q144/random_k4/random_4.md

Q4 FY18
Financial Update
Salesforce

NYSE: CRM
@Salesforce_ir

1

Safe Harbor

"Safe harbor" statement under the Private Securities Litigation Reform Act of 1995:  This presentation contains forward-looking statements about our financial results, which may
include expected GAAP and non-GAAP financial and other operating and non-operating results, including revenue, net income, diluted earnings per share, operating cash flow growth,
operating margin improvement, deferred revenue growth, expected revenue run rate, expected tax rates, stock-based compensation expenses, amortization of purchased intangibles,
amortization of debt discount and shares outstanding.  The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and
assumptions.  If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the company’s 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 the effect of general economic and market conditions; the impact of foreign
currency exchange rate and interest rate fluctuations on our results; our business strategy and our plan to build our business, including our strategy to be the leading provider of
enterprise cloud computing applications and platforms; the pace of change and innovation in enterprise cloud computing services; the competitive nature of the market in which we
participate; our international expansion strategy; our service performance and security, including the resources and costs required to prevent, detect and remediate potential security
breaches; the expenses associated with new data centers and third-party infrastructure providers; additional data center capacity; real estate and office facilities space; our operating
results and cash flows; new services and product features; our strategy of acquiring or making investments in complementary businesses, joint ventures, services, technologies and
intellectual property rights; the performance and fair value of our investments in complementary businesses through our strategic investment portfolio; our ability to realize the
benefits from strategic partnerships and investments; our ability to successfully integrate acquired businesses and technologies; our ability to continue to grow and maintain deferred
revenue and unbilled deferred revenue; our ability to protect our intellectual property rights; our ability to develop our brands; our reliance on third-party hardware, software and
platform providers; our dependency on the development and maintenance of the infrastructure of the Internet; the effect of evolving domestic and foreign government regulations,
including those related to the provision of services on the Internet, those related to accessing the Internet, and those addressing data privacy and import and export controls; the
valuation of our deferred tax assets; the potential availability of additional tax assets in the future; the impact of new accounting pronouncements and tax laws, including the U.S. Tax
Cuts and Jobs Act, and interpretations thereof; uncertainties affecting our ability to estimate our non-GAAP tax rate; the impact of expensing stock options and other equity awards;
the sufficiency of our capital resources; factors related to our outstanding convertible notes, revolving credit facility, term loan and loan associated with 50 Fremont; compliance with
our debt covenants and capital lease obligations; current and potential litigation involving us; and the impact of climate change.

Further information on these and other factors that could affect the company’s 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.  These documents are available on the SEC Filings section of the Investor Information section of the company’s
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.

2

Company Overview
The global leader in CRM

Founded in 1999, public listing (NYSE: CRM) 2004.

#1 CRM provider for the fifth year in a row

.

Fastest growing top five enterprise software company with $10.48B in revenue FY18 (25% Y/Y).

1

Doubled operating cash flow ($1.2B-$2.7B) over the past three years (FY15-FY18) while nearly
doubling revenue ($5.4B-$10.5B).

Headquartered in San Francisco, with >29,000 Employees focused on CRM and customer success.

#1 The Future 50

Best Places to Work
for LGBTQ Equality

The World’s Most
Innovative Companies

#1 World’s Most
Innovative Companies

#1 Top 50
Companies that Care

1Based on IDC 2017H1 Market Share Revenue Worldwide. Source: IDC, Worldwide Semiannual Software
Tracker, Oct 2017

3

Financial Overview
Annual Results

4

FY18 Financial Summary

GAAP

Non-GAAP1

Annual Results

Increase / (Decrease) y/y

Annual Results

Increase / (Decrease) y/y

Revenue

$10,480M

Deferred Revenue

$7,095M

Unbilled Deferred Revenue

N/A

25%

28%

N/A

Operating Margin

2.2%

148 bps

Diluted Earnings Per Share

$0.172

Operating Cash Flow

$2,738M

(35%)

27%

$10,381M CC

24% CC

$6,965M CC

25% CC

$13,300M

48%

14.5%

$1.352

N/A

128 bps

34%3

N/A

1The Non-GAAP columns present only non-GAAP financial metrics and the related non-GAAP growth rates as compared to prior periods. Non-GAAP
revenue and non-GAAP deferred revenue represent CC results. Refer to slide 8 for an explanation of non-GAAP CC revenue and to slide 14 for an
explanation of non-GAAP CC deferred revenue. Unbilled Deferred Revenue is an operational measure and represents future billings under our non-
cancelable subscription agreements that have not been invoiced and, accordingly, are not recorded in deferred revenue. Non-GAAP operating margin
and non-GAAP EPS are non-GAAP financial measures. Refer to the Appendix for an explanation of non-GAAP financial measures, and why we believe
these measures can be useful, as well as a reconciliation of non-GAAP financial measures to the most comparable GAAP measures, when applicable.
2Diluted EPS calculation utilizes GAAP revenue results disclosed above. 3Non-GAAP Diluted EPS year-over-year growth is calculated using the EPS
results for the current and prior periods rounded to the nearest whole cent, as presented in the Appendix.

5

FY18 Financial Results

$10,480M

$8,392M

$6,667M

$5,374M

10.7% 12.4% 13.2% 14.5%

1.7%

0.8%

2.2%

-2.7%

$2,738M

$2,162M

$1,672M

$1,181M

FY15

FY16

FY17

FY18

FY15

FY16

FY17

FY18

   Quarterly Revenue
Operating Margin
Non-GAAP Operating Margin

1Non-GAAP operating margin excludes the effects of stock-based compensation, amortization of
purchased intangibles, and lease termination resulting from purchase of office building. A complete
reconciliation of GAAP to non-GAAP measures can be found in the Appendix and at
www.salesforce.com.

Operating Cash Flow

6

Annual Subscription and Support Revenue by Cloud
Complete portfolio of CRM products

+16% y/y

+24% y/y

$3.6B

$2.9B

+34% y/y

$1.9B

+45% y/y

$1.3B

FY18
FY17
Sales Cloud

FY18

FY17
Service Cloud

FY18

FY17
Salesforce
Platform & Other

FY17

FY18

Marketing Cloud
& Commerce Cloud2

37%

29%

FY18

14%

20%

Subscription and Support
Revenue by Cloud1

1Percentages represent annual cloud revenues as a proportion of total annual Subscription and Support revenue. 2Marketing Cloud
revenue, excluding Commerce Cloud revenue, grew 34% during FY18.

7

FY18 Revenue by Region
Strong revenue growth across geographies

AMERICAS

EMEA

APAC

$7,579M
+22% y/y
+22% y/y CC1

$1,904M
+39% y/y
+31% y/y CC1

$997M
+26% y/y
+27% y/y CC1

1Non-GAAP revenue CC growth rates as compared to the comparable prior period. We present CC information for revenue to provide a framework for assessing
how our underlying business performed excluding the effects of foreign currency rate fluctuations. To present CC revenue, current and comparative prior period
results for entities reporting in currencies other than United States dollars are converted into United States dollars at the weighted average exchange rate for the
quarter being compared to for growth rate calculations presented, rather than the actual exchange rates in effect during that period.

8

Financial Overview
Quarterly Results

9

Q4 FY18 Financial Summary

GAAP

Non-GAAP1

Quarterly Results

Increase y/y

Quarterly Results

Increase y/y

Revenue

$2,851M

Deferred Revenue

$7,095M

Unbilled Deferred Revenue

N/A

24%

28%

N/A

Operating Margin

2.7%

375 bps

Diluted Earnings Per Share

$0.092

Operating Cash Flow

$1,051M

229%

49%

$2,787M CC

21% CC

$6,965M CC

25% CC

$13,300M

48%

13.5%

$0.352

N/A

62 bps

25%3

N/A

1The Non-GAAP columns present only non-GAAP financial metrics and the related non-GAAP growth rates as compared to prior periods. Non-GAAP
revenue and non-GAAP deferred revenue represent CC results. Refer to slide 8 for an explanation of non-GAAP CC revenue and to slide 14 for an
explanation of non-GAAP CC deferred revenue. Unbilled Deferred Revenue is an operational measure and represents future billings under our non-
cancelable subscription agreements that have not been invoiced and, accordingly, are not recorded in deferred revenue. Non-GAAP operating margin
and non-GAAP EPS are non-GAAP financial measures. Refer to the Appendix for an explanation of non-GAAP financial measures, and why we believe
these measures can be useful, as well as a reconciliation of non-GAAP financial measures to the most comparable GAAP measures, when applicable.
2Diluted EPS calculation utilizes GAAP revenue results disclosed above. 3Non-GAAP Diluted EPS year-over-year growth is calculated using the EPS
results for the current and prior periods rounded to the nearest whole cent, as presented in the Appendix.

10

Total Quarterly Revenue and Operating Margin
Balanced top-line and bottom-line growth

$2,851M

$1,809M

12.1%

1.1%

$1,445M

10.9%

-2.4%

$2,294M

12.9%

13.5%

-1.0%

2.7%

Q4 FY18
+24% /
+21% CC1

y/y revenue growth

GAAP operating margin

+510 bps

3 year improvement

Non-GAAP operating margin2

+260bps

3 year improvement

Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418

   Quarterly Revenue

Operating Margin

Non-GAAP Operating Margin

2

1Refer to slide 8 for an explanation of non-GAAP revenue CC growth rate as compared to the
comparable prior period. 2Non-GAAP Operating Margin is the proportion of non-GAAP income from
operations as a percentage of revenue and is a non-GAAP financial measure. Refer to the Appendix for
an explanation of which items are excluded from our non-GAAP financial measures, and why we believe
these measures can be useful, as well as a reconciliation of non-GAAP financial measures to the most
comparable GAAP measures, when applicable.

11

Quarterly Subscription and Support Revenue by Cloud
Complete portfolio of CRM products

+16% y/y

+28% y/y

$0.9B

$0.8B

+37% y/y

30%

35%

+33% y/y

Q4 FY18

$0.5B

$0.4B

Q417 Q418
Sales Cloud

Q417 Q418
Service Cloud

Q417 Q418
Salesforce
Platform & Other

Q417 Q418
Marketing Cloud
& Commerce Cloud

20%

15%

Subscription and Support
Revenue by Cloud1

1Percentages represent quarterly cloud revenues as a proportion of total quarterly Subscription and Support revenue. 2Marketing Cloud
revenue, excluding Commerce Cloud revenue, grew 31% during Q4 FY18.

12

Q4 FY18 Revenue by Region
Strong revenue growth across geographies

AMERICAS

EMEA

APAC

$2,042M
+19% y/y
+19% y/y CC1

$536M
+48% y/y
+31% y/y CC1

$273M
+27% y/y
+26% y/y CC1

1Refer to slide 8 for an explanation of Non-GAAP CC revenue.

13

Quarterly Deferred Revenue: Billed and Unbilled
Consistent growth on and off the balance sheet

$9,021M

$5,700M

$3,321M

$11,392M

$7,100M

$4,292M

$14,543M

$9,000M

$5,543M

$20,395M

$13,300M

$7,095M

Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418

Deferred Revenue

Unbilled Deferred Revenue

1

1Unbilled Deferred Revenue is an operational measure and represents future billings under our non-cancelable subscription
agreements that have not been invoiced and, accordingly, are not recorded in deferred revenue. 2Non-GAAP CC growth rates as
compared to the comparable prior periods. We present CC information for deferred revenue to provide a framework for assessing
how our underlying business performed excluding the effects of foreign currency rate fluctuations. To present CC deferred revenue,
we convert the deferred revenue balances in local currencies in previous comparable periods using the United States dollar currency
exchange rate as on the most recent balance sheet date.

Q4 FY18
y/y growth

+40%

Total Billed and Unbilled
Deferred Revenue

+48%

Unbilled Deferred Revenue

+28% /
+25% CC1

Deferred Revenue

14

Quarterly Operating Cash Flow
Operating cash flow growth outpaces revenue growth

$337M

$470M

$1,051M

$706M

Q4 FY18
y/y growth

+49%

operating cash flow

Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418

Free Cash Flow

1

Capex

1Free cash flow is a non-GAAP financial measure. Refer to the Appendix for an explanation of non-GAAP
financial measures, and why we believe these measures can be useful, as well as a reconciliation of non-
GAAP free cash flow to the most comparable GAAP measure.

15

Quarterly Cash and Marketable Securities

Q4 FY18
y/y growth

+105%

Total Cash and
Marketable Securities

+228%

Marketable Securities

+58%

Cash

$4,522M

$2,725M

$2,209M

$1,890M

Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418

Cash

Marketable Securities

16

Business Overview

17

CRM is Now the Fastest Growing Enterprise Software Segment

$75B

$60B

$45B

$30B

$15B

$0B

O/S

ERP

DBMS

CRM

O/S

ERP

DBMS

CRM

2016

2021

Chart created by Salesforce based on Gartner research. CRM and ERP is part of the Enterprise
Application Software market. DBMS and O/S is part of the Infrastructure Software market.
Source: Gartner, Forecast: Enterprise Software Markets, Worldwide, 2014-2021, 4Q17 Update, 12.15.17

O/S*

ERP

DBMS*

CRM

18

$72 Billion Market Opportunity Today…

CY16 Market
Share1

38%

19%

11%

4%2

5%

<1%

CY16 TAM3

$12B

$8B

$7B

$5B

$26B

$14B

Sales

Service

Marketing

Commerce

Platform & Other

Analytics

Calculations performed by Salesforce and graphics created by Salesforce based on Gartner research. 1Source: Sales, Service, Marketing, and Commerce
per Gartner, Market Share All Software Markets, Worldwide, 2016, 4.14.17. Platform & other and Analytics market share calculated by Salesforce using the
definitions below. 2Salesforce acquired Demandware on July 11, 2016. Market share includes Demandware’s 2016 commerce contribution of $115.8M.
3Source: Gartner Total Enterprise Software Revenue for All Software Segments and Regions, 2014-2021, 4Q17 Update, 12.15.17. Platform & Other market
defined as Application Platform Software, Application Platform Software as a Service (aPaaS), Other AD, Data Integration Tools, Business Process
Management Suites, Identity Governance and Administration, Mobile Application Development Platforms, Testing, Full Life Cycle API Management, Web
Access Management. Analytics market defined as Modern BI Platforms, Traditional BI Platforms, Data Science Platforms, Analytic Applications.

19

…Growing to $123B in 2021

Market Growth
(CAGR 16-21)1

12%

15%

16%

15%

CY21 TAM1

$24B

$14B

$16B

$10B

8%

$38B

9%

$21B

Sales

Service

Marketing

Commerce

Platform & Other

Analytics

Calculations performed by Salesforce and graphics created by Salesforce based on Gartner research. 1Source: Gartner Total Enterprise Software Revenue
for All Software Segments and Regions, 2014-2021, 4Q17 Update, 12.15.17. Platform & Other market defined as Application Platform Software,
Application Platform Software as a Service (aPaaS), Other AD, Data Integration Tools, Business Process Management Suites, Identity Governance and
Administration, Mobile Application Development Platforms, Testing, Full Life Cycle API Management, Web Access Management. Analytics market
defined as Modern BI Platforms, Traditional BI Platforms, Data Science Platforms, Analytic Applications. Note: data has been updated to reflect
Gartner’s forecast as of December 2017 and therefore are different from what was presented at Salesforce’s Investor Day on November 7, 2017.

20

The Only Complete Cloud CRM Platform
No other company is better positioned to drive digital transformation

COMMUNITIES
Customer, partner, and employee experiences

SERVICE
Drive service transformations

SALES
Transform sales from
lead to cash to loyalty

COMMERCE
Intelligent, unified shopper
experiences across any channel

MARKETING
Deliver personalized consumer
engagement at scale

COLLABORATION
Quip team collaboration platform

INDUSTRIES
World’s #1 CRM reimagined
for your industry

21

Salesforce. #1 in CRM
Worldwide CRM applications 2017H1 market share by IDC

19.9%

8.4%

6.1%

2012

2013

2014

2015

2016

2017 H1

Source: IDC Worldwide Semiannual Software Tracker, October 2017.

22

Traction in Target Industries
Industry leaders rely on Salesforce

Financial Services

HLS

Retail

Travel, Transport & Hospitality

18 OF 20

Top U.S. & European
Banks1

16 OF 20

Top Global
Pharmaceutical Companies

11 OF 20

Top Global
Retailers

7 OF 10

Top Hospitality
Companies

Manufacturing

8 OF 10

Top Discrete
Manufacturers

Communications & Media

Consumer Goods

High Tech

8 OF 10

Top Global
Telecom Companies

11 OF 15

Top CPG
Companies

12 OF 15

Top Tech
Companies

1Represents top 10 U.S. banks and top 10 European banks.

23

The Salesforce Economy
Thriving ecosystem of customers, partners, and developers

$859B

in GDP impact by 20201

3.3M

Salesforce related
jobs created by 20201

2 of theTop 10

jobs in 2017 are Salesforce-specific

300K

job postings today with Salesforce
related skills3

1IDC White Paper sponsored by Salesforce, The Salesforce Economy Forecast:
3.3 Million New Jobs, $859 Billion New Business Revenues to Be Created from
2016 to 2022, October 2017. 2Indeed, Mar 2017 3Burning Glass Report,
“Salesforce Skills Demand”, Aug 2016

24

Global Events and Ad Campaign
Extending our brand presence globally

World Tour & Events

Ad Campaign

Sydney
March 6

TrailheaDX
March 28 - 29

Washington D.C.
April 4

Boston
April 5

Amsterdam
April 12

New York
April 26

Toronto
May 3

London
May 17

Paris
June 6

Dreamforce
Sept. 25 - 28

25

26

Appendix

27

Seasonality of Financial Metrics
Deferred Revenue and Operating Cash Flow

28

Seasonal Nature of Deferred Revenue and Operating Cash Flow
Quarterly metric seasonality evolving

•

Deferred revenue primarily consists of billings to customers for our subscription service and we generally invoice our customers in
annual cycles.

• We typically issue renewal invoices in advance of the renewal service period, and depending on timing, the initial invoice for the
subscription and services contract and the subsequent renewal invoice may occur in different quarters. This may result in an
increase in deferred revenue.

•

•

There is a disproportionate weighting towards annual billings in the fourth quarter, primarily as a result of large enterprise account
buying patterns. Our fourth quarter has historically been our strongest quarter for new business and renewals. The year on year
compounding effect of this seasonality in both billing patterns and overall new and renewal business causes the value of invoices
that we generate in the fourth quarter for both new business and renewals to increase as a proportion of our total annual billings.

Given the year on year compounding effect of this seasonality, the quarterly sequential changes in Deferred Revenue and
Operating Cash Flow have historically become more pronounced.

o As it relates to Deferred Revenue, the sequential change from our third quarter to our fourth quarter has historically increased. The

sequential change in our first three quarters has historically decreased.

o As it relates to Operating Cash Flow, our first quarter and, increasingly, our fourth quarter are our largest collections and operating
cash flow quarters. Our second quarter and third quarter are seasonally smaller in regards to collections and operating cash flow.

29

Q1 Deferred Revenue Sequential Change
Q1 seasonality evolving

h
t
w
o
r
g

l

a
i
t
n
e
u
q
e
S

20%

15%

10%

5%

0%

-5%

-10%

-15%

9%

8%

5%

4%

Q105 Q106 Q107 Q108 Q109 Q110 Q111 Q112 Q113 Q114 Q115 Q116 Q117 Q118 Q119
Guide

1

(2%)

(2%)

(3%)

(6%)

(8%)

(7%)

(8%)

(8%)

(7%)

(9%)

(12%)

1Based on the mid-point of the guidance provided on February 28, 2017.

30

Q2 Deferred Revenue Sequential Change
Q2 seasonality evolving

20%

18%

12%

11%

9%

2%

3%

2%

Q205

Q206

Q207

Q208

Q209

0%
Q210

Q211

Q212

Q213

Q214

Q215

3%

1%

0%

h
t
w
o
r
g

l

a
i
t
n
e
u
q
e
S

15%

10%

5%

0%

-5%

-10%

(1%)

Q216

Q217

Q218

(4%)

(5%)

31

Q3 Deferred Revenue Sequential Change
Q3 seasonality evolving

21%

8% 8%

6%

Q305

Q306

Q307

Q308

Q309

Q310

Q311

(2%)

Q312
(2%)

2%

(1%)

h
t
w
o
r
g

l

a
i
t
n
e
u
q
e
S

25%

20%

15%

10%

5%

0%

-5%

-10%

-15%

Q313

Q314

Q315

Q316

Q317

Q318

(3%)

(3%)

(5%)

(6%)

(9%)

(9%)

32

Q4 Deferred Revenue Sequential Change
Q4 seasonality evolving

h
t
w
o
r
g

l

a
i
t
n
e
u
q
e
S

60%

45%

30%

29%

33%

29%

41%

Annual
invoicing1

35%

27%

29%

62%

59%

50%

49% 51%

44% 45%

15%

0%

Q405

Q406

Q407

Q408

Q409

Q410

Q411

Q412

Q413

Q414

Q415

Q416

Q417

Q418

33

Operating Cash Flow Sequential Change
OCF seasonality evolving

h
t
w
o
r
g

l

a
i
t
n
e
u
q
e
S

700%

600%

500%

400%

300%

200%

100%

0%

-100%

736%

358%

74%

99%

74%

6%

172%

118%

189%

124%

Q114 Q214 Q314 Q414 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317 Q417 Q118 Q218 Q318 Q418
(59%)(47%)

(36%)(23%)

(50%)(48%)

(38%)

(76%)

(73%)(62%)

34

Non-GAAP Financial Measures

This presentation includes information about non-GAAP diluted earnings per share, non-GAAP income from operations, non-GAAP free cash flow, and constant currency revenue and
constant currency deferred revenue growth rates (collectively the “non-GAAP financial measures”). These non-GAAP financial measures are measurements of financial performance that are
not prepared in accordance with U.S. generally accepted accounting principles and computational methods may differ from those used by other companies. Non-GAAP financial measures
are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with the company’s consolidated financial statements
prepared in accordance with GAAP. Management uses both GAAP and non-GAAP measures when planning, monitoring, and evaluating the company’s performance.

The primary purpose of using non-GAAP measures is to provide supplemental information that may prove useful to investors and to enable investors to evaluate the company’s results in the
same way management does. Management believes that supplementing GAAP disclosure with non-GAAP disclosure provides investors with a more complete view of the company’s
operational performance and allows for meaningful period-to-period comparisons and analysis of trends in the company’s business. Further, to the extent that other companies use similar
methods in calculating non-GAAP measures, the provision of supplemental non-GAAP information can allow for a comparison of the company’s relative performance against other
companies that also report non-GAAP operating results.

Non-GAAP diluted earnings per share excludes, to the extent applicable, the impact of the following items:  stock-based compensation, amortization of acquisition-related intangibles,
amortization of acquired leases, the net amortization of debt discount on the company’s convertible senior notes, gains/losses on conversions of the company’s convertible senior notes,
gains/losses on sales of land and building improvements, gains/losses on company-initiated acquisitions of entities in which the company held an equity investment, and termination of
office leases, as well as income tax adjustments.  These items are excluded because the decisions that give rise to them are not made to increase revenue in a particular period, but instead
for the company’s long-term benefit over multiple periods.

Non-GAAP income from operations excludes the impact of the following items: stock-based compensation, amortization of acquisition-related intangibles, and termination of office leases.

The company defines the non-GAAP measure free cash flow as GAAP net cash provided by operating activities, less capital expenditures.  For this purpose, capital expenditures does not
include our strategic investments, nor does it include any costs or activities related to our purchase of 50 Fremont land and building, and building - leased facilities.

Constant currency information is provided as a framework for assessing how our underlying business performed excluding the effect of foreign currency rate fluctuations. To present constant
currency revenue, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the weighted
average exchange rate for the quarter being compared to for growth rate calculations presented, rather than the actual exchange rates in effect during that period. To present deferred
revenue on a constant currency basis, we convert the deferred revenue balances in local currencies in previous comparable periods using the United States dollar currency exchange rate as
of the most recent balance sheet date.

35

GAAP to Non-GAAP Financial Reconciliation
Annual Results

(in thousands)
Non-GAAP income from operations
GAAP income (loss) from operations
Plus:
     Amortization of purchased intangibles
     Stock-based expense
Less:
     Operating lease termination resulting from purchase of 50 Fremont, net
Non-GAAP income from operations

Fiscal Year Ended January 31,
2018
235,768

2017
64,228

$

$

$

2016
114,923

2015
(145,633)

$

286,885
997,013

225,277
820,367

158,070
593,628

154,973
564,765

0
1,519,666

$

0
1,109,872

$

(36,617)
830,004

$

0
574,105

$

Non-GAAP diluted earnings per share
GAAP diluted net income (loss) per share
Plus:
Amortization of purchased intangibles
Amortization of acquired lease intangible
Stock-based expense
Amortization of debt discount, net
Less:
Gains from acquisitions of strategic investments
Income tax effects and adjustments
Non-GAAP diluted earnings per share
Shares used in computing Non-GAAP diluted net income per share

Fiscal Year Ended January 31,

$

2018
0.17

$

2017
0.26

0.39
0.00
1.36
0.04

0.32
0.00
1.17
0.04

0.00
(0.61)
1.35
734,598

$

(0.02)
(0.76)
1.01
700,217

$

36

GAAP to Non-GAAP Financial Reconciliation
Quarterly Results

(in thousands)
Non-GAAP income from operations
GAAP income (loss) from operations
Plus:
     Amortization of purchased intangibles
     Stock-based expense
Non-GAAP income from operations

Three Months Ended January 31,

2018
77,869

$

2017
(23,345)

$

2016
20,560

$

2015
(34,816)

$

68,932
237,682
384,483

$

74,214
244,387
295,256

$

39,250
158,972
218,782

$

39,971
151,802
156,957

$

Non-GAAP diluted earnings per share
GAAP diluted net income (loss) per share
Plus:
Amortization of purchased intangibles
Amortization of acquired lease intangible
Stock-based expense
Amortization of debt discount, net
Less:
Gains from acquisitions of strategic investments
Income tax effects and adjustments
Non-GAAP diluted earnings per share
Shares used in computing Non-GAAP diluted net income per share

(in thousands)
Free cash flow analysis, a non-GAAP measure
Operating cash flow
GAAP net cash provided by operating activities
Less:
Capital expenditures
Free cash flow

Three Months Ended January 31,

$

2018
0.09

$

2017
(0.07)

0.09
0.00
0.32
0.01

0.10
0.00
0.34
0.01

0.00
(0.16)
0.35
749,464

$

0.00
(0.10)
0.28
711,203

$

Three Months Ended January 31,

2018

2017

2016

2015

$

1,051,320

$

706,146

$

470,208

$

336,506

(137,759)
913,561

$

(143,974)
562,172

$

(68,495)
401,713

$

(85,354)
251,152

$

37