18:26 CRM Salesforce.com Conference Call Summary (34.40 +0.79) -Update-
Salesforce.com addresses reliability of its service on call; co says it's recently replaced all of its tech, and that led to "challenging days" during the qtr. Co says it considers its service problems uncharacteristic. CRM says it's working w/ its tech partners to solve reliability problems. Co touts its in-line Q4 performance, co says it had 48,000 new subs, totaling 399,000 worldwide, w/52k in Europe. CRM says service reliability in Feb. was 99.7%; co says it will publish reliability/availability data so customers can monitor it via the Salesforce.com site at trust.salesforce.com. Co says Q4 benefited from some year-end effects, such as customers spending year-end budget dollars. CRM makes clear that it expects "lumpiness" in its subs numbers going forward. CRM on call says it expects subs growth in Q1 to be more in line w/ trends of Q1 and Q3 last year. Co says it is being conservative with Q1 ests. CRM says it wants to make an even stronger investment in R&D for future architectures, as co says it now has a higher goal of reliability than it did previously. Co makes clear that will likely affect gross margins, not necessarily capex, as CRM leases most of its equipment. CRM estimates stock comp costs of $45 mln for full year '06. Co talks about App Exchange at length, but co won't talk about the revs contribution from the product, only will reference growth in apps tied to it... Stock Trades down $1.49 to $32.91 after hours. |
