased service and the capabilities of such service 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 possible fluctuations in our operating results and rate of growth, errors, interruptions or delays in our service or our Web hosting, our new business model, our history of operating losses, the possibility that we will not remain profitable, breach of our security measures, the emerging 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 and gain customer acceptance of new and improved versions of our service, successful customer deployment and utilization of our services, changes in our effective tax rate, fluctuations in the number of shares outstanding, foreign currency exchange rates and interest rates.
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-K for the period ended January 31, 2005 filed with the SEC on March 25, 2005. 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.
NOTE: Salesforce.com is a registered trademark of, and Sforce, Multiforce, Customforce.com and Supportforce.com are trademarks of, salesforce.com, Inc., San Francisco, California. Other names used may be trademarks of their respective owners.