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Form 8-K SALESFORCE COM INC For: Feb 25

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February 25, 2015 4:20 PM EST


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
________________________________________________________ 
FORM 8-K
________________________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
February 25, 2015
Date of Report (date of earliest event reported)
 
__________________________________________________________
salesforce.com, inc.
(Exact name of registrant as specified in its charter) 
__________________________________________________________ 
 
Delaware
 
001-32224
 
94-3320693
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(I. R. S. Employer
Identification No.)

The Landmark @ One Market, Suite 300
San Francisco, CA 94105
(Address of principal executive offices)
Registrant’s telephone number, including area code: (415) 901-7000
N/A
(Former name or former address, if changed since last report)
 ________________________________________________
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 





Section 2 – Financial Information
Item 2.02 Results of Operations and Financial Condition.
On February 25, 2015, salesforce.com, inc. issued a press release announcing its results for the fiscal quarter and fiscal year ended January 31, 2015. A copy of the press release is attached as Exhibit 99.1 to this current report on Form 8-K and is incorporated by reference herein.
The information in this current report on Form 8-K and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
Section 9 – Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
 
(d)
Exhibits
99.1
  
Press Release dated February 25, 2015





Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Dated:
February 25, 2015
 
salesforce.com, inc.
 
 
 
 
 
 
/s/ Mark J. Hawkins
 
 
 
Mark J. Hawkins, Chief Financial Officer





Exhibit Index
 
Exhibit
Number
  
Exhibit Title
 
 
99.1
  
Press Release dated February 25, 2015




Exhibit 99.1
John Cummings
Salesforce
Investor Relations
415-778-4188
Chi Hea Cho
Salesforce
Public Relations
415-281-5304


Salesforce Announces Fiscal 2015 Fourth Quarter and Full Year Results
Surpasses $5 Billion in Annual Revenue Faster Than Any Other Enterprise Software Company

•
Quarterly Revenue of $1.44 Billion, up 26% Year-Over-Year
•
Full Year Revenue of $5.37 Billion, up 32% Year-Over-Year
•
Deferred Revenue of $3.32 Billion, up 32% Year-Over-Year
•
Unbilled Deferred Revenue of Approximately $5.7 Billion, up 27% Year-Over-Year
•
Full Year Operating Cash Flow of $1.17 Billion, up 34% Year-Over-Year
•
Initiates First Quarter Revenue Guide of $1.485 - $1.505 Billion
•
Raises FY16 Revenue Guidance Range to $6.475 Billion to $6.520 Billion

SAN FRANCISCO, Calif. - February 25, 2015 - Salesforce (NYSE: CRM), the Customer Success Platform and world’s #1 CRM company, today announced results for its fiscal fourth quarter and full fiscal year ended January 31, 2015.

“Salesforce delivered yet another year of exceptional growth, with revenue, deferred revenue and operating cash flow all growing more than 30%, while exceeding our expectations in non-GAAP operating margin improvement,” said Marc Benioff, Chairman and CEO, Salesforce. “Salesforce reached $5 billion in annual revenue faster than any other enterprise software company and now it’s our goal to be the fastest to reach $10 billion.”

Salesforce delivered the following results for its fiscal fourth quarter and full fiscal year 2015:    

Revenue: Total Q4 revenue was $1.44 billion, an increase of 26% year-over-year, and 29% in constant currency. Subscription and support revenues were $1.35 billion, an increase of 25% year-over-year. Professional services and other revenues were $99 million, an increase of 41% year-over-year.

Full fiscal year 2015 revenue was $5.37 billion, an increase of 32% year-over-year, and 33% in constant currency. Subscription and support revenues were $5.01 billion, an increase of 31% year-over-year. Professional services and other revenues were $360 million, an increase of 46% year-over-year.

Earnings per Share: Q4 GAAP loss per share was ($0.10), and diluted non-GAAP earnings per share was $0.14. The company’s non-GAAP results exclude the effects of $152 million in stock-based compensation expense, $40 million in amortization of purchased intangibles, $8 million in net non-cash interest expense related to the company’s convertible senior notes, and are based on a projected long-term non-GAAP tax rate of 36.5%. GAAP EPS calculations are based on a basic share count of approximately 637 million shares. Non-GAAP EPS calculations are based on approximately 647 million diluted shares outstanding during the quarter.

For the full fiscal year 2015, GAAP loss per share was ($0.42), and non-GAAP diluted earnings per share was $0.52. The company’s non-GAAP results exclude the effects of $565 million in stock-based compensation expense, $155 million in amortization of purchased intangibles, $16 million in gains on sales of land and building improvements, $47 million in net non-cash interest expense related to the company’s convertible senior notes, including the related loss on conversions of our convertible 0.75% senior notes, due 2015, and are based on a projected long-term non-GAAP tax rate of 36.5%. GAAP EPS calculations are based on a basic




share count of approximately 624 million shares. Non-GAAP EPS calculations are based on approximately 652 million diluted shares outstanding during the quarter, including approximately 15 million shares associated with the company’s convertible 0.75% senior notes due 2015 and related warrants.

Cash: Cash generated from operations for the fiscal fourth quarter was $332 million, an increase of 22% year-over-year. For the full fiscal year 2015, operating cash flow totaled $1.17 billion, up 34% year-over-year. Total cash, cash equivalents and marketable securities finished the quarter at $1.89 billion.

Deferred Revenue: Deferred revenue on the balance sheet as of January 31, 2015 was $3.32 billion, an increase of 32% year-over-year, and 35% in constant currency. Unbilled deferred revenue, representing business that is contracted but unbilled and off balance sheet, ended the fourth quarter at approximately $5.7 billion, up 27% year-over-year.

As of February 25, 2015, the company is initiating revenue and EPS guidance for its first quarter of fiscal year 2016, and initiating EPS guidance for its full fiscal year 2016. In addition, the company is raising its full fiscal year 2016 revenue guidance previously provided on November 19, 2014.

Q1 FY16 Guidance: Revenue for the company’s first fiscal quarter is projected to be approximately $1.485 billion to $1.505 billion, an increase of 21% to 23% year-over-year.

GAAP loss per share is expected to be in the range of ($0.04) to ($0.03), while diluted non-GAAP EPS is expected to be in the range of $0.13 to $0.14. The non-GAAP estimate excludes the effects of stock-based compensation expense, expected to be approximately $138 million, amortization of purchased intangibles related to acquisitions, expected to be approximately $40 million, net non-cash interest expense related to the 0.25% convertible senior notes, due 2018, expected to be approximately $6 million, and lease termination resulting from the first quarter purchase of an office building, expected to be a gain of approximately $42 million. EPS estimates assume a GAAP tax rate of approximately 390%, which reflects the estimated quarterly change in the tax valuation allowance, and a projected long-term non-GAAP tax rate of 36.5%. Note that the tax valuation allowance adds complexity, causing potential volatility in our forecasted GAAP tax rate. The GAAP EPS calculation assumes an average basic share count of approximately 653 million shares, and the non-GAAP EPS calculation assumes an average fully diluted share count of approximately 668 million shares.

Full Year FY16 Guidance: Revenue for the company’s full fiscal year 2016 is projected to be approximately $6.475 billion to $6.520 billion, an increase of 20% to 21% year-over-year, which includes an FX headwind of approximately $175 to $200 million.

GAAP loss per share is expected to be in the range of ($0.16) to ($0.14) while diluted non-GAAP EPS is expected to be in the range of $0.67 to $0.69. The non-GAAP estimate excludes the effects of stock-based compensation expense, expected to be approximately $617 million, amortization of purchased intangibles related to acquisitions, expected to be approximately $158 million, gains on sales of land and building improvements of approximately $18 million, net non-cash interest expense related to the 0.25% convertible senior notes, due 2018, expected to be approximately $25 million, and lease termination resulting from the first quarter purchase of an office building, expected to be a gain of approximately $42 million. EPS estimates assume a GAAP tax rate of approximately 351%, which reflects the estimated annual change in the tax valuation allowance, and a projected long-term non-GAAP tax rate of 36.5%. Note that the tax valuation allowance adds complexity, causing potential volatility in our forecasted GAAP tax rate. The GAAP EPS calculation assumes an average basic share count of approximately 662 million shares, and the non-GAAP EPS calculation assumes an average fully diluted share count of approximately 679 million shares.

Operating cash flow growth for the company’s full fiscal year 2016 is projected to be approximately 22% to 23% year-over-year.

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





 
Fiscal 2016
 
Q1
 
FY2016
GAAP EPS Range*
($0.04) – ($0.03)

 
($0.16) – ($0.14)

Plus
 
 
 
Amortization of purchased intangibles
$
0.06

 
$
0.23

Stock-based expense
$
0.21

 
$
0.91

Amortization of debt discount, net
$
0.01

 
$
0.04

Less
 
 
 
Gain on sale of land and building improvements
$
—

 
$
(0.03
)
Lease termination resulting from purchase of office building
$
(0.06
)
 
$
(0.06
)
Income tax effects and adjustments**
$
(0.05
)
 
$
(0.26
)
Non-GAAP diluted EPS
$0.13 – $0.14

 
$0.67 – $0.69

Shares used in computing basic net income per share (millions)
653

 
662

Shares used in computing diluted net income per share (millions)
668

 
679

 
*
For Q1 and FY16 GAAP EPS loss, basic number of shares used for calculation.
**
The Company's non-GAAP tax provision uses a long-term projected tax rate of 36.5%.



Quarterly Conference Call

Salesforce will host a conference call at 2:00 p.m. (PST) / 5:00 p.m. (EST) to discuss its financial results with the investment community. A live web broadcast of the event will be available on the Salesforce Investor Relations website at www.salesforce.com/investor. A live dial-in is available domestically at 866-901-SFDC or 866-901-7332 and internationally at 706-902-1764, passcode 76220312. A replay will be available at (800) 585-8367 or (855) 859-2056 until midnight (EST) Mar. 25, 2015.

About Salesforce
Salesforce, the Customer Success Platform and world's #1 CRM company, empowers companies to connect with their customers in a whole new way. Salesforce 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 about Salesforce (NYSE: CRM), visit: www.salesforce.com.

###

Non-GAAP Financial Measures: This press release includes information about non-GAAP EPS and non-GAAP tax rates (collectively the “non-GAAP financial measures”). Non-GAAP EPS estimates exclude the impact of the following items: stock-based compensation, amortization of acquisition-related intangibles, the net amortization of debt discount on the company’s convertible senior notes, and gains/losses on conversions of the company’s convertible senior notes, gains/losses on sales of land and building improvements, and termination of office leases, as well as income tax adjustments. The purpose of the non-GAAP tax rate is to quantify the excluded tax adjustments and the tax consequences associated with the above excluded expense items. The company reports a projected long-term tax rate to eliminate the effects of non-recurring and period specific items which can vary in size and frequency. This projected long-term non-GAAP tax rate could be subject to change in the future for a variety of reasons, for example, significant changes in the company’s geographic earnings mix including acquisition activity, or fundamental tax law changes in major jurisdictions where the company operates. These non-GAAP financial measures 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, the net amortization of




debt discount on the company’s convertible senior notes, gains/losses on the sales of land and building improvements, and gains/losses on conversions of the company’s convertible senior notes, are being excluded from the company’s FY15 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 related to the issuance of equity awards, resulting in stock-based compensation, the acquisitions of companies, real estate activity, or the issuance of convertible senior notes, are made to further the company’s long-term strategic objectives and impact the company’s statement of operations 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, such as certain one-time charges. As significant unusual or discrete events occur, such as real estate activity, the results may be excluded in the period in which the events occur. 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 Q4 and FY15 and its non-GAAP estimates for Q1 and FY16:

•
Stock-Based Expenses: The company’s compensation strategy includes the use of stock-based compensation to attract and retain 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 the cost associated with an acquired company’s research and development efforts, trade names, customer lists and customer relationships, and acquired lease intangibles, as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are continually evaluated for impairment, amortization of the cost of purchased intangibles is a static expense, one that is 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 senior notes due 2015 that were issued in a private placement in January 2010 and the company’s $1.15 billion of convertible senior notes due 2018 that were issued in a private placement in March 2013. The imputed interest rates were approximately 5.9% for the convertible notes due 2015 and approximately 2.5% for the convertible notes due 2018, while the actual coupon interest rates of the notes were 0.75% and 0.25%, respectively. The difference between the imputed interest expense and the coupon interest expense, net of the interest amount capitalized, 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.

•
Non-Cash Gains/Losses on Conversion of Debt: Upon settlement of the company’s convertible senior notes, we attribute the fair value of the consideration transferred to the liability and equity components of the convertible senior notes. The difference between the fair value of consideration attributed to the liability component and the carrying value of the liability as of settlement date is recorded as a non-cash gain or loss on the statement of operations. Management believes that the exclusion of the non-cash gain/loss provides investors an enhanced view of the company’s operational performance.

•
Gain on Sales of Land and Building Improvements:  The Company views the non-operating gains associated with the sales of the land and building improvements at Mission Bay to be a discrete




item. Management believes that the exclusion of the gains provides investors an enhanced view of the Company’s operational performance.

•
Lease Termination Resulting From Purchase of Office Building: The Company views the non-cash, one-time gain associated with the termination of its lease at 50 Fremont to be a discrete item. Management believes that the exclusion of the gains provides investors an enhanced view of the Company’s operational performance.

•
Income Tax Effects and Adjustments: During fiscal 2014, the Company’s non-GAAP tax provision excludes the tax effects of expense items described above and certain tax items not directly related to the current fiscal year’s ordinary operating results. Examples of such tax items include, but are not limited to, changes in the valuation allowance related to deferred tax assets, certain acquisition-related costs and unusual or infrequently occurring items. Management believes the exclusion of these income tax adjustments provides investors with useful supplemental information about the Company’s operational performance. During fiscal 2015, the Company began to compute and utilize a fixed long-term projected non-GAAP tax rate in order to provide better consistency across the interim reporting periods by eliminating the effects of non-recurring and period-specific items such as changes in the tax valuation allowance and tax effects of acquisitions-related costs, since each of these can vary in size and frequency. When projecting this long-term rate, the Company evaluated a three-year financial projection that excludes the impact of the following non-cash items: Stock-Based Expenses, Amortization of Purchased Intangibles, Amortization of Debt Discount, Gains/Losses on the sales of land and building improvements, and Gains/Losses on Conversions of Debt. The projected rate also assumes no new acquisitions in the three-year period, and takes into account other factors including the Company’s current tax structure, its existing tax positions in various jurisdictions and key legislation in major jurisdictions where the Company operates. The non-GAAP tax rate is 36.5%. The Company intends to re-evaluate this long-term rate on an annual basis or if any significant events that may materially affect this long-term rate occur. This long-term rate could be subject to change for a variety of reasons, for example, significant changes in the geographic earnings mix including acquisition activity, or fundamental tax law changes in major jurisdictions where the Company operates.

###

"Safe harbor" statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements about our financial results, which may include expected GAAP and non-GAAP financial and other operating and non-operating results, including revenue, net income (loss), EPS, expected revenue run rate, expected tax rates, stock-based compensation expenses, amortization of purchased intangibles and debt discount, non-cash interest expense and gains/losses on the conversions of debt, gains/losses on the sales of land and building improvements, termination of operating lease, shares outstanding, and changes in deferred tax asset valuation allowances. The achievement or success of the matters covered by such forward-looking statements involves 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; the company’s rate of growth and anticipated revenue run rate, including the company’s ability to convert deferred revenue and unbilled deferred revenue into revenue and, as appropriate, cash flow, and the continued growth and ability to maintain deferred revenue and unbilled deferred revenue; 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 previous and 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 company’s ability to realize benefits from strategic partnerships; the emerging markets in which the company operates; 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; factors affecting the company’s outstanding convertible notes and revolving credit facility; fluctuations in the number of shares we have outstanding and the price of such shares; foreign currency exchange rates; collection of receivables; interest




rates; factors affecting our deferred tax assets and ability to value and utilize them, including the timing of when we once again achieve profitability on a pre-tax basis; the potential negative impact of indirect tax exposure; the risks and expenses associated with the company’s real estate and office facilities space; 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. 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.

© 2015 salesforce.com, inc.  All rights reserved.  Salesforce, Sales Cloud, Service Cloud, Marketing Cloud, AppExchange, Salesforce1, and others are trademarks of salesforce.com, inc.  Other brands featured 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 January 31,
 
Fiscal Year Ended January 31,
 
2015
 
2014
 
2015
 
2014
Revenues:
 
 
 
 
 
 
 
Subscription and support
$
1,345,358

 
$
1,075,001

 
$
5,013,764

 
$
3,824,542

Professional services and other
99,250

 
70,241

 
359,822

 
246,461

Total revenues
1,444,608

 
1,145,242

 
5,373,586

 
4,071,003

Cost of revenues (1)(2):
 
 
 
 
 
 
 
Subscription and support
258,027

 
198,613

 
924,638

 
711,880

Professional services and other
97,896

 
74,917

 
364,632

 
256,548

Total cost of revenues
355,923

 
273,530

 
1,289,270

 
968,428

Gross profit
1,088,685

 
871,712

 
4,084,316

 
3,102,575

Operating expenses (1)(2):
 
 
 
 
 
 
 
Research and development
205,990

 
173,090

 
792,917

 
623,798

Marketing and sales
736,140

 
639,792

 
2,757,096

 
2,168,132

General and administrative
181,371

 
162,576

 
679,936

 
596,719

Total operating expenses
1,123,501

 
975,458

 
4,229,949

 
3,388,649

Loss from operations
(34,816
)
 
(103,746
)
 
(145,633
)
 
(286,074
)
Investment income
2,983

 
1,367

 
10,038

 
10,218

Interest expense
(16,882
)
 
(22,743
)
 
(73,237
)
 
(77,211
)
Gain on sales of land and building improvements
0

 
0

 
15,625

 
0

Other income (expense)
(4,783
)
 
1,975

 
(19,878
)
 
(4,868
)
Loss before benefit from (provision for) income taxes
(53,498
)
 
(123,147
)
 
(213,085
)
 
(357,935
)
Benefit from (provision for) income taxes
(12,267
)
 
6,524

 
(49,603
)
 
125,760

Net loss
$
(65,765
)
 
$
(116,623
)
 
$
(262,688
)
 
$
(232,175
)
Basic net loss per share
$
(0.10
)
 
$
(0.19
)
 
$
(0.42
)
 
$
(0.39
)
Diluted net loss per share
$
(0.10
)
 
$
(0.19
)
 
$
(0.42
)
 
$
(0.39
)
Shares used in computing basic net loss per share
637,219

 
607,374

 
624,148

 
597,613

Shares used in computing diluted net loss per share
637,219

 
607,374

 
624,148

 
597,613

 
(1)
Amounts include amortization of purchased intangibles from business combinations, as follows:
Cost of revenues
$
20,006

 
$
31,657

 
$
90,300

 
$
109,356

Marketing and sales
19,965

 
15,032

 
64,673

 
37,179

(2)
Amounts include stock-based expense, as follows:
Cost of revenues
$
14,907

 
$
12,830

 
$
53,812

 
$
45,608

Research and development
33,929

 
29,024

 
121,193

 
107,420

Marketing and sales
75,900

 
69,340

 
286,410

 
258,571

General and administrative
27,066

 
25,345

 
103,350

 
91,681






salesforce.com, inc.
Condensed Consolidated Statements of Operations
As a percentage of total revenues:
(Unaudited)
 
 
Three Months Ended January 31,
 
Fiscal Year Ended January 31,
 
2015
 
2014
 
2015
 
2014
Revenues:
 
 
 
 
 
 
 
Subscription and support
93
 %
 
94
 %
 
93
 %
 
94
 %
Professional services and other
7

 
6

 
7

 
6

Total revenues
100

 
100

 
100

 
100

Cost of revenues (1)(2):
 
 
 
 
 
 
 
Subscription and support
18

 
17

 
17

 
18

Professional services and other
7

 
7

 
7

 
6

Total cost of revenues
25

 
24

 
24

 
24

Gross profit
75

 
76

 
76

 
76

Operating expenses (1)(2):
 
 
 
 
 
 
 
Research and development
14

 
15

 
15

 
15

Marketing and sales
51

 
56

 
51

 
53

General and administrative
13

 
14

 
13

 
15

Total operating expenses
78

 
85

 
79

 
83

Loss from operations
(3
)
 
(9
)
 
(3
)
 
(7
)
Investment income
0

 
0

 
0

 
0

Interest expense
(1
)
 
(2
)
 
(1
)
 
(2
)
Gain on sales of land and building improvements
0

 
0

 
0

 
0

Other income (expense)
0

 
0

 
0

 
0

Loss before benefit from (provision for) income taxes
(4
)
 
(11
)
 
(4
)
 
(9
)
Benefit from (provision for) income taxes
(1
)
 
1

 
(1
)
 
3

Net loss
(5
)%
 
(10
)%
 
(5
)%
 
(6
)%
 
(1)
Amortization of purchased intangibles from business combinations as a percentage of total revenues, as follows:
Cost of revenues
1
%
 
3
%
 
2
%
 
3
%
Marketing and sales
1

 
1

 
1

 
1

(2)
Stock-based expense as a percentage of total revenues, as follows:
Cost of revenues
1
%
 
1
%
 
1
%
 
1
%
Research and development
2

 
3

 
2

 
3

Marketing and sales
5

 
6

 
5

 
6

General and administrative
2

 
2

 
2

 
2







salesforce.com, inc.
Condensed Consolidated Balance Sheets
(in thousands)
 
 
January 31,
2015
 
January 31,
2014
 
(unaudited)
 
 
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
908,117

 
$
781,635

Short-term marketable securities
87,312

 
57,139

Accounts receivable, net
1,905,506

 
1,360,837

Deferred commissions
225,386

 
171,461

Prepaid expenses and other current assets
280,554

 
309,180

Land and building improvements held for sale
143,197

 
0

Total current assets
3,550,072

 
2,680,252

Marketable securities, noncurrent
894,855

 
482,243

Property and equipment, net
1,125,866

 
1,240,746

Deferred commissions, noncurrent
162,796

 
153,459

Capitalized software, net
433,398

 
481,917

Goodwill
3,782,660

 
3,500,823

Other assets, net
628,320

 
613,490

Restricted cash
115,015

 
0

Total assets
$
10,692,982

 
$
9,152,930

Liabilities, temporary equity and stockholders’ equity
 
 
 
Current liabilities:
 
 
 
Accounts payable, accrued expenses and other liabilities
$
1,103,335

 
$
934,324

Deferred revenue
3,286,768

 
2,473,705

Convertible 0.75% senior notes, net
0

 
542,159

Term loan, current
0

 
30,000

Total current liabilities
4,390,103

 
3,980,188

Convertible 0.25% senior notes, net
1,070,692

 
1,046,930

Term loan, noncurrent
0

 
255,000

Revolving credit facility
300,000

 
0

Deferred revenue, noncurrent
34,681

 
48,410

Other noncurrent liabilities
922,323

 
757,187

Total liabilities
6,717,799

 
6,087,715

Temporary equity
0

 
26,705

Stockholders’ equity:
 
 
 
Common stock
651

 
610

Additional paid-in capital
4,604,485

 
3,363,377

Accumulated other comprehensive income (loss)
(24,108
)
 
17,680

Accumulated deficit
(605,845
)
 
(343,157
)
Total stockholders’ equity
3,975,183

 
3,038,510

Total liabilities, temporary equity and stockholders’ equity
$
10,692,982

 
$
9,152,930

 





salesforce.com, inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
 
 
Three Months Ended January 31,
 
Fiscal Year Ended January 31,
 
2015
 
2014
 
2015
 
2014
Operating activities:
 
 
 
 
 
 
 
Net loss
$
(65,765
)
 
$
(116,623
)
 
$
(262,688
)
 
$
(232,175
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
117,938

 
114,813

 
448,296

 
369,423

Amortization of debt discount and transaction costs
8,460

 
13,375

 
39,620

 
49,582

Gain on sales of land and building improvements
0

 
0

 
(15,625
)
 
0

Loss on conversions of convertible senior notes
96

 
214

 
10,326

 
214

Amortization of deferred commissions
71,116

 
54,689

 
257,642

 
194,553

Expenses related to employee stock plans
151,802

 
136,539

 
564,765

 
503,280

Excess tax benefits from employee stock plans
(4,283
)
 
(5,978
)
 
(7,730
)
 
(8,144
)
Changes in assets and liabilities, net of business combinations:
 
 
 
 
 
 
 
Accounts receivable, net
(1,110,916
)
 
(756,792
)
 
(544,610
)
 
(424,702
)
Deferred commissions
(149,882
)
 
(144,282
)
 
(320,904
)
 
(265,080
)
Prepaid expenses and other current assets and other assets
11,318

 
90,676

 
45,819

 
105,218

Accounts payable, accrued expenses and other liabilities
204,867

 
97,111

 
159,973

 
(29,043
)
Deferred revenue
1,097,472

 
787,496

 
798,830

 
612,343

Net cash provided by operating activities
332,223

 
271,238

 
1,173,714

 
875,469

Investing activities:
 
 
 
 
 
 
 
Business combinations, net of cash acquired
0

 
(2,570
)
 
38,071

 
(2,617,302
)
Proceeds from land activity, net
0

 
0

 
223,240

 
0

Deposit for purchase of building and land
(11,500
)
 
0

 
(126,435
)
 
0

Strategic investments
(45,820
)
 
(13,329
)
 
(93,725
)
 
(31,160
)
Purchases of marketable securities
(90,516
)
 
(138,908
)
 
(780,540
)
 
(558,703
)
Sales of marketable securities
46,552

 
15,814

 
243,845

 
1,038,284

Maturities of marketable securities
41,390

 
15,405

 
87,638

 
36,436

Capital expenditures
(85,354
)
 
(69,849
)
 
(290,454
)
 
(299,110
)
Net cash used in investing activities
(145,248
)
 
(193,437
)
 
(698,360
)
 
(2,431,555
)
Financing activities:
 
 
 
 
 
 
 
Proceeds from borrowings on convertible senior notes, net
0

 
0

 
0

 
1,132,750

Proceeds from issuance of warrants
0

 
0

 
0

 
84,800

Purchase of convertible note hedge
0

 
0

 
0

 
(153,800
)
Proceeds from term loan, net
0

 
0

 
0

 
298,500

Proceeds from revolving credit facility, net
0

 
0

 
297,325

 
0

Proceeds from employee stock plans
82,428

 
72,502

 
308,989

 
289,931

Excess tax benefits from employee stock plans
4,283

 
5,978

 
7,730

 
8,144

Payments on convertible senior notes
(181,633
)
 
(5,992)

 
(568,862
)
 
(5,992
)
Principal payments on capital lease obligations
(9,383
)
 
(8,052
)
 
(70,663
)
 
(41,099
)
Payments on term loan
0

 
(7,500)

 
(285,000
)
 
(15,000
)
Net cash provided by (used in) financing activities
(104,305
)
 
56,936

 
(310,481
)
 
1,598,234

Effect of exchange rate changes
(20,878
)
 
(4,852
)
 
(38,391
)
 
(7,758
)
Net increase in cash and cash equivalents
61,792

 
129,885

 
126,482

 
34,390

Cash and cash equivalents, beginning of period
846,325

 
651,750

 
781,635

 
747,245

Cash and cash equivalents, end of period
$
908,117

 
$
781,635

 
$
908,117

 
$
781,635





salesforce.com, inc.
Additional Metrics
(Unaudited) 
 
Jan 31,
2015
 
Oct 31,
2014
 
Jul 31,
2014
 
Apr 30,
2014
 
Jan 31,
2014
 
Oct 31,
2013
 
Full Time Equivalent Headcount
16,227

 
15,458

 
15,145

 
14,239

 
13,312

 
12,770

 
Financial data (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
Cash, cash equivalents and marketable securities
$
1,890,284

(1)
$
1,827,277

(1)
$
1,671,758

 
$
1,529,888

 
$
1,321,017

 
$
1,085,307

 
Deferred revenue, current and noncurrent
$
3,321,449

 
$
2,223,977

 
$
2,352,904

 
$
2,324,615

 
$
2,522,115

 
$
1,734,619

 
Principal due on convertible senior notes, term loan, and revolving credit facility
$
1,450,000

(3)
$
1,631,635

(2)
$
1,691,280

 
$
1,712,472

 
$
2,003,864

 
$
2,017,356

 
(1)
Excludes $115.0 million and $114.9 million of restricted cash as of January 31, 2015 and October 31, 2014, respectively.
(2)
On October 6, 2014, the Company paid in full the outstanding balance of its term loan of $262.5 million and borrowed $300.0 million from its new revolving credit facility.
(3)
On January 15, 2015, the 0.75% Convertible Senior Notes matured and the Company paid in full the remaining outstanding balance which was $179.8 million as of October 31, 2014.






Selected Balance Sheet Accounts (in thousands):
 
January 31,
2015
 
October 31,
2014
 
January 31,
2014
Prepaid Expenses and Other Current Assets
 
 

 
 
Deferred income taxes, net
$
35,528

 
$
45,738

 
$
49,279

Prepaid income taxes
21,514

 
20,847

 
23,571

Customer contract asset (4)
16,620

 
28,073

 
77,368

Prepaid expenses and other current assets
206,892

 
192,954

 
158,962

 
$
280,554

 
$
287,612

 
$
309,180

Property and Equipment, net
 
 

 
 
Land and building improvements (5)
$
0

 
$
0

 
$
297,835

Computers, equipment and software
1,171,762

 
1,133,701

 
931,171

Furniture and fixtures
71,881

 
69,542

 
58,956

Leasehold improvements
376,761

 
362,170

 
296,390

Building in progress - leased facility
125,289

 
102,975

 
40,171

 
1,745,693

 
1,668,388

 
1,624,523

Less accumulated depreciation and amortization
(619,827
)
 
(558,572
)
 
(383,777
)
 
$
1,125,866

 
$
1,109,816

 
$
1,240,746

Capitalized Software, net
 
 

 
 
Capitalized internal-use software development costs, net of accumulated amortization
$
96,617

 
$
89,106

 
$
72,915

Acquired developed technology, net of accumulated amortization
336,781

 
358,982

 
409,002

 
$
433,398

 
$
448,088

 
$
481,917

Other Assets, net
 
 

 
 
Deferred income taxes, noncurrent, net
$
9,275

 
$
8,128

 
$
9,691

Long-term deposits
19,715

 
19,597

 
17,970

Purchased intangible assets, net of accumulated amortization
329,971

 
349,665

 
416,119

Acquired intellectual property, net of accumulated amortization
15,879

 
10,844

 
11,957

Strategic investments
175,774

 
132,150

 
92,489

Customer contract asset (4)
1,447

 
3,747

 
18,182

Other
76,259

 
71,032

 
47,082

 
$
628,320

 
$
595,163

 
$
613,490


(4)
Customer contract asset reflects future billings of amounts that were contractually committed by ExactTarget’s existing customers as of the acquisition date. As the Company bills these customers this balance will reduce and accounts receivable will increase.

(5)
During the year ended January 31, 2015, the Company sold approximately 5.2 net acres of its undeveloped real estate. As of January 31, 2015 the remaining portion of the land and building improvements, approximately 8.8 net acres, was classified as land and building improvements held for sale, which is included in current assets on the condensed consolidated balance sheet.




 
January 31,
2015
 
October 31,
2014
 
January 31,
2014
Accounts Payable, Accrued Expenses and Other Liabilities
 
 
 
 
 
Accounts payable
$
95,537

 
$
88,794

 
$
64,988

Accrued compensation
457,102

 
339,982

 
397,002

Accrued other liabilities
321,032

 
314,311

 
235,543

Accrued income and other taxes payable
184,844

 
141,388

 
153,026

Accrued professional costs
16,889

 
17,597

 
15,864

Customer liability, current (6)
13,084

 
19,737

 
53,957

Accrued rent
14,847

 
14,133

 
13,944

 
$
1,103,335

 
$
935,942

 
$
934,324

Other Noncurrent Liabilities
 
 

 
 
Deferred income taxes and income taxes payable
$
94,396

 
$
106,759

 
$
108,760

Customer liability, noncurrent (6)
1,026

 
2,546

 
13,953

Financing obligation, building in progress - leased facility
125,289

 
102,975

 
40,171

Long-term lease liabilities and other
701,612

 
703,530

 
594,303

 
$
922,323

 
$
915,810

 
$
757,187

(6)
Customer liability reflects the legal obligation to provide future services that were contractually committed by ExactTarget’s existing customers but unbilled as of the acquisition date.
Selected Off-Balance Sheet Account
 
January 31,
2015
 
October 31,
2014
 
January 31,
2014
Unbilled Deferred Revenue, a non-GAAP measure
$ 5.7bn
 
$ 5.4bn
 
$ 4.5bn
Unbilled deferred revenue represents future billings under our non-cancelable subscription agreements that have not been invoiced and, accordingly, are not recorded in deferred revenue.
The balances exclude the remaining amount related to the fair value of unbilled deferred revenue associated with the acquisition of ExactTarget, which was initially recorded as part of business combination accounting, because these amounts are reflected on the balance sheet under “accounts payable, accrued expenses and other liabilities” and “other noncurrent liabilities”.
Supplemental Revenue Analysis
Subscription and support revenue by cloud service offering (in millions):
Three Months Ended 
 January 31, 2015
 
Fiscal Year Ended 
 January 31, 2015
Sales Cloud
$
631.3

 
$
2,443.0

Service Cloud
367.1

 
1,320.2

Salesforce1 Platform and Other
206.6

 
745.3

Marketing Cloud
140.4

 
505.3

 
$
1,345.4

 
$
5,013.8





 
Three Months Ended January 31,
 
Fiscal Year Ended January 31,
 
2015
 
2014
 
2015
 
2014
Total revenues by geography (in thousands):
 
 
 
 
 
 
 
Americas
$
1,055,675

 
$
820,794

 
$
3,868,329

 
$
2,899,837

Europe
254,595

 
209,757

 
984,919

 
741,220

Asia Pacific
134,338

 
114,691

 
520,338

 
429,946

 
$
1,444,608

 
$
1,145,242

 
$
5,373,586

 
$
4,071,003

As a percentage of total revenues:
 
 
 
 
 
 
 
Total revenues by geography:
 
 
 
 
 
 
 
Americas
73
%
 
72
%
 
72
%
 
71
%
Europe
18

 
18

 
18

 
18

Asia Pacific
9

 
10

 
10

 
11

 
100
%
 
100
%
 
100
%
 
100
%
 
Revenue constant currency growth rates
(as compared to the comparable prior periods)
Three Months Ended
January 31, 2015
compared to Three 
Months Ended January 31, 2014
 
Three Months Ended
October 31, 2014
compared to Three Months
Ended October 31, 2013
 
Three Months Ended
January 31, 2014
compared to Three 
Months Ended January 31, 2013
Americas
29%
 
29%
 
41%
Europe
32%
 
34%
 
35%
Asia Pacific
27%
 
25%
 
24%
Total growth
29%
 
30%
 
38%
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 into United States dollars at the weighted average exchange rate for the quarter being compared to for growth rate calculations presented, rather than the actual exchange rates in effect during that period.
 
January 31, 2015 compared to January 31, 2014
 
October 31, 2014 compared to
October 31, 2013
 
January 31, 2014
compared to
January 31, 2013
Deferred revenue, current and noncurrent constant currency growth rates (as compared to the comparable prior periods)
 
 
 
 
 
Total growth
35%
 
31%
 
36%

We present constant currency information for deferred revenue, current and noncurrent to provide a framework for assessing how our underlying business performed excluding the effects of foreign currency rate fluctuations.  To present the information above, we convert the deferred revenue balances in local currencies in previous comparable periods using the United States dollar currency exchange rate as on the most recent balance sheet date.





Supplemental Diluted Share Count Information
(in thousands)
 
Three Months Ended January 31,
 
Fiscal Year Ended January 31,
 
2015
 
2014
 
2015
 
2014
Weighted-average shares outstanding for basic earnings per share
637,219

 
607,374

 
624,148

 
597,613

Effect of dilutive securities (1):
 
 
 
 
 
 
 
Convertible 0.75% senior notes
0

 
16,373

 
5,381

 
14,550

Warrants associated with the convertible 0.75% senior note hedges
0

 
12,391

 
9,536

 
9,658

Employee stock awards
10,067

 
14,227

 
12,469

 
13,867

Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share
647,286

 
650,365

 
651,534

 
635,688


(1)
The effects of these dilutive securities were not included in the GAAP calculation of diluted net loss per share for the three and twelve months ended January 31, 2015 and 2014 because the effect would have been anti-dilutive.

Supplemental Cash Flow Information
Free cash flow analysis, a non-GAAP measure
(in thousands)
 
 
Three Months Ended January 31,
 
Fiscal Year Ended January 31,
 
2015
 
2014
 
2015
 
2014
Operating cash flow
 
 
 
 
 
 
 
GAAP net cash provided by operating activities
$
332,223

 
$
271,238

 
$
1,173,714

 
$
875,469

Less:
 
 
 
 
 
 
 
Capital expenditures
(85,354
)
 
(69,849
)
 
(290,454
)
 
(299,110
)
Free cash flow
$
246,869

 
$
201,389

 
$
883,260

 
$
576,359

Our free cash flow analysis includes GAAP net cash provided by operating activities less capital expenditures. The capital expenditures balance does not include any costs related to the purchase and activities related to land activity, building improvements, building in progress - leased facilities, and strategic investments.
Comprehensive Income (Loss)
(in thousands)
(Unaudited)
 
 
Three Months Ended January 31,
 
Fiscal Year Ended January 31,
 
2015
 
2014
 
2015
 
2014
Net loss
$
(65,765
)
 
$
(116,623
)
 
$
(262,688
)
 
$
(232,175
)
Other comprehensive income (loss), before tax and net of reclassification adjustments:
 
 
 
 
 
 
 
Foreign currency translation and other losses
(27,400
)
 
(3,329
)
 
(43,276
)
 
(4,930
)
Unrealized gains on investments
4,543

 
6,732

 
1,488

 
8,120

Other comprehensive income (loss), before tax
(22,857
)
 
3,403

 
(41,788
)
 
3,190

Tax effect
0

 
(2,529
)
 
0

 
(2,647
)
Other comprehensive income (loss), net of tax
(22,857
)
 
874

 
(41,788
)
 
543

Comprehensive loss
$
(88,622
)
 
$
(115,749
)
 
$
(304,476
)
 
$
(231,632
)




salesforce.com, inc.
GAAP RESULTS RECONCILED TO NON-GAAP RESULTS
The following table reflects selected GAAP results reconciled to non-GAAP results
(in thousands, except per share data)
(Unaudited) 
 
Three Months Ended January 31,
 
Fiscal Year Ended January 31,
 
2015
 
2014
 
2015
 
2014
Gross profit
 
 
 
 
 
 
 
GAAP gross profit
$
1,088,685

 
$
871,712

 
$
4,084,316

 
$
3,102,575

Plus:
 
 
 
 
 
 
 
Amortization of purchased intangibles (a)
20,006

 
31,657

 
90,300

 
109,356

Stock-based expense (b)
14,907

 
12,830

 
53,812

 
45,608

Non-GAAP gross profit
$
1,123,598

 
$
916,199

 
$
4,228,428

 
$
3,257,539

Operating expenses
 
 
 
 
 
 
 
GAAP operating expenses
$
1,123,501

 
$
975,458

 
$
4,229,949

 
$
3,388,649

Less:
 
 
 
 
 
 
 
Amortization of purchased intangibles (a)
(19,965
)
 
(15,032
)
 
(64,673
)
 
(37,179
)
Stock-based expense (b)
(136,895
)
 
(123,709
)
 
(510,953
)
 
(457,672
)
Non-GAAP operating expenses
$
966,641

 
$
836,717

 
$
3,654,323

 
$
2,893,798

Income from operations
 
 
 
 
 
 
 
GAAP loss from operations
$
(34,816
)
 
$
(103,746
)
 
$
(145,633
)
 
$
(286,074
)
Plus:
 
 
 
 
 
 
 
Amortization of purchased intangibles (a)
39,971

 
46,689

 
154,973

 
146,535

Stock-based expense (b)
151,802

 
136,539

 
564,765

 
503,280

Non-GAAP income from operations
$
156,957

 
$
79,482

 
$
574,105

 
$
363,741

Non-operating income (loss) (c)
 
 
 
 
 
 
 
GAAP non-operating loss
$
(18,682
)
 
$
(19,401
)
 
$
(67,452
)
 
$
(71,861
)
Plus:
 
 
 
 
 
 
 
Amortization of debt discount, net
7,738

 
12,589

 
36,575

 
46,728

Loss on conversion of debt
96

 
214

 
10,326

 
214

Less:
 
 
 
 
 
 
 
Gain on sales of land and building improvements
0

 
0

 
(15,625
)
 
0

Non-GAAP non-operating loss
$
(10,848
)
 
$
(6,598
)
 
$
(36,176
)
 
$
(24,919
)
Net income
 
 
 
 
 
 
 
GAAP net loss
$
(65,765
)
 
$
(116,623
)
 
$
(262,688
)
 
$
(232,175
)
Plus:
 
 
 
 
 
 
 
Amortization of purchased intangibles (a)
39,971

 
46,689

 
154,973

 
146,535

Stock-based expense (b)
151,802

 
136,539

 
564,765

 
503,280

Amortization of debt discount, net
7,738

 
12,589

 
36,575

 
46,728

Loss on conversion of debt
96

 
214

 
10,326

 
214

Less:
 
 
 
 
 
 
 
Gain on sales of land and building improvements
0

 
0

 
(15,625
)
 
0

Income tax effects and adjustments
(41,063
)
 
(32,422
)
 
(146,741
)
 
(242,729
)
Non-GAAP net income
$
92,779

 
$
46,986

 
$
341,585

 
$
221,853







 
Three Months Ended January 31,
 
Fiscal Year Ended January 31,
 
2015
 
2014
 
2015
 
2014
Diluted earnings per share
 
 
 
 
 
 
 
GAAP diluted loss per share (d)
$
(0.10
)
 
$
(0.19
)
 
$
(0.42
)
 
$
(0.39
)
Plus:
 
 
 
 
 
 
 
Amortization of purchased intangibles
0.06

 
0.07

 
0.24

 
0.23

Stock-based expense
0.23

 
0.21

 
0.87

 
0.79

Amortization of debt discount, net
0.01

 
0.02

 
0.06

 
0.07

Loss on conversion of debt
0.00

 
0.00

 
0.02

 
0.00

Less:
 
 
 
 
 
 
 
Gain on sales of land and building improvements
0.00

 
0.00

 
(0.02
)
 
0.00

Income tax effects and adjustments
(0.06
)
 
(0.04
)
 
(0.23
)
 
(0.35
)
Non-GAAP diluted earnings per share
$
0.14

 
$
0.07

 
$
0.52

 
$
0.35

Shares used in computing diluted net income per share
647,286

 
650,365

 
651,534

 
635,688


a)
Amortization of purchased intangibles were as follows:
 
Three Months Ended January 31,
 
Fiscal Year Ended January 31,
 
2015
 
2014
 
2015
 
2014
Cost of revenues
$
20,006

 
$
31,657

 
$
90,300

 
$
109,356

Marketing and sales
19,965

 
15,032

 
64,673

 
37,179

 
$
39,971

 
$
46,689

 
$
154,973

 
$
146,535


b)
Stock-based expense was as follows:
 
Three Months Ended January 31,
 
Fiscal Year Ended January 31,
 
2015
 
2014
 
2015
 
2014
Cost of revenues
$
14,907

 
$
12,830

 
$
53,812

 
$
45,608

Research and development
33,929

 
29,024

 
121,193

 
107,420

Marketing and sales
75,900

 
69,340

 
286,410

 
258,571

General and administrative
27,066

 
25,345

 
103,350

 
91,681

 
$
151,802

 
$
136,539

 
$
564,765

 
$
503,280


c)
Non-operating income (loss) consists of investment income, interest expense and other expense.
d)
Reported GAAP loss per share was calculated using the basic share count. Non-GAAP diluted earnings per share was calculated using the diluted share count.






salesforce.com, inc.
COMPUTATION OF BASIC AND DILUTED GAAP AND NON-GAAP NET INCOME (LOSS) PER SHARE
(in thousands, except per share data)
(Unaudited)
 
 
Three Months Ended January 31,
 
Fiscal Year Ended January 31,
 
2015
 
2014
 
2015
 
2014
GAAP Basic Net Loss Per Share
 
 
 
 
 
 
 
Net loss
$
(65,765
)
 
$
(116,623
)
 
$
(262,688
)
 
$
(232,175
)
Basic net loss per share
$
(0.10
)
 
$
(0.19
)
 
$
(0.42
)
 
$
(0.39
)
Shares used in computing basic net loss per share
637,219

 
607,374

 
624,148

 
597,613

 
Three Months Ended January 31,
 
Fiscal Year Ended January 31,
 
2015
 
2014
 
2015
 
2014
Non-GAAP Basic Net Income Per Share
 
 
 
 
 
 
 
Non-GAAP net income
$
92,779

 
$
46,986

 
$
341,585

 
$
221,853

Basic Non-GAAP net income per share
$
0.15

 
$
0.08

 
$
0.55

 
$
0.37

Shares used in computing basic net income per share
637,219

 
607,374

 
624,148

 
597,613

 
Three Months Ended January 31,
 
Fiscal Year Ended January 31,
 
2015
 
2014
 
2015
 
2014
GAAP Diluted Net Loss Per Share
 
 
 
 
 
 
 
Net loss
$
(65,765
)
 
$
(116,623
)
 
$
(262,688
)
 
$
(232,175
)
Diluted net loss per share
$
(0.10
)
 
$
(0.19
)
 
$
(0.42
)
 
$
(0.39
)
Shares used in computing diluted net loss per share
637,219

 
607,374

 
624,148

 
597,613

 
Three Months Ended January 31,
 
Fiscal Year Ended January 31,
 
2015
 
2014
 
2015
 
2014
Non-GAAP Diluted Net Income Per Share
 
 
 
 
 
 
 
Non-GAAP net income
$
92,779

 
$
46,986

 
$
341,585

 
$
221,853

Diluted Non-GAAP net income per share
$
0.14

 
$
0.07

 
$
0.52

 
$
0.35

Shares used in computing diluted net income per share
647,286

 
650,365

 
651,534

 
635,688

 




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