Summary
Salesforce.com, Inc. (CRM) reported its third-quarter results for the period ending October 30, 2011. The company demonstrated strong revenue growth, with total revenues increasing by 36% year-over-year to $584.3 million. This growth was primarily driven by its Subscription and Support segment, which saw a 36% increase to $549.2 million. Despite the revenue surge, the company reported a net loss of $3.8 million for the quarter, a shift from a net income of $21.1 million in the prior year period. This shift to a loss was influenced by increased operating expenses, particularly in Marketing and Sales (up 52% of revenue) and Research and Development (up 13% of revenue), as well as significant stock-based compensation expenses and amortization of acquired intangible assets. The company also saw a substantial increase in its cash and cash equivalents, ending the quarter with $503.0 million, up from $424.3 million at the start of the fiscal year, and maintained a strong overall liquidity position with $1.3 billion in cash, cash equivalents, and marketable securities. The company continued its aggressive acquisition strategy, with notable acquisitions of Radian6 and Assistly during the fiscal year. These acquisitions contributed to a significant increase in goodwill on the balance sheet. Management highlighted its focus on expanding its social enterprise offerings and continued investment in its cloud computing platform and sales force. Investors should note the increased operating expenses, which are attributed to strategic investments in growth, and the shift to a net loss, while also recognizing the robust revenue growth and healthy cash position.
Financial Highlights
52 data points| Revenue | $584.26M |
| Cost of Revenue | $128.56M |
| Gross Profit | $455.69M |
| R&D Expenses | $76.05M |
| Operating Expenses | $465.85M |
| Operating Income | -$10.16M |
| Interest Expense | $3.86M |
| Net Income | -$3.76M |
| EPS (Basic) | $-0.01 |
| EPS (Diluted) | $-0.01 |
| Shares Outstanding (Basic) | 543.39M |
| Shares Outstanding (Diluted) | 543.39M |
Key Highlights
- 1Total revenues increased by 36% year-over-year to $584.3 million for the three months ended October 31, 2011.
- 2Subscription and Support revenue, the primary revenue driver, grew by 36% to $549.2 million.
- 3The company reported a net loss of $3.8 million for the quarter, a decline from a net income of $21.1 million in the prior year period.
- 4Operating expenses, particularly in Marketing & Sales and Research & Development, increased significantly, impacting profitability.
- 5Cash, cash equivalents, and marketable securities stood at $1.3 billion as of October 31, 2011.
- 6The company made significant acquisitions, including Radian6 and Assistly, contributing to a substantial increase in goodwill.
- 7The company continued to invest heavily in sales and marketing, which represented 52% of total revenues.