Salesforce.com 2015 Annual Report Download - page 45

April 30,
2013
July 31,
2013
October 31,
2013
January 31,
2014
Fiscal 2014
Accounts receivable, net ................. $ 502,609 $ 599,543 $ 604,045 $1,360,837
Deferred revenue, current and noncurrent .... 1,733,160 1,789,648 1,734,619 2,522,115
Operating cash flow (1) .................. 283,189 183,183 137,859 271,238
Unbilled deferred revenue, a non-GAAP
measure ............................ 3.6bn 3.8bn 4.2bn 4.5bn
April 30,
2012
July 31,
2012
October 31,
2012
January 31,
2013
Fiscal 2013
Accounts receivable, net ................. $ 371,395 $ 446,917 $ 418,590 $ 872,634
Deferred revenue, current and noncurrent .... 1,334,716 1,337,184 1,291,703 1,862,995
Operating cash flow (1) .................. 213,212 136,197 105,915 281,573
Unbilled deferred revenue, a non-GAAP
measure ............................ 2.7bn 2.8bn 3.0bn 3.5bn
(1) Operating cash flow represents net cash provided by operating activities for the three months ended in the
periods stated above.
Unbilled Deferred Revenue, a Non-GAAP Measure
The deferred revenue balance on our consolidated balance sheet does not represent the total contract value
of annual or multi-year, non-cancelable subscription agreements. Unbilled deferred revenue represents future
billings under our subscription agreements that have not been invoiced and, accordingly, are not recorded in
deferred revenue. Unbilled deferred revenue was approximately $5.7 billion as of January 31, 2015 and
approximately $4.5 billion as of January 31, 2014. Our typical contract length is between 12 and 36 months. We
expect that the amount of unbilled deferred revenue will change from quarter to quarter for several reasons,
including the specific timing, duration and size of large customer subscription agreements, varying billing cycles
of subscription agreements, the specific timing of customer renewals, foreign currency fluctuations, the timing of
when unbilled deferred revenue is to be recognized as revenue, and changes in customer financial circumstances.
For multi-year subscription agreements billed annually, the associated unbilled deferred revenue is typically high
at the beginning of the contract period, zero just prior to renewal, and increases if the agreement is renewed. Low
unbilled deferred revenue attributable to a particular subscription agreement is often associated with an
impending renewal and may not be an indicator of the likelihood of renewal or future revenue from such
customer. Accordingly, we expect that the amount of aggregate unbilled deferred revenue will change from year-
to-year depending in part upon the number and dollar amount of subscription agreements at particular stages in
their renewal cycle. Such fluctuations are not a reliable indicator of future revenues. Unbilled deferred revenue
does not include minimum revenue commitments from indirect sales channels, as we recognize revenue, deferred
revenue, and any unbilled deferred revenue upon sell-through to an end user customer.
Cost of Revenues and Operating Expenses
Cost of Revenues. Cost of subscription and support revenues primarily consists of expenses related to
hosting our service and providing support, the costs of data center capacity, depreciation or operating lease
expense associated with computer equipment and software, allocated overhead, amortization expense associated
with capitalized software related to our services and acquired developed technologies and certain fees paid to
various third parties for the use of their technology, services and data. We allocate overhead such as information
technology infrastructure, rent and occupancy charges based on headcount. Employee benefit costs and taxes are
allocated based upon a percentage of total compensation expense. As such, general overhead expenses are
reflected in each cost of revenue and operating expense category. Cost of professional services and other
revenues consists primarily of employee-related costs associated with these services, including stock-based
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