8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

August 20, 2009

Date of Report (date of earliest event reported)

SALESFORCE.COM, INC.

(Exact name of Registrant as specified in charter)

Delaware	001-32224	94-3320693
(State or other jurisdiction of incorporation)	(Commission File Number)	(I. R. S. Employer Identification No.)

The Landmark @ One Market, Suite 300

San Francisco CA 94105

(Address of principal executive offices)

Registrant’s telephone number, including area code: (415) 901-7000

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2 – Financial Information

Item 2.02 – Results of Operations and Financial Condition

On August 20, 2009, the Company issued a press release announcing its results for the quarter ended July 31, 2009. A copy of the press release is attached as Exhibit 99.1 to this current report on Form 8-K and is incorporated by reference herein.

The information in this current report on Form 8-K and the exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

99.1     Press Release dated August 20, 2009

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: August 20, 2009	salesforce.com, inc.
	/s/    David Schellhase
	David Schellhase, Senior Vice President and General Counsel

Exhibit Index

Exhibit Number	Exhibit Title
99.1	Press Release dated August 20, 2009

EX-99.1

Exhibit 99.1

David Havlek

salesforce.com

Investor Relations

415-536-2171

dhavlek@salesforce.com

Jane Hynes

salesforce.com

Public Relations

415-901-5079

jhynes@salesforce.com

Salesforce.com Announces Fiscal Second Quarter Results

Company Raises FY2010 Revenue and EPS Guidance

• Record Revenue of $316 Million, up 20% Year-Over-Year

• Record GAAP EPS of $0.17, up 113% Year-Over-Year

• GAAP Operating Margin of 9.3%, up from 6.1% a Year Ago

• 3,900 Net New Customers During the Quarter

• Total Customers at 63,200, up 32% Year-Over-Year

• Total Cash and Marketable Securities of $1.03 Billion, up $207 Million Year-Over-Year

• Company Raises FY2010 Revenue Guidance to $1.27 Billion to $1.28 Billion

• Company Raises FY2010 EPS Guidance to $0.60 to $0.61

SAN FRANCISCO, Calif. – August 20, 2009 – Salesforce.com (NYSE: CRM), the enterprise cloud computing company, today announced results for its fiscal second quarter ended July 31, 2009.

“We are pleased to report record revenue and GAAP earnings per share for our fiscal second quarter,” said Marc Benioff, chairman and CEO, salesforce.com. “We added 3,900 net new customers, bringing our total to more than 63,000, with our Service Cloud turning in its best quarter ever.”

Salesforce.com delivered the following results for the second quarter:

Revenue: Total Q2 revenue was $316.1 million, an increase of 20% on a year-over-year basis. Subscription and support revenues were $293.4 million, an increase of 22% on a year-over-year basis. Professional services and other revenues were $22.6 million, a decrease of 3% on a year-over-year basis.

Earnings per Share: Q2 GAAP diluted earnings per share were approximately $0.17, including approximately $20.9 million in stock based compensation expense and approximately $2.2 million in amortization of purchased intangibles related to previously announced acquisitions. For purposes of the Q2 GAAP EPS calculations, there was an average of approximately 127 million diluted shares outstanding during the quarter.

Customers: Net paying customers rose approximately 3,900 during the quarter to finish at approximately 63,200. Compared with the year ago quarter, net paying customers have grown by approximately 15,500 or 32%.

Cash: Cash from operations for the fiscal second quarter was approximately $45.9 million, down 14% year-over-year. Total cash, cash equivalents and marketable securities finished the quarter at approximately $1.03 billion, an increase of approximately $207 million from the year prior.

Deferred Revenue: Deferred revenue on the balance sheet as of July 31, 2009 was $549 million, an increase of 14% on a year-over-year basis.

As of August 20, 2009, salesforce.com is initiating guidance for its third quarter, fiscal year 2010. For its full fiscal year 2010, the company is raising its prior revenue guidance and EPS guidance.

Q3 FY10: Revenue for the company’s third fiscal quarter is projected to be in the range of approximately $323 million to approximately $324 million. GAAP diluted EPS is expected to be in the range of approximately $0.15 to approximately $0.16. Stock based compensation expense is expected to be approximately $20 million, and amortization of purchased intangibles of previously announced acquisitions is expected to be approximately $2.2 million. For purposes of the Q3 GAAP EPS calculation, the company is expecting an average diluted shares count of approximately 128 million shares, a GAAP tax rate of approximately 42% and a noncontrolling interest expense of approximately $600,000.

Full Year FY10: The company today is raising the full year revenue guidance it provided on May 21, 2009, with revenue now expected to be approximately $1.27 billion to approximately $1.28 billion. The company is also raising its earnings outlook for the full year, expecting GAAP diluted EPS to be in the range of approximately $0.60 to approximately $0.61. Stock based compensation expense is expected to be approximately $86 million, and amortization of purchased intangibles of previously announced acquisitions is currently expected to be approximately $9.3 million. For purposes of the full fiscal year 2010 GAAP EPS calculation, the company is expecting an average diluted shares count of approximately 127 million shares, a GAAP tax rate of approximately 42%, and a noncontrolling interest expense of approximately $2.8 million.

Quarterly Conference Call

Salesforce.com will host a conference call to discuss its second quarter fiscal 2010 results at 2:00 p.m. Pacific Daylight Time today. A live audio webcast of the conference call, together with detailed financial information, can be accessed through the company’s Investor Relations Web site at http://www.salesforce.com/investor. In addition, an archive of the webcast can be accessed through the same link. Participants who choose to call in to the conference call can do so by dialing domestically 866-901-SFDC or 866-901-7332 and internationally 706-902-1764. A replay will be available at (800) 642-1687 or (706) 645-9291, passcode 23838830, until midnight (EDT) September 10, 2009.

About salesforce.com

Salesforce.com is the enterprise cloud computing company. The company’s portfolio of Salesforce CRM applications, available at http://www.salesforce.com/products/, has revolutionized the ways that companies collaborate and communicate with their customers across sales, marketing and service. The company’s Force.com Platform (http://www.salesforce.com/platform/) enables customers, partners and developers to quickly build powerful business applications to run every part of the enterprise in the cloud. Based on salesforce.com’s <http://salesforce.com> real-time, multi-tenant architecture, Salesforce CRM and Force.com offer the fastest path to customer success with cloud computing.

As of July 31, 2009, salesforce.com manages customer information for approximately 63,200 customers including Allianz Commercial, Dell, Dow Jones Newswires, Japan Post, Kaiser Permanente, KONE, and SunTrust Banks.

Any unreleased services or features referenced in this or other press releases or public statements are not currently available and may not be delivered on time or at all. Customers who purchase

salesforce.com applications should make their purchase decisions based upon features that are currently available. Salesforce.com has headquarters in San Francisco, with offices in Europe and Asia, and trades on the New York Stock Exchange under the ticker symbol “CRM”. For more information please visit http://www.salesforce.com, or call 1-800-NO-SOFTWARE.

###

“Safe harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements about expected revenue and GAAP earnings per share for the third fiscal quarter of 2010 and for the full fiscal year 2010, and our expected tax rate, stock based compensation expense, amortization expense, noncontrolling interest expense, and shares outstanding, the achievement of which involve risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make.

The risks and uncertainties referred to above include – but are not limited to – risks associated with possible fluctuations in our financial and operating results, rate of growth and anticipated revenue run rate; errors, interruptions or delays in our service or our Web hosting; breaches of our security measures; the financial impact of any future acquisitions; the nature of our business model; our ability to continue to release, and gain customer acceptance of, new and improved versions of our service; successful customer deployment and utilization of our existing and future services; changes in our sales cycle; competition; various financial aspects of our subscription model; unexpected increases in attrition or decreases in new business; the emerging market in which we operate; our ability to hire, retain and motivate our employees and manage our growth; changes in our customer base; technological developments; regulatory developments; litigation; unanticipated changes in our effective tax rate; and fluctuations in the number of shares we have outstanding, the price of such shares, foreign currency exchange rates, interest rates, and general developments in the economy, financial markets, and credit markets.

Further information on these and other factors that could affect our financial results is included in the reports on Forms 10-K, 10-Q and 8-K and in other filings we make with the Securities and Exchange Commission from time to time, including our Form 10-Q that will be filed for the quarter ended July 31, 2009 and our Form 10-K for the fiscal year ended January 31, 2009. These documents are available on the SEC Filings section of the Investor Information section of our website at www.salesforce.com/investor.

Salesforce.com, inc. assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

Copyright (c) 2009 salesforce.com, inc. All rights reserved. Salesforce and the “no software” logo are registered trademarks of salesforce.com, inc., and salesforce.com owns other registered and unregistered trademarks. Other names used herein may be trademarks of their respective owners.

salesforce.com, inc.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(Unaudited)

	Three Months Ended July 31,						Six Months Ended July 31,
	2009			2008			2009			2008
Revenues:
Subscription and support	$	293,440		$	239,720		$	575,208		$	465,061
Professional services and other		22,621			23,357			45,777			45,638
Total revenues		316,061			263,077			620,985			510,699
Cost of revenues (1):
Subscription and support		38,971			30,668			75,999			59,378
Professional services and other		23,525			23,423			48,297			46,011
Total cost of revenues		62,496			54,091			124,296			105,389
Gross profit		253,565			208,986			496,689			405,310
Operating expenses (1):
Research and development		31,103			24,033			62,687			43,800
Marketing and sales		146,214			130,774			284,481			253,478
General and administrative		46,759			38,081			89,909			76,513
Total operating expenses		224,076			192,888			437,077			373,791
Income from operations		29,489			16,098			59,612			31,519
Interest, net		7,454			6,708			11,776			13,430
Other expense		(1,072	)		(840	)		(701	)		(1,603	)
Income before provision for income taxes and noncontrolling interest		35,871			21,966			70,687			43,346
Provision for income taxes		(14,030	)		(10,558	)		(29,853	)		(20,869	)
Consolidated net income		21,841			11,408			40,834			22,477
Less: Net income attributable to noncontrolling interest		(643	)		(1,412	)		(1,200	)		(2,926	)
Net income attributable to salesforce.com	$	21,198		$	9,996		$	39,634		$	19,551
Earnings per share—basic and diluted:
Basic net income per share attributable to salesforce.com common shareholders	$	0.17		$	0.08		$	0.32		$	0.16
Diluted net income per share attributable to salesforce.com common shareholders	$	0.17		$	0.08		$	0.31		$	0.16
Shares used in computing basic net income per share		123,846			120,863			123,526			120,321
Shares used in computing diluted net income per share		126,566			125,626			125,894			125,091
(1)    Amounts include stock-based expenses, as follows:
Cost of revenues	$	3,171		$	2,657		$	6,327		$	5,332
Research and development		2,950			2,259			6,034			4,358
Marketing and sales		9,317			8,749			19,259			16,870
General and administrative		5,439			5,219			10,920			10,389

salesforce.com, inc.

Condensed Consolidated Statements of Operations

As a percentage of total revenues:

(Unaudited)

	Three Months Ended July 31,				Six Months Ended July 31,
	2009		2008		2009		2008
Revenues:
Subscription and support	93	%	91	%	93	%	91	%
Professional services and other	7		9		7		9
Total revenues	100		100		100		100
Cost of revenues:
Subscription and support	12		12		12		12
Professional services and other	8		9		8		9
Total cost of revenues	20		21		20		21
Gross profit	80		79		80		79
Operating expenses:
Research and development	10		9		10		8
Marketing and sales	46		50		46		50
General and administrative	15		14		14		15
Total operating expenses	71		73		70		73
Income from operations	9		6		10		6
Interest, net	2		2		2		2
Other expense	0		0		(1	)	0
Income before provision for income taxes and noncontrolling interest	11		8		11		8
Provision for income taxes	(4	)	(3	)	(5	)	(3	)
Consolidated net income	7		5		6		5
Less: Net income attributable to noncontrolling interest	0		(1	)	0		(1	)
Net income attributable to salesforce.com	7	%	4	%	6	%	4	%
Stock-based expenses as a percentage of total revenues, as follows:
Cost of revenues	1	%	1	%	1	%	1	%
Research and development	1		1		1		1
Marketing and sales	3		3		3		3
General and administrative	2		2		2		2

salesforce.com, inc.

Condensed Consolidated Balance Sheets

(in thousands)

	July 31, 2009			January 31, 2009
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	246,169		$	483,834
Short-term marketable securities		173,957			213,769
Accounts receivable, net		168,842			266,555
Deferred commissions		36,370			39,384
Deferred income taxes		26,827			31,900
Prepaid expenses and other current assets		49,153			33,115
Total current assets		701,318			1,068,557
Marketable securities, noncurrent		610,280			184,962
Fixed assets, net		96,470			77,027
Deferred commissions, noncurrent		15,457			17,699
Deferred income taxes, noncurrent		29,865			26,589
Capitalized software, net		28,981			29,989
Goodwill		44,872			44,872
Other assets, net		29,284			30,127
Total assets	$	1,556,527		$	1,479,822
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	13,389		$	16,379
Accrued expenses and other current liabilities		157,604			163,205
Income taxes payable		2,759			3,619
Deferred revenue		538,836			583,763
Total current liabilities		712,588			766,966
Income taxes payable, noncurrent		16,579			12,490
Long-term lease liabilities and other		14,796			7,616
Deferred revenue, noncurrent		10,174			10,263
Total liabilities		754,137			797,335
salesforce.com stockholders’ equity:
Common stock		124			123
Additional paid-in capital		727,533			648,724
Accumulated other comprehensive loss		(2,016	)		(2,905	)
Retained earnings		65,476			25,842
Total stockholders’ equity controlling interest		791,117			671,784
Total stockholders’ equity noncontrolling interest		11,273			10,703
Total stockholders’ equity		802,390			682,487
Total liabilities and stockholders’ equity	$	1,556,527		$	1,479,822

salesforce.com, inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(Unaudited)

	Three Months Ended July 31,						Six Months Ended July 31,
	2009			2008			2009			2008
Operating activities:
Consolidated net income	$	21,841		$	11,408		$	40,834		$	22,477
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		12,144			8,870			24,289			17,028
Amortization of deferred commissions		15,315			13,907			30,261			28,630
Expenses related to stock-based awards		20,877			18,884			42,540			36,949
Excess tax benefits from employee stock plans		(15,687	)		(11,843	)		(25,135	)		(24,541	)
Changes in assets and liabilities:
Accounts receivable, net		(22,816	)		(3,073	)		97,870			73,079
Deferred commissions		(14,136	)		(14,232	)		(25,005	)		(26,882	)
Prepaid expenses and other current assets		1,308			(978	)		(1,819	)		(6,093	)
Other assets		2,683			1,738			(118	)		2,514
Accounts payable		(2,368	)		(5,507	)		(2,990	)		6,330
Accrued expenses and other current liabilities		27,057			24,652			8,120			8,764
Deferred revenue		(363	)		9,249			(45,016	)		(1,348	)
Net cash provided by operating activities		45,855			53,075			143,831			136,907
Investing activities:
Changes in marketable securities		(138,393	)		(25,118	)		(381,031	)		(8,578	)
Capital expenditures		(19,328	)		(13,036	)		(32,756	)		(37,213	)
Net cash used in investing activities		(157,721	)		(38,154	)		(413,787	)		(45,791	)
Financing activities:
Proceeds from the exercise of stock options		5,139			22,525			14,307			34,010
Excess tax benefits from employee stock plans		15,687			11,843			25,135			24,541
Principal payments on capital lease obligations		(2,258	)		—			(3,506	)		(5	)
Net cash provided by financing activities		18,568			34,368			35,936			58,546
Effect of exchange rate changes		(2,238	)		(794	)		(3,645	)		(1,714	)
Net (decrease) increase in cash and cash equivalents		(95,536	)		48,495			(237,665	)		147,948
Cash and cash equivalents, beginning of period		341,705			378,548			483,834			279,095
Cash and cash equivalents, end of period	$	246,169		$	427,043		$	246,169		$	427,043

salesforce.com, inc.

Additional Metrics

(Unaudited)

	July 31, 2009		April 30, 2009		Jan 31, 2009		Oct 31, 2008		Jul 31, 2008		Apr 30, 2008
Full Time Equivalent Headcount		3,653		3,607		3,566		3,318		3,046		2,864
Financial data (in thousands):
Cash, cash equivalents and marketable securities	$	1,030,406	$	983,824	$	882,565	$	804,606	$	823,417	$	750,633
Deferred revenue, current and noncurrent	$	549,010	$	549,373	$	594,026	$	469,534	$	479,546	$	470,297

	Three Months Ended July 31,						Six Months Ended July 31,
	2009			2008			2009			2008
Revenues by geography (in thousands):
Americas	$	226,008		$	188,563		$	446,658		$	366,934
Europe		55,992			49,356			107,594			94,520
Asia Pacific		34,061			25,158			66,733			49,245
	$	316,061		$	263,077		$	620,985		$	510,699
As a percentage of total revenues:
Revenues by geography:
Americas		72	%		72	%		72	%		72	%
Europe		18			19			17			19
Asia Pacific		10			9			11			9
		100	%		100	%		100	%		100	%