Salesforce.com conference call highlights

Salesforce.com closed their day yesterday with the holding of a conference call regarding their earnings for the second quarter of fiscal year 2007. Representing Salesforce were heavy hitters chairman / CEO Marc Benioff, chief financial officer Steve Cakebread, and vice president of investor relations David Havlek.

Investor website Seeking Alpha was kind enough to run a full transcript of yesterday’s conference call which, by dint of Benioff’s presence alone, makes for some decent reading. Some highlights are as follows. Salesforce’s inexorable rise continues, as evidenced by the fourth-quarter results, among which few minuses may be seen. Second quarter revenue was listed at US $118 million, a 64 percent improvement over one year ago.

The customer count is now at nearly 8,000, a 47 percent increase in clientele in the past year. Fully diluted non-GAAP earnings per share came out to US $0.06, a full 33 percent higher than forecasted at the beginning of the quarter. Net cash from operations was approximately US $30 million in the quarter, bringing the value of Salesforce cash and marketable securities at just over one-third of a billion dollars: US $334 million.

Benioff took center stage after customary opening legal remarks and pretty much immediately launched into reiteration of the two major Salesforce party lines: That Salesforce will generate over US $1 billion in annual revenue, and that “virtually every major software vendor in the world is talking about the end of software.” Benioff thanked recent contractees such as Sprint Nextel, Mizuho Financial Services, and Bear Stearns for increasing Salesforce sales and presence on “an even larger list of Salesforce.com success stories in the financial services industry around the world, including Merrill, Morgan Stanley, SunTrust, ABN AMRO, Citizens Bank, Wells Fargo, The World Bank, ThinkEquity, AmeriTrade, eTrade, SG Cowen and others.”

The outspoken Benioff offered a tease or two about the new future as well, explaining that the firm is preparing for DreamForce, Salesforce.com’s annual meeting of customers, partners and developers in San Francisco. Benioff revealed that keynote speeches would be forthcoming from the likes of former U.S. secretary of state Colin Powell, venture capitalist Ray Lane, and eBay COO Maynard Webb. The chairman was also pleased as punch to announce that, in the firm’s search for a CFO, Salesforce.com kept the man they already had: Steve Cakebread.

Cakebread had announced his imminent retirement, but was convinced to hang on at Salesforce for at least one more year. Cakebread explained that, whilst interviewing candidates, his own pitch started to sound good to him: “It became more and more clear to me that there was still a lot more exciting challenges ahead on our way to the billion dream and beyond.” To their credit, the Salesforce trio took many questions from their customers and, as always, Benioff was on top of his game.

After holding back for a question or three, a client asked if the three could “talk a little bit about competition.” What, just a little. Benioff shot back with, “There is one competitor that I was reading about how they have this new on-demand product. It is a big software company — and I won’t name names here — I was talking to a reporter, and I said, ‘Well, can you tell me what is the URL for their on-demand offering?’ [The reporter] said, ‘Well, you know, this is a big software company and they are in the Pacific Northwest. They are known as leaders in the software industry.’ I said, ‘Yes, but can you give me the URL, because in the on-demand world the difference between the software world and the on-demand world is we have these URLs.’ [The reporter] said, ‘Oh, I guess they don’t have one.’ I said, ‘Well then, they probably don’t have an on-demand product either.’” (You could almost hear the laugh track building on that one.)

A question or two about the sales team was diplomatically dodged and the team hedged no bets as to whether Salesforce could maintain such rapid growth. Conservatively, the brain trust grudgingly admits that such rates can probably not be maintained, but Salesforce should see continuous growth for sometime to come. The full transcript of the conference call is available at http://seekingalpha.com/article/15617. Audio playback is available at www.salesforce.com.

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