01—Abstract
Summary
Summary of the 10-Q filed August 31, 2012. Cited figures are marked; the original filing is the authoritative source.
Salesforce.com, Inc. (CRM) reported its second-quarter fiscal year 2013 results for the period ending July 30, 2012, showing continued revenue growth.
Total revenues increased by 34% year-over-year to $731.6 milliona, driven by a 35% increase in subscription and support revenues, which accounted for 94% of total revenue. Despite revenue growth, the company reported a net loss of $9.8 million for the quarter, a slight increase from the $4.3 million net loss in the prior year's comparable quarter.
Operating expenses, particularly marketing and sales, and research and development, saw significant increases, contributing to the wider net loss. The company also highlighted strong cash flow from operations, indicating a healthy liquidity position with $1.8 billionb in cash, cash equivalents, and marketable securities.
02—Key points
Key Highlights
- Total revenues increased by 34% to $731.6 million for the three months ended July 31, 2012, compared to $546.0 million in the prior year period.
- Subscription and support revenues grew by 35% to $687.5 million, representing 94% of total revenues.
- The company reported a net loss of $9.8 million for the quarter, compared to a net loss of $4.3 million in the same period last year.
- Operating expenses increased significantly, with Marketing and Sales up 34% and Research and Development up 35%, reflecting investments in growth.
- Cash and cash equivalents and marketable securities totaled $1.8 billion at July 31, 2012, providing strong liquidity.
- Net cash provided by operating activities was $136.2 million for the quarter, up from $82.9 million in the prior year period.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q2 FY2013, Salesforce, Inc. lost $0.01.
- Revenue$731.6M100.0%
- Cost of revenue−$162.4M22.2%
- Gross profit$569.2M77.8%
- Operating costs−$582.7M79.6%
- Operating income−$13.5M1.8%
- Interest, other & tax$3.6M0.5%
- Net income−$9.8M1.3%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2013filed August 31, 2012Financial Statements
Q2 FY2013 against Q2 FY2012
| Line item | Q2 FY2013Q2 FY2012 | Change |
|---|---|---|
| Revenue | $731.65M$546.00M | +34.0% |
| Cost of Revenue | $162.42M$120.91M | +34.3% |
| Gross Profit | $569.23M$425.09M | +33.9% |
| R&D Expenses | $99.44M$73.39M | +35.5% |
| Operating Expenses | $582.70M$440.84M | +32.2% |
| Operating Income | -$13.47M-$15.75M | +14.5% |
| Interest Expense | $8.03M$3.85M | +108.9% |
| Net Income | -$9.83M-$4.27M | −130.3% |
| EPS (Basic) | $-0.02$-0.01 | −166.7% |
| EPS (Diluted) | $-0.02$-0.01 | −166.7% |
| Shares Outstanding (Basic) | 557.70M540.37M | +3.2% |
| Shares Outstanding (Diluted) | 557.70M540.37M | +3.2% |
05—Questions
Frequently Asked Questions
What was Salesforce's revenue performance in the second quarter of fiscal year 2013?
Salesforce reported total revenues of $731.6 million for the three months ended July 31, 2012, representing a 34% increase compared to $546.0 million in the same period last year. Subscription and support revenues, the primary revenue driver, increased by 35%.
Did Salesforce achieve profitability in this quarter?
No, Salesforce reported a net loss of $9.8 million for the three months ended July 31, 2012. This is a wider loss compared to the $4.3 million net loss reported in the same period of the prior year. The company continues to invest heavily in growth, which impacts short-term profitability.
How strong is Salesforce's financial position in terms of liquidity?
Salesforce maintains a strong liquidity position. As of July 31, 2012, the company had $1.8 billion in cash, cash equivalents, and marketable securities. Additionally, net cash provided by operating activities for the quarter was $136.2 million, indicating healthy cash generation from its core business operations.
What were the main drivers of increased expenses?
The increase in expenses was primarily driven by investments in growth. Marketing and Sales expenses rose by 34% and Research and Development expenses increased by 35% compared to the prior year. These increases are attributed to higher employee-related costs, stock-based expenses, and investments in data center capacity and new technologies.
06—Continue