F4Q10 Earnings Call
February 24, 2010 5:00 PM ET
David Havlek – VP, IR
Marc Benioff – Chairman and CEO
Graham Smith – EVP and CFO
Brent Thill – UBS
Heather Bellini – ISI Group
Adam Holt – Morgan Stanley
Laura Lederman – William Blair
Stephanie Withers – Goldman Sachs
Kash Rangan – Merrill Lynch
Thomas Ernst – Deutsche Bank
Brendan Barnicle – Pacific Crest Securities
Richard Baldry – Canaccord Adams
Karl Keirstead – Kaufman Brothers
Ross MacMillan – Jefferies
Previous Statements by CRM
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(Operator Instructions) I will now turn the call over to Mr. David Havlek, Vice President of Investor Relations. Mr. Havlek, you may begin your conference.
Thanks, operator and welcome everyone to Salesforce.com’s fourth quarter fiscal year 2010 earnings conference call. Joining me as always to discuss our outstanding quarter are Marc Benioff, CEO and Graham Smith, CFO. Following Marc and Graham’s prepared remarks, we will open things up to your questions.
A complete disclosure of our fourth quarter results can be found in the press release issued about an hour ago as well as in our Form 8-K filed with the SEC. Additional information including historical financials beyond what is provided in the press release will also be made available on our website. A webcast of today’s call is available on our website for 90 days and a dial-in replay would be available through March 19.
Our fourth quarter commentary today will be in GAAP terms unless otherwise stated, at times in our prepared comments or in response to your questions. We may offer certain additional metrics to provide a greater understanding of our business or our quarterly results. Please be advised that we may or may not update these additional metrics on future calls. Looking forward to FY ‘11, I am happy to make you aware of an important addition to our financial reporting beginning with our first quarter results, the company will be reporting its operating metrics and results in both GAAP and non-GAAP formats. Our outlook today reflects this additional disclosure.
Graham will discuss a detailed during his prepared remarks and a full reconciliation of our GAAP and non-GAAP outlook can be found in our earnings press release.
With that said, let me make today’s call official by reminding you that the primary purpose of today’s call is to provide you with information regarding our fourth quarter fiscal year 2010 performance. However some of our discussion or responses to your questions may contain forward-looking statements. These statements are subject to risks, uncertainties and assumptions. Should any of these risks or uncertainties materialize or should our assumptions prove incorrect, actual company results could differ materially from these forward-looking statements.
All these risks, uncertainties and assumptions as well as other information on potential factors that could affect our financial results are included in our reports filed with the SEC including our most recently reported Form 10-Q particularly under the heading risk factors. To access our Q4 release, the additional financial detail, the webcast or any of our SEC disclosures or simply to learn more about Salesforce.com, I encourage you to visit our investor relations website at Salesforce.com/investor.
Finally, please also be advised that any unreleased services or features referenced in today’s discussion or in other public statements are not currently available and may not be delivered on time or at all. Customers who purchased our services should make the purchase decisions based upon features that are currently available.
With that let me turn the call over to Marc.
Thanks very much, David. Our fourth quarter caps off the biggest year in Salesforce.com’s history and I am delighted to be able to share with you today our outstanding results. While most software companies are still trying to forget the past year, our fiscal 2010 was perhaps our most memorable and exciting year ever and some of the highlights from our full year included $1.3 billion in revenue, the first enterprise cloud computing company ever to reach this scale; revenue growth of more than 20%, the fastest growth of any comparably sized software company in the world.
While most of the software companies went backwards last year, Salesforce.com went forward in a dramatic way, and more than a quarter of a billion dollars in operating cash flow and a balance sheet with more than $1.7 billion in cash and equivalents and more than 72,000 customers globally including an amazing 17,000 net new customers joining our ranks in the fiscal year, this represents a 31% year-over-year increase in our customer base, more than 2 million subscribers including more than 500,000 net additions during the year, an increase of roughly 35% year-over-year. And we closed the year by hosting the biggest cloud computing event ever Dreamforce 2009 in December. It was an simply an amazing year.
We closed the year by delivering the biggest financial quarter in our history. Fourth quarter revenue rose 22% to $354 million. At this level, we have broken through yet another huge milestone, the $1.4 billion annual revenue run rate. Fourth quarter growth of 22% was our best performance in more than a year. GAAP EPS of $0.16 increased from $0.11 a year ago; that’s an increase of more than 40% and more EPS in a single quarter than we achieved in all of fiscal year 2008.
Cash from operations increased 21% to $92 million and finally, deferred revenue broke through that $700 million threshold for the first time ever to finish at $704 million, an increase of 19%. That was our best growth performance of the year.
By virtually every financial measure, our fourth quarter was amazing. Equally important, we saw continued improvement in our business for the second quarter in a row. That’s why we are stepping it up and hiring heavily into next year. After a year of reduced investment levels, the time has now ripe to invest in our continued growth and leadership of the cloud computing market. Graham will have more to say about our outlook in a moment.