Graham Smith - Chief Financial Officer, Principal Accounting Officer and Executive Vice President
Marc Benioff - Co-Founder, Chairman and Chief Executive Officer
David Havlek -
Laura Lederman - William Blair & Company L.L.C.
Thomas Ernst - Deutsche Bank AG
Brent Thill - UBS Investment Bank
Heather Bellini - UBS
Kash Rangan - BofA Merrill Lynch
Adam Holt - Morgan Stanley
Mark Murphy - Piper Jaffray Companies
Sarah Friar - Goldman Sachs Group Inc.
Salesforce.com (CRM) F1Q11 (Qtr End 04/30/2010) Earnings Call May 20, 2010 5:00 PM ET
Good day, ladies and gentlemen. My name is Gerald, and I will be your conference operator. At this time, I would like to welcome everyone to Salesforce.com's Q1 2011 Fiscal Results Conference Call. [Operator Instructions] I would now like to turn the conference over to Mr. David Havlek, Vice President of Investor Relations. Sir, you may begin.
Thanks, Gerald. We are thrilled to be coming to you today from our offices in Tokyo, Japan for our first quarter Earnings Call. It's obviously pretty early here, 6:00 a.m. on a Friday morning to be precise. From our offices you can see Mount Fuji, so it's an incredible setting to host today's call. Joining me at this early hour to discuss our outstanding first quarter results are Marc Benioff, Chairman and CEO; and Graham Smith, our CFO. Marc and Graham will open today with a few prepared remarks, and then we'll open things up to your questions. Because we want to address as many of you as possible, I do ask that you limit yourself to a single question today.
Before we get started, a few housekeeping items. A complete disclosure of our first quarter results can be found in our press release issued about an hour ago as well as in our Form 8-K filed with the SEC. Additional information, including historical financial detail beyond what is provided in the press release, will also be made available on our website. In addition, the webcast of today's call is available on our website for 90 days, and a dial-in replay will be available through the 11th of June.
And formally, our commentary today will be in both GAAP and non-GAAP terms, a complete reconciliation between GAAP and non-GAAP for both our reported results and our forward guidance can be found in our earnings press release as well as by clicking on the Detailed Financials tab on our Investor website. At times in our prepared remarks or in response to your questions today, we may offer certain additional metrics to provide a greater understanding of our business or quarterly results. Please be advised that we may or may not update these additional metrics in the future calls.
With that said, let me quickly remind you that the primary purpose of today's call is to provide you with information regarding our fiscal first quarter 2011 performance. However, some of our discussion or responses to your questions may contain forward-looking statements. These statements are subject to risks, uncertainties and assumptions. Should any of these risks or uncertainties materialize, or should our assumptions prove to be incorrect, actual company results could differ materially from these forward-looking statements. All of our risks, uncertainties and assumptions, as well as other information on potential factors that could affect our financial results, are included in our reports filed with the SEC, including our most recent report on Form 10-K, particularly under the heading, Risk Factors. To access our first quarter press release, the detail of our historical results, including the GAAP and non-GAAP reconciliations, the webcast replay or any of our SEC disclosures or simply to learn more about Salesforce, I encourage you to visit our Investor Relations website at salesforce.com/investor.
Finally, please also be advised that unreleased services or features referenced in today's discussion or in other public statements are not currently available and may not be delivered on time or at all. Customers who purchase our services should make the purchase decisions based upon features that are currently available.
With that said, let me turn the call over to Marc.
Thanks, David. [Japanese] And greetings everybody from Tokyo, Japan. We're excited to be hosting today's call this morning from our offices on the 39th floor of Roppongi Tower here in Tokyo. Japanese have been pioneers in cloud computing and leaders in many key areas in cloud computing, including 3G and social networking, as well as e-commerce. And our Japanese business unit continues to turn in amazing results quarter-after-quarter. Currently, Japan is our second largest market outside of the United States.
I spent the better part of May here in Japan talking to customers, speaking at Ministry events and even have the opportunity to meet with the Minister of Technology. And I also, yesterday, met with the Prime Minister of Japan, and fundamentally, to discuss one thing, that cloud computing is a tremendous accelerator for the economics and businesses of Japan. And I believe this is even more strong than ever before after spending this extended period here in Tokyo.
Our first quarter was a terrific kick off to 2011 on virtually every front. Our business is gaining momentum globally. On the customer front, a record 4,800 net new customers contributed towards our fastest business growth in more than two years. On the technology front, we're positioned to create much higher levels of customer success with the coming additions of incredible new technology, including: Salesforce Chatter, our enterprise collaboration service; Salesforce Jigsaw, the leader in crowdsourced data services, the emergence of the data cloud; and VMforce, the world's first Java cloud. So in these three critical new areas, the collaboration cloud, the data cloud and the Java cloud, Salesforce.com is really defining the very next level of our growth and technology capability for our customers.
And finally on the financial front, we delivered another spectacular quarter. Let me begin with some of the financial highlights for the quarter. Revenue increased by 24% from a year ago to $377 million. Well, that was our best growth performance in five quarters. And even more incredibly, we're delivering this growth as we pushed through the $1.5 billion annual revenue run rate threshold, that is really amazing, and starts to focus us very acutely and clearly on that elusive and very important $2 billion annual revenue milestone.
While our GAAP EPS of $0.13 was down a bit from last year due primarily to the imputed interest on our convertible note, our non-GAAP EPS rose to $0.30 from $0.28 to a year ago. We're committed to growing profit, even as we increase our investments in top line growth. But by far, most exciting financial achievement in the quarter was our record cash generation. Until now, we've never eclipsed the $100 million threshold for operating cash flow. However, not only did we break through that threshold in the first quarter, we absolutely obliterated that milestone.
Cash from operations totaled more than $140 million in the quarter, an increase of more than 40% from a year ago, and this translates into more than $1 per share of operating cash flow in a single quarter, roughly the same we earned in the entire first half of our last fiscal year ago. Nothing speaks more to the operating strength and quality of our business than our continued strong cash generation.
Our financial success was powered by another quarter of incredible customer success. In fact, we delivered our biggest new business growth quarter since our amazing fourth quarter of fiscal 2008, and our 4,800 net customer additions was an all-time high for the company. Simply put, demand for Salesforce.com services has never been better worldwide.
And as we continue to achieve this success by beating the biggest, most important software companies in the world, I guess to Oracle, this quarter, we won significant new or add-on business at Informatica, Sony Ericsson, Symantec, MasterCard, GE Australia, Motorola. Here in Japan, we've beat them at Canon and Fujitsu, two of the most important companies in the country, Pitney Bowes, ASA and Waste Management. And against an unnamed patent troll, we won business at Abbott Labs, Mercury Insurance, Ingram Micro, Austin Ventures and Salient Surgical. And finally, while SAP struggles to redefine itself, we won business against them at Häagen-Dazs, Carestream and NVIDIA.
In total, across all of our businesses, we've added roughly 18,000 net new customers over the past year to bring our global community to more than 77,000 customers using Salesforce.com and our platform. That's an increase of more than 30% in just 12 months. It's really incredible growth. This massive community represents a huge growth opportunity for us over the next decade.
In the near term, by adding additional services that create broader customer success, we plan to drive new and greater account penetration, and we're going to talk about that with our strategy to go enterprise wide with Salesforce Chatter. Longer term, we hope to benefit from the obvious network effects that we are creating between a huge ecosystem of cloud customers, a cloud platform and developers, all running on this Force.com environment.
Also important, our growth continues to diversify. While our flagship Sales Cloud continues to drive the majority of new business, roughly 1/3 of new business in the first quarter came from Service and Platform Clouds. And of our top five largest transactions this quarter, three were Sales Cloud deals, one was Service Cloud deal and one was a Platform Cloud deal.
Our Service Cloud business, in particular, is showing tremendous momentum in the marketplace. Gartner recently named our Service Cloud a leader in its Magic Quadrant for customer service contact centers. And new business for our Service Cloud grew at triple-digit rates for the second quarter in a row. Just awesome for this new product.
During the first quarter, we won exciting new Service Cloud transactions at global leaders like USAA. Here in Japan at the Ministry of Land Infrastructure, Transport and Tourism, Iron Mountain, Motorola, U.S. Census Bureau, Abbott Labs, Procter & Gamble and McKesson. And these customers are just a few of the roughly 9,000 customers now using our Service Cloud today.
Our Platform business also delivered outstanding growth in the quarter, including our largest transaction just down the street here at Japan's Ministry of the Environment. This opportunity expands on the eco-point program, now a very famous in Japan that we've discussed in prior quarters, and joins a long list of platform wins at both new and existing customers, including Avon, NVIDIA, the California State Automobile Association and the premier organization in Japan, Tokio Marine.
I'm also thrilled to announce that both Computer Associates and BMC have gone live with their native Force.com cloud applications built at 100% natively on the Force.com platform. And Pitney Bowes recently agreed to build their next generation of insurance solutions for policy coding and underwriting natively on the Force.com platform.
And we're not just growing customers and partners with the platform, transaction volume grew more than 40% year-over-year in the first quarter to nearly $20 billion. That translates into more than 2,500 transactions every second of every day in the quarter. It's an incredible number. Nothing speaks more to the value of our customers than them actually using the product with the speed and reliability and capability that we're known for.
Availability and performance were once again outstanding at 99.9% in 300 milliseconds respectively. And our developer community now stands at more than 250,000 developers globally, an increase of more than 100,000 since last year.
Look, we feel more than ever and especially in today's global environment, and as we make on-site checks like we're doing like here in the one in Japan, that the time to invest in this company is now. All of our success this quarter demonstrates the massive shift we see globally in cloud computing. Businesses of every type are increasingly looking to the cloud to solve their challenges and they're starting to look at the cloud in a whole new way.
The first phase of cloud computing was about leveraging technologies that were low cost, fast and easy-to-use. But as we're here in Japan and throughout some of our other presentations, recently in the United States and in Europe, the next phase of cloud computing, or we call Cloud 2, represents the next generation. One that is more social, more mobile, more real-time and delivers a completely new and dynamic experience to the user. The market opportunity for cloud computing is enormous, and the time for us to invest in capturing this market has never been better.
We have the clear market leadership, we have the brand leadership and we have key positions in every global market in the world. We are completely focused on growing customer and financial momentum and a favorable competitive position against the biggest legacy software companies in the world. All of whom seem to be more focused on consolidation than innovation. That's why we're ramping up our investments to ensure that we continue to lead the most important market in enterprise technology today. We're aggressively adding sales capacity, hiring sales people, account executives, systems engineers and managers and investing in innovation that trades greater levels of customer success in our five key clouds, our Sales Cloud, our Service Cloud, our Collaboration Cloud, our Data Cloud and our Platform. Three exciting new technologies that all embrace the power of Cloud 2 and have our customers buzzing are Salesforce Chatter, Salesforce Jigsaw and our new alliance with VMware, VMforce.
First on Chatter. Look, the response to Chatter has been nothing short of amazing. Few times in my career have I seen really the emergence of a real killer app. I certainly saw it with Oracle with the Oracle Database, I certainly saw it with SalesForce.com with our core SFA [sales force automation]. But now, I believe that I'm personally working on the largest and most important application in my career, and I've never been more excited. And no matter what market I bring it to, whether it's the United States, whether it's Europe or even here in Japan, amazingly, the demonstrations that I make create an almost visceral reaction with a customer that they want the technology immediately. And what's amazing about it is, it's not just some point solution or business line solution, it's Salesforce.com's first enterprise-wide solution. And we routinely hear now that the customer wants 10, 20, 30, 40, 50,000 users of Salesforce Chatter, and we're very excited about getting this product into production.
After starting with 100 customers, our beta program has quickly grew to 500. And today, I'm thrilled to say that more than 1,000 customers are now using the beta version of Salesforce Chatter. Not only are they collaborating with fellow employees, but they're using the service to collaborate around data, documents and apps. It's all in real-time. And it's very familiar to them. It's exactly the same experience that they get whether they're on the United States on Facebook or in Japan, Twitter's really on fire here, and it's the same experience as Twitter for them.
This common experience of a social network applied to compelling critical data deeply integrated them to their business, pulling out their sales data, their account data, their product data, their content, and presenting it to them in this user-friendly way is a huge breakthrough. It's all in realtime and it's on any Internet-connected device, including BlackBerrys and iPhones, and what we've been demonstrating here in Japan, the iPad.
Chatter is really important for three key reasons. First, Chatter is, as I said, our first enterprise-wide application. Every employee in every department at every business of every size can absolutely benefit from this technology. And that's a huge opportunity for growth, and it also becomes a Trojan horse for future enterprise-wide usage of the Force.com platform.
Second, because Chatter is built on Force.com, every application built on our platform will inherit the benefits of next-generation collaboration. Not just Sales and Service, but every custom app and every custom object will be Chatterized immediately, in realtime, with no coding, and that's the incredible power of multitenancy.
And finally, Chatter immediately makes our Sales and Service Clouds even more compelling and more differentiated than our competition than ever before. On April 8, in New York, we demonstrated to more than 1,000 attendees how Chatter will improve customer service by better connecting call center agents, technology experts and information within their companies. We had a spectacular reaction from these customers. And better customer experience and one that is less costly is something they all want and view as a killer combination.
I am excited to announce that all 77,000 customers will have Chatter, be live and be production with Chatter when it becomes available on June 22. We will be holding an event in San Jose on June 22, which will also be our Developer Conference. And I'd like to invite all of you to come and see the next generation of innovation in action. You're going to be seeing with Salesforce Chatter what really is, I believe, the next major wave of cloud computing.
Earlier this month, we also closed our acquisition of Jigsaw, the leader in crowdsource business contact data. Jigsaw was a great acquisition for us for several reasons. First, Jigsaw's data services strengthen and differentiate our core business, enabling us to deliver a new level of CRM [customer relationship management] success. Put simply, better data turns killer apps into killer solutions. And for existing customers, we believe Jigsaw will translate into higher levels of customer satisfaction, stickiness and much lower attrition.
Second, Jigsaw creates a new growth opportunity for Salesforce.com in the $3 billion business-to-business data services industry. By delivering a fully integrated application and data solution, much in the way that Apple has with iTunes and the iPod, we believe we'll be well positioned to capture a growing piece of this market.
And third, by deeply integrating data into our core services, we're laying the foundation for a rich data ecosystem, one that will build the easily appear into our other applications like Chatter or the Sales Cloud or the Service Cloud. You can imagine changes to your contact information, a phone number, maybe a news story or a stock indication automatically appearing in the Chatter feed all through the Salesforce Jigsaw. We believe that this, too, will create new opportunities for customer and revenue growth in the future creating the concept of the data cloud. And Jigsaw makes our core stronger and positions us for growth in the future, and it's tightly integrated with everything we do at Salesforce. You can check it out today at www.jigsaw.com.
And finally, together with VMware, we closed our first quarter by announcing a major alliance to jointly deliver, sell and support a new Java cloud called VMforce. With VMforce, more than 6 million enterprise Java developers globally, including 2 million using the Spring network, will have an open path to cloud computing. And Force.com developers, who traditionally have been using the Apex technology, will have the opportunity to use Java. In addition, CIOs are going to love that the Force.com platform is trusted and open. And users are going to love the result in applications, which are going to be social, mobile and collaborative and easy-to-use. By building Java apps on Force.com, developers will immediately benefit from.
Force.com's database is a service, which delivers proven reliability, scalability and flexibility in the most transparent and trusted enterprise cloud today, where VMware strong Spring environment becomes a client to this service. And Force.com Chatter services that enable collaboration features to be fully integrated into their Java applications, and the Force.com developer program providing access to pre-built business services like search, identity and security, workflow reporting and analytics, are robust web services integration API [Application Programming Interface] in the ability to mobilize any application to virtually any mobile device. And best of all, all these capabilities will be available immediately in realtime without the need for any custom coding. Again, that's the power of cloud computing.
We're thrilled to be working with VMware on such game-changing technology and we're looking forward to having the services available for developer preview later this year. We've never been more excited than having a Java cloud, and we couldn't have a better partner than our good friends in VMware.
To close, our first quarter was a spectacular way to kick off our fiscal year 2011, including financial momentum, customer momentum and innovation momentum that we believe is setting the stage for greater customer success in the future. We're investing heavily in our sales capacity, in our growth capacity, in our distribution capacity, and innovation to ensure that our continued leadership in the most exciting and important market in enterprise business technology today.
And with that, let me turn it over to Graham to discuss our amazing first quarter results in more detail.
Thanks, Marc. Q1 was an excellent quarter by almost every measure. We saw a very strong new business. Attrition continued on a downward path, and we had a great start to the year from an operating cash flow perspective.
Let me get into the detail. Revenue of $377 million rose 24% year-over-year and was well above our outlook, primarily the result of strong new business, and to a lesser extent, the continuing reduction in the rate of attrition.
From a geographic mix perspective, our International business continues to expand as a percentage of our revenue. Europe posted revenue of almost $67 million, that's represented growth of 30% in dollars and approximately 25% in local currency versus the year-ago quarter.
Driven by continued strength in Japan, revenue in Asia rose 55% in dollars and 50% in local currency year-over-year. We also crossed an exciting threshold in Asia this quarter with revenue of just over $50 million. That's an annual revenue run rate that now exceeds $200 million.
And finally, revenue in the Americas rose by 18% from Q1 of last year. Overall, our company growth rate of 24% benefited from a roughly one point currency tailwind from last year.
Our first quarter revenue benefited from another downtick in our dollar attrition rate, which is the third sequential quarter of slight reduction. We think the economy is helping, but we're also doing a lot of things internally to try and minimize this number.
And now on to rest of the income statement. Our non-GAAP gross margin of 82% increased one point from year-ago quarter. The gross margin on our Subscription and Support business improved by around half a point as we achieved greater scale and drove efficiency by deploying new service in storage, and our gross margin also benefited from a mix shift away from professional services to Subscription and Support.
Non-GAAP operating expenses increased to 66% of revenue, that's up two points from last year. This increase is a result of us investing for growth this year versus being a much more cautious mode in Q1 a year ago. Primary expense driver is of course headcount. We added 137 heads to finish the quarter, which is over 4,100 employees. This compares with just 40 heads we added in Q1 last year. We expect to hire more heads in Q2 than we did in the first quarter and to continue hiring aggressively for the remainder of the year.
With the acquisition of Jigsaw, which will add approximately $14 million to GAAP revenue and approximately $38 million to non-GAAP expenses for the remainder of fiscal 2011, we now estimate that our non-GAAP operating margin will be approximately flat with last year. I'll have more detailed commentary on the Jigsaw acquisition later in my remarks.
As our business and profitability scale internationally, our tax rate continues to decline. In Q1, our non-GAAP tax rate fell two points from a year ago to 37%. Turning to cash flow, as Marc noted, our Q1 operating cash flow was a company record of $143 million, that's an increase of approximately 46% from last year. Of note, the quarter result did benefit from a one-time $12 million tax refund related to our fiscal 2010 tax year.
As I mentioned earlier, we do plan to ramp hiring aggressively, as well as invest in Jigsaw during the remainder of fiscal 2011. But after such a strong start to the year, we now expect operating cash flow for the year will likely grow at roughly the same pace as our projected revenue growth.
Capital spending for the quarter was approximately $12 million, primarily for the leasehold improvements and capitalized software. Free cash flow, which we define as operating cash flow less CapEx, was $131 million or just under $1 per share for the first quarter. This was an increase of 54% from last year when we delivered roughly $85 million or $0.67 per share of free cash flow.
The strong cash generation fortified our already strong balance sheet. Cash and equivalents ended the quarter at approximately $1.9 billion. That's up roughly $175 million from Q4. Net cash, excluding net proceeds of approximately $500 million from our convertible debt offering ended the quarter at $1.4 billion, that's up more than 40% from Q1 of last year. As an aside, remember that the convertible debt shows up on our balance sheet as $450 million because it includes the debt discount. This cash balance gives us great flexibility to make strategic investments to extend our leadership as we did this quarter with the acquisition of Jigsaw.
As you know, Q1 is seasonally our strongest collections quarter. This year, accounts receivable balance fell by almost $140 million from Q4 to finish the quarter at roughly $180 million. Our receivables aging and collections continue to be excellent. We ended the quarter with a DSO of 44 days. That's flat with Q1 last year.
Deferred revenue finished the quarter at $665 million, down roughly $40 million from Q4, but up $115 million or 21% from Q1 last year, well above our expectations. As I'll discuss more when I get to our outlook, the current dollar-euro exchange rate will likely create a significant headwind for us to the remainder of fiscal 2011. In Q1, our deferred revenue balance was reduced by roughly $10 million when compared with the fourth quarter balance as a result of currency effects. On a year-over-year basis, FX had a minimal impact on deferred revenue growth.
Before I get to our specific outlook, let me discuss three items that will impact our results for the remainder of the year. The Jigsaw acquisition, the dollar-euro exchange rate and two small technology acquisitions, on which we're currently working. First, Jigsaw, as you all know, business combination accounting rules require that we write down the majority of Jigsaw's deferred revenue to its fair value. The actual amount that we estimate will be written off is approximately $7 million. And as a result, we project Jigsaw-related revenue for the remainder of fiscal 2011 to be approximately $14 million on a GAAP basis. On the earnings front, as we disclosed on April 21, we expect Jigsaw to be dilutive to our fiscal 2011 earnings to non-GAAP EPS by approximately $0.11 and the GAAP EPS by roughly $0.20.
Turning next to FX. When we gave guidance for Q1 and fiscal year 2011 on our February 24 conference call, the dollar-euro conversion rate was about $1.35. By quarter's end, that rate had declined to $1.33. Today it stands at around, somewhere around $1.24, that's close to a 9% devaluation. And as I indicated a moment ago, this rate change is already showing up in our sequential deferred revenue movement.
Looking ahead, revenue for the remainder of the year will likely also be affected assuming rates don't move materially from today. We now estimate that the change in the dollar euro FX rate will reduce Q2 revenue by approximately $7 million when compared with Q1. An impact to Q2 through Q4 will be to reduce revenue by roughly $20 million when compared with our assumptions back in February. Although the euro depreciation hurts our profitability, we've been able to offset the impact by raising our revenue guidance based on a stronger outlook for the new business in fiscal 2011.
Finally, we're very close to closing two small transactions to add key technologies to our platform. These acquisitions will bring a small amount of revenue with them, but overall, they will reduce our reported non-GAAP EPS by roughly $0.02 for the remainder of the year and our GAAP EPS by roughly $0.03. We will continue to opportunistically pursue these types of transactions as we believe they are very important to extending the value of our services and our leadership in the market.
With that context, let me now offer some details around our non-GAAP outlook. For the full fiscal year, despite a very significant currency headwind I mentioned earlier, our strong Q1 performance and pipeline give us confidence to raise our revenue expectation for the full year to approximately $1.54 billion to $1.555 billion.
We are adjusting our non-GAAP EPS outlook today by approximately $0.13 to reflect the impact of Jigsaw and a two small asset acquisitions I mentioned a moment ago. Including those items and holding our core business expectations constant, we now expect non-GAAP EPS for the full year in the range of approximately $1.13 to $1.15. This estimate excludes the effects of stock-based compensation, amortization of purchased intangibles and amortization of the debt discount on our convertible debt and of course the related tax effects of these three items.
Also as you model our EPS results for the year, it's important to remember that our Dreamforce event, which we estimate will have approximately a $0.05 impact overall, as well as seasonally high commission cost, will cause our fourth quarter non-GAAP EPS to be at roughly the same level as Q2.
It's also important to understand that after such a strong first quarter, we will definitely be making decisions that support our growth objectives, as Marc's recently just discussed, such as hiring in sales, technical operations and development, as well as continuing to look at acquisitions.
Turning now to the second quarter. As I indicated, the weakening of the euro is expected to create a $7 million headwind to Q2 revenue. We expect our revenue for the second quarter to be in the range of $381 million to $383 million. And I'd like to remind you that last year, we actually had a $4 million sequential tailwind due to the euro strengthening as we move from Q1 to Q2.
Our non-GAAP EPS for the second quarter will be impacted by the same items that impacted the full year, and that totals specifically $0.03 relating to Jigsaw and the two technology-asset acquisitions. In that context, we now expect non-GAAP EPS for the second quarter to be approximately $0.26 to $0.27. This estimate also excludes the effects of stock-based compensation, amortization of purchased intangibles and the amortization of the debt discount on our convertible debt. All of the details of our non-GAAP outlook, as well as our GAAP outlook and a full reconciliation between the two, can be found in our press release issued earlier today.
To conclude, Q1 was an excellent quarter. We delivered outstanding financial results, executed well in making investments we think are necessary to ensure our continued cloud industry leadership. We look forward to providing an update on our progress in August. And with that, let me open up the call to your questions.
[Operator Instructions] Our first question comes from Heather Bellini with ISI Group.
Heather Bellini - UBS
Marc, I was just wondering, if you set aside Sales Cloud for a second and if you had to pick between Chatter, VMforce or Service Cloud, I know it's like probably trying to pick a favorite child, but which one would you think would have a bigger impact on deferred growth over the next 12 to 24 months?
I have a lot of clarity around that because I'm actually here with our top 30 officers of Salesforce and we're doing a three-day review of the quarter, which obviously was really a spectacular quarter. But the real star of the quarter was that Service Cloud. And that Service Cloud has seen triple digit growth, it's a hot market, it's a market that has not been refreshed by the traditional enterprise technology vendors. We don't have -- we view it very much as a green field opportunity. A lot of those customers who are using products like Siebel 7.8, they have to make a tremendous decision to upgrade to Siebel 8, which is a huge new mega piece of software and architecture customization, everything is new. And so it's been giving us a great opportunity, and that's why we've seen some fantastic customers move to our Service Cloud like companies like VMware that I mentioned or like Thomson Reuters and many others. And we have a really solid pipeline for this product. So I always will go with the bird in the hand. Now that said, we have a really awesome pipeline already for enterprise-wide deals for Chatter. And how those actually work out when the customer gets it in agreement, well, I would rather have sign quite a few of those before I make a prediction on that. So I will say certainly for the short term, we've got some really hot existing products like the Sales Cloud, the Service Cloud and the Platform. I will tell you that Chatter makes the Service Cloud even better. In my own personal use of Chatter everyday, the way I have it architected, I am able to follow a customer case of the same way that I can follow an employee in the company and I'm able to follow that case. And as the case changes and the company, as things happen, as transactions happen with the case, maybe service entitlements are reached or it's escalated to different managers, I'm all notified through my Chatter feed. And that kind of real-time access to customer service information and that kind of visibility from Chatter into the Service Cloud makes the Service Cloud even better. So you're going to see a major new version of the Service Cloud released on June 22. So it's kind of a win-win there, but in terms of pure revenue, I'm going to go with Service Cloud.
Our next question comes from Kash Rangan with BofA Merrill Lynch.
Kash Rangan - BofA Merrill Lynch
One clarification for you, Graham. You talked about how the currency would impact revenue the next couple of quarters. So reading that another way, if currency had not moved around your -- in fact, if the euro have taken up revenue guidance by about $27 million for the next couple of quarters, right?
No, just to clarify, it's a $20 million for the three quarters...
Kash Rangan - BofA Merrill Lynch
I'm sorry, okay, combined, all the three?
Kash Rangan - BofA Merrill Lynch
And Marc, one for you on Chatter, on these beta customers, can you give us some color on how many potential subscribers are using Chatter? How many of them are your non-core users that is not in Sales, Service typical core business type usage activity so we can gauge how broadly the product could go beyond your core markets?
Well, I can give you some real-life customer examples without giving you the customer names, strictly as kind of models of the potential opportunity. First, I just want to mention in regards to currency, all of us, of course, remember the tremendous changes in the euro that happened a couple of years ago, and that created a type of, I would say, almost kind of a post-traumatic euro disorder with us. So we, obviously, have a lot more experience in foreign exchange as, I think, everyone on the call does. And we are, I think, taking appropriate measures because we have seen some unprecedented things with the euro in the last couple of weeks again, and there were some very strong articles yesterday in the Wall Street Journal on the euro. And I think that Graham's comments regarding foreign exchange and how it could potentially impact our revenue are extremely appropriate. And of course we want the best. We want the euro to go back up to $1.40 or whatever it is. And we wish the euro well, but we also are just realistic based on the current situation. And specifically to your question about Chatter, what I've been seeing is a couple of few things. First, in demonstrating to customers who are coming into our customer visit centers around the world or where we're going out, when we're demonstrating kind of like what I mentioned to Heather with the Service Cloud or even the Sales Cloud or even in custom applications, it's a huge wow. And for those point solutions and for those business line solutions, we've got a huge new competitive differentiator, and it's integration with mobility and just the visionary aspect of the product, and also that it's working and that so many customers have it, and that they're going to have it when they buy the product, and that this is not some big future, that has been pretty awesome. Number two, I've personally had quite a few situations now where I'm in with either a CIO or a CEO demonstrating Chatter to them, initially just telling them how their sales users are going to do better. There was a case where a company here in Japan, I won't give you the name, but they've got about 20,000 employees. And it's a very well-known company, and they've got, I don't know, maybe they've got a couple of thousand users on Salesforce.com for their sales force. And when we were in with their CEO presenting to him and a few key members of his management team, he stood up and he said, "I've been on Twitter, I've been using Twitter everyday to kind of get my message out to the market and, in effect, what the government is thinking about us and what our customers are thinking about us. This is like a private-enterprise Twitter, but it's integrated with my core data. I want this in the hands of every one of my employees." Now I don't know what that initially means in terms of revenue and deployment because we're not there yet. And I think that by the time we get to the next call, we'll have more data. Certainly, as we kind of head towards the end of the fiscal year, we're going to have some transactions under our belt. So we can only hypothesize that it's not just making our core technology better and more differentiated, but it's definitely giving us the possibility of this enterprise-wide app. And we have seen that in a number of customers, and I am extremely optimistic about that. When we turn on Salesforce Chatter, all 77,000 customers just get it. It becomes the new user interface. And then built into the product in the next release is the ability to kind of just automatically spawn from any user's account another user on the network and bring them into their Chatter feed. And we think that the viral nature of that has just tremendous potential within the existing enterprise. And then we're looking at doing things outside of the enterprise, but this is kind of a more of a future thing. By the time we get to Dreamforce, we hope to be able to kind of clearly articulate to you the future direction of the product, but also I think we'll be able to have customers onstage who have actually deployed it enterprise-wide. There have been customers on beta already who have had a real conversations with us, and we have upgraded them to be enterprise-wide. They're reporting it to become a dramatic change in how they communicate and collaborate with their employees and their core business information. And additionally, they report that there is some significant, usually double-digit drop on email usage, that this becomes kind of a preferred communication system for them. So this is very -- we're very optimistic, but we're also cautious because until we get those real numbers like we are it's kind of like a year ago with the Service Cloud. A year ago with the Service Cloud, we had just announced it in New York, and we are very excited about it. But there's no way I could know today that we've got triple-digit growth and we've got the makings of a multi-hundred million dollar -- billion-dollar product line, basically. So we don't have that level of detail quite yet. With the Service Cloud, we do. Obviously, with the Sales Cloud, we have a billion-dollar product. The Service Cloud looks like they have another billion-dollar product with a platform. That's also the emergence. That's also has very strong growth. And that's a product that we want to grow to a billion dollars. But Chatter has got the right stuff I would say.
And our next question comes from Brent Thill with UBS.
Brent Thill - UBS Investment Bank
A number of tech companies are seeing an early return in large enterprise spend. I was just curious if you're seeing the same. And if you could contrast what you're seeing in large enterprise versus the SMID segment?
We're really seeing it across the board. We see a really good growth in all of our businesses. I reviewed all of our businesses yesterday, what we call our kind of eight core parts of our business, and I was very optimistic about all eight parts. And some of them, I'm extremely optimistic about, like where I'm sitting. But I see general growth in buying in all sectors, and I see less cautious behavior than ever before as well.
And our next question comes from Tom Ernst with Deutsche Bank.
Thomas Ernst - Deutsche Bank AG
So obviously, the business is accelerating nicely, and a lot of investors, I think, would appreciate you funneling even more aggressively into investment to accelerate the top line growth. But two questions, how dilutive is the second year of the acquisitions that you've targeted Jigsaw plus the two small ones? So what's that run rate of dilution we should think about into next year? And then just philosophically, what do you view as your commitment towards increasing the bottom line profitability and expanding margins given the growth opportunity?
Well, let me take the philosophy, and then I will give the concrete numbers to Graham. We do have a global recovery underway. I think that everyone knows that. You can read that in the newspaper. And we do have enhanced technology spending. You hear that from every technology CEO. And we know that cloud computing is the fastest-growing part of the technology industry. You can see that when you aggregate all the cloud computing companies together. And we're number one in cloud computing. You can see that from our revenue where we have just passed the $1.5 billion annual revenue run rate, and now we're aggressively targeting the $2 billion number. So our position is because we believe that there are certain parts of cloud computing that are extremely attractive, now different companies focus on different parts of cloud computing. And some focus on infrastructure. Some focus on the development platform. Some focus on apps, and some focus renaming their existing data-center products' cloud. And I would say that for us, of course, we're very focused in those five core areas that we see the real action in, which is the customer-facing apps like sales and service. We see a lot of action, obviously, in the development platform and the way our customers customize as well as having core ISVs building on our platform like BMC and Computer Associates. With the platform, we're very, obviously, excited about the opportunity for collaboration as a service because honestly, the customers certainly here in Japan are just fed up with IBM and Lotus Notes and can't believe the state of that technology, and Microsoft SharePoint kind of is a bit of a grandmother's attic with it. Everything gets kind of jammed in there, but it's kind of hard to find, and it's not really -- information is not being pushed to you, and it's not that type of Facebook or Twitter-like architecture. And then we see this great opportunity in building a public data cloud. We managed already about 1 billion contacts for our customers, and we're asking them if they want to participate in our public beta cloud, and then they have the opportunity to cleanse their data more aggressively. This can be a key part of cloud computing because of the crowd-sourcing model. And these are kind of our five areas that we're really excited about. So we've got the pedal to the metal, and the way we have to do that is we have to generally think one year out or two years out -- but really, one-year out. So the investments and things that you are seeing us make now, we're really thinking about fiscal year '12, and we really think about the level of distribution capacity we want to have online for next year based on the fundamental direction of the market. Today, we already have a lot of distribution capacity. We have that globally. We're able to operate with fluidity of a global stage, but we want to have more capacity because honestly, in my opinion, this is a distribution-constrained organization. When you look at our lead flows, when you look at the product capabilities, when you look at the size of the markets that we can address, we are fundamentally distribution constrained, and I believe the best thing for the shareholders is to expand distribution, and this is the majority of the investment. And then some slight additional investment is, obviously, were acquired our way into the data cloud. That was not an organic development because we felt it could be a separate platform, and they have the right technology and model at jigsaw.com. And then we have a couple of tuck-in acquisitions, which is not unusual for us. We have a history of tuck-ins. But we found a couple of really cool companies that we think will make our sales service and collaboration clouds better and more competitive. And I think that, that's kind of a -- I would say there's a run rate over the past few years with those tuck-ins. But when you take those tuck-ins and then you combine them with Jigsaw, then it's a little bit more acquisition activity this year than in previous years. And I'll let Graham actually speak to the numbers, but that's generally how we look at the problem right now.
So Tom, obviously, without ratable revenue model, it's more difficult for us to get acquisitions to breakeven rapidly. We sort of target certainly to get them to breakeven in a quarter-by-quarter period. Clearly, we've just acquired Jigsaw, so we're very excited about that. We're investing heavily to expand their distribution capacity. But I would think a good yardstick is going to be four to eight quarters out, we're looking to get that business to breakeven. And certainly, if you look at the tuck-ins, there's an impact this year. But clearly next year, as Marc said, we should build that into our run rate of development spend. And I think certainly, this had an impact our gains. We've had to take that into account this year. But I think look to cash low, if you like, as a true north of our operating performance, that we feel we're incrementally more optimistic this quarter about cash flow. We've said we think cash flow is going to grow at the same rate as revenue. Last quarter, we said we thought slightly less than revenue. So I think that's the second set of numbers to look at and make sure that, clearly, we're operating the business well.
And our next question comes from Mark Murphy with Piper Jaffray.
Mark Murphy - Piper Jaffray Companies
Marc, we have spoken with a couple of the Chatter beta test customers in great detail, and actually in both cases, they saw Chatter spread like wildfire and kind of unexpectedly drove them into these enterprise-wide agreements. I'm just wondering if you can clarify how prevalent that behavior is across the entire pool of beta testers that you have insight into. Are there dozens of customers that are contemplating this? And secondly, just a quick one for Graham. It seems that the initial Jigsaw dilution guidance was $0.06 to $0.08, and it's now $0.11. If I'm looking at that correctly, can you maybe walk us through what has changed there?
So the way you have to look at this, Mark, and I've read your transcripts, is the following: We have 77,000 customers. That's a lot of customer, and they're very diverse portfolio of customers; geographies, language, industries, markets and so forth and so on. And all of these customers are going to have this just flipped on basically, and all they need to do to have it running is they need to have a modern browser, which is they need to have IE8. They need to have Chrome. They need to have Firefox or Safari. And not all of them do. By the way, there's a huge percentage of the industry that's still, for example, on IE6. So some customers will have to upgrade. Now that said, we have a lot of really positive data points on this product. But when you're in this kind of early days, it's hard to exactly put your finger on the materiality to the business. Number one, it's great marketing. It's unbelievable marketing. All of my demonstrations if you've been watching them on YouTube or whatever here in Japan. I've done over eight major presentations here in Japan over the past two weeks, and I'm going to be doing a major presentation on Tuesday in Singapore at the Cloudforce to feature this technology. And customers are definitely stunned and they want it. It kind of takes the competition issue off the table unusually fast because it's clear as day that this is not what competitors have. Competitors still kind of have the old sales force automation, contact account opportunity, forecast reports or the old customer service products, the cases, the solutions, the knowledge management, the analytics; or the old platform, the database, the app server, the forms, the tools and the reports. And we have that, too, of course, as a service, multi-tenant shared. But then when you layer on this social model and then deliver that user interface that makes everything look like what they're spending their time on, which is Facebook and Twitter, well, then that's the big game changer. And it's very motivating, I think, that customers get quite emotional about the product, which is very exciting and, certainly, the leaders of the organizations do. And we had a great experience here, but we have a lot of banks here in Japan who use our product. And there's one very large banking group that's quite decentralized, and they did something unusual. They brought all their CIOs in to meet with us, and I don't think they have actually ever done that before as an organization, and they just wanted to get an update on using the Sales technology. And we're all sitting in the room and, of course, I do the whole presentation on Cloud 2. And I'm sure you've seen -- it's my most recent stump speech. And then I do my whole demo, but it's run by one of our SE here in Japan. We're using Japanese -- we're using the new Sony Ericsson phone with Google Android on it as a demonstration device. I've got an iPad. We've got a BlackBerry with [ph] DOCOMO on it. We've got an iPhone running Softbank. And at the end of it, we thought we're just looking for more orders on sales force automation, right, from these CIOs. We want to be the sales solution for the banks, of course. And the result is not bad, which is they come up to me and say, "Oh no, I want to be your first enterprise-wide on Chatter in Japan. And when exactly? I want it now." And I love that. And we just need to figure out getting it to them. We have it. The code is essentially production at this point. And on one of our pods, we can actually turn on more customers at will. I think that we feel very good about the technology quality. We feel very good about where it is as a version 1. It's an unusually good version 1. And our version 2 and 3 and 4, which will also be coming out within the next six months is also awesome. And I will -- between now and the end of the year, I think we're going to see a lot of customers. I think by the time we get to Dreamforce, we will see a lot of customers on Chatter. And I just can't tell you if we're going to have four, five CIOs onstage at Dreamforce or CEOs saying, "I want enterprise-wide with Chatter and here is why, and here is what it's done for me." All I can tell you is my personal experience that it's completely transformed Salesforce.com. Certainly, it's broken me out of my bubble as a CEO, I have visibility in my organization, I never had. Deep into my sales information, deep into my customer service inquiries, deep into my products, deep into my competitors, and I'm outside of the CEO bubble. And every CEO gets trapped in it because only you have your direct reports. You get out and you make a few customer calls. You meet some employees. You're doing a lot of email, and that's your bubble, and I'm out of it. And I think other CEOs see when we're doing the demo that it can do that for them and that's going to let someone like me make better decisions like the decision we've made to grow because we see the opportunities, so it's like grow, grow it higher and let's go. And in certain markets -- like one of the reasons that I'm here is I saw an inordinate amount of activity in Japan and I'm like, "Wow, maybe we should be making a disproportionate investment in Japan because it's so awesome here. So I think that we've got a great thing on our hands, but I wish I could say, kind of getting back to Heather Bellini's question, tell me about the revenue. What's more important? Is it Service Cloud or Chatter? Right now, it's all about Sales Cloud and Service Cloud because those are multi-billion dollar markets, ready to go. Yes, collaboration is also a multi-billion dollar market ready to go, but we'll not going to know until we get it out there. So come June 22, to San Jose, to the convention center, talk to the customers, also talk to the ISVs who are building on Chatter. All of our ISVs are rebuilding their apps on Chatter, and customers who have built native force.com apps are having unusual experiences. We held a user group meeting here in Japan, a customer stood up, he is a very senior and very well-respected engineer at NTT, which is the big telecommunications company here, and said, "I just have to say something about Chatter." And I said, "what is it?" He goes, "I don't understand this, my business is tweeting me. My applications are tweeting me." And this is changing how I think about applications. And I'm excited, but now I need to see the rubber hit the road, and we hope we'll have some very specific transaction discussions for you in the coming quarters.
And Mark, just to follow up on the second part of your question. When we issued the press release, when we did the Jigsaw acquisition, we did say $0.06 to $0.08 impact non-GAAP. We've said $0.11 today. The difference of $0.03 is the revenue, the deferred revenue write-down. We elected not to bother to try and pro forma the issue on non-GAAP revenue number for the sake of $7 million on over $1.5 billion. It's less than half a percent, so we made that change between the Jigsaw announcement in our call today. So sorry, if there's confusion, but that's the $0.03. It's the $7 million relating to the deferred revenue write-down.
Our next question comes from Laura Lederman with William Blair.
Laura Lederman - William Blair & Company L.L.C.
Talking about the large deal pipeline, can you talk a little bit about it? What it looked like in terms of growth year-over-year, sequentially? Just are the big deals starting to come back? Or is it just a lot of kind of regular way business? And also the lawsuit, I know it's sort of a difficult subject, but any sense on how long it could take? Are you changing the way you do anything? Are you looking at alternate ways to deliver the service? Just anything you're willing to tell us at all, cost to the P&L over the next year? Anything you're willing to share on the lawsuit?
Well, first of all, in regards to the lawsuit, I guess, the most important thing for you to understand, Laura, is that no impact. This is not material to our day-to-day business and doesn't have any impact on our customers. And just it is not significant to our business even if it's a potential resolution. It's just not significant at that level. I should just say right off the bat, we can't comment on pending litigation, of course. Laura, the reality is that these patent trolls are unfortunately just part of doing business in technology these days. They're basically the alley thugs. Every thriving economy has alley thugs, and we do, too, and that's fine. Personally, I'm just disappointed to see this from a former leader of our industry, but it's imminently resolvable, and it's not material to our day-to-day business. It's basically a no-impact situation. It's not something that, I think, anyone needs to make anything of. I think it probably has more ramifications for other cloud vendors than it, honestly, does for us because we're strong. And a lot of other cloud CEOs have been contacting me, and my heart goes out to them and because I feel like that's the real impact is that if you go through it, you can see where this is going. And there's obviously a next step here, and it's not about us, it's about others. So that's my unfortunate commentary on the state of our industry. It's just what's going on in our industry.
And there's a question about the big-deal environment.
I would say on the big-deal environment that it's kind of like the other environment about -- other question about total transaction volume. We see all kinds of transactions happening. And yes, we have a lot of big transactions, and we got a lot of small and a lot of medium. And our business has never been -- and we've done this on purpose, it never swung one direction or the other based on any one particular transaction or customer. So we've closed a lot of big deals. We've closed a lot of big deals this quarter. I can tell you we're going to close a lot of big deals this year. I've seen the pipeline. I recently had a meeting at a major venture capital firm on Sand Hill road with about 30 of the largest CIOs in the world, and their message to us is your technology is great, and we're having a great experience. We've been testing it for the last two or three or four years, and we want to buy more of it. And that's generally an indication of better quality and larger deals coming, and we're excited about that. But we see a lot of those deals right now. We see more coming. But we see more business across the board because there's a fundamental shift happening to cloud computing that's benefiting a whole series of new companies and not benefiting old companies. And we are going to really, I think, continue to see the benefits of that because in my opinion, I'm biased, no one is better positioned for the future of the enterprise cloud than us. We've got the best products and technology. We've got the best sales organization. We've got the best brand and reputation with customers. And I would also just say we're working hard to move into that kind of elusive top 10 independent software company rankings, which is kind of gets into that $2 billion annual revenue run rate level. I mean that's just an exciting thing for Salesforce.com to move into the multi-billion dollar area. And I think now that we've passed $1.5 billion, it gives us a lot of confidence that the next step for us is right there, the brass ring is right there for us to take.
And our next question comes from Sarah Friar with Goldman Sachs.
Sarah Friar - Goldman Sachs Group Inc.
It kind of alludes back to, I think, what Kash was trying to get at. Do you have a sense with Chatter? What percentage of your kind of average customer is penetrated today with a Salesforce.com product? And ultimately, Chatter, do you expect that to go to 100%? So I'm kind of trying to understand what the lift in your TAM is?
Yes, I can kind of give you the theory, sell the theory, but I can't give you the -- this is what potentially can happen. On average, we're in about 15% to 20% of our employees in one of our customers. So that tends to be the sales organization in total. Obviously, our percentage is much higher at Salesforce or more than twice that. But the average company is about 20% for sales. And that's how they look at distribution, and we're generally in there for that. Maybe we have some service users too. Maybe they've built some custom apps. But there aren't too many examples where every user has a license already. Dell is one where we have an ELA. We have a few other ELAs. But the vast majority of our 77,000 customers is kind of that 20% level on average. That's my gut. Maybe it's kind of hard for me to exactly know because we don't run that report. But I would say just at a gut level and that our opportunity is to go from that, let's say at 77,000 companies and let's say, so couple the 3 million users to -- we want to get over. I guess I should say our goal or our dream or our vision is that within the next year is to move that to over 10 million users on Salesforce's services, and that Chatter is our directional vehicle to do that. And we think that, that's the right strategy. It's the right technology, and I think that's the possibility. I'm not giving you that as kind of a forward-looking guidance thing that we're going to 10 million users. But in theory, that's the potential. We think that, that's the big potential, the big kahuna.
Gerald, we have time for one more question. So we'll go ahead and take our last question of the day.
Your final question comes from Adam Holt with Morgan Stanley.
Adam Holt - Morgan Stanley
My question is for Graham actually on the renewal rates, great to see those approving. Can you talk a little bit more about what you are doing to drive those renewal rates up? Have you seen the rate of change in improvement actually start to increase? And do you actually think with some of your initiatives that you could get to levels that are higher than what you saw going into the downturn?
Adam, I think as we said all along, the rate crept up pretty slowly. And I think we certainly expect if it continues to move down, it'll be at a fairly leisurely pace. The things we're doing internally are really quite a few things. We're trying to sort of build some predictive analytics around how customers use our product, what are the sort of preemptive warning signs that we should be looking for, how much data do they have in the system, what happens to renewal rates if they have a second product or they're using the platform, they've done customizations, so really just trying to build a lot more intelligence around usage and the predictor of that. And then clearly, we're also -- you saw our press release recently, we hired Maria Martinez from Microsoft to run our Service and Support business, and I think she is taking a fresh view at sort of our operating model in terms of how we support customers, how we on board them, how we get successful as rapidly as possible. It's a lot of different things. And clearly, certain types of attrition, we can't control. For example, if a customer of ours is bought and the acquirer of that company is on a different technology, often there's little we can do about that. We obviously get the reverse side of that, which is good. But we're just looking at the slice of the pies that we can control and working hard on those.
All right, I want to thank everybody for joining us today. Also, as Marc mentioned, we will be hosting an event on June 22, and I encourage you all to look for news on that. Lots of questions today on Chatter, we'll be talking a little bit more about Chatter. So thanks for joining us. Have a great day, and we look forward to talking with you soon.
Ladies and gentlemen, this does conclude today's Salesforce.com's Q1 2011 Fiscal Results Conference Call. You may now all disconnect.
Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.
THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.
If you have any additional questions about our online transcripts, please contact us at: email@example.com. Thank you!