01—Abstract
Summary
Summary of the 10-Q filed August 25, 2015. Cited figures are marked; the original filing is the authoritative source.
Salesforce, Inc. reported its financial results for the second quarter of fiscal year 2016, ending July 31, 2015.
The company demonstrated strong revenue growth, with total revenues increasing by 24% year-over-year to $1.63 billiona. This growth was primarily driven by a 23% increase in subscription and support revenues, which now constitute 93% of total revenues. The company also saw a significant 32% increase in professional services and other revenues.
While the company reported a net loss of $852,000b on a GAAP basis, this was a substantial improvement from the previous year's loss of $61.1 million. Non-GAAP net income, which excludes certain expenses like stock-based compensation and amortization of intangibles, showed a robust increase of 50% year-over-year to $128.3 million, translating to non-GAAP diluted EPS of $0.19.
The company ended the quarter with a healthy cash and cash equivalents balance of $1.09 billionc and significant marketable securities, indicating a strong liquidity position. Management remains focused on growth, with substantial investments in sales and marketing, research and development, and data center capacity to support future expansion.
02—Key points
Key Highlights
- Total revenues grew 24% year-over-year to $1.63 billion for the three months ended July 31, 2015.
- Subscription and support revenues increased by 23% to $1.52 billion, representing 93% of total revenues.
- Professional services and other revenues increased by 32% to $113.4 million.
- Net loss improved significantly to $0.85 million from a loss of $61.1 million in the prior year period.
- Non-GAAP net income increased by 50% to $128.3 million, with non-GAAP diluted EPS of $0.19.
- The company ended the quarter with $1.09 billion in cash and cash equivalents and $0.98 billion in marketable securities.
- Marketing and sales expenses represented 49% of total revenues, reflecting continued investment in customer acquisition and growth.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q2 FY2016, Salesforce, Inc. lost $0.00.
- Revenue$1.63B100.0%
- Cost of revenue−$405.4M24.8%
- Gross profit$1.23B75.2%
- Operating costs−$1.21B74.0%
- Operating income$19.8M1.2%
- Interest, other & tax−$20.7M1.3%
- Net income−$852,0000.1%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2016filed August 25, 2015Financial Statements
Q2 FY2016 against Q2 FY2015
| Line item | Q2 FY2016Q2 FY2015 | Change |
|---|---|---|
| Revenue | $1.63B$1.32B | +24.0% |
| Gross Profit | $1.23B$1.01B | +21.6% |
| R&D Expenses | $234.10M$203.11M | +15.3% |
| Operating Expenses | $1.21B$1.04B | +15.8% |
| Operating Income | $19.82M-$33.43M | +159.3% |
| Interest Expense | $18.10M$18.31M | −1.2% |
| Net Income | -$852K-$61.09M | +98.6% |
| Shares Outstanding (Basic) | 659.37M617.02M | +6.9% |
| Shares Outstanding (Diluted) | 659.37M617.02M | +6.9% |
05—Questions
Frequently Asked Questions
What was Salesforce's revenue performance in the quarter?
Salesforce reported total revenues of $1.63 billion for the three months ended July 31, 2015, a 24% increase compared to the same period in the prior year. Subscription and support revenues were $1.52 billion, up 23%, while professional services and other revenues grew 32% to $113.4 million.
How did Salesforce perform on a profitability basis (GAAP vs. Non-GAAP)?
On a GAAP basis, Salesforce reported a net loss of $0.85 million for the quarter, a significant improvement from the $61.1 million net loss in the same quarter last year. However, on a non-GAAP basis, which excludes certain expenses, the company reported a net income of $128.3 million, a 50% increase year-over-year, with non-GAAP diluted earnings per share of $0.19.
What is the company's current liquidity position?
Salesforce maintained a strong liquidity position, ending the quarter with $1.09 billion in cash and cash equivalents and $982 million in marketable securities. This provides the company with substantial financial flexibility.
What are the key drivers of Salesforce's revenue growth?
Revenue growth is primarily driven by volume increases from new business, including new customers, upgrades, and additional subscriptions from existing customers. The company's consistent customer retention efforts and increasing enterprise adoption of cloud computing services also contribute to this growth. The sales and marketing expenses remain a significant investment area, reflecting the company's focus on customer acquisition and market expansion.
06—Continue