Summary
Salesforce.com, Inc. (CRM) reported its results for the third quarter of fiscal year 2013, ending October 31, 2012. The company experienced significant year-over-year revenue growth of 35%, reaching $788.4 million, primarily driven by its subscription and support services. Despite strong top-line growth, Salesforce reported a net loss of $220.3 million for the quarter, a substantial increase from the $3.8 million net loss in the prior year. This widened net loss is largely attributable to a significant one-time, non-cash charge of $149.1 million to establish a valuation allowance for deferred tax assets, a key factor impacting profitability. Operationally, the company continued to invest heavily in marketing and sales (54% of revenue) and research and development (15% of revenue) to fuel its growth strategy. Furthermore, Salesforce completed several strategic acquisitions during the period, including Buddy Media for $735.8 million and GoInstant for $50.6 million, which contributed to a substantial increase in goodwill on the balance sheet. While these acquisitions are expected to drive future growth, they also led to increased amortization expenses and integration costs. Despite the net loss, the company maintained a healthy cash position, with $1.4 billion in cash, cash equivalents, and marketable securities, and reported positive cash flow from operations.
Financial Highlights
50 data points| Revenue | $788.40M |
| Cost of Revenue | $186.25M |
| Gross Profit | $602.15M |
| R&D Expenses | $114.07M |
| Operating Expenses | $656.34M |
| Operating Income | -$54.19M |
| Interest Expense | $8.19M |
| Net Income | -$220.30M |
| EPS (Basic) | $-0.39 |
| EPS (Diluted) | $-0.39 |
| Shares Outstanding (Basic) | 568.81M |
| Shares Outstanding (Diluted) | 568.81M |
Key Highlights
- 1Total revenues increased by 35% year-over-year to $788.4 million for the third quarter of fiscal 2013.
- 2Subscription and support revenue remains the dominant revenue stream, accounting for 94% of total revenue.
- 3Net loss widened significantly to $220.3 million, primarily due to a $149.1 million non-cash charge for a deferred tax asset valuation allowance.
- 4Operating expenses, particularly marketing and sales (54% of revenue) and R&D (15% of revenue), reflect continued investment in growth.
- 5Significant acquisitions were completed, including Buddy Media for $735.8 million and GoInstant for $50.6 million, increasing goodwill substantially.
- 6The company ended the quarter with $1.4 billion in cash, cash equivalents, and marketable securities.
- 7Cash flow from operations remained positive at $455.3 million for the first nine months of the fiscal year.