) reported third quarter fiscal 2013 adjusted loss per share of
31 cents, significantly wider than the Zacks Consensus Estimate
of a loss of 10 cents a share.
Revenues in the quarter were $788.0 million, up 35.0% from the
year-ago quarter. The quarter's result was above the company's
guidance range of $773.0 million to $777.0 million.
Geographically, the company witnessed decent revenue growth in
all of its operating regions. Revenue in the American region
increased 37.8% to $547.4 million. Revenue from the European
region was $133.8 million, up 28.8% from the year-ago quarter.
Asia contributed $107.2 million to revenue, an increase of 28.7%
from the year-ago quarter.
Gross profit expanded 32.1% year over year to $602.1 million.
Gross margin was 76.4%, down 160 basis points from the year-ago
Total operating expenses rose 40.9% year over year to $656.3
million on the back of 50.0% rise in research and development
expense (R&D), 40.7% increase in sales and marketing expense
and 222.8% rise general administrative expense. Continuous
increase in headcount from recent acquisitions drove the
operating expenses higher.
Operating loss of $54.2 million during the quarter was
narrower than the year-ago quarter loss of $10.2 million.
Operating loss margin was 6.9% versus 1.7% in the prior-year
GAAP net loss in the quarter was $220.3 million or $1.55 per
share compared with net loss of $3.8 million or 3 cents in the
comparable quarter last year. Excluding special items but
including stock-based compensation expense, adjusted net loss was
31 cents per share compared to a profit of 19 cents in the
Balance Sheet & Cash Flow
Salesforce.com ended the quarter with cash, equivalents and
short-term marketable securities of $605.6 million, down from
$1.1 billion in the prior quarter. Accounts receivable decreased
to $418.6 million from $446.9 million in the prior quarter. Total
deferred revenue in the quarter was $1.29 billion, down from
$1.34 billion in the previous quarter.
Cash from operating activities was $105.9 million compared
with $136.2 million in the prior quarter.
Net loss for the fourth quarter of fiscal 2013 is projected
between 23 and 25 cents per share. Non-GAAP EPS is expected to
range from 38 to 40 cents per share.
Again, fourth fiscal quarter revenue is projected to be in the
range of $825.0 million to $830.0 million, increasing of 31%
For fiscal 2013, GAAP net loss per share is projected between
$2.02 and $2.00 per share. Management expects non-GAAP EPS to be
$1.50 to $1.52 per share.
Again for the full year 2013, revenue is projected to be in
the range of $3.041 billion to $3.046 billion, which increased
34.0% on a year-over-year basis.
For the full fiscal year 2014, revenue is projected to be in
the range of approximately $3.80 billion to approximately $3.85
Management was encouraged by the strong response for the
company's next generation social and mobile cloud
Salesforce.com reported modest third quarter 2013 results. Loss
per share was wider than the Zacks Consensus Estimate. The fourth
quarter guidance was modest.
However, the revenue grew across geographies, which was a
positive factor. The company also received strong business from
its cloud customers.
However, a dull business environment in Europe, currency
headwinds, not-so-encouraging tech expenses and stiff competition
from its peers keep us concerned.
Though we are encouraged by Salesforce's growth prospects in
the cloud market, the entry of tech giants such as
)into the cloud space would further increase competition.
Currently, Salesforce.com has a Zacks #4 Rank, implying a
short-term Sell rating.
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