01—Abstract
Summary
Summary of the 10-K filed March 5, 2014. Cited figures are marked; the original filing is the authoritative source.
Salesforce.com, Inc. (CRM) for the fiscal year ended January 31, 2014, reported total revenues of $4.1 billiona, a 33% increase year-over-year, driven primarily by a 33% growth in subscription and support revenues.
The company experienced a net loss of $232.2 millionb, a slight improvement from the prior year's loss of $270.4 million, largely due to significant investments in sales, marketing, and research and development to fuel growth, including the major acquisition of ExactTarget. Despite the net loss, the company demonstrated strong operating cash flow of $875.5 million, indicating healthy cash generation from its core business activities. Salesforce continues to expand its cloud-based CRM and marketing solutions, emphasizing its strategy to strengthen offerings, pursue new customers, and build global market presence.
02—Key points
Key Highlights
- Total revenues grew 33% to $4.1 billion, with subscription and support revenue up 33% to $3.8 billion.
- The company reported a net loss of $232.2 million, a reduction from the $270.4 million net loss in the prior fiscal year.
- Operating cash flow was robust at $875.5 million, demonstrating strong cash generation from operations.
- Salesforce completed the significant acquisition of ExactTarget in July 2013 for approximately $2.6 billion, aiming to bolster its marketing cloud capabilities.
- The company continued to invest heavily in sales and marketing (53% of revenue) and R&D (15% of revenue) to drive future growth.
- As of January 31, 2014, the company had $1.3 billion in cash, cash equivalents, and marketable securities.
- Attrition rates showed improvement, declining to a high-single digit percentage range from the low-double digit percentage range in the previous year.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2014, Salesforce, Inc. lost $0.06.
- Revenue$4.07B100.0%
- Cost of revenue−$968.4M23.8%
- Gross profit$3.10B76.2%
- Operating costs−$3.39B83.2%
- Operating income−$286.1M7.0%
- Interest, other & tax$53.9M1.3%
- Net income−$232.2M5.7%
04—Financials
Financial Highlights
Figures from 10-KFY2014filed March 5, 2014Financial Statements
FY2014 against FY2013
| Line item | FY2014FY2013 | Change |
|---|---|---|
| Revenue | $4.07B$3.05B | +33.5% |
| Cost of Revenue | $968.43M$683.58M | +41.7% |
| Gross Profit | $3.10B$2.37B | +31.1% |
| R&D Expenses | $623.80M$429.48M | +45.2% |
| Operating Expenses | $3.39B$2.48B | +36.8% |
| Operating Income | -$286.07M-$110.71M | −158.4% |
| Interest Expense | $77.21M$30.95M | +149.5% |
| Net Income | -$232.18M-$270.44M | +14.2% |
| EPS (Basic) | $-0.39$-0.48 | +18.7% |
| EPS (Diluted) | $-0.39$-0.48 | +18.7% |
| Shares Outstanding (Basic) | 597.61M564.90M | +5.8% |
| Shares Outstanding (Diluted) | 597.61M564.90M | +5.8% |
05—Questions
Frequently Asked Questions
What was Salesforce's revenue performance in FY2014?
Salesforce reported total revenues of $4.1 billion for the fiscal year ended January 31, 2014, a substantial 33% increase compared to the previous year. This growth was primarily driven by its subscription and support services, which increased by 33% to $3.8 billion.
Did Salesforce achieve profitability in FY2014?
No, Salesforce reported a net loss of $232.2 million for fiscal year 2014. While this is an improvement from the net loss of $270.4 million in fiscal year 2013, the company continued to invest heavily in growth initiatives, including acquisitions and R&D, which contributed to the ongoing net loss.
What was the impact of the ExactTarget acquisition?
In July 2013, Salesforce acquired ExactTarget for approximately $2.6 billion. This strategic acquisition aimed to enhance Salesforce's marketing cloud offerings, creating a comprehensive digital marketing platform. The financial results of ExactTarget were consolidated into Salesforce's financials from the acquisition date.
How healthy was Salesforce's cash flow position?
Salesforce demonstrated strong financial health in terms of cash flow. Net cash provided by operating activities was $875.5 million for fiscal year 2014, indicating that the company's core operations were generating significant cash. The company also ended the fiscal year with a solid liquidity position, holding $1.3 billion in cash, cash equivalents, and marketable securities.
06—Continue