01—Abstract
Summary
Summary of the 10-K filed March 23, 2011. Cited figures are marked; the original filing is the authoritative source.
Salesforce, Inc. (CRM) reported strong revenue growth for the fiscal year ended January 31, 2011, with total revenues increasing by 27% to $1.7 billiona.
This growth was primarily driven by its subscription and support services, which accounted for 94%b of total revenue, showing a 28% increase year-over-year. The company's strategy focuses on strengthening its CRM applications, expanding into new functional areas, aggressively pursuing new customers and territories, deepening relationships with existing customers, and leading the transformation to the next phase of cloud computing. Investments in R&D and sales & marketing remained significant to fuel this growth.
Financially, Salesforce demonstrated robust operating performance, with income from operations at $97.5 millionc. The company also invested heavily in growth initiatives, including acquisitions like Jigsaw, Heroku, and DimDim, and significant capital expenditures such as the purchase of land for its future global headquarters. The company's balance sheet remains strong, with $1.4 billion in cash, cash equivalents, and marketable securities, providing ample liquidity for future investments and operations.
02—Key points
Key Highlights
- Total revenues reached $1.7 billion, a 27% increase year-over-year, driven by subscription and support services.
- The company acquired three businesses (Jigsaw, Heroku, DimDim) to enhance its cloud offerings and expand its platform capabilities.
- Investments in sales and marketing represent a significant portion (48%) of total revenues, reflecting the company's focus on customer acquisition and growth.
- Research and development expenses increased by 43% to support ongoing service enhancements and new technology development.
- The company purchased land for its future global headquarters in San Francisco for $278 million.
- Salesforce.com maintained a strong liquidity position with $1.4 billion in cash, cash equivalents, and marketable securities.
- International revenues grew by 37%, indicating increasing global acceptance of Salesforce's cloud-based solutions.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2011, Salesforce, Inc. kept $0.04.
- Revenue$1.66B100.0%
- Cost of revenue−$323.8M19.5%
- Gross profit$1.33B80.5%
- Operating costs−$1.24B74.6%
- Operating income$97.5M5.9%
- Interest, other & tax−$33.0M2.0%
- Net income$64.5M3.9%
Where FY2011 revenue went
$1.66B- Other operating costs: $1.05B, 63% of revenue
- Cost of revenue: $323.8M, 20% of revenue
- Net income: $64.5M, 3.9% of revenue
- R&D: $187.9M, 11% of revenue
- Interest, other & tax: $33.0M, 2.0% of revenue
Kept 3.9% as net incomeNet income $64.5M · 3.9%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2011filed March 23, 2011Financial Statements
FY2011 against FY2010
| Line item | FY2011FY2010 | Change |
|---|---|---|
| Revenue | $1.66B$1.31B | +26.9% |
| Cost of Revenue | $323.81M$257.93M | +25.5% |
| Gross Profit | $1.33B$1.05B | +27.3% |
| R&D Expenses | $187.89M$131.90M | +42.4% |
| Operating Expenses | $1.24B$932.39M | +32.5% |
| Operating Income | $97.50M$115.27M | −15.4% |
| Interest Expense | $24.91M$2.00M | +1145.5% |
| Net Income | $64.47M$80.72M | −20.1% |
| EPS (Basic) | $0.13$0.16 | −23.1% |
| EPS (Diluted) | $0.12$0.16 | −25.4% |
| Shares Outstanding (Basic) | 520.89M497.85M | +4.6% |
| Shares Outstanding (Diluted) | 546.39M512.46M | +6.6% |
05—Questions
Frequently Asked Questions
What was Salesforce's revenue growth and key drivers in the fiscal year ended January 31, 2011?
Salesforce reported a 27% increase in total revenues, reaching $1.7 billion. The primary driver was subscription and support services, which grew 28% year-over-year and constituted 94% of total revenue. This growth was attributed to new customer acquisition, upgrades from existing customers, and improved renewal rates.
How did Salesforce invest in its future growth during this period?
The company made significant investments in its future by acquiring three companies (Jigsaw, Heroku, and DimDim) to enhance its cloud capabilities and platform. It also increased R&D spending by 43% to develop new features and technologies, and expanded its sales and marketing efforts, which represented 48% of total revenues. Additionally, Salesforce purchased land for its future global headquarters for $278 million.
What is Salesforce's financial health and liquidity position?
Salesforce maintained a strong financial position with $1.4 billion in cash, cash equivalents, and marketable securities as of January 31, 2011. The company generated positive cash flow from operations ($459.1 million), demonstrating its ability to fund its growth initiatives and ongoing operations.
How is Salesforce addressing competition and industry transformation?
Salesforce's strategy includes strengthening its CRM applications and expanding into new functional areas, aggressively pursuing new customers and territories, deepening customer relationships, and leading the industry transformation to the next phase of cloud computing (social, mobile, and open). The company also fosters an ecosystem of third-party applications on its Force.com platform.
06—Continue