Salesforce.com 2015 Annual Report Download - page 23

• the timing of stock awards to employees and the related adverse financial statement impact of having to
expense those stock awards on a straight-line basis over their vesting schedules;
• the timing of commission, bonus, and other compensation payments to employees; and
• the timing of payroll and other withholding tax expenses, which are triggered by the payment of
bonuses and when employees exercise their vested stock awards.
Many of these factors are outside of our control, and the occurrence of one or more of them might cause our
operating results to vary widely. As such, we believe that historical quarter-to-quarter comparisons of our
revenues, operating results, changes in our deferred revenue and unbilled deferred revenue balances and cash
flows may not be meaningful and should not be relied upon as an indication of future performance.
Additionally, if we fail to meet or exceed the expectations of securities analysts and investors, or if one or
more of the securities analysts who cover us adversely change their recommendation regarding our stock, the
market price of our common stock could decline. Moreover, our stock price may be based on expectations,
estimates and forecasts of our future performance that may be unrealistic or that may not be met. Further, our
stock price may fluctuate based on reporting by the financial media, including television, radio and press reports
and blogs.
Our efforts to expand our services beyond the CRM market and to develop our existing services in order
to keep pace with technological developments may not succeed and may reduce our revenue growth rate and
harm our business.
We derive substantially all of our revenue from subscriptions to our CRM enterprise cloud computing
application services, and we expect this will continue for the foreseeable future. The markets for our Analytics
Cloud and Community Cloud remain relatively new and it is uncertain whether our efforts will ever result in
significant revenue for us. Further, the introduction of new services beyond the CRM market may not be
successful, and early stage interest and adoption of such new services may not result in long term success or
significant revenue for us. Our efforts to expand our services beyond the CRM market may not succeed and may
reduce our revenue growth rate.
Additionally, if we are unable to develop enhancements to and new features for our existing or new services
that keep pace with rapid technological developments, our business will be harmed. The success of
enhancements, new features and services depends on several factors, including the timely completion,
introduction and market acceptance of the feature, service or enhancement. Failure in this regard may
significantly impair our revenue growth. In addition, because our services are designed to operate on a variety of
network hardware and software platforms using a standard browser, we will need to continuously modify and
enhance our services to keep pace with changes in Internet-related hardware, software, communication, browser
and database technologies. We may not be successful in either developing these modifications and enhancements
or in bringing them to market timely. Furthermore, uncertainties about the timing and nature of new network
platforms or technologies, or modifications to existing platforms or technologies, could increase our research and
development or service delivery expenses. Any failure of our services to operate effectively with future network
platforms and technologies could reduce the demand for our services, result in customer dissatisfaction and harm
our business.
Sales to customers outside the United States expose us to risks inherent in international sales.
We sell our services throughout the world and are subject to risks and challenges associated with
international business. Historically, sales in Europe and Asia Pacific together have represented approximately
30 percent of our total revenues, and we intend to continue to expand our international sales efforts. The risks and
challenges associated with sales to customers outside the United States include:
• localization of our services, including translation into foreign languages and associated expenses;
• laws and business practices favoring local competitors;
17