Summary
Salesforce (ticker: CRM) reported financial results for the third quarter of fiscal year 2015, ending October 31, 2014. The company's subscription and support revenues for the quarter totaled $1,288.5 million, contributing to a total of $3,668.4 million for the nine months ended on the same date. Salesforce's revenue was heavily driven by its core offerings: Sales Cloud, Service Cloud, Marketing Cloud, and the Salesforce1 Platform. The Sales Cloud continued to lead with quarterly revenues at $625 million.
Despite the strong revenue performance, Salesforce continues to operate at a GAAP net loss, largely due to significant expenses from stock-based awards and amortization of intangibles, reflecting its aggressive growth strategy. The company recorded an operating loss of $110.8 million in the first nine months of FY2015, which, while still a loss, was an improvement from the $182.3 million loss noted in the same period of the previous year.
Strategically, Salesforce emphasizes expanding through high-growth market distribution and nurturing existing customer relationships while building new ones. Maintaining a lower customer attrition rate of 9-10% is essential as it looks to upgrade customers to more comprehensive service packages. Marketing and sales expenses represent a significant share of Salesforce’s revenue, sitting at 52% of total revenues for the quarter, emphasizing the company's efforts to grow its customer base and increase brand awareness.
Operational risks remain a concern, particularly with service reliability given Salesforce's dependence on third-party data centers. Any service interruptions or delays could severely impact the business. Additionally, integration challenges with acquired companies present a medium risk, potentially affecting the quality of Salesforce's service and financial performance. Furthermore, the significant focus on acquisitions, like that of ExactTarget, introduces financial risks, such as write-offs and inability to generate expected revenue returns, which could pressure the company's financial health.
Ultimately, while Salesforce remains a leader in cloud computing solutions with a clear strategy for maintaining its market position and expanding, the ongoing net losses and potential operational risks could weigh on the company’s financial performance if not managed effectively. The company's ability to maintain service reliability, effectively integrate acquisitions, and control the significant costs related to sales, marketing, and growth initiatives will likely be critical components in determining its future financial trajectory.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2015 | Q2 FY2015 | QoQ | Q3 FY2014 | YoY |
|---|---|---|---|---|---|
| Revenue | $1.38B | $1.32B | +4.9% | $71.6M | +1833.6% |
| Gross profit | $1.05B | $1.01B | +3.9% | $807.8M | +30.0% |
| Gross margin | 75.9% | 76.7% | -0.7 pp | 1128.9% | -1053.0 pp |
| Research & development | $195.5M | $203.1M | -3.8% | $170.7M | +14.5% |
| Sales & marketing | $709.6M | $672.0M | +5.6% | $581.2M | +22.1% |
| General & administrative | $167.4M | $169.1M | -1.0% | $153.9M | +8.8% |
| Total operating expenses | $1.07B | $1.04B | +2.7% | $905.8M | +18.4% |
| Operating income (loss) | -$22.0M | -$33.4M | +34.1% | -$97.9M | +77.5% |
| Operating margin | -1.6% | -2.5% | +0.9 pp | -136.9% | +135.3 pp |
| Net income (loss) | -$38.9M | -$61.1M | +36.3% | -$124.4M | +68.7% |
| Net margin | -2.8% | -4.6% | +1.8 pp | -173.9% | +171.1 pp |
| Diluted EPS | -$0.06 | -$0.10 | +$0.04 | -$0.21 | +$0.15 |
Risks
Interruptions or delays in service from our third-party data centers could impair service delivery and harm our business, leading to revenue loss and higher attrition rates.
Difficulties in integrating acquired company technologies into our service may disrupt quality standards, adversely affecting operations and financial outcomes.
Risks associated with acquisitions, including potential write-offs of acquired assets and challenges in generating sufficient revenue to offset acquisitions costs, could adversely affect results.
Summary, forecast, risks and KPIs are extracted from Salesforce, Inc.'s SEC filings for Q3 FY2015 (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.