Salesforce.com Announces Fiscal Third Quarter Results
Thursday, November 18, 2021 4:06 PM

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-- Record Quarterly Revenue of $429 Million, up 30% Year-Over-Year

-- Operating Cash Flow of $74M, up 10

SAN FRANCISCO, Nov. 18, 2010 /PRNewswire-FirstCall/ -- Salesforce.com (NYSE: CRM), the enterprise cloud computing company, today announced results for its fiscal third quarter ended October 31, 2010.

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“After taking a decade to achieve our first billion dollar year in fiscal 2009, we believe that our strong growth this year will allow us to deliver approximately $2 billion in revenue in fiscal 2012, making salesforce.com the first cloud computing company to achieve that milestone,” said Marc Benioff, chairman and CEO salesforce.com.

Salesforce.com delivered the following results for the third quarter fiscal year 2011:


Revenue: Total Q3 revenue was $429 million, an increase of 30% on a year-over-year basis.  Subscription and support revenues were $403 million, an increase of 31% on a year-over-year basis.  Professional services and other revenues were $26 million, an increase of 10% on a year-over-year basis.  




Earnings per Share:  Q3 GAAP diluted earnings per share decreased 6% year-over-year to $0.15, and non-GAAP diluted earnings per share increased 14% year-over-year to $0.32.  The company’s non-GAAP results exclude the effects of approximately $26 million in stock-based compensation expense, approximately $5 million in amortization of purchased intangibles, and approximately $6 million in non-cash interest expense related to the company’s convertible senior notes.  All EPS calculations are based on 137 million diluted shares outstanding during the quarter.




Customers: Net paying customers rose approximately 4,800 during the quarter. The number of total net paying customers at the end of the fiscal third quarter was approximately 87,200. Since October 31, 2009, the company has added approximately 19,300 net paying customers, an increase of approximately 28%.




Cash: Cash from operations for the fiscal third quarter was approximately $74 million, up 108% year-over-year.  Total cash, cash equivalents and marketable securities finished the quarter at approximately $1.8 billion, an increase of approximately $732 million from the prior year, which includes approximately $500 million in net proceeds from the company’s issuance of convertible senior notes in January 2010.




Deferred Revenue: Deferred revenue on the balance sheet as of October 31, 2021 was $695 million, an increase of 27% on a year-over-year basis.



As of November 18, 2010, salesforce.com is initiating guidance for its fourth quarter, fiscal year 2011.  For its fiscal year 2011, the company is updating the guidance provided on August 19, 2010. In addition, the company is initiating revenue guidance for fiscal year 2012.


Q4 FY11 Guidance:  Revenue for the company’s fourth quarter is projected to be in the range of approximately $447 million to approximately $449 million.  




GAAP diluted EPS is expected to be in the range of approximately $0.06 to approximately $0.07, while non-GAAP diluted EPS in Q4 is expected to be in the range of approximately $0.27 to approximately $0.28.  The company’s non-GAAP EPS estimate excludes the effects of stock-based compensation expense, expected to be approximately $35 million, amortization of purchased intangibles related to acquisitions, expected to be approximately $6 million and non-cash interest expense related to the convertible senior notes, expected to be approximately $6 million.  EPS estimates assume a GAAP tax rate of 42%, and a non-GAAP tax rate of 38%.  All EPS estimates assume an average diluted share count of approximately 140 million shares.




Full Year FY11 Guidance:  The company is raising its expected full fiscal year 2011 revenue from the guidance previously provided on August 19, 2010.   Revenue for the company’s full fiscal year 2011 is projected to be in the range of approximately $1.647 billion to approximately $1.649 billion.




For the company’s full fiscal year 2011, diluted GAAP EPS is expected to be in the range of approximately $0.46 to approximately $0.47, while diluted non-GAAP EPS is expected to be in the range of approximately $1.18 to approximately $1.19.  The non-GAAP estimate excludes the effects of stock-based compensation expense, expected to be approximately $114 million, amortization of purchased intangibles related to acquisitions, expected to be approximately $18 million, and non-cash interest expense related to the convertible senior notes, expected to be approximately $23 million. EPS estimates assume a GAAP tax rate of 42%, and a non-GAAP tax rate of 38%.  All EPS estimates assume an average diluted share count of approximately 136 million shares.




Full Year FY12 Guidance:  The company is initiating revenue guidance for fiscal year 2012 with projected revenue in the range of approximately $1.97 billion to approximately $2.0 billion.  The company expects to update this guidance, as well as provide its expectations for FY12 GAAP EPS, when it announces its fourth quarter, fiscal year 2011 results in February, 2011.



The following is a reconciliation of the GAAP diluted EPS to non-GAAP diluted EPS guidance for the fourth quarter and full fiscal year:


Fiscal 2011


Q4

FY2011




GAAP diluted EPS Range

$0.06-$0.07

$0.46-$0.47

Plus



Amortization of purchased intangibles

0.04

0.14

Stock-based expense

0.25

0.84

Amortization of debt discount

0.04

0.18

Less



Income tax effect of certain Non-GAAP items

(0.12)

(0.44)

Non-GAAP diluted EPS

$0.27-$0.28

$1.18-$1.19







Shares used in computing diluted net income per share (millions)

140

136



Quarterly Conference Call

Salesforce.com will host a conference call to discuss its third quarter fiscal year 2011 results at 2:00 p.m. Pacific Time today. A live audio webcast of the conference call, together with detailed financial information, can be accessed through the company's Investor Relations Web site at http://www.salesforce.com/investor.  In addition, an archive of the webcast can be accessed through the same link.  Participants who choose to call in to the conference call can do so by dialing domestically 866-901-SFDC or 866-901-7332 and internationally at +1 706-902-1764.  A replay will be available at 800-642-1687 or +1 706-645-9291, passcode 21460955, until midnight (Eastern Time) December 17, 2010.

About salesforce.com

Salesforce.com is the enterprise cloud computing company.  Based on salesforce.com’s real-time, multitenant architecture, the company’s platform and CRM applications (http://www.salesforce.com/crm) have revolutionized the way companies collaborate and communicate with their customers, including:

  • The Sales Cloud, for sales force automation and contact management
  • The Service Cloud, for customer service and support solutions
  • Chatter, for social collaboration
  • The Force.com platform, for custom application development
  • The AppExchange, the world’s leading marketplace for enterprise cloud computing applications

Salesforce.com offers the fastest path to customer success with cloud computing.  As of October 31, 2010, salesforce.com manages customer information for approximately 87,200 customers including Allianz Commercial, Dell, Japan Post, Kaiser Permanente, KONE, and SunTrust Banks. 

Any unreleased services or features referenced in this or other press releases or public statements are not currently available and may not be delivered on time or at all.  Customers who purchase salesforce.com applications should make their purchase decisions based upon features that are currently available.  Salesforce.com has headquarters in San Francisco, with offices in Europe and Asia, and trades on the New York Stock Exchange under the ticker symbol "CRM.”  For more information please visit http://www.salesforce.com, or call 1-800-NO-SOFTWARE.

Non-GAAP Financial Measures:  This press release includes information about non-GAAP earnings per share and non-GAAP tax rates (collectively the “non-GAAP financial measures”).  Non-GAAP earnings estimates exclude the impact of the following non-cash items:  stock-based compensation, amortization of purchased intangibles, and the amortization of debt discount on the company’s convertible senior notes, as well as the tax consequences associated with these items.  The purpose of the non-GAAP tax rate is to quantify the excluded tax consequences of the excluded expense items.  These non-GAAP estimates are not measurements of financial performance prepared in accordance with U.S. generally accepted accounting principles.  The method used to produce non-GAAP financial measures is not computed according to GAAP and may differ from the methods used by other companies.  Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with the company’s consolidated financial statements prepared in accordance with GAAP.

The primary purpose of these non-GAAP measures is to provide supplemental information that may prove useful to investors who wish to consider the impact of certain non-cash items on the company’s operating performance.  Non-cash stock-based compensation, amortization of acquisition-related intangible assets, and the amortization of debt discount on the company’s convertible senior notes are being excluded from the company’s FY11 financial results because the decisions which gave rise to these expenses were not made to increase revenue in a particular period, but were made for the company’s long-term benefit over multiple periods.  While strategic decisions, such as those to issue stock-based compensation, acquire a company, or issue convertible senior notes, are made to further the company’s long-term strategic objectives and impact the company’s income statement under GAAP measures, these items affect multiple periods and management is not able to change or affect these items in any particular period.  As such, supplementing GAAP disclosure with non-GAAP disclosure using the non-GAAP measures provides management with an additional view of operational performance by excluding expenses that are not directly related to performance in any particular period, and management uses both GAAP and non-GAAP measures when planning, monitoring, and evaluating the company’s performance.

In addition, the majority of the company’s industry peers report non-GAAP operating results that exclude certain non-cash or non-recurring items.  Management believes that the provision of supplemental non-GAAP information will enable a more complete comparison of the company’s relative performance.  

Specifically, management is excluding the following items from its non-GAAP EPS for Q3 and its estimated non-GAAP estimates for Q4 and FY2011:

Stock-Based Expenses:  The company’s compensation strategy is to use stock-based compensation to attract and retain key employees and executives.  It is principally aimed at aligning their interests with those of our stockholders and at long-term employee retention, rather than to motivate or reward operational performance for any particular period.  Thus, stock-based compensation expense varies for reasons that are generally unrelated to operational decisions and performance in any particular period.  



Amortization of Purchased Intangibles:  The company views amortization of acquisition-related intangible assets, such as the amortization of an acquired company’s research and development efforts, customer lists and customer relationships, as items arising from pre-acquisition activities.  These are costs that are determined at the time of an acquisition.  While it is continually viewed for impairment, amortization of the cost is a static expense, one that are not typically affected by operations during any particular period.




Amortization of Debt Discount:  Under GAAP, certain convertible debt instruments that may be settled in cash (or other assets) on conversion are required to be separately accounted for as liability (debt) and equity (conversion option) components of the instrument in a manner that reflects the issuer’s non-convertible debt borrowing rate.  Accordingly, for GAAP purposes we are required to recognize imputed interest expense on the company’s $575 million of convertible subordinated notes that were issued in a private placement in January 2010.  The imputed interest rate is approximately 5.9%, while the coupon interest rate is 0.75%.   The difference between the imputed interest expense and the coupon interest expense is excluded from management’s assessment of the company’s operating performance because management believes that this non-cash expense is not indicative of ongoing operating performance.  Management believes that the exclusion of the non-cash interest expense provides investors an enhanced view of the company’s operational performance.



Income Tax Effects:  The company’s estimated non-GAAP effective tax rate is lower than the estimated GAAP effective tax rate due to the exclusion of the expense items described above.  



“Safe harbor” statement under the Private Securities Litigation Reform Act of 1995:  This press release contains forward-looking statements about expected GAAP revenue and GAAP and non-GAAP earnings per share for the fourth fiscal quarter of 2011 the full fiscal year, and fiscal year 2012, the company’s expected tax rates, stock-based compensation expenses, amortization expenses, and shares outstanding.  The achievement or success of the matters covered by such forward-looking statements involve risks, uncertainties and assumptions.  If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the company’s results could differ materially from the results expressed or implied by the forward-looking statements we make.

The risks and uncertainties referred to above include - but are not limited to - risks associated with possible fluctuations in the company’s financial and operating results; rate of growth and anticipated revenue run rate; errors, interruptions or delays in the company’s service or the company’s Web hosting; breaches of the company’s security measures; the financial impact of any future acquisitions; the nature of the company’s business model; the company’s ability to continue to release, and gain customer acceptance of, new and improved versions of the company’s service; successful customer deployment and utilization of the company’s existing and future services; changes in the company’s sales cycle; competition; various financial aspects of the company’s subscription model; unexpected increases in attrition or decreases in new business; the emerging markets in which we operate; unique aspects of entering or expanding in international markets, the company’s ability to hire, retain and motivate  employees and manage the company’s growth; changes in the company’s customer base; technological developments; regulatory developments; litigation related to intellectual property and other matters, and any related claims, negotiations and settlements; unanticipated changes in the company’s effective tax rate; fluctuations in the number of shares we have outstanding and the price of such shares; foreign currency exchange rates; interest rates; the company’s plans to build our new global headquarters in San Francisco, California and general developments in the economy, financial markets, and credit markets.

Further information on these and other factors that could affect the company’s financial results is included in the reports on Forms 10-K, 10-Q and 8-K and in other filings we make with the Securities and Exchange Commission from time to time, including the company’s Form 10-Q that will be filed for the quarter ended October 31, 2021 and our Form 10-K filed for the fiscal year ended January 31, 2010.  These documents are available on the SEC Filings section of the Investor Information section of the company’s website at www.salesforce.com/investor.

Salesforce.com, inc. assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

Copyright (c) 2010 salesforce.com, inc.  All rights reserved.  Salesforce and the "no software" logo are registered trademarks of salesforce.com, inc., and salesforce.com owns other registered and unregistered trademarks.  Other names used herein may be trademarks of their respective owners.

salesforce.com, inc.









Condensed Consolidated Statements of Operations






(in thousands, except per share data)









(Unaudited)



































Three Months Ended October 31,


Nine Months Ended October 31,






2010


2009


2010


2009













Revenues:











Subscription and support


$402,948


$306,870


$1,122,611


$882,078


Professional services and other


26,139


23,679


77,661


69,456



Total revenues


429,087


330,549


1,200,272


951,534













Cost of revenues (1):










Subscription and support


54,089


40,745


147,127


116,744


Professional services and other


28,042


24,825


84,375


73,122



Total cost of revenues


82,131


65,570


231,502


189,866













Gross profit



346,956


264,979


968,770


761,668













Operating expenses (1):










Research and development


47,305


32,763


130,357


95,450


Marketing and sales


200,544


152,166


558,812


436,647


General and administrative


63,951


49,909


181,713


139,818



Total operating expenses


311,800


234,838


870,882


671,915













Income from operations


35,156


30,141


97,888


89,753













Investment income



11,699


7,503


28,309


19,780

Interest expense



(7,374)


(292)


(21,619)


(793)

Other expense



(921)


(336)


(4,659)


(1,037)













Income before provision for income taxes and noncontrolling interest

38,560


37,016


99,919


107,703













Provision for income taxes


(16,192)


(15,573)


(41,092)


(45,426)













Consolidated net income


22,368


21,443


58,827


62,277













Less: Net income attributable to noncontrolling interest

(1,296)


(752)


(5,266)


(1,952)













Net income attributable to salesforce.com

$21,072


$20,691


$53,561


$60,325













Basic net income per share attributable to salesforce.com common shareholders

$0.16


$0.17


$0.41


$0.49













Diluted net income per share attributable to salesforce.com common shareholders

$0.15


$0.16


$0.40


$0.48













Shares used in computing basic net income per share

130,888


124,561


129,461


123,871













Shares used in computing diluted net income per share

137,044


128,596


135,007


126,993

























(1) Amounts include stock-based expenses, as follows:










Cost of revenues


$    2,357


$    2,995


$       8,617


$    9,322



Research and development


3,976


2,707


12,119


8,741



Marketing and sales


11,969


9,055


36,496


28,314



General and administrative


7,330


5,650


21,483


16,570



salesforce.com, inc.









Condensed Consolidated Statements of Operations

















As a percentage of total revenues:








(Unaudited)























Three Months Ended October 31,


Nine Months Ended October 31,






2010


2009


2010


2009

Revenues:











Subscription and support


94%


93%


94%


93%


Professional services and other

6


7


6


7



Total revenues


100


100


100


100













Cost of revenues:











Subscription and support


13


12


12


12


Professional services and other

6


8


7


8



Total cost of revenues


19


20


19


20













Gross profit



81


80


81


80













Operating expenses:











Research and development


11


10


11


10


Marketing and sales


47


46


47


46


General and administrative


15


15


15


15



Total operating expenses


73


71


73


71













Income from operations


8


9


8


9













Investment income



3


2


2


2

Interest expense



(2)


0


(2)


0

Other expense



0


0


0


0













Income before provision for income taxes and noncontrolling interest

9


11


8


11













Provision for income taxes


(4)


(5)


(3)


(5)













Consolidated net income


5


6


5


6













Less: Net income attributable to noncontrolling interest

0


0


(1)


0













Net income attributable to salesforce.com

5%


6%


4%


6%





































Stock-based expenses as a percentage of total revenues, as follows:










Cost of revenues


- %


1%


1%


1%



Research and development

1


1


1


1



Marketing and sales


3


3


3


3



General and administrative

2


1


2


2



salesforce.com, inc.







Condensed Consolidated Balance Sheets





(in thousands)





















October 31,



January 31,






2010



2010






(unaudited)













Assets








Current assets:









Cash and cash equivalents


$630,303



$1,011,306


Short-term marketable securities


139,545



230,659


Accounts receivable, net



258,764



320,956


Deferred commissions



50,361



47,388


Deferred income taxes



49,620



40,116


Prepaid expenses and other current assets

64,343



55,734










Total current assets



1,192,936



1,706,159










Marketable securities, noncurrent


1,032,592



485,083

Fixed assets, net



116,078



89,711

Deferred commissions, noncurrent


32,856



28,140

Deferred income taxes, noncurrent


30,501



27,579

Capitalized software, net



79,499



34,809

Goodwill




187,038



48,955

Other assets, net



69,194



39,765










Total assets




$2,740,694



$2,460,201










Liabilities and stockholders' equity





Current liabilities:








Accounts payable



$23,320



$14,791


Accrued expenses and other current liabilities

287,627



194,738


Income taxes payable



9,644



8,424


Deferred revenue



672,454



690,177










Total current liabilities



993,045



908,130










0.75% Convertible senior notes due 2015, net

466,847



450,198

Income taxes payable, noncurrent


18,284



17,551

Long-term lease liabilities and other

27,949



13,485

Deferred revenue, noncurrent

22,103



14,171

Total liabilities




1,528,228



1,403,535










salesforce.com stockholders' equity:







Common stock



131



127


Additional paid-in capital



1,041,005



938,544


Accumulated other comprehensive gain (loss)

9,030



(1,430)


Retained earnings



160,122



106,561












Total stockholders' equity  controlling interest

1,210,288



1,043,802










Total stockholders' equity noncontrolling interest

2,178



12,864










Total stockholders' equity



1,212,466



1,056,666










Total liabilities and stockholders' equity

$2,740,694



$2,460,201



salesforce.com, inc.











Condensed Consolidated Statements of Cash Flows








(in thousands)













(Unaudited)

























Three Months Ended October 31,


Nine Months Ended October 31,







2010


2009


2010


2009

Operating activities:











Consolidated net income




$            22,368


$                21,443


$                58,827


$                62,277

Adjustments to reconcile net income to net









cash provided by operating activities:











Depreciation and amortization



19,710


13,601


52,008


37,890


Amortization of debt discount



6,655


0


17,639


0


Amortization of deferred commissions


19,959


15,698


57,554


45,959


Expenses related to stock-based awards


25,632


20,407


78,715


62,947


Excess tax benefits from employee stock plans


(14,578)


(7,401)


(46,768)


(32,536)


Changes in assets and liabilities:












Accounts receivable, net



(30,212)


(22,515)


67,326


75,355



Deferred commissions



(25,687)


(18,013)


(65,243)


(43,018)



Prepaid expenses and other current assets

(16,583)


(12,892)


(6,463)


(14,711)



Other assets



(5,263)


(506)


(9,405)


(624)



Accounts payable



2,575


2,228


6,500


(762)



Accrued expenses and other current liabilities

57,926


27,045


95,320


35,165



Deferred revenue



11,538


(3,575)


(12,691)


(48,591)





























Net cash provided by operating activities

74,040


35,520


293,319


179,351














Investing activities:











Business combinations, net of cash acquired


(3,834)


(4,500)


(155,337)


(4,500)

Land activity





(8,000)


0


(8,000)


0

Investments in privately-held companies



(4,000)


(3,700)


(6,500)


(4,400)

Changes in marketable securities



280,340


(41,243)


(449,633)


(422,274)

Capital expenditures




(20,790)


(10,389)


(60,311)


(42,445)





























Net cash provided by (used in) investing activities

243,716


(59,832)


(679,781)


(473,619)














Financing activities:











Purchase of subsidiary stock




(150,970)


0


(152,243)


0

Proceeds from the exercise of stock options

44,353


18,559


115,996


32,866

Excess tax benefits from employee stock plans


14,578


7,401


46,768


32,536

Principal payments on capital lease obligations


(3,116)


(2,398)


(7,157)


(5,904)





























Net cash provided by (used in) financing activities

(95,155)


23,562


3,364


59,498














Effect of exchange rate changes



(2,223)


(2,531)


2,095


(6,176)














Net increase (decrease) in cash and









cash equivalents




220,378


(3,281)


(381,003)


(240,946)














Cash and cash equivalents, beginning of period

409,925


246,169


1,011,306


483,834














Cash and cash equivalents, end of period


$          630,303


$              242,888


$              630,303


$              242,888



























Supplemental cash flow disclosure:









Cash paid (received) during the period for:











Interest




$              1,378


$                     292


$                  3,980


$                     793



Income taxes, net of tax refunds


$              4,260


$                  6,446


$                   (530)


$                27,520

Non-cash financing and investing activities











Fixed assets acquired under capital leases

$              6,765


$                  3,105


$                12,929


$                17,897



salesforce.com, inc.  











Additional Metrics












(Unaudited)




































Oct 31,


Jul 31,


Apr 30,


Jan 31,


Oct 31,


Jul 31,






2010


2010


2010


2010


2009


2009

















Full Time Equivalent Headcount 


4,758


4,447


4,106


3,969


3,814


3,653

































Financial data (in thousands):































Cash, cash equivalents and marketable securities



$1,802,440


$1,858,928


$1,901,548


$1,727,048


$1,070,092


$1,030,406


Deferred revenue, current and noncurrent 


$694,557


$683,019


$664,529


$704,348


$545,435


$549,010


















































Three Months Ended October 31,


Nine Months Ended October 31,










2010


2009


2010


2009





Revenues by geography
(in thousands):
















Americas




$                             292,540


$                             232,802


$                            826,493


$          679,460






Europe




76,464


60,761


208,851


168,355






Asia Pacific




60,083


36,986


164,928


103,719


























$                             429,087


$                             330,549


$                         1,200,272


$          951,534





















As a percentage of total revenues:





























Revenues by geography:
















Americas




68

%

70

%

69

%

71

%





Europe




18


18


17


18






Asia Pacific




14


12


14


11


























100

%

100

%

100

%

100

%




































































Supplemental Revenue Analysis (1)


















Three Months Ended


Three Months Ended


Three Months Ended












October 31, 2021


July 31, 2021


April 30, 2022



































Revenue constant currency growth rates (as compared to the comparable quarter a year ago)






























Americas




26%


22%


18%








Europe




38%


30%


24%








Asia Pacific




53%


53%


50%








Total growth




31%


26%


22%























(1)  We present constant currency information to provide a framework for assessing how our underlying business performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted in to United States dollars at the exchange rates in effect at the end of each quarter for  growth rate calculations presented rather than the actual exchange rates in effect during that period.



Supplemental Cash Flow Information


















Free cash flow analysis, a non-GAAP measure



(amounts in thousands)



































Three Months Ended October 31,


Nine Months Ended October 31,






2010


2009


2010


2009



Operating cash flow



$                               74,040


$                               35,520


$                            293,319


$          179,351



GAAP net cash provided by operating activities










Less:












Capital expenditures



(20,790)


(10,389)


(60,311)


(42,445)



Free cash flow



$                               53,250


$                               25,131


$                            233,008


$          136,906



salesforce.com, inc.








GAAP RESULTS RECONCILED TO NON-GAAP RESULTS








The following table reflects selected salesforce.com GAAP results reconciled to non-GAAP results

(amounts in thousands, except per share data)


(unaudited)



















Three Months Ended October 31,


Nine Months Ended October 31,












2010


2009


2010


2009


Gross Profit









GAAP gross profit

$                  346,956


$                  264,979


$                  968,770


$                  761,668


Plus:









Amortization of purchased intangibles (b)

4,168


1,968


9,738


5,682


Stock-based expenses (c)

2,357


2,995


8,617


9,322











Non-GAAP gross profit

$                  353,481


$                  269,942


$                  987,125


$                  776,672











Operating expenses









GAAP operating expenses

$                  311,800


$                  234,838


$                  870,882


$                  671,915


Less:









Amortization of purchased intangibles (b)

(1,013)


(802)


(3,063)


(2,445)


Stock-based expenses (c)

(23,275)


(17,412)


(70,098)


(53,625)











Non-GAAP operating expenses

$                  287,512


$                  216,624


$                  797,721


$                  615,845











Income from operations









GAAP income from operations

$                    35,156


$                    30,141


$                    97,888


$                    89,753


Plus:









Amortization of purchased intangibles (b)

5,181


2,770


12,801


8,127


Stock-based expenses (c)

25,632


20,407


78,715


62,947











Non-GAAP income from operations

$                    65,969


$                    53,318


$                  189,404


$                  160,827











Non-operating income (a)









GAAP non-operating income

$                      3,404


$                      6,875


$                      2,031


$                    17,950


Plus:  Amortization of debt discount

5,665


0


16,649


0











Non-GAAP non-operating income

$                      9,069


$                      6,875


$                    18,680


$                    17,950











Net income attributable to salesforce.com









GAAP net income attributable to salesforce.com

$                    21,072


$                    20,691


$                    53,561


$                    60,325


Plus:









Amortization of purchased intangibles

5,181


2,770


12,801


8,127


Stock-based expenses

25,632


20,407


78,715


62,947


Amortization of debt discount

5,665


0


16,649


0


Less:









Income tax effect of Non-GAAP items

(13,197)


(8,105)


(38,690)


(23,868)


Non-GAAP net income attributable to salesforce.com

$                    44,353


$                    35,763


$                  123,036


$                  107,531











Diluted earnings per share









GAAP diluted earnings per share

$                        0.15


$    0.16


$                        0.40


$    0.48


Plus:









Amortization of purchased intangibles

0.04


0.02


0.09


0.06


Stock-based expenses

0.19


0.16


0.58


0.50


Amortization of debt discount

0.04


0


0.12


0


Less:









Income tax effect of  Non-GAAP items

(0.10)


(0.06)


(0.28)


(0.19)


Non-GAAP diluted earnings per share attributable to salesforce.com

$                        0.32


$                        0.28


$                        0.91


$                        0.85











Shares used in computing diluted net income per share

137,044


128,596


135,007


126,993



















a)    Non-operating income consists of investment income, interest expense and other expense  



b)  Amortization of purchased intangibles were as follows:  



Three Months Ended October 31,


Nine Months Ended October 31,



2010


2009


2010


2009











Cost of revenues

$                      4,168


$                      1,968


$                      9,738


$                      5,682


Marketing and sales

1,013


802


3,063


2,445



$                      5,181


$                      2,770


$                    12,801


$                      8,127



















c)   Stock-based expenses were as follows:  



Three Months Ended October 31,


Nine Months Ended October 31,



2010


2009


2010


2009











Cost of revenues

$                      2,357


$                      2,995


$                      8,617


$                      9,322


Research and development

3,976


2,707


12,119


8,741


Marketing and sales

11,969


9,055


36,496


28,314


General and administrative

7,330


5,650


21,483


16,570



$                    25,632


$                    20,407


$                    78,715


$                    62,947



salesforce.com, inc. 

COMPUTATION OF BASIC AND DILUTED GAAP AND NON-GAAP NET INCOME PER SHARE

The following reflects the calculation of Basic and Diluted Net Income Per Share

(amounts in thousands, except per share data)



Three Months Ended October 31,


Nine  Months Ended October 31,



2010

2009


2010

2009









GAAP Basic Net Income Per Share














Net income attributable to salesforce.com

$                         21,072

$                             20,691


$                             53,561

$                             60,325









Basic net income per share attributable to salesforce.com common stockholders

0.16

0.17


0.41

0.49









Shares used in computing basic net income per share attributable to salesforce.com common stockholders

130,888

124,561


129,461

123,871
























Three Months Ended October 31,


Nine  Months Ended October 31,



2010

2009


2010

2009









Non-GAAP Basic Net Income Per Share














Non-GAAP net income attributable to salesforce.com

$                         44,353

$                             35,763


$                           123,036

$                           107,531









Basic Non-GAAP net income per share attributable to salesforce.com common stockholders

0.34

0.29


0.95

0.87









Shares used in computing basic net income per share attributable to salesforce.com common stockholders

130,888

124,561


129,461

123,871
























Three Months Ended October 31,


Nine  Months Ended October 31,



2010

2009


2010

2009









GAAP Diluted Net Income Per Share














Net income attributable to salesforce.com

$                         21,072

$                             20,691


$                             53,561

$                             60,325









Diluted net income per share attributable to salesforce.com common stockholders

0.15

0.16


0.40

0.48









Shares used in computing diluted net income per share attributable to salesforce.com common stockholders

137,044

128,596


135,007

126,993
























Three Months Ended October 31,


Nine  Months Ended October 31,



2010

2009


2010

2009









Non-GAAP Diluted Net Income Per Share














Non-GAAP net  income attributable to salesforce.com

$                         44,353

$                             35,763


$                           123,036

$                           107,531









Diluted  Non-GAAP net income per share attributable to salesforce.com common stockholders

0.32

                                0.28


0.91

0.85









Shares used in computing diluted net income per share attributable to salesforce.com common stockholders

137,044

128,596


135,007

126,993



SOURCE salesforce.com, inc.

(Source: PR Newswire )
(Source: Quotemedia)
 

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