What is the primary purpose of this 8-K filing?

This 8-K filing is primarily to announce Salesforce.com's financial results for the quarter ended April 30, 2006, and to provide a press release detailing these results. It also serves to inform investors about the company's adoption of new accounting standards and the impact of recent acquisitions on its financial reporting.

Why is Salesforce.com providing non-GAAP financial measures?

Salesforce.com provides non-GAAP financial measures to offer investors a more complete understanding of the company's underlying operational results and trends. These measures exclude items such as stock-based expenses, amortization of acquired intangibles, and one-time income/charges that management believes can obscure or enhance trends, allowing for a clearer period-to-period comparison and assessment against performance targets.

What impact did adopting SFAS 123R have on Salesforce.com's financial results?

The adoption of SFAS 123R, effective February 1, 2006, required Salesforce.com to recognize stock-based compensation expense. For the quarter ended April 30, 2006, the company recognized $7.6 million in pre-tax stock-based expense on a GAAP basis. This is a significant change from the prior year period when $0.9 million was recognized under APB Opinion No. 25, highlighting a key difference between the GAAP and non-GAAP reporting for this period.

How did the acquisition of Sendia Corporation affect the financial results?

The acquisition of Sendia Corporation in April 2006 resulted in the recognition of $89,000 in amortization expense for acquired intangible assets during the quarter ended April 30, 2006. This expense is excluded from the company's non-GAAP financial measures.

CRM 8-K: Earnings & Results

Summary

Salesforce.com, Inc. filed an 8-K report on May 17, 2006, to announce its financial results for the quarter ended April 30, 2006. The report highlights the company's performance, including the impact of adopting new accounting standards for stock-based compensation (SFAS 123R) and the amortization of intangible assets from a recent acquisition. Management provided non-GAAP financial measures alongside GAAP results to offer investors a clearer view of underlying operational trends, excluding items such as stock-based expenses, acquisition-related amortization, and a one-time income item from the prior year. Investors should note the specific adjustments made to arrive at the non-GAAP figures, which are intended to provide a more consistent comparison of performance over time and against industry peers. The adoption of SFAS 123R led to a significant increase in reported stock-based expenses compared to the prior year period, a key factor for understanding the difference between GAAP and non-GAAP earnings. The acquisition of Sendia Corporation also introduced new expenses that are detailed in the filing.

Key Highlights

1The company reported financial results for the quarter ended April 30, 2006.
2Salesforce.com adopted SFAS 123R (Share-Based Payment) effective February 1, 2006, leading to the recognition of $7.6 million in pre-tax stock-based expense for the quarter.
3The report includes both GAAP and non-GAAP financial measures, with non-GAAP figures excluding stock-based expenses, amortization of acquired intangibles, and a one-time income item from the prior year.
4Amortization expense of $89,000 was recognized due to the acquisition of Sendia Corporation in April 2006.
5A one-time, unusual income item of $285,000 was recorded in the prior year's quarter (April 30, 2005) related to abandoned office space.
6Management's rationale for providing non-GAAP measures is to offer investors a better understanding of underlying operational results and trends, excluding certain charges that can obscure performance.
7The filing includes a press release dated May 17, 2006, as an exhibit detailing these financial results.

Salesforce, Inc. 8-K Report, Financial Results (May 17, 2006)

Summary

Key Highlights

Frequently Asked Questions