10-QPeriod: Q1 FY2013

Salesforce, Inc. Quarterly Report for Q1 Ended Apr 30, 2012

Filed May 25, 2012For Securities:CRM

Summary

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 million, 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 billion in cash, cash equivalents, and marketable securities.

Financial Highlights

50 data points
Beta

Revenue

$695.47M

78.2% Gross Margin

Net Income

-$19.48M

-2.8% Net Margin

EPS (Diluted)

$-0.04

Total Assets

$4.16B

Cash & Equivalents

$440.79M

Free Cash Flow

$168.49M

Financial Statements
Beta
Revenue$695.47M
Cost of Revenue$151.55M
Gross Profit$543.92M
R&D Expenses$94.78M
Operating Expenses$566.16M
Operating Income-$22.25M
Interest Expense$6.37M
Net Income-$19.48M
EPS (Basic)$-0.04
EPS (Diluted)$-0.04
Shares Outstanding (Basic)552.60M
Shares Outstanding (Diluted)552.60M

Key Highlights

  • 1Total 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.
  • 2Subscription and support revenues, the primary revenue driver, grew 38% year-over-year to $655.2 million.
  • 3Operating 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.
  • 4The 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.
  • 5Cash, cash equivalents, and marketable securities totaled $1.7 billion at April 30, 2012, providing a strong liquidity position.
  • 6The company completed the acquisition of Rypple (2Catalyze, Inc.) for approximately $50.6 million in cash during the quarter.
  • 7Deferred revenue stood at $1.3 billion, indicating future revenue to be recognized.

Frequently Asked Questions

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.

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.

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%.

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.