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SalesForce.com (CRM) reported FY Q1 2012 financial results on May 19, 2011
*Charts and commentary have been updated for SalesForce.com FY Q1 April 2011 financial results*
SalesForce.com (CRM) Reports Another Quarterly GAAP Operating Loss
SalesForce.com Summary Fiscal Q1 (GAAP) Revenues continue increasing as return on assets decrease. 2 consecutive quarterly GAAP operating losses have been reported. Cash flow per share is a very good $0.99. The 2 most recent quarters have been unimpressive. No matter, the CRM stock price will most likely continue upwards defying the current and past questionable financial performance. CRM trades at 300+ price/earnings ratio and fundamentals have not been a hindrance to this high flying stock. For a technology sector stock, CRM continues significantly under-performing. The stock price is priced for a stellar future performance that does not appear to be on the horizon.
SalesForce.com Income Statement Fiscal Q1 (GAAP) SalesForce.com (CRM) reported total revenues of $504M, a net operating loss -$2.8M, and earnings per share of $0.00. From the prior fiscal quarter Q4 2011, total revenues were up +10.40%, net income down -95.12%, and earnings per share down -100.00%. From the prior year fiscal Q1 2011, these were up +33.85%, down -97.33%, and down -100.00%, respectively. Gross, operating, and net margins were all down, to 79.57%, -0.56%, and 0.11%, respectively. For the prior fiscal quarter Q4 2011, these were 79.79%, -0.09%, and 2.38%, respectively. From the prior year fiscal Q1 2011, these were 81.00%, 8.77%, and 5.27%, respectively. Cash flow from operations was the bright spot at $0.99 per share.
SalesForce.com Balance Sheet Fiscal Q1 (GAAP) SalesForce.com's (CRM) total assets increased +1.19% QoQ to a record $3.13B from the prior quarter of $3.09B. The capital to assets ratio (total stockholders' equity divided by total assets) is a respectable 40.14%, but down from previous quarters and a multi-year low. The current ratio (current assets divided by total assets) is a liquid 37.98% and does not include $758M in noncurrent marketable securities. SalesForce.com (CRM) is liquid with respectable capital. The return on assets peaked in QE October 2009 at 5.13% and has declined each quarter since to the current 1.78% in QE April 2011. The $1.5B+ in cash, cash equivalents, and marketable securities (current and noncurrent), which are 48.7% of the total assets of $3.13B, is pulling down the Return on Assets, along with a lower gross profit margin and net operating margin.
SalesForce.com (CRM) Financial Performance by the Quarters (Charts)
SalesForce.com Earnings Per Share and Cash Flow per Share (Chart) Below is a chart of quarterly earnings per share and cash flow from operations per share. Earnings per share have ranged between $0.00 and $0.17 for the past 17 quarters and remained below $0.20 for all the quarters reviewed. Latest QE April 2011 EPS of $0.00 is at the lowest to-date and a multi-year low. Cash flow per share has been volatile ranging from $0.14 to $1.18. Latest QE April 2011 cash flow per share of $0.99 is just below the prior quarter peak and the bright spot of the most recent quarter.
SalesForce.com Total Revenues, Operating Income, and Net Income (Chart) Below is a chart of quarterly total revenues, operating income, and net income. Total revenues have consistently grown, are at a new high of $504.4M for the latest QE April 2011, and guidance indicates higher in the future. Operating income has not kept pace with total revenues and 2 consecutive GAAP operating losses have been reported, of -$2.8M for QE April 2011 and -$391K for QE January 2011. These operating losses were after the October 2010 record operating income of $35.2M. Net income dropped in QE April 2011 to a meager $530K, a multi-year low. This is after a disappointing $10.9M in QE January 2011, which was the lowest since the QE January 2008. The QE January 2010 net income of $22.415 is the all-time high.
SalesForce.com Gross Margin, Operating Margin, and Net Margin (Chart) Below is a chart of quarterly gross margin, operating margin, and net margin. Gross margin has been stable and remained in the 79%-81% range for the past 13 quarters. Operating margin has fluctuated, been negative for 2 consecutive quarters, and is below the peaks of 9%+ in 2009. Net margin is very low at a dismal +0.11% for the QE April 2011 and is well below the peaks of 2009.
SalesForce.com Return on Assets (Chart) Below is a chart of annual return on average assets per quarter. The total net income for the most recent 4 quarters is divided into average assets for the most recent 4 quarters to obtain a rolling annualized ROA, an annualized return on average assets for the 12 months (4 quarters) ended. SalesForce.com has a historically low ROA for a technology company and doesn't appear to have an effective deployment of assets. The ROA peaked in QE October 2009 at 5.13% and has declined each quarter since to 1.78% in QE April 2011. The $1.52B+ in cash, cash equivalents, and marketable securities, which are 48.7% of the total assets of $3.13B is pulling down the ROA. If this excess liquidity is not going to be used for an acquisition or expansion, the company should retire debt or pay a dividend. Return on assets peaked in the QE October 2009 at 5.13% and have decreased for 6 consecutive quarters to an extremely low 1.78%.
SalesForce.com Growth Rates (Chart) Below is a chart of the quarterly (QoQ, Q/Q, quarterly change) growth rates for revenues and earnings per share. Total revenues QoQ have increased in every quarter on the chart, ranging from +3.65% to +14.16%. Earnings per share QoQ has fluctuated and decreased for 2 consecutive quarters.
SalesForce.com (CRM) Announces Fiscal Fourth Quarter and Full Year Results
SAN FRANCISCO, Calif. – May 19, 2011 – Salesforce.com (NYSE: CRM), the enterprise cloud computing company, today announced results for its fiscal first quarter ended April 30, 2011.. “Salesforce.com has become the first enterprise cloud computing company to reach a $2.0 billion annual revenue run rate," said Marc Benioff, Chairman and CEO. "We are delighted to see our revenue growth rate continue to accelerate.”
- Record Quarterly Revenue of $504 Million, up 34% Year-Over-Year
- Deferred Revenue of $915 Million, up 38% Year-Over-Year
- Operating Cash Flow of $140 Million, down 3% Year-Over-Year
- 5,400 Net New Customers in the Quarter
- Total Customers at 97,700 up 26% Year-Over-Year
- Raises FY12 Revenue Guidance to $2.15 - $2.17 Billion
SalesForce.com (CRM) Guidance
Q2 FY12 Guidance: Revenue for the company's second fiscal quarter is projected to be in the range of approximately $526 million to approximately $528 million. For the second fiscal quarter, the company expects to report a GAAP net loss per share of approximately ($0.01) to breakeven, while diluted non-GAAP EPS is expected to be approximately $0.29 to $0.30. All EPS estimates include a one-time tax benefit of $0.02, associated with the acquisition of Radian6. The non-GAAP estimate excludes the effects of stock-based compensation expense, expected to be approximately $54 million, amortization of purchased intangibles related to acquisitions, expected to be approximately $17 million, and non-cash interest expense related to the company's convertible senior notes, expected to be approximately $3 million. EPS estimates assume a GAAP tax rate of 113%, and a non-GAAP tax rate of 30%. For the purpose of the EPS calculation, assume an average basic share count of approximately 136 million shares, and an average diluted share count of approximately 144 million shares. Salesforce.com completed its previously announced acquisition of Radian6 on May 2, 2011, and these estimates include the forecasted operating results for Radian6 from that date forward. Radian6 estimates incorporate a preliminary purchase price allocation, and are therefore subject to change.
Full Year FY12 Guidance: Revenue for the company's full fiscal year 2012 is projected to be in the range of approximately $2.15 billion to approximately $2.17 billion. For the full fiscal year 2012, the company expects to report a GAAP net loss per share of approximately ($0.03) to ($0.01), while diluted non-GAAP EPS is expected to be approximately $1.30 to $1.32. All EPS estimates include a one-time tax benefit of $0.04, associated with the acquisition of Radian6. The non-GAAP estimate excludes the effects of stock-based compensation expense, expected to be approximately $238 million, amortization of purchased intangibles related to acquisitions, expected to be approximately $60 million, and non-cash interest expense related to the convertible senior notes, expected to be approximately $11 million. EPS estimates assume a GAAP tax rate of 113%, and a non-GAAP tax rate of 33%. For the purpose of the EPS calculation, assume an average basic share count of approximately 136 million shares, and an average diluted share count of approximately 145 million shares. Salesforce.com completed its previously announced acquisition of Radian6 on May 2, 2011, and these estimates include the forecasted operating results for Radian6 from that date forward. Radian6 estimates incorporate a preliminary purchase price allocation, and are therefore subject to change.
Salesforce.com is the enterprise cloud computing company that has transformed the way companies collaborate and communicate. Salesforce.com is leading the effort to bring Cloud 2, the next paradigm for computing, to the enterprise by offering its customers the social collaboration, mobility and openness that are the hallmark of this new world. The company’s platform and application services include:
* Salesforce Chatter, a private social network for your enterprise
* The Sales Cloud, for sales force automation and contact management
* The Service Cloud, for customer service and support solutions
* Radian6, for social media monitoring and engagement
* The Jigsaw Data Cloud, for ensuring data integrity and quality
* The Force.com platform, for custom application development
* Heroku, for building social and mobile apps in Ruby
* The AppExchange, the world’s leading marketplace for enterprise cloud computing applications
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