Salesforce.com 2006 Annual Report Download - page 21
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Table of Contents
If we experience significant fluctuations in our operating results and rate of growth and fail to balance our expenses with our revenue and earnings
expectations, our results would be harmed and our stock price may fall rapidly and without advance notice.
Due to our limited operating history, our evolving business model and the unpredictability of our emerging industry, we may not be able to accurately
forecast our rate of growth. We base our current and future expense levels and our investment plans on estimates of future revenue and future rate of growth.
We may not be able to adjust our spending quickly enough if our revenue falls short of our expectations.
As a result, we expect that our operating results may fluctuate significantly on a quarterly basis. Revenue growth may not be sustainable and may
decrease in the future. We believe that period-to-period comparisons of our operating results may not be meaningful, and you should not rely upon them as an
indication of future performance.
Our quarterly results can fluctuate and if we fail to meet the expectations of analysts or investors, our stock price and the value of your investment
could decline substantially.
Our quarterly operating results are likely to fluctuate, and if we fail to meet or exceed the expectations of securities analysts or investors, the trading
price of our common stock could decline. Moreover, our stock price may be based on expectations of our future performance that may be unrealistic or that
may not be met. Some of the important factors that could cause our revenues and operating results to fluctuate from quarter to quarter include:
• the adverse financial statement impact of having to expense stock options, which is now required of us effective February 1, 2006;
• our ability to retain and increase sales to existing customers, attract new customers and satisfy our customers' requirements;
• the renewal rates for our service;
• changes in our pricing policies;
• the introduction of new features to our service;
• the rate of expansion and effectiveness of our sales force;
• the length of the sales cycle for our service;
• new product and service introductions by our competitors;
• our success in selling our service to large enterprises;
• variations in the revenue mix of editions of our service;
• technical difficulties or interruptions in our service;
• expenses related to increasing our data center capacity;
• changes in foreign currency exchange rates;
• changes in tax rates and adjustments to the valuation allowance for our deferred tax assets;
• general economic conditions in our geographic markets;
• the timing of additional investments in our on-demand application service and in our consulting service;
• regulatory compliance costs;
• the timing of customer payments and payment defaults by customers;
• costs associated with acquisitions of companies and technologies;
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