Summary
Salesforce, Inc.'s (CRM) 10-Q filing for the period ending October 30, 2013, reveals robust revenue growth, primarily driven by its subscription and support services, which increased by 36% year-over-year for the quarter. This growth is attributed to acquiring new customers, upgrades from existing ones, and reduced attrition rates. Despite strong top-line performance, the company reported a net loss of $124.4 million for the quarter, widening from a loss of $220.3 million in the prior year's comparable period. This increased loss is largely due to significant operating expenses, including substantial investments in marketing and sales, research and development, and general administrative costs, exacerbated by the impact of stock-based compensation and amortization of acquired intangible assets. The company completed a major acquisition of ExactTarget for approximately $2.6 billion, which significantly impacted its balance sheet with increased goodwill and intangible assets, as well as its cash flows due to the financing of this acquisition through debt. Despite the reported net loss, the company's cash flow from operations remained positive, demonstrating its ability to generate cash from its core business activities.
Financial Highlights
49 data points| Revenue | $1.08B |
| Cost of Revenue | $268.19M |
| Gross Profit | $807.85M |
| R&D Expenses | $170.69M |
| Operating Expenses | $905.78M |
| Operating Income | -$97.93M |
| Interest Expense | $22.93M |
| Net Income | -$124.43M |
| EPS (Basic) | $-0.21 |
| EPS (Diluted) | $-0.21 |
| Shares Outstanding (Basic) | 600.47M |
| Shares Outstanding (Diluted) | 600.47M |
Key Highlights
- 1Total revenues increased by 36% to $1.076 billion for the three months ended October 31, 2013, compared to $788.4 million in the prior year period.
- 2Subscription and support revenues grew by 36% to $1.004 billion, indicating strong demand for the core CRM services.
- 3The company reported a net loss of $124.4 million for the quarter, compared to a net loss of $220.3 million in the prior year's comparable period. The net loss per share was $(0.21) compared to $(0.39) in the prior year.
- 4Operating expenses increased significantly, with Marketing and Sales expenses at $581.2 million and Research and Development at $170.7 million, reflecting ongoing investments in growth and integration of ExactTarget.
- 5The company completed the acquisition of ExactTarget for approximately $2.6 billion, which contributed significantly to goodwill ($1.84 billion) and intangible assets ($706 million).
- 6Cash and cash equivalents decreased to $651.8 million from $747.2 million at the beginning of the fiscal year, partly due to investing activities, including acquisitions.
- 7Net cash provided by operating activities was $137.9 million for the quarter, up from $105.9 million in the prior year period.