* Revenue up 78% year-over-year to $82.7 million
* GAAP Earnings per diluted share rise to $0.11, including a one time tax benefit of approximately $0.06
* Non-GAAP Earnings per diluted share rise to $0.05, up 150% from the prior year
* Cash Flow from Operations is a record $24.6 million
* Paying Subscribers rise a record 43,000 to 351,000, up 80% year-over-year and up 14% sequentially
* Customers rise a record 1,800 to 18,700, up 50% year-over-year and up 11% sequentially
Salesforce.com (NYSE: CRM), the market and technology leader in on-demand customer relationship management, today announced results for its fiscal third quarter ended October 31, 2005.
“This has been a quarter of seismic shifts in our industry, and the strength of our numbers today clearly indicates that the market is moving toward salesforce.com,” said Marc Benioff, chairman and CEO of salesforce.com. “During the quarter, we announced a game-changing application sharing strategy built around our AppExchange platform, witnessed the capitulation of a long time rival, and saw the dominant force in technology attempt to mimic our model in an effort to catch up.”
Salesforce.com delivered the following results for the third quarter of fiscal year 2006:
Revenue: Total revenue was $82.7 million, an increase of 78% on a year-over-year basis and an increase of 15% on a quarter-to-quarter basis. Subscription and support revenues were $74.4 million, an increase of 79% on a year-over-year basis and an increase of 13% on a quarter-to-quarter basis. Professional services and other revenues were $8.3 million, an increase of 69% on a year-over-year basis and an increase of 31% on a quarter-to-quarter basis.
GAAP Net Income: GAAP net income was $13.1 million.
Non-GAAP Net Income: Non-GAAP net income was $6.3 million, an increase of 194% on a year-over-year basis and an increase of 26% on a quarter-to-quarter basis.
GAAP Earnings per Share: GAAP earnings per diluted share were $0.11 and include a one time income tax benefit equal to $0.06 per diluted share. Average shares outstanding were 118.7 million.
Non-GAAP Earnings per Share: Non-GAAP earnings per diluted share, which exclude the one time income tax benefit, were $0.05, as compared to $0.02 per share for the prior year period, a 150% increase year-over-year and an increase of 25% on a quarter-to-quarter basis.
Customers and Paying Subscribers: During the third quarter, the company added approximately 1,800 customers and approximately 43,000 paying subscribers. As of the end of the fiscal third quarter, the company had approximately 18,700 customers and approximately 351,000 paying subscribers.
Cash: Cash from operations for the fiscal third quarter was $24.6 million, an increase of 87% on a year-over-year basis and an increase of 75% on a quarter-to-quarter basis.
Deferred Revenue: Deferred revenue as of October 31, 2005 was $127.1 million, an increase of 71% on a year-over-year basis and 8% 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 fourth quarter 2006 based on information as of November 16, 2005:
FY06 Revenue: Expected to be in the range of approximately $307 million to approximately $309 million.
FY06 Diluted Non-GAAP EPS: Expected to be in the range of approximately $0.15 to approximately $0.17 based on an estimated average of 120 million diluted shares outstanding.
Q4 FY06 Revenue: Expected to be in the range of approximately $88 million to approximately $90 million.
Q4 FY06 Diluted GAAP EPS: Expected to be in the range of approximately $0.02 to approximately $0.04, based on an estimated average of 120 million diluted shares outstanding and an estimated effective tax rate of 20%.
Salesforce.com is providing, for the first time, fiscal year 2007 guidance based on information as of November 16, 2005:
FY07 Revenue: Expected to be in the range of approximately $460 million to approximately $465 million.
FY07 Diluted Non-GAAP EPS: Expected to be in the range of approximately $0.20 to $0.22, based on an estimated average of 123 million diluted shares outstanding and an estimated effective tax rate of 45%. These estimates exclude the impact of stock option expensing which will commence in Q1 FY07. The company will provide an update on the impact of this change at the end of its fiscal year.
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NOTES TO EDITORS
About salesforce.com
Salesforce.com is the market and technology leader in on-demand customer relationship management (CRM). The company’s Salesforce suite of on-demand applications enables customers to manage and share all of their sales, support, marketing and partner information on-demand. AppExchange, salesforce.com’s on-demand platform, allows customers and partners to build powerful new applications quickly and easily, customize and integrate the Salesforce suite to meet their unique business needs, and distribute and sell on-demand apps at www.appexchange.com. Customers can also take advantage of Successforce, salesforce.com’s world-class training, support, consulting and best practices offerings.
As of October 31, 2005, salesforce.com manages customer information for approximately 18,700 customers and approximately 351,000 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. 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 www.salesforce.com.
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“Safe harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements about expected revenue and earnings per share for the fourth fiscal quarter of 2006, the full fiscal year 2006, and the full fiscal year 2007, the achievement of which 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, unanticipated 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 Forms 10-K, 10-Q and 8-K and in other filings we make with the Securities and Exchange Commission from time to time, including our Form 10-Q for the period ended July 31, 2005 and our Form10-K for the fiscal year ended January 31, 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.
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