Salesforce.com 2014 Annual Report Download - page 53

valuation allowance for a significant portion of our deferred tax assets was established that resulted in a tax
expense of $186.8 million. We will continue to assess the realizability of the deferred tax assets in each of the
applicable jurisdictions going forward and adjust the valuation allowance accordingly. Due to the valuation
allowance, the effective tax rate could be volatile and is therefore difficult to forecast in future periods. See
Note 8 “Income Taxes” to the Notes to the Consolidated Financial Statements for our reconciliation of income
taxes at the statutory federal rate to the provision for income taxes.
Fiscal Years Ended January 31, 2013 and 2012
Revenues.
Fiscal Year Ended
January 31, Variance
(in thousands) 2013 2012 Dollars Percent
Subscription and support .................... $2,868,808 $2,126,234 $742,574 35%
Professional services and other ............... 181,387 140,305 41,082 29%
Total revenues ............................ $3,050,195 $2,266,539 $783,656 35%
Total revenues were $3.1 billion for fiscal 2013, compared to $2.3 billion during fiscal 2012, an increase of
$783.7 million, or 35 percent. Subscription and support revenues were $2.9 billion, or 94 percent of total
revenues, for fiscal 2013, compared to $2.1 billion, or 94 percent of total revenues, during fiscal 2012. 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. During fiscal 2013,
we continued to invest in a variety of customer programs and initiatives which, along with longer contract
durations and increasing enterprise adoption, have helped improve our renewal rates. The price per user per
month for our three primary offerings, Professional Edition, Enterprise Edition and Unlimited Edition, in fiscal
2013 has generally remained consistent relative to prior periods. Professional services and other revenues were
$181.4 million, or six percent of total revenues, for fiscal 2013, compared to $140.3 million, or six percent of
total revenues, for fiscal 2012. The increase in professional services and other revenues was due primarily to the
higher demand for services from an increased number of customers.
Revenues in Europe and Asia Pacific accounted for $926.5 million, or 30 percent of total revenues, for fiscal
2013, compared to $726.3 million, or 32 percent of total revenues, during fiscal 2012, an increase of
$200.2 million, or 28 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 as a
result of the reasons stated above. Revenues outside of the Americas increased despite an overall strengthening
of the U.S. dollar relative to major international currencies, which reduced aggregate international revenues by
$43.9 million compared to fiscal 2012.
Cost of Revenues.
Fiscal Year Ended
January 31, Variance
Dollars(in thousands) 2013 2012
Subscription and support ....................... $494,187 $360,758 $133,429
Professional services and other .................. 189,392 128,128 61,264
Total cost of revenues ......................... $683,579 $488,886 $194,693
Percent of total revenues ....................... 22% 22%
Cost of revenues was $683.6 million, or 22 percent of total revenues, for fiscal 2013, compared
to $488.9 million, or 22 percent of total revenues, during fiscal 2012, an increase of $194.7 million. The increase
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