Summary
Salesforce, Inc. (CRM) reported strong year-over-year growth in its third-quarter fiscal 2009 filing. Total revenues increased by 49% to $263.1 million for the three months ended July 31, 2008, compared to the same period in the prior year. This growth was primarily driven by a 50% surge in subscription and support revenues, indicating continued demand for its core CRM services. The company also demonstrated improved profitability, with operating income increasing significantly to $16.1 million from $3.3 million in the prior year's quarter, reflecting improved operational efficiency despite substantial investments in growth. The balance sheet remains robust, with cash, cash equivalents, and marketable securities growing to $823.4 million. The acquisition of InStranet for $31.5 million in cash shortly after the quarter's end highlights Salesforce's strategic intent to expand its product offerings and market reach. Investors should note the continued significant investment in marketing and sales (50% of revenue) as a key driver of future growth, as well as the ongoing impact of stock-based compensation expense. The company's international expansion is also a notable trend, with revenues from Europe and Asia Pacific showing strong growth and contributing a larger percentage of total revenue.
Financial Highlights
27 data points| Revenue | $263.08M |
| Cost of Revenue | $54.09M |
| Gross Profit | $208.99M |
| R&D Expenses | $24.03M |
| Operating Expenses | $192.89M |
| Operating Income | $16.10M |
| Interest Expense | -$6.71M |
| Net Income | $10.00M |
| EPS (Basic) | $0.02 |
| EPS (Diluted) | $0.02 |
| Shares Outstanding (Basic) | 483.45M |
| Shares Outstanding (Diluted) | 502.50M |
Key Highlights
- 1Total revenues for the three months ended July 31, 2008, surged by 49% year-over-year to $263.1 million.
- 2Subscription and support revenue, the company's primary revenue stream, grew by 50% year-over-year, demonstrating strong demand for its core CRM services.
- 3Operating income showed significant improvement, rising to $16.1 million from $3.3 million in the prior year's quarter, indicating better operational leverage.
- 4The company's cash, cash equivalents, and marketable securities increased to $823.4 million as of July 31, 2008, up from $497.2 million at the same time last year, reflecting strong cash generation.
- 5Salesforce completed the acquisition of InStranet for approximately $31.5 million in cash in August 2008, signaling strategic expansion beyond core CRM.
- 6International revenue growth was strong, with Europe and Asia Pacific contributing 28% of total revenues, up from 24% in the prior year's quarter, highlighting successful global expansion efforts.
- 7Marketing and sales expenses remained substantial at 50% of total revenues, underscoring the company's continued investment in customer acquisition and market penetration.