CRM Notes:

IBD Article 9/17/07

• Open platform allows user to customize service to precisely meet needs with easy setup and no software installation

• Charges fee per user and growing user base as company expands offering of business intelligence services

• Large competitors entering the market but CRM has an eight year head start

Lehman Report 1/18/08

• Announced “per log-in” pricing option for force.com

• Expectation to exceed 1m users by end of CY 07

• Currently working on building installed base with little revenue with hopes of monetizing once it reaches critical mass

• Force.com is a development platform – built in connectors for Oracle, SAP, Siebel and People Soft

WMB Report 2/11/08

• Releases earnings 2/27 with conference call @ 5:00 PM EST

• Revenue guidance 206-208m (40-44% y/y) – consensus 209.2m

• Expecting pro-forma margins of 9.8% versus 6.6% year ago

• Believe revenue guidance for 2009 to be 1.02B (in line with previous guidance)

• Number of subscribers and ASP becoming less useful as metrics because of variable types of subscriptions

• Analysts looking to guidance, deferred revenue, and customer checks to model future earnings

• Company’s financial clients have exceeded expectations for this environment

• Interestingly, no model to justify price but rated outperform.

 

EPS Report & Conf. Call 2/27/08

-          Revenue $217m up 50% y/y and EPS 0.06 versus flat last year

-          Net customers up 11,200 from last year to 41,000

-          Cash position of 670m up 257m y/y

-          Guidance raised – revenue 1.03-1.035 billion

-          Management continues to champion “the end of software”

-          Full year revenue 748m up 51% from 2006

-          EPS of 0.06 for the quarter and 0.15 for 2007

-          Deferred revenue $481m at year end up 69% y/y

-          Guiding Q1 233-235m revenue with EPS @ 0.06-0.07 – full year 1.03-1.035b revenue and EPS 0.32-0.33

-          Landed Citigroup as a large client in November and Aeon became 7^th customer to top 10,000 subscriber threshold

o        Also landed new contracts with Lincoln Financial, Genworth Financial, AIG Casualty

-          Q4 European Revenue of 38.4m up 70%, Asia revenue of 20m up 85%

-          Revenue well diversified between small, medium and large businesses

-          Reviewing necessity of additional data centers overseas – hope to have exciting announcements in near future

-          Heading into seasonally softer quarters (according to Lehman)

 

RAJA note 8/18/08

-          Will report Wednesday after the close, RAJA forecasting revenue $260.5m, GAAP EPS $0.08, cash flow 49.1m

-          Anticipate meaningful downtick in sequential free cash flow

-          Likelihood for meaningful deceleration in growth into CY 2009

o        Important for company to present plan for bookings in Platform-as-a-service (PAAS)

-          On-demand CRM saturation will become more of an issue in coming quarters

 

Wedbush Morgan 8/18/08

-          Concerns with valuation and minor concerns with global economic slowdown

-          Subscription model is highly predictable so Q2 results unlikely to come below expectations

-          Management tends to guide conservatively and revenues typically come in several million above guidance

-          Competitors have reported lengthening sales cycles

 

RBC Report 8/19/08

-          Expect particular strength in International markets

-          Full year guidance needs to increase to keep pace with consensus expectations

-          Q1 finished with 43,600 customers. RBC expects addition of 3,000 customers in Q2

EPS Release 11/20/08

-          Value proposition of low start up cost, low risk and fast results is resonating like never before.

-          Revenue $276.5 mil, up 43% - subscription and support $253.4 mil, professional services & other $23.1 mil – EPS of $0.08

-          Deferred revenue $470 mil up 38% y/y

-          Cash balance of $805 mil after spending $44 mil on acquisitions

-          Number of customers 51,800, an increase of 4,100 sequentially and 13,700 y/y

-          Projecting Q4 (January 09) revenue of $285 mil & EPS $0.06-.07

-          Initiating guidance for 2010 – Revenue 1.35-1.36 bil

 

Wachovia Report 11/21/08

-          Pro-forma EPS were $0.18, above $0.17 estimate

-          Billings growth of 26% - deceleration from 2008 levels

-          Risks: Significant exposure to financial services, non-mission critical nature of automation software, high valuation

-          Investments in its business include headcount increases and infrastructure development

o        Will continue to ramp headcount across sales and R&D as it expands internationally and introduces new products

 

Barclays Report 11/21/08

-          Trends in bookings growth and cash flow from operations clear signs that business has begun to decelerate

-          Primary challenge will be to put up sequential bookings growth over next few quarters.