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Salesforce.com Announces Record Fiscal Second Quarter Results Crossing the Threshold of ...

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Paris, le 17 Août 2006

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Salesforce.com Announces Record Fiscal Second Quarter Results Crossing the Threshold of Half-Million Subscribers


    * Record Revenue of $118M, up 64% year-over-year
    * Company Raises Full Year Fiscal 2007 Guidance   
    * Net Paying Subscribers rise a record 57,000 to 501,000
    * Net Customers rise 2,100 to 24,800, up 47% year-over-year
    * GAAP EPS approximately break-even
    * Fully Diluted Non-GAAP EPS of $0.06
    * Operating cash rises to $30M, up 133% year-over-year


SAN FRANCISCO, Calif. – August 16, 2006 – Salesforce.com (NYSE: CRM), the market and technology leader in on-demand business services, today announced results for its fiscal second
quarter ended July 31, 2006.
 
“As we soar past the half-million paying subscriber mark, we stand on the cusp of another remarkable achievement:  a half-billion dollar annual run rate. These are historic milestones for salesforce.com  and the industry that we are leading,” said Marc Benioff, chairman and CEO of salesforce.com. “Few software companies achieve this scale and momentum. As we head towards one million subscribers  and one billion dollars in revenue, I want to thank our 24,800 customers, partners, and our 1,625 employees for creating this amazing community of success on the Business Web.”
 
 Salesforce.com delivered the following results for the second quarter of fiscal year 2007:
 
Revenue: Total revenue was $118 million, an increase of 64% on a year-over-year basis and an increase of 13% on a quarter-to-quarter basis.  Subscription and support revenues were $106.7
million, an increase of 63% on a year-over-year basis and an increase of 13% on a quarter-to- quarter basis.  Professional services and other revenues were $11.5 million, an increase of 82% on a year-over-year basis and an increase of 13% on a quarter-to-quarter basis.   
 
Earnings per Share:  GAAP earnings per share were approximately break-even.  Non-GAAP earnings per diluted share, excluding the effects of stock based compensation and amortization of purchased intangibles related to acquisitions, were $0.06.  For the basis of non-GAAP EPS calculations, a diluted share count of 119 million shares was used.
 
Customers and Paying Subscribers: Net paying subscribers rose approximately 57,000 during Q2 to exit the quarter at approximately 501,000 total subscribers.  This ending total represents an
increase of 63% from Q2 of the prior year, and an increase of 13% from the prior quarter. Customers rose approximately 2,100 during the quarter and totaled approximately 24,800, an increase of 47% from Q2 of the prior year, and an increase of 9% from the prior quarter.   
 
Cash: Cash from operations for the fiscal second quarter was approximately $30 million, an increase of 133% year-over-year.
 
Deferred Revenue: Deferred revenue on the balance sheet as of July 31, 2006 was $202.8 million, an increase of 73% on a year-over-year basis and 11% on a quarter-to-quarter basis.
 Based on information as of August 16, 2006, salesforce.com is initiating guidance for its third quarter fiscal 2007 ending October 31, 2006, and updating guidance for its full fiscal year 2007 ending January 31, 2007.
 
Q3 FY07:  Revenue for the company’s third fiscal quarter is projected to be in the range of approximately $126 million to approximately $128 million.  Non-GAAP diluted EPS is expected to be in the range of approximately $0.04 to $0.05, and GAAP EPS is expected to be in the range of approximately breakeven to a loss of $0.02 for the third quarter.  Non-GAAP EPS estimates exclude the effects of stock based compensation, which is now expected to be approximately $0.05 to $0.06 per share, and the amortization of purchased intangibles which are now expected to be a small fraction of $0.01 per share.  Non-GAAP estimates further assume an estimated average of 121 million diluted shares outstanding and an estimated non-GAAP effective tax rate of 45%.   
 
Full Year FY07: The company today is raising its revenue outlook for its fiscal year 2007, and now expects full year revenue of approximately $488 million to approximately $493 million.  The company is also raising it’s earnings outlook for the full year, and now expects non-GAAP diluted EPS to be in the range of approximately $0.19 to $0.21, with GAAP EPS expected to be in the range of approximately breakeven to a loss of $0.04.  Non-GAAP EPS estimates exclude the effects of stock based compensation, which is now expected to be approximately $0.20 to $0.22 per share, and the amortization of purchased intangibles which are now expected to be approximately $0.01 per share.  Non-GAAP estimates further assume an estimated average of 121 million diluted shares outstanding and an estimated non-GAAP effective tax rate of 45%.   
 
Quarterly Conference Call
Salesforce.com will host a conference call to discuss its second quarter fiscal 2007 results at 2:00 p.m. Pacific Daylight Time today. A live audio webcast of the conference call, together with detailed financial information, can be accessed through the company's Investor Relations Web site at http://www.salesforce.com/investor. In addition, an archive of the webcast can be accessed through the same link.  Participants who choose to call into the conference call can do so by dialing 866-901- SFDC or 866-901-7332.  International participants may dial 706-758-3772.  
A replay will be available until midnight Eastern Daylight Time on September 1, 2006 and can be accessed by dialing, (800)
642-1687 or (706) 645-9291, passcode 3911289.
 
About salesforce.com
Salesforce.com is the market and technology leader in on-demand business services.  The company’s Salesforce suite of on-demand applications enables customers to manage and share all of their sales,
support, marketing and partner information on-demand. AppExchange, salesforce.com’s on-demand platform, allows customers and partners to build powerful new applications quickly and easily, customizeand integrate the Salesforce suite to meet their unique business needs, and distribute and sell on-demand apps at www.appexchange.com. Customers can also take advantage of Successforce, salesforce.com’s world-class training, support, consulting and best practices offerings.
 
As of July 31, 2006, salesforce.com manages customer information for approximately 24,800 customers and approximately 501,000 paying subscribers including Advanced Micro Devices (AMD),
America Online (AOL), Avis/Budget Rent A Car (Cendant Rental Car Group), Dow Jones Newswires, Nokia, Polycom and SunTrust. Any unreleased services or features referenced in this or other press releases or public statements are not currently available and may not be delivered on time or at all.  Customers who purchase salesforce.com applications should make their purchase decisions based upon features that are currently available.  Salesforce.com has headquarters in San Francisco, with offices in Europe and Asia, and trades on the New York Stock Exchange under the ticker symbol "CRM". Fomore information please visit http://www.salesforce.com, or call 1-800-NO-SOFTWARE.

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“Safe harbor” statement under the Private Securities Litigation Reform Act of 1995:  This press release contains forward-looking statements about expected revenue and GAAP and Non-GAAP earnings per
share for the third fiscal quarter of 2007, the full fiscal year 2007, and our revenue run rate and future subscriber goals, the achievement of which involve risks, uncertainties and assumptions. If any such
risks or uncertainties materialize or if any of the assumptions proves incorrect, our 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 our operating results, rate of growth and anticipated revenue run rate, errors,
interruptions or delays in our service or our Web hosting, our new business model, our history of operating losses, the possibility that we will not remain profitable, breach of our security measures, the  
emerging market in which we operate, our relatively limited operating history, our ability to hire, retain and motivate our employees and manage our growth, competition, our ability to continue to release
and gain customer acceptance of new and improved versions of our service, customer and partner acceptance of the AppExchange, successful customer deployment and utilization of our services, unanticipated changes in our effective tax rate, fluctuations in the number of shares outstanding, the price of such shares, foreign currency exchange rates and interest rates.  
 
Further information on these and other factors that could affect our 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, including Form 10-Q for the quarter ended April 30, 2006, and our Form 10-K for the fiscal year ended January 31, 2006.  These documents are available on the SEC Filings section of the Investor Information section of our 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.  
 
Salesforce.com is a registered trademark of, and The Business Web, AppExchange and Successforce are trademarks of, salesforce.com, Inc., San Francisco, California. Other names used may be trademarks of their respective owners.  salesforce.com, inc.


Contacts presse :

LEWIS PR
Anne Taudin
Tél. 01 55 31 75 60 - Email : annet ( a ) lewispr.com
Vanessa Wall
Tél. 01 55 31 98 04 - Email : vanessaw ( a ) lewispr.com

Salesforce.com
Isabelle Havre Chillaud
Southern Europe Director Marketing
ihavrechillaud ( a ) salesforce.com



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Vanessa Wall
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LEWIS – Global Public Relations

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