Salesforce (CRM) 8-K Salesforce.com Announces Record Fiscal Fourth Quarter Results

Exhibit 99.1

David Havlek

salesforce.com

Investor Relations

415-536-2171

dhavlek@salesforce.com

Gordon Evans

salesforce.com

Public Relations

415-536-7608

gevans@salesforce.com

Salesforce.com Announces Record Fiscal Fourth Quarter Results

First Enterprise Cloud Computing Company to Achieve Fiscal Year Revenue of One Billion Dollars

• Record Revenue of $290 Million, up 34% Year-Over-Year

• GAAP EPS of $0.11, up 83% Year-Over-Year

• Net Customers Increase 3,600 in the Quarter to 55,400

• Net Paying Subscribers Increase 400K Year-Over-Year to Surpass 1.5 Million

• Operating Cash Flow of $76 Million for Quarter; $230 Million for Fiscal Year

• Total Cash and Marketable Securities of $883 Million, up $213 Million Year-Over-Year

• Company Updates FY10 Revenue Guidance to $1.30 - $1.33 Billion

SAN FRANCISCO, Calif. – February 25, 2009 –Salesforce.com (NYSE: CRM), the enterprise cloud computing company, today announced results for its fiscal fourth quarter and full fiscal year ended January 31, 2009.

“Salesforce.com is proud to be the first billion dollar cloud computing company,” said Marc Benioff, chairman and CEO, salesforce.com. “At a time when capital is precious, big-ticket software purchases just don’t make sense.”

Salesforce.com delivered the following results for the fourth quarter and full fiscal year 2009:

Revenue: Total Q4 revenue was $289.6 million, an increase of 34% on a year-over-year basis and an increase of 5% on a quarter-over-quarter basis. Subscription and support revenues were $266.1 million, an increase of 35% on a year-over-year basis and an increase of 5% on a quarter-over-quarter basis. Professional services and other revenues were $23.5 million, an increase of 15% on a year-over-year basis and an increase of 2% on a quarter-over-quarter basis.

For the full fiscal year 2009, the company reported revenue of approximately $1.077 billion, an increase of 44% from the prior year. Subscription and support revenues were $984.6 million for the year, an increase of 45%, while professional services revenue rose 35% to $92.2 million.

Earnings per Share: Q4 GAAP diluted earnings per share were approximately $0.11, including approximately $21.1 million in stock based compensation expense and approximately $2.9 million in amortization of purchased intangibles related to previously announced acquisitions. For purposes of the Q4 GAAP EPS calculations, there was an average of approximately 125 million diluted shares outstanding during the quarter.

For the full year, GAAP diluted earnings per share rose approximately 130% year-over-year to $0.35, including approximately $77.4 million in stock based compensation and approximately $8.0 million in amortization of purchased intangibles related to previously announced acquisitions. For purposes of the GAAP EPS calculations, there was an average of approximately 125 million diluted shares outstanding during the year.

Customers and Paying Subscribers: Net paying customers rose approximately 3,600 during the quarter and approximately 14,400 during the year to finish at approximately 55,400. Net paying subscribers rose to greater than 1.5 million, an increase of approximately 400,000 from the prior fiscal year end.

Cash: Cash from operations for the fiscal fourth quarter was approximately $76 million, up from $17 million in the third quarter, and down 7% year-over-year. For the full year, operating cash flow totaled $230 million, an increase of 12% from the prior year. Total cash, cash equivalents and marketable securities finished the year at approximately $883 million, an increase of approximately $78 million from Q3 and approximately $213 million from the prior fiscal year end.

Deferred Revenue: Deferred revenue on the balance sheet as of January 31, 2009 was $594 million, an increase of 24% on a year-over-year basis and 27% on a quarter-over-quarter basis.

As of February 25, 2009, salesforce.com is initiating guidance for its first quarter, fiscal year 2010. For its full fiscal year 2010, the company is updating its prior revenue guidance and initiating EPS guidance.

Q1 FY10: Revenue for the company’s first fiscal quarter is projected to be in the range of approximately $304 million to approximately $305 million. GAAP diluted EPS is expected to be in the range of approximately $0.10 to approximately $0.11. Stock based compensation expense is expected to be approximately $22 million, and amortization of purchased intangibles is expected to be approximately $2.6 million. For purposes of the Q1 GAAP EPS calculation, the company is expecting an average diluted shares count of 126 million shares, a GAAP tax rate of approximately 43% and a minority interest expense of approximately $200,000.

Full Year FY10: The company today is updating the full year revenue guidance it provided on November 20, 2008, with revenue now expected to be approximately $1.30 billion to approximately $1.33 billion. The company is also initiating its earnings outlook for the full year, expecting GAAP diluted EPS to be in the range of approximately $0.54 to approximately $0.55. Stock based compensation expense is expected to be approximately $91 million, and amortization of purchased intangibles is currently expected to be approximately $9.3 million. For purposes of the full fiscal year 2010 GAAP EPS calculation, the company is expecting an average diluted shares count of 128 million shares, a GAAP tax rate of approximately 43%, and a minority interest expense of approximately $1 million.

Quarterly Conference Call

Salesforce.com will host a conference call to discuss its fourth quarter fiscal 2009 results at 2:00 p.m. Pacific Standard 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 in to the conference call can do so by dialing domestically 866-901-SFDC or 866-901-7332 and internationally 706-902-1764. A replay will be available at (800) 642-1687 or (706) 645-9291, passcode 84582465, until midnight (EST) March 13, 2009.

About salesforce.com

Salesforce.com is the enterprise cloud computing company. The company’s portfolio of SaaS applications, including its award-winning CRM offering, available at http://www.salesforce.com/products/, has revolutionized the ways that customers manage and share business information over the Internet. The company’s Force.com PaaS enables customers, developers and partners to build powerful on-demand applications that deliver the benefits of multi-tenancy across the enterprise. Applications built on

the Force.com platform, available at http://www.force.com/, can be easily shared, exchanged and installed with a few simple clicks via salesforce.com’s Force.com AppExchange marketplace available at http://www.salesforce.com/appexchange/.

As of January 31, 2009, salesforce.com manages customer information for approximately 55,400 customers including Allianz Commercial, Dell, Dow Jones Newswires, Japan Post, Kaiser Permanente, KONE, and SunTrust Banks.

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”. For more information please visit http://www.salesforce.com, or call 1-800-NO-SOFTWARE.

###

“Safe harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements about expected revenue and GAAP earnings per share for the first fiscal quarter of 2010 and for the full fiscal year 2010, and our expected tax rate, stock based compensation expense, amortization rate, reduction in minority interest expense, and shares outstanding, the achievement of which involve risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove 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 financial and operating results, rate of growth and anticipated revenue run rate; errors, interruptions or delays in our service or our Web hosting; breaches of our security measures; the financial impact of the acquisition of InStranet and any future acquisitions; the nature of our business model; our ability to continue to release, and gain customer acceptance of, new and improved versions of our service; successful customer deployment and utilization of our existing and future services; competition; various financial aspects of our subscription model; the emerging market in which we operate; our ability to hire, retain and motivate our employees and manage our growth; changes in our customer base; technological developments; regulatory developments; unanticipated changes in our effective tax rate; and fluctuations in the number of shares we have outstanding, the price of such shares, foreign currency exchange rates, interest rates, and general developments in the economy, financial markets, and credit markets.

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 October 31, 2008 and our Form 10-K that will be filed for the fiscal year ended January 31, 2009. 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.

Copyright (c) 2009 salesforce.com, inc. All rights reserved. Salesforce and the “no software” logo are registered trademarks of salesforce.com, inc., and salesforce.com owns other registered and unregistered trademarks. Other names used herein may be trademarks of their respective owners.

salesforce.com, inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

    (Unaudited)

	Three Months Ended January 31,						Fiscal Year Ended January 31,
	2009			2008			2009			2008
Revenues:
Subscription and support	$	266,110		$	196,517		$	984,574		$	680,581
Professional services and other		23,473			20,389			92,195			68,119
Total revenues		289,583			216,906			1,076,769			748,700
Cost of revenues (1):
Subscription and support		35,280			24,822			127,082			91,268
Professional services and other		23,454			21,909			93,389			80,323
Total cost of revenues		58,734			46,731			220,471			171,591
Gross profit		230,849			170,175			856,298			577,109
Operating expenses (1):
Research and development		29,460			17,703			99,530			63,812
Marketing and sales		144,483			106,123			534,413			376,480
General and administrative		40,816			35,619			158,613			116,508
Total operating expenses		214,759			159,445			792,556			556,800
Income from operations		16,090			10,730			63,742			20,309
Interest, net		5,397			7,315			22,667			24,493
Gain on sale of investment		—			—			—			1,272
Other income (expense)		252			(595	)		(817	)		139
Income before provision for income taxes and minority interest		21,739			17,450			85,592			46,213
Provision for income taxes		(7,864	)		(8,296	)		(37,557	)		(23,385	)
Income before minority interest		13,875			9,154			48,035			22,828
Minority interest in consolidated joint venture		(122	)		(1,775	)		(4,607	)		(4,472	)
Net income	$	13,753		$	7,379		$	43,428		$	18,356
Basic net income per share	$	0.11		$	0.06		$	0.36		$	0.16
Diluted net income per share	$	0.11		$	0.06		$	0.35		$	0.15
Shares used in computing basic net income per share		122,428			118,757			121,183			116,840
Shares used in computing diluted net income per share		124,533			123,680			125,228			122,422
(1)    Amounts include stock-based expenses, as follows:
Cost of revenues	$	2,902		$	2,173		$	11,051		$	7,926
Research and development		3,000			1,864			9,852			6,336
Marketing and sales		9,923			7,226			36,028			25,423
General and administrative		5,316			4,323			20,435			15,522
Total stock-based expenses	$	21,141		$	15,586		$	77,366		$	55,207

salesforce.com, inc.

Condensed Consolidated Statements of Operations

As a percentage of total revenues:

(Unaudited)

	Three Months Ended January 31,				Fiscal Year Ended January 31,
	2009		2008		2009		2008
Revenues:
Subscription and support	92	%	91	%	91	%	91	%
Professional services and other	8		9		9		9
Total revenues	100		100		100		100
Cost of revenues:
Subscription and support	12		11		12		12
Professional services and other	8		11		8		11
Total cost of revenues	20		22		20		23
Gross profit	80		78		80		77
Operating expenses:
Research and development	10		8		9		8
Marketing and sales	50		49		50		50
General and administrative	14		16		15		16
Total operating expenses	74		73		74		74
Income from operations	6		5		6		3
Interest, net	2		3		2		3
Gain on sale of investment	0		0		0		0
Other income (expense)	0		0		0		0
Income before provision for income taxes and minority interest	8		8		8		6
Provision for income taxes	(3	)	(4	)	(4	)	(3	)
Income before minority interest	5		4		4		3
Minority interest in consolidated joint venture	0		(1	)	0		(1	)
Net income	5	%	3	%	4	%	2	%
Stock-based expenses as a percentage of total revenues, as follows:
Cost of revenues	1	%	1	%	1	%	1	%
Research and development	1		1		1		1
Marketing and sales	3		3		3		3
General and administrative	2		2		2		2
Total stock-based expenses	7	%	7	%	7	%	7	%

salesforce.com, inc.

Condensed Consolidated Balance Sheets

(in thousands)

	January 31, 2009			January 31, 2008
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	483,834		$	279,095
Short-term marketable securities		213,769			171,748
Accounts receivable, net		266,555			220,061
Deferred commissions		39,384			35,679
Deferred income taxes		31,900			7,173
Prepaid expenses and other current assets		33,115			27,055
Total current assets		1,068,557			740,811
Marketable securities, noncurrent		184,962			218,957
Fixed assets, net		77,027			41,380
Deferred commissions, noncurrent		17,699			16,435
Deferred income taxes, noncurrent		26,589			26,512
Capitalized software, net		29,989			23,061
Goodwill		44,872			8,556
Other assets		30,127			13,881
Total assets	$	1,479,822		$	1,089,593
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	16,379		$	7,478
Accrued expenses and other current liabilities		163,205			125,996
Income taxes payable		3,619			3,622
Deferred revenue		583,763			468,821
Total current liabilities		766,966			605,917
Income taxes payable, noncurrent		12,490			8,465
Long-term lease liabilities and other		7,616			2,136
Deferred revenue, noncurrent		10,263			12,073
Minority interest		10,703			8,943
Total liabilities		808,038			637,534
Stockholders’ equity:
Common stock		123			119
Additional paid-in capital		648,724			471,802
Accumulated other comprehensive loss		(2,905	)		(2,276	)
Retained earnings (deficit)		25,842			(17,586	)
Total stockholders’ equity		671,784			452,059
Total liabilities and stockholders’ equity	$	1,479,822		$	1,089,593

salesforce.com, inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	Three Months Ended January 31,						Fiscal Year Ended January 31,
	2009			2008			2009			2008
Operating activities:
Net income	$	13,753		$	7,379		$	43,428		$	18,356
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of investment		0			0			0			(1,272	)
Loss (gain) on securities		(269	)		0			1,783			0
Minority interest		122			1,775			4,607			4,472
Depreciation and amortization		11,033			6,568			35,971			24,219
Amortization of deferred commissions		15,318			12,468			58,732			42,195
Change in deferred income tax valuation allowance		0			(970	)		0			(970	)
Expenses related to stock-based awards		21,141			15,586			77,366			55,207
Excess tax benefits from employee stock plans		(12,350	)		(7,474	)		(54,597	)		(31,978	)
Changes in assets and liabilities		26,781			45,461			62,267			94,046
Net cash provided by operating activities		75,529			80,793			229,557			204,275
Investing activities:
Business combination, net of cash acquired		(563	)		0			(27,907	)		0
Purchase of subsidiary stock		(4,929	)		0			(21,622	)		0
Changes in marketable securities		28,432			22,271			(10,409	)		(60,816	)
Capital expenditures		(12,232	)		(8,369	)		(61,059	)		(43,552	)
Proceeds from sale of investment		0			0			0			1,659
Net cash provided by (used in) investing activities		10,708			13,902			(120,997	)		(102,709	)
Financing activities:
Proceeds from the exercise of stock options		2,706			16,620			43,311			60,910
Excess tax benefits from employee stock plans		12,350			7,474			54,597			31,978
Principal payments on capital lease obligations		(706	)		(6	)		(997	)		(175	)
Net cash provided by financing activities		14,350			24,088			96,911			92,713
Effect of exchange rate changes		933			(449	)		(732	)		(1,792	)
Net increase in cash and cash equivalents		101,520			118,334			204,739			192,487
Cash and cash equivalents, beginning of period		382,314			160,761			279,095			86,608
Cash and cash equivalents, end of period	$	483,834		$	279,095		$	483,834		$	279,095

salesforce.com, inc.

Additional Metrics

    (Unaudited)

	Jan 31, 2009			Oct 31, 2008			Jul 31, 2008			Apr 30, 2008			Jan 31, 2008		Oct 31, 2007
Full Time Equivalent Headcount		3,566			3,318			3,046			2,864			2,606		2,461
Financial data (in thousands):
Cash, cash equivalents and marketable securities	$	882,565		$	804,606		$	823,417		$	750,633		$	669,800	$	571,003
Deferred revenue, current and non-current	$	594,026		$	469,534		$	479,546		$	470,297		$	480,894	$	340,808
	Three Months Ended January 31,						Fiscal Year Ended January 31,
	2009			2008			2009			2008
Revenues by geography (in thousands):
Americas	$	209,419		$	158,499		$	776,495		$	557,976
Europe		48,088			38,396			190,685			127,010
Asia Pacific		32,076			20,011			109,589			63,714
	$	289,583		$	216,906		$	1,076,769		$	748,700
As a percentage of total revenues:
Revenues by geography:
Americas		72	%		73	%		72	%		75	%
Europe		17			18			18			17
Asia Pacific		11			9			10			8
		100	%		100	%		100	%		100	%