Salesforce.com 2004 Annual Report Download - page 63

Table of Contents
salesforce.com, inc.
Notes to Consolidated Financial Statements—(Continued)
Concentrations of Credit Risk and Significant Customers and Suppliers
The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, marketable
securities, restricted cash, and trade accounts receivable. Although the Company deposits its cash with multiple financial institutions, its deposits, at times,
may exceed federally insured limits. Collateral is not required for accounts receivable.
The Company's accounts receivable and net revenues are derived from a large number of direct customers. No customer accounted for more than 5
percent of accounts receivable at January 31, 2005 and 2004, other than a single customer who accounted for 7 percent of the accounts receivable balance at
January 31, 2004. No single customer accounted for 5 percent or more of total revenue during fiscal 2005, 2004 and 2003.
As of January 31, 2005 and 2004, assets located outside the Americas were 8 percent and 12 percent of total assets, respectively. Revenues by
geographical region are as follows (in thousands):
Fiscal Year Ended January 31,
2005 2004 2003
Revenues by geography:
Americas $ 140,871 $ 78,958 $ 43,855
Europe 25,201 11,754 5,345
Asia Pacific 10,303 5,311 1,791
$ 176,375 $ 96,023 $ 50,991
The income (loss) from operations outside the Americas totaled $2,681,000, $(1,098,000) and $(3,791,000) during fiscal 2005, 2004 and 2003,
respectively.
The Company serves all of its customers and users from a single, third-party Web hosting facility located in Sunnyvale, California. The Company does
not control the operation of this facility, and it is vulnerable to damage or interruption. The Company has an agreement with SunGard Data Systems, a
provider of availability services, to provide access to a geographically remote disaster recovery facility that would provide the Company with access to
hardware, software and Internet connectivity in the event the Web hosting facility in Sunnyvale becomes unavailable. Even with this disaster recovery
arrangement, the Company's service would be interrupted during the transition.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash
equivalents, which primarily consist of cash on deposit with banks and money market funds, are stated at cost, which approximates fair value.
Restricted Cash
The Company's restricted cash balance of $3,191,000 at January 31, 2005 consisted primarily of a certificate of deposit in the amount of $2,800,000,
plus interest, that serves as collateral to a letter of credit that was issued to the Company's principal landlord as a security deposit. The certificate of deposit
bears annual interest at 1 percent and the letter of credit renews annually through December 31, 2010. The remaining restricted cash balance at January 31,
2005 of $391,000 consisted of collateral for two additional letters of credit related to office leases and mature at various dates through December 2008.
56