Summary
Salesforce, Inc. (CRM) reported its financial results for the second quarter and first half of fiscal year 2015, ending July 31, 2014. The company demonstrated strong revenue growth, with total revenues increasing by 38% year-over-year to $1.32 billion for the quarter and $2.55 billion for the first half. This growth was primarily driven by subscription and support revenues, which accounted for 93-94% of total revenue, and was further bolstered by the acquisition of ExactTarget in the prior year. Despite robust revenue expansion, Salesforce reported a net loss of $61.1 million for the quarter and $158.0 million for the first half, compared to a net income of $76.6 million and $8.9 million respectively in the prior year periods. The increased losses were largely attributable to significant operating expenses, particularly in marketing and sales (51% of revenue), and substantial stock-based compensation expenses. The company continues to invest heavily in growth initiatives, including R&D and sales force expansion, which are impacting short-term profitability but are expected to drive long-term value.
Financial Highlights
49 data points| Revenue | $1.32B |
| Cost of Revenue | $307.83M |
| Gross Profit | $1.01B |
| R&D Expenses | $203.11M |
| Operating Expenses | $1.04B |
| Operating Income | -$33.43M |
| Interest Expense | $18.31M |
| Net Income | -$61.09M |
| EPS (Basic) | $-0.10 |
| EPS (Diluted) | $-0.10 |
| Shares Outstanding (Basic) | 617.02M |
| Shares Outstanding (Diluted) | 617.02M |
Key Highlights
- 1Total revenues for the three months ended July 31, 2014, increased by 38% to $1.32 billion compared to the prior year period.
- 2Subscription and support revenues, the primary revenue driver, grew 37% year-over-year to $1.23 billion for the quarter.
- 3The company reported a net loss of $61.1 million for the quarter, a significant shift from the net income of $76.6 million in the same period last year.
- 4Operating expenses, particularly marketing and sales, continue to be a substantial portion of revenue (51% of total revenues for the quarter), reflecting continued investment in growth.
- 5Deferred revenue increased to $2.35 billion as of July 31, 2014, indicating strong future revenue potential from existing contracts.
- 6The company held $1.7 billion in cash, cash equivalents, and marketable securities as of July 31, 2014, providing ample liquidity.
- 7Salesforce continues to manage convertible senior notes, with a portion of the 0.75% notes converted and repaid during the period.