Salesforce.com 2016 Annual Report Download - page 24
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Our quarterly results are likely to fluctuate and our stock price and the value of our common stock could
decline substantially.
Our quarterly results are likely to fluctuate. For example, our fiscal fourth quarter has historically been our
strongest quarter for new business and renewals. The year-over-year compounding effect of this seasonality in
billing patterns and overall new business and renewal activity causes the value of invoices that we generate in the
fourth quarter to continually increase in proportion to our billings in the other three quarters of our fiscal year. As
a result, our fiscal first quarter is our largest collections and operating cash flow quarter.
Additionally, some of the important factors that may cause our revenues, operating results and cash flows to
fluctuate from quarter to quarter include:
• our ability to retain and increase sales to existing customers, attract new customers and satisfy our
customers’ requirements;
• the attrition rates for our services;
• the amount and timing of operating costs and capital expenditures related to the operations and
expansion of our business;
• changes in deferred revenue and unbilled deferred revenue balances, which are not reflected in the
balance sheet, due to seasonality, the compounding effects of renewals, invoice duration, size and
timing, new business linearity between quarters and within a quarter and fluctuations due to foreign
currency movements;
• changes in foreign currency exchange rates;
• the number of new employees;
• changes in our pricing policies and terms of contracts, whether initiated by us or as a result of
competition;
• the cost, timing and management effort for the introduction of new features to our services;
• the costs associated with acquiring new businesses and technologies and the follow-on costs of
integration and consolidating the results of acquired businesses;
• the rate of expansion and productivity of our sales force;
• the length of the sales cycle for our services;
• new product and service introductions by our competitors;
• our success in selling our services to large enterprises;
• evolving regulations of cloud computing and cross-border data transfer restrictions and similar
regulations;
• variations in the revenue mix of editions of our services;
• technical difficulties or interruptions in our services;
• expenses related to our real estate, our office leases and our data center capacity and expansion;
• changes in interest rates and our mix of investments, which would impact the return on our investments
in cash and marketable securities;
• conditions, particularly sudden changes, in the financial markets, which have impacted and may
continue to impact the value of and liquidity of our investment portfolio;
• income tax effects;
• our ability to realize benefits from strategic partnerships, acquisition or investments;
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