salesforce.com, inc. Profile

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Table of Contents

Company Overview

1 Market St., Ste. 300 The Landmark San Francisco, CA 94105 United States Phone : 415-901-7000

Fax : 415-901-7040

http://www.salesforce.com

salesforce.com champions the power of the social enterprise. The company offers Internet-based applications that manage employee collaboration as well as customer information for sales, marketing, and customer support, providing clients with a rapidly deployable alternative to traditional, more time-consuming and user-maintained software installations. Its customers come from a variety of industries, including financial services, telecommunications, manufacturing, and entertainment. salesforce.com also provides the Force.com and Heroku platforms for clients and partners to build new applications and customize existing ones that are installed and sold through salesforce.com's AppExchange.

Key Information

DUNS Number 072148831 Location Type Headquarters Subsidiary Status No

Manufacturer No

Company Type Public Plant/Facility Size (sq. ft.) 625,000.00

Owns/Rents Rents

Accountant Ernst & Young LLP Total Employees 7,785

1-Year Employee Growth 46.72% Employees At This Location 600 Year of Founding or Change in Control 1999

Primary Industry 1128:Customer Relationship Management, Marketing Primary SIC Code 73720000:Prepackaged software

Primary NAICS Code 511210:Software Publishers Latitude/Longitude 37.794376 / -122.394881

Key Financials

Fiscal Year-End January Sales ($ M) $2,266.54M 1-Year Sales Growth 36.77% Net Income ($11.57M) Total Assets $4,164.15M Market Value $19,944.46M Prescreen Score Low Risk

Company Description

Force.com is part of its vision to not only be the leader in enterprise-targeted social applications, but also a platform for developing and offering such applications for its customers. Force.com provides the tools for application creation, customization, integration, deployment (through its AppExchange marketplace), and integration. The Heroku platform focuses on development of social and mobile applications for salesforce.com products. These platforms allow the use of many major programming languages, such as Java and Ruby, to improve usability and integration. Heroku was a San Francisco-based company, which was acquired in 2011 for about $210 million in cash, which operated a cloud application platform for Ruby.

As a pioneer in demonstrating the profitability and scalability of the Software-as-a-Service (SaaS) business model, salesforce.com's revenues and net income have grown substantially each year since fiscal 2007. Sales continued the streak, in both subscriptions and services, climbing nearly 40% for fiscal 2012. Profits finally took a hit, however, with operating losses of about $35 million in fiscal 2012 (compared to a profit of nearly $100 million the year prior) and net losses of nearly $12 million. Operating expenses increased in each area -- R&D, marketing and sales, general and administrative -- at a higher rate than in 2011. R&D, most notably, went from a 42% increase in 2011 to nearly 60% more spending in 2012, while sales and marketing increased nearly 50% compared to a 30% rise in 2011.

Revenue spread geographically has remained fairly consistent in recent years, with about 70% coming from customers in the Americas, nearly 20% from Europe, with only Asia/Pacific scooting up from 11% in 2010 to 14% in 2011 and 2012. Late in 2011 salesforce.com moved to bolster its infrastructure in Asia/Pacific with the launch of a new data center in Tokyo. Residing in an NTT Communications facility, it will support growth and services throughout the region.

In 2012 salesforce.com acquired long-time partner Model Metrics, which provides consulting services for mobile and cloud computing. The acquisition of Model Metrics provides salesforce.com with a workforce experienced in mobile and social design conception, business process alignment, and other mobile and cloud services. In another deal that year, salesforce.com acquired Rypple, which provides a cloud-based social performance management application.

Also that year it partnered with business information provider Dun & Bradstreet (D&B) to provide salesforce.com customers access to D&B's global company information database. The partnership not only offers access to one of the leading databases of company information in the world, but also to one of the most widely-recognized, proprietary business entity identifiers, the D-U-N-S number. In a similar move the year prior, it bought business contact data provider Jigsaw for about $140 million. The deal expanded salesforce.com's cloud computing offerings and extended its reach into the business-to-business data service market.

Acquisitions and partnerships help drive growth, but salesforce.com also relies on internal development. The company expanded its social networking and collaboration capabilities through the launch of Chatter, which began as an enterprise instant messaging-style application for sharing updates and data within organizations on people, projects, groups, and documents. In 2011 it bolstered Chatter with the acquisition of Dimdim, which has created a real-time communication platform that is used to participate in online meetings, demos, and webinars. salesforce.com combined Dimdim's cloud-based communication capabilities with Chatter to provide an integrated social networking product, similar to Facebook, for the enterprise market. Also that year the company paid nearly $270 million in cash and $50 million in stock to buy Radian6, a developer of software used by corporate clients to manage and monitor social networking efforts for customer service and sales purposes.

Previous acquisitions include the 2008 purchase of InStranet, a provider of call center software; salesforce.com integrated InStranet's software into its SaaS platform. The deal was part of a broader strategic move by salesforce.com to extend its product set past core CRM applications to encompass areas such as call center management, partner relationship management, and more.

Company Financials

1-Year Sales Growth

Prescreen Score

--1-Year Net Income Growth

36.77%

Low Risk

Ernst & Young LLP

Financial Summary

Fiscal Year-End January NYSE: CRM Headquarters 2012 Sales

Annual Income Statement

All amounts in millions of US Dollars except per share amounts.

Jan 2012 Revenue 2,266.54 Cost of Goods Sold 488.89 Gross Profit 1,777.65 Gross Profit Margin 78.43% SG&A Expense 1,517.39 Depreciation and Amortization 157.29 Operating Income (35.09) Operating Margin (1.55%) Nonoperating Income (4.46) Nonoperating Expenses 6.22 Income Before Taxes (33.32) Income Taxes (21.75) Net Income After Taxes (11.57) Continuing Operations (11.57)

Discontinued Operations

--Total Operations (11.57)

Total Net Income (11.57)

Net Profit Margin

--Diluted EPS from Continuing Operations (0.09)

Diluted EPS from Total Operations (0.09)

Diluted EPS from Total Net Income (0.09)

Dividends per Share

--Jan 2011 1,657.14 323.81 1,333.33 80.46% 1,047.94 75.75 97.50 5.88% 3.44 3.36 104.30 34.60 69.70 64.47 --64.47 64.47 3.89% 0.47 0.47 0.47 --Jan 2010 1,305.58 257.93 1,047.66 80.24% 800.49 53.18 115.27 8.83% 29.11 (2.00) 142.38 57.69 84.69 80.72 --80.72 80.72 6.18% 0.63 0.63 0.63 --Jan 2009 1,076.77 220.47 856.30 79.52% 693.03 94.70 63.74 5.92% (0.82) 22.67 85.59 37.56 48.04 43.43 --43.43 43.43 4.03% 0.35 0.35 0.35 --Jan 2008 748.70 171.59 577.11 77.08% 492.99 66.41 20.31 2.71% 1.41 --46.21 23.39 22.83 18.36 --18.36 18.36 2.45% 0.15 0.15 0.15