01—Abstract
Summary
Summary of the 10-Q filed May 25, 2012. Cited figures are marked; the original filing is the authoritative source.
Salesforce, Inc. (CRM) reported its first-quarter fiscal year 2013 results for the period ending April 30, 2012.
The company experienced robust revenue growth of 38%, reaching $695.5 milliona, primarily driven by a 38% increase in subscription and support revenues. This growth was fueled by new customer acquisitions, upgrades from existing customers, and improved renewal rates. Despite strong revenue performance, the company reported a net loss of $19.5 million for the quarter, a significant decrease from the $0.5 million net income in the prior year's comparable quarter.
This loss was influenced by increased operating expenses, particularly in marketing and sales (up 45% year-over-year) and research and development (up 45% year-over-year), reflecting continued investment in growth and expansion initiatives. The company also saw an increase in stock-based compensation expenses and amortization of purchased intangibles, contributing to the higher operating costs. Salesforce ended the quarter with a healthy liquidity position, including $1.7 billionb in cash, cash equivalents, and marketable securities.
02—Key points
Key Highlights
- Total revenues increased by 38% to $695.5 million for the three months ended April 30, 2012, compared to $504.4 million in the prior year period.
- Subscription and support revenues, the primary revenue driver, grew 38% year-over-year to $655.2 million.
- Operating expenses increased significantly, with Marketing and Sales expenses rising 45% to $369.8 million and Research and Development expenses up 45% to $94.8 million, indicating substantial investment in growth.
- The company reported a net loss of $19.5 million for the quarter, compared to a net income of $0.5 million in the same period last year.
- Cash, cash equivalents, and marketable securities totaled $1.7 billion at April 30, 2012, providing a strong liquidity position.
- The company completed the acquisition of Rypple (2Catalyze, Inc.) for approximately $50.6 million in cash during the quarter.
- Deferred revenue stood at $1.3 billion, indicating future revenue to be recognized.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q1 FY2013, Salesforce, Inc. lost $0.03.
- Revenue$695.5M100.0%
- Cost of revenue−$151.6M21.8%
- Gross profit$543.9M78.2%
- Operating costs−$566.2M81.4%
- Operating income−$22.2M3.2%
- Interest, other & tax$2.8M0.4%
- Net income−$19.5M2.8%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2013filed May 25, 2012Financial Statements
Q1 FY2013 against Q1 FY2012
| Line item | Q1 FY2013Q1 FY2012 | Change |
|---|---|---|
| Revenue | $695.47M$504.36M | +37.9% |
| Cost of Revenue | $151.55M$103.07M | +47.0% |
| Gross Profit | $543.92M$401.30M | +35.5% |
| R&D Expenses | $94.78M$65.29M | +45.2% |
| Operating Expenses | $566.16M$404.10M | +40.1% |
| Operating Income | -$22.25M-$2.80M | −693.8% |
| Interest Expense | $6.37M$3.67M | +73.5% |
| Net Income | -$19.48M$530K | −3774.5% |
| EPS (Basic) | $-0.04— | — |
| EPS (Diluted) | $-0.04— | — |
| Shares Outstanding (Basic) | 552.60M533.82M | +3.5% |
| Shares Outstanding (Diluted) | 552.60M564.25M | −2.1% |
05—Questions
Frequently Asked Questions
What was Salesforce's revenue growth in the reported quarter?
Salesforce reported a robust 38% increase in total revenues, reaching $695.5 million for the three months ended April 30, 2012, up from $504.4 million in the same period last year. This growth was primarily driven by subscription and support services.
Did Salesforce maintain profitability in this quarter?
No, Salesforce reported a net loss of $19.5 million for the quarter ended April 30, 2012. This compares to a net income of $0.5 million in the same quarter of the prior year. The loss is attributed to increased operating expenses, particularly in marketing and sales and research and development, as the company continued to invest in growth.
How did operating expenses change compared to the prior year?
Operating expenses saw a significant increase. Marketing and sales expenses rose by 45% to $369.8 million, and research and development expenses increased by 45% to $94.8 million. General and administrative expenses also increased by approximately 20%.
What is the company's liquidity position?
Salesforce maintained a strong liquidity position, with cash, cash equivalents, and marketable securities totaling $1.7 billion as of April 30, 2012, providing ample resources for operations and future investments.
06—Continue