01—Abstract
Summary
Summary of the 10-K filed March 11, 2010. Cited figures are marked; the original filing is the authoritative source.
Salesforce.com, Inc. filed its annual report on Form 10-K for the fiscal year ended January 31, 2010.
The company, a leader in enterprise cloud computing and CRM services, reported strong revenue growth of 21% year-over-year, reaching $1.3 billiona. Subscription and support revenue constituted the vast majority of this, indicating the success of its Software-as-a-Service (SaaS) model. The company demonstrated solid operational performance, with income from operations growing significantly.
Significant investments in marketing and sales, along with research and development, highlight Salesforce's commitment to continued growth and market leadership. Financially, Salesforce ended the fiscal year with a strong cash position of $1.7 billionb, reflecting healthy cash flow from operations. The company also managed its expenses effectively, with marketing and sales expenses, while substantial, representing a slightly lower percentage of revenue compared to the previous year.
The report also details the issuance of $575 millionc in convertible senior notes, signaling a move to strengthen its capital structure for future growth. Overall, the filing paints a picture of a rapidly growing company solidifying its position in the emerging cloud computing market.
02—Key points
Key Highlights
- Total revenues grew by 21% to $1.3 billion for the fiscal year ended January 31, 2010.
- Subscription and support revenue accounted for 93% of total revenues, demonstrating the strength of the subscription-based cloud model.
- Income from operations increased to $115.3 million, up from $63.7 million in the prior fiscal year.
- The company ended the fiscal year with a robust cash and marketable securities balance of $1.7 billion.
- Salesforce.com raised $575 million through the issuance of 0.75% convertible senior notes, enhancing its capital structure.
- Marketing and sales expenses, a significant investment area, represented 46% of total revenues, down from 50% in the prior year.
- The company experienced strong international revenue growth, with Europe and Asia Pacific contributing 29% of total revenues.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2010, Salesforce, Inc. kept $0.06.
- Revenue$1.31B100.0%
- Cost of revenue−$257.9M19.8%
- Gross profit$1.05B80.2%
- Operating costs−$932.4M71.4%
- Operating income$115.3M8.8%
- Interest, other & tax−$34.6M2.6%
- Net income$80.7M6.2%
Where FY2010 revenue went
$1.31B- Other operating costs: $800.5M, 61% of revenue
- Cost of revenue: $257.9M, 20% of revenue
- Net income: $80.7M, 6.2% of revenue
- R&D: $131.9M, 10% of revenue
- Interest, other & tax: $34.6M, 2.6% of revenue
Kept 6.2% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2010filed March 11, 2010Financial Statements
FY2010 against FY2009
| Line item | FY2010FY2009 | Change |
|---|---|---|
| Revenue | $1.31B$1.08B | +21.3% |
| Cost of Revenue | $257.93M$220.47M | +17.0% |
| Gross Profit | $1.05B$856.30M | +22.3% |
| R&D Expenses | $131.90M$99.53M | +32.5% |
| Operating Expenses | $932.39M$792.56M | +17.6% |
| Operating Income | $115.27M$63.74M | +80.8% |
| Interest Expense | $2.00M$107K | +1769.2% |
| Net Income | $80.72M$43.43M | +85.9% |
| EPS (Basic) | $0.16$0.09 | +80.6% |
| EPS (Diluted) | $0.16$0.09 | +80.0% |
| Shares Outstanding (Basic) | 497.85M484.73M | +2.7% |
| Shares Outstanding (Diluted) | 512.46M500.91M | +2.3% |
05—Questions
Frequently Asked Questions
What was Salesforce's primary revenue driver during the fiscal year ended January 31, 2010?
The primary revenue driver for Salesforce during fiscal year 2010 was its subscription and support services, which accounted for approximately 93% of its total revenues. This indicates the success and dominance of its cloud-based subscription model.
How did Salesforce manage its expenses relative to its revenue growth?
Salesforce experienced significant revenue growth while managing its expenses effectively. Marketing and sales expenses, though substantial at 46% of revenue, decreased as a percentage of total revenue compared to the prior year (50%), reflecting improved operational efficiency as the company scaled. Research and development and general and administrative expenses also grew in absolute terms, supporting the company's expansion and product development.
What significant financial activities did Salesforce undertake during this fiscal year?
A key financial activity was the issuance of $575 million in 0.75% convertible senior notes in January 2010. This move was aimed at strengthening the company's capital structure. Additionally, Salesforce entered into convertible note hedge transactions and sold warrants to mitigate potential dilution from the convertible notes.
How healthy was Salesforce's liquidity and financial position at the end of the fiscal year?
Salesforce maintained a strong liquidity position, ending the fiscal year with $1.7 billion in cash, cash equivalents, and marketable securities. This, combined with positive cash flow from operations, indicated a healthy financial standing to support its growth initiatives.
06—Continue