Salesforce.com 2012 Annual Report Download - page 49

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Fiscal Years Ended January 31, 2012 and 2011
Revenues.
Fiscal Year Ended January 31, Variance
(In thousands) 2012 2011 Dollars Percent
Subscription and support ................................ $2,126,234 $1,551,145 $575,089 37%
Professional services and other ........................... 140,305 105,994 34,311 32%
Total revenues ........................................ $2,266,539 $1,657,139 $609,400 37%
Total revenues were $2.3 billion for fiscal 2012, compared to $1.7 billion during the same period a year ago,
an increase of $609.4 million, or 37 percent. Subscription and support revenues were $2.1 billion, or 94 percent
of total revenues, for fiscal 2012, compared to $1.6 billion, or 94 percent of total revenues, during the same
period a year ago. The increase in subscription and support revenues was due primarily to new customers,
upgrades and additional subscriptions from existing customers and improved renewal rates as compared to a year
ago. The price per user per month for our three primary offerings, Professional Edition, Enterprise Edition and
Unlimited Edition, in fiscal 2012 has generally remained consistent relative to fiscal 2011. Professional services
and other revenues were $140.3 million, or six percent of total revenues, for fiscal 2012, compared to
$106.0 million, or six percent of total revenues, for the same period a year ago. The increase in professional
services and other revenues was due primarily to the improved utilization of existing headcount and a benefit
from the prospective adoption of the new revenue accounting guidance for multiple-deliverable arrangements.
Revenues in Europe and Asia Pacific accounted for $726.3 million, or 32 percent of total revenues, for fiscal
2012, compared to $522.1 million, or 32 percent of total revenues, during the same period a year ago, an increase
of $204.1 million, or 39 percent. The increase in revenues outside of the Americas was the result of the
increasing acceptance of our service, our focus on marketing our services internationally and improved renewal
rates. Additionally, the value of the U.S. dollar relative to foreign currencies contributed to a slight increase in
U.S. dollar revenues outside of the Americas for fiscal 2012 as compared to the same period a year ago. The
foreign currency impact had the effect of increasing our aggregate revenues by $36.9 million compared to the
same period a year ago. As part of our overall growth, we expect the percentage of our revenue generated outside
of the Americas to increase as a percentage of our total revenues worldwide.
Cost of Revenues.
Fiscal Year Ended January 31, Variance
Dollars(In thousands) 2012 2011
Subscription and support ...................................... $360,758 $208,243 $152,515
Professional services and other ................................. 128,128 115,570 12,558
Total cost of revenues ........................................ $488,886 $323,813 $165,073
Percent of total revenues ...................................... 22% 20%
Cost of revenues was $488.9 million, or 22 percent of total revenues, during fiscal 2012, compared to
$323.8 million, or 20 percent of total revenues, during the same period a year ago, an increase of $165.1 million.
The increase in absolute dollars was primarily due to an increase of $20.4 million in employee-related costs, an
increase of $5.3 million in stock based expenses, an increase of $39.8 million in service delivery costs, primarily
due to our efforts to increase data center capacity, an increase of $68.3 million in depreciation and amortization
expenses, $44.6 million of which related to the amortization of purchased intangible assets, an increase of $24.2
million in outside subcontractor and other service costs, and an increase of $5.5 million in allocated overhead.
Gross profit margins for professional services and other revenues improved over the same period a year ago
primarily due to the improved utilization of existing headcount and a benefit from the prospective adoption of the
new revenue accounting guidance for multiple-deliverable arrangements.
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