- Net Paying Subscribers Rise a Record 90,000 to 646,000
- Record Revenue of $144M, up 58% year-over-year
- Net Customers Rise a Record 2,700 to 29,800
- Largest customer grows to 25,000 subscribers
- Operating Cash Flow of $38M
- Total Cash and Marketable Securities increase $41M to $413M, up $116M year over year
- Break-even GAAP EPS, at the high end of company guidance
Salesforce.com (NYSE: CRM), the market and technology leader in on-demand business services, today announced results for its fiscal fourth quarter and full fiscal year ended January 31, 2007.
“The fourth quarter was remarkable for its strength across all business segments, products, and geographies, best demonstrated by our adding 90,000 net new subscribers, and 2,700 net new customers,” said Marc Benioff, Chairman and CEO of salesforce.com. “The fourth quarter also included our largest enterprise implementation, 25,000 subscribers---the largest on-demand CRM customer ever---demonstrating the enterprise-class scalability of our solution that is unrivaled in the industry today. In fact, we added more than a thousand net new subscribers a day during the quarter for a new grand total of approximately 646,000.”
Salesforce.com delivered the following results for the fourth quarter and full fiscal year 2007:
Revenue: Total Q4 revenue was $144.2 million, an increase of 58% on a year-over-year basis and an increase of 11% on a quarter-over-quarter basis. Subscription and support revenues were $132.1 million, an increase of 60% on a year-over-year basis and an increase of 12% on a quarter-over-quarter basis. Professional services and other revenues were $12.2 million, an increase of 41% on a year-over-year basis and an increase of 5% on a quarter-over-quarter basis.
For the full year, the company reported revenue of approximately $497.1 million, an increase of 60% from the prior year. Subscription and support revenues were $451.6 million for the year, an increase of 61%, while professional services revenue rose 56% to finish at $45.4 million.
Earnings per Share: Q4 GAAP earnings per share were break-even, including approximately $11.2 million in stock based compensation and approximately $0.5 million in amortization of purchased intangibles related to a previously announced acquisition. For the basis of Q4 GAAP EPS calculations, there was an average of 121 million diluted shares outstanding during the quarter.
For the full year, GAAP earnings per share were breakeven, including approximately $39 million in stock based compensation and approximately $1.7 million in amortization of purchased intangibles related to a previously announced acquisition. For the basis of full year GAAP EPS calculations, there was an average of 120 million diluted shares outstanding during the quarter.
Customers and Paying Subscribers: Net paying customers rose approximately 2,700 during the quarter to approximately 29,800, an increase of 45% from Q4 of the prior year, and an increase of 10% from the prior quarter. Net paying subscribers rose approximately 90,000 during Q4 to exit the quarter at approximately 646,000 total subscribers.
Cash: Cash from operations for the fiscal fourth quarter was approximately $38 million, and roughly $111 million for the full fiscal year. Total cash, cash equivalents and marketable securities finished the quarter at approximately $413 million.
Deferred Revenue: Deferred revenue on the balance sheet as of January 31, 2007 was $284 million, an increase of 68% on a year-over-year basis and 29% on a quarter-over-quarter basis.
Based on information as of February 21, 2007, salesforce.com is initiating guidance for its first quarter, fiscal year 2008. For its full fiscal year 2008, the company is affirming its revenue guidance and initiating EPS guidance.
Q1 FY08: Revenue for the company’s first fiscal quarter is projected to be in the range of approximately $155 million to approximately $157 million. GAAP diluted EPS is expected to be in the range of approximately <$0.01> to $0.01. GAAP EPS estimates include the effects of stock based compensation and the amortization of purchased intangibles. For the first fiscal quarter FY08, stock based compensation expense is expected to be approximately $11 to $13 million, and the expense associated with the amortization of purchased intangibles is now expected to be approximately $0.5 million. For the basis of Q1 GAAP EPS calculation, the company is expecting an average diluted shares count of 124 million shares, and a GAAP tax rate of 70%.
Full Year FY08: The company today is affirming the increased full year revenue outlook it provided on December 12, 2007, with revenue expected to be approximately $710 million to approximately $720 million. The company is also initiating its earnings outlook for the full year, expecting GAAP diluted EPS to be in the range of approximately $0.07 to $0.09. GAAP EPS estimates include the effects of stock based compensation and the amortization of purchased intangibles. For the full fiscal year ‘08, stock based compensation expense is expected to be approximately $60 to $70 million, and the expense associated with the amortization of purchased intangibles is currently expected to be approximately $2.2 million. For the basis of full fiscal year 2008 GAAP EPS calculation, the company is expecting an average diluted shares count of 126 million shares, and a GAAP tax rate of 60%.
About salesforce.com
Salesforce.com is the market and technology leader in on-demand business services. 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 January 31, 2007, salesforce.com manages customer information for approximately 29,800 customers and approximately 646,000 paying subscribers including Advanced Micro Devices (AMD), America Online (AOL), 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, or call 1-800-NO-SOFTWARE.
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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 GAAP earnings per share for the first fiscal quarter of 2008 and the full fiscal year 2008, our expected tax rate and anticipated shares outstanding, 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, rate of growth and anticipated revenue run rate, 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, customer and partner acceptance of the AppExchange, successful customer deployment and utilization of our services, unanticipated changes in our effective tax rate, fluctuations in the number of shares outstanding, the price of such shares, 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 Form 10-Q for the quarter ended October 31, 2006, and our Form 10-K for the fiscal year ended January 31, 2006. 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.
Salesforce.com is a registered trademark of, and AppExchange and Successforce are trademarks of, salesforce.com, Inc., San Francisco, California. Other names used may be trademarks of their respective owners.
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