Summary
Salesforce.com continues its strong presence in the cloud computing industry by focusing on aggressive growth strategies and the integration of recent acquisitions like ExactTarget. During the quarter, Salesforce completed the acquisition of ExactTarget, a significant move aimed at expanding their marketing platform. This acquisition marked a total purchase price of approximately $2.6 billion. The financial reporting perspective reflected a one-time, non-cash tax benefit related to deferred taxes from this acquisition, temporarily resulting in net income on a GAAP basis, though management anticipates further net losses in upcoming quarters due to ongoing aggressive growth and acquisition strategies.
Renewal rates held steady in the high 80% range as of July 31, 2013, indicating slight improvement from the rates earlier in the fiscal year. This performance is crucial for Salesforce as subscription and support revenues accounted for 94% of total revenues in the six months ending July 31, 2013. Despite this high dependency on subscription revenues, Salesforce is expanding into new markets through its Marketing Cloud and Salesforce Platform, though it is uncertain whether these will become significant revenue streams soon.
Risk factors remain a key consideration. The inherent complexity of Salesforce's services brings the risk of defects or disruptions, potentially damaging the company's reputation and business relationships. The reliance on third-party data center facilities poses further risks, particularly concerning interruptions or delays in service, which could severely impact customer satisfaction and business operations.
Additionally, the security of customer data remains paramount. Unauthorized access or data breaches could have severe legal and financial consequences. As Salesforce endeavors to remain current with technological developments, any failure to introduce new features or manage integration processes could adversely affect its market position.
The strategic focus on growing its customer base and enhancing existing service offerings is clear, but the risks, particularly around service delivery and data security, underscore the complexity of maintaining growth in a highly competitive environment. Despite these challenges, Salesforce's robust brand and history of innovation provide a firm foundation as it navigates these concerns.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2014 | Q1 FY2014 | QoQ | Q2 FY2013 | YoY |
|---|---|---|---|---|---|
| Revenue | $54.3M | $892.6M | -93.9% | $731.6M | -92.6% |
| Gross profit | $739.4M | $683.6M | +8.2% | $569.2M | +29.9% |
| Gross margin | 1362.9% | 76.6% | +1286.3 pp | 77.8% | +1285.1 pp |
| Research & development | $148.1M | $131.9M | +12.2% | $99.4M | +48.9% |
| Sales & marketing | $480.6M | $466.5M | +3.0% | $380.2M | +26.4% |
| General & administrative | $150.5M | $129.8M | +16.0% | $103.1M | +46.0% |
| Total operating expenses | $779.2M | $728.2M | +7.0% | $582.7M | +33.7% |
| Operating income (loss) | -$39.9M | -$44.5M | +10.5% | -$13.5M | -196.0% |
| Operating margin | -73.5% | -5.0% | -68.5 pp | -1.8% | -71.6 pp |
| Net income (loss) | $76.6M | -$67.7M | +213.1% | -$9.8M | +879.4% |
| Net margin | 141.2% | -7.6% | +148.8 pp | -1.3% | +142.5 pp |
| Diluted EPS | $0.12 | -$0.12 | +$0.24 | -$0.07 | +$0.19 |
Risks
Defects or disruptions in our service could diminish demand and subject us to substantial liability. Any errors, defects, or disruptions could harm our reputation and customer retention.
Interruptions or delays in service from third-party data center hosting facilities could impair our service delivery.
Unauthorized access to a customer’s data or our data could lead to significant legal and financial exposure.
Failure to develop new features or services in line with technological developments could harm our business and reduce revenue growth.
Summary, forecast, risks and KPIs are extracted from Salesforce, Inc.'s SEC filings for Q2 FY2014 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Aug 4, 2026.