Salesforce, Inc. Quarterly Report for Q2 Ended Jul 31, 2010

Summary

Salesforce.com, Inc. (CRM) reported its financial results for the second quarter of fiscal year 2011, ending July 31, 2010. The company demonstrated robust revenue growth, with total revenues increasing by 25% year-over-year to $394.4 million. This growth was primarily driven by a 26% increase in subscription and support revenues, highlighting the continued demand for its core CRM services. While operating expenses increased across R&D, marketing and sales, and general and administrative functions to support growth, income from operations remained relatively stable year-over-year at $29.7 million. The company's net income attributable to salesforce.com was $14.7 million, a decrease from the prior year's $21.2 million, impacted by increased interest expenses related to its recent convertible senior notes issuance and higher operating expenses. Despite the net income decline, the company maintained a strong liquidity position with $1.9 billion in cash, cash equivalents, and marketable securities.

Key Highlights

• 1Total revenues grew 25% year-over-year to $394.4 million for the three months ended July 31, 2010.
• 2Subscription and support revenues, the primary revenue driver, increased 26% to $369.0 million.
• 3Income from operations remained strong at $29.7 million, though slightly up from $29.5 million in the prior year's quarter.
• 4Net income attributable to salesforce.com decreased to $14.7 million ($0.11/share diluted) from $21.2 million ($0.17/share diluted) in the prior year's quarter.
• 5The company acquired Jigsaw Data Corporation for approximately $148.5 million in cash, expanding its data services capabilities.
• 6Cash, cash equivalents, and marketable securities totaled $1.9 billion, indicating a strong liquidity position.
• 7Operating expenses increased across all categories (R&D, Marketing & Sales, G&A) to support growth initiatives and headcount expansion.

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