Salesforce.com 2005 Annual Report Download - page 84

Table of Contents
salesforce.com, inc.
Notes to Consolidated Financial Statements—(Continued)
In addition to the resource sharing with the Foundation, the Company issued the Foundation warrants in August 2002 to purchase 500,000 shares of
common stock. Through January 31, 2006, the Foundation has exercised 250,000 of these warrants. Additionally, the Company has donated subscriptions to
the Company's service to other qualified non-profit organizations. The fair value of these donated subscriptions is currently approximately $800,000 per
month. The Company plans to continue providing free subscriptions to qualified non-profit organizations.
11. Selected Quarterly Financial Data (Unaudited)
Selected summarized quarterly financial information and customer and subscriber metrics for fiscal 2006 and 2005 is as follows:
1st
Quarter
2nd
Quarter
3rd
Quarter
4th
Quarter
Fiscal
Year
(in thousands, except per share data and customer and
subscriber metrics)
Fiscal 2006
Revenues $ 64,177 $ 71,943 $ 82,673 $ 91,064 $ 309,857
Gross profit 52,212 55,706 63,089 69,724 240,731
Lease recovery 285 — — — 285
Income from operations 4,270 4,193 6,387 5,252 20,102
Net income (1) 4,380 5,040 13,097 5,957 28,474
Basic net income per share (1) 0.04 0.05 0.12 0.05 0.27
Diluted net income per share (1) 0.04 0.04 0.11 0.05 0.24
As of each quarter-end date:
Approximate number of customers 15,500 16,900 18,700 20,500
Approximate number of paying subscribers (2) 267,000 308,000 351,000 399,000
Fiscal 2005
Revenues $ 34,839 $ 40,581 $ 46,361 $ 54,594 $ 176,375
Gross profit 28,476 32,399 37,456 44,590 142,921
Income from operations 361 1,165 1,773 3,221 6,520
Net income 437 1,170 2,153 3,586 7,346
Basic net income per share 0.01 0.02 0.02 0.03 0.10
Diluted net income per share — 0.01 0.02 0.03 0.07
As of each quarter-end date:
Approximate number of customers 9,800 11,100 12,500 13,900
Approximate number of paying subscribers (2) 147,000 168,000 195,000 227,000
(1) Net income during the third quarter of fiscal 2006 includes $6,769,000 of income associated with the reversal of the Company's deferred tax valuation
allowance. This represents $0.06 of basic and diluted net income per share for the third quarter of fiscal 2006.
(2) Paying subscriptions are defined as unique user accounts, purchased by customers for use by their employees and other customer-authorized users that
have not been suspended for non-payment and for which the Company is recognizing subscription revenue.
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