Summary
Salesforce, Inc. (CRM) reported solid year-over-year growth in its third-quarter fiscal 2009 results, with total revenues increasing by 43% to $276.5 million for the three months ended October 31, 2008. This growth was primarily driven by a 44% surge in subscription and support revenue, reflecting an expanding customer base. The company also saw a significant increase in operating income, rising to $16.1 million from $6.1 million in the prior year's comparable period. This improved profitability, despite a substantial increase in stock-based expenses, demonstrates operational leverage. The balance sheet remains robust, with cash, cash equivalents, and marketable securities growing to $804.6 million, providing ample liquidity. The company continues to invest in growth, evidenced by increased headcount and the recent acquisition of InStranet, Inc., positioning itself for sustained expansion in the software-on-demand market. Despite the positive top-line and bottom-line performance, investors should note the significant impact of stock-based compensation expenses, which totaled $19.3 million for the quarter. Additionally, the company experienced a $2.0 million loss related to investments in money market funds where fair value declines were deemed other-than-temporary, highlighting some market headwinds. Management's outlook suggests continued revenue growth, though the rate may moderate as the business scales. The company remains focused on expanding its software-on-demand offerings and its global reach, indicating a long-term growth strategy.
Financial Highlights
29 data points| Revenue | $276.49M |
| Cost of Revenue | $56.35M |
| Gross Profit | $220.14M |
| R&D Expenses | $26.27M |
| Operating Expenses | $204.01M |
| Operating Income | $16.13M |
| Interest Expense | -$3.84M |
| Net Income | $10.12M |
| EPS (Basic) | $0.02 |
| EPS (Diluted) | $0.02 |
| Shares Outstanding (Basic) | 486.54M |
| Shares Outstanding (Diluted) | 500.53M |
Key Highlights
- 1Total revenues increased by 43% year-over-year to $276.5 million for the third quarter of fiscal 2009.
- 2Subscription and support revenue grew by 44%, indicating strong customer adoption and retention.
- 3Operating income improved significantly, reaching $16.1 million, up from $6.1 million in the prior year's quarter.
- 4Cash, cash equivalents, and marketable securities grew to $804.6 million, reflecting a healthy liquidity position.
- 5The company made strategic acquisitions, including InStranet, Inc., to expand its service offerings.
- 6Stock-based expenses remain substantial, totaling $19.3 million for the quarter, impacting net income.
- 7Investments in The Reserve Fund resulted in a $1.2 million other-than-temporary impairment loss.