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Salesforce Hits $1 Billion Dollars In Annual Revenues

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Salesforce is now officially the first enterprise cloud computing company to hit $1 billion in annual revenues. The company announced its fourth quarter and year-end earnings. It’s quarterly revenues were up 34 percent to $290 million, bringing the total for the year to $1. 077 billion. Net income for the quarter was $13.7 million ($0.11 a share), and $43.4 million ($0.36 a share) for the year (which doesn’t sound like a lot compared to $1 billion in revenues, but it was more than double last year’s earnings). Its operating cash flow for the year was a quite healthy $230 million.

Salesforce ended the year with 55,400 corporate customers, and 1.5 million individual subscribers. And it has $883 million in the bank. Salesforce expects revenues to increase by about 30 percent this fiscal year to $1.3 billion.

Passing the $1 billion mark is a major milestone for both Salesforce and cloud computing in general. Salesforce is the first enterprise computing company to get to that size based solely on selling Web apps.

Here is the press release:

Salesforce.com delivered the following results for the fourth quarter and full fiscal year 2009:

Revenue: Total Q4 revenue was $289.6 million, an increase of 34% on a year-over-year basis and an increase of 5% on a quarter-over-quarter basis. Subscription and support revenues were $266.1 million, an increase of 35% on a year-over-year basis and an increase of 5% on a quarter-over-quarter basis. Professional services and other revenues were $23.5 million, an increase of 15% on a year-over-year basis and an increase of 2% on a quarter-over-quarter basis.

For the full fiscal year 2009, the company reported revenue of approximately $1.077 billion, an increase of 44% from the prior year. Subscription and support revenues were $984.6 million for the year, an increase of 45%, while professional services revenue rose 35% to $92.2 million.

Earnings per Share: Q4 GAAP diluted earnings per share were approximately $0.11, including approximately $21.1 million in stock based compensation expense and approximately $2.9 million in amortization of purchased intangibles related to previously announced acquisitions. For purposes of the Q4 GAAP EPS calculations, there was an average of approximately 125 million diluted shares outstanding during the quarter.

For the full year, GAAP diluted earnings per share rose approximately 130% year-over-year to $0.35, including approximately $77.4 million in stock based compensation and approximately $8.0 million in amortization of purchased intangibles related to previously announced acquisitions. For purposes of the GAAP EPS calculations, there was an average of approximately 125 million diluted shares outstanding during the year.

Customers and Paying Subscribers: Net paying customers rose approximately 3,600 during the quarter and approximately 14,400 during the year to finish at approximately 55,400. Net paying subscribers rose to greater than 1.5 million, an increase of approximately 400,000 from the prior fiscal year end.

Cash: Cash from operations for the fiscal fourth quarter was approximately $76 million, up from $17 million in the third quarter, and down 7% year-over-year. For the full year, operating cash flow totaled $230 million, an increase of 12% from the prior year. Total cash, cash equivalents and marketable securities finished the year at approximately $883 million, an increase of approximately $78 million from Q3 and approximately $213 million from the prior fiscal year end.

Deferred Revenue: Deferred revenue on the balance sheet as of January 31, 2009 was $594 million, an increase of 24% on a year-over-year basis and 27% on a quarter-over-quarter basis.

As of February 25, 2009, salesforce.com is initiating guidance for its first quarter, fiscal year 2010. For its full fiscal year 2010, the company is updating its prior revenue guidance and initiating EPS guidance.

Q1 FY10: Revenue for the company’s first fiscal quarter is projected to be in the range of approximately $304 million to approximately $305 million. GAAP diluted EPS is expected to be in the range of approximately $0.10 to approximately $0.11. Stock based compensation expense is expected to be approximately $22 million, and amortization of purchased intangibles is expected to be approximately $2.6 million. For purposes of the Q1 GAAP EPS calculation, the company is expecting an average diluted shares count of 126 million shares, a GAAP tax rate of approximately 43%, and a minority interest expense of approximately $200,000.

Full Year FY10: The company today is updating the full year revenue guidance it provided on November 20, 2008, with revenue now expected to be approximately $1.30 billion to approximately $1.33 billion. The company is also initiating its earnings outlook for the full year, expecting GAAP diluted EPS to be in the range of approximately $0.54 to approximately $0.55. Stock based compensation expense is expected to be approximately $91 million, and amortization of purchased intangibles is currently expected to be approximately $9.3 million. For purposes of the full fiscal year 2010 GAAP EPS calculation, the company is expecting an average diluted shares count of 128 million shares, a GAAP tax rate of approximately 43%, and a minority interest expense of approximately $1 million.

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