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1,800 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | who pass through their terminal annually, I'm sure many of you have been one of those passengers I have as well, Heathrow is operating in a tremendous scale, managing the entire airport experience with the Service Cloud, Marketing Cloud, Commerce Cloud, but now Heathrow, they've added Data Cloud also giving them a single source of truth for every customer interaction and setting them up to pioneer the AI revolution. And with Einstein, Heathrow's service agents now have this AI-assisted generator applies to service inquiries, case deflection, writing case summaries, all the relevant data and business context coming from Data Cloud, we're doing so much incredible and exciting innovative work in service with Data Cloud and with our Service Cloud and AI is going to show us a whole new vision for the future of service and what our Service Cloud can do for customers not only with delivering high-quality customer service, but delivering incredible new levels of productivity. This is saving their agents huge amounts of time and effort. This is the power of Salesforce. I've never been more excited about the future of our industry, the power and future of our company, the potential to help all of our customers and also especially our team, the quality of our team, especially fueled by all these amazing new boomerangs and you're going to see it all at Dreamforce. Dreamforce is right around the corner, September 12 through 14 right here in San Francisco. I'm looking forward to welcoming each and every one of you to Dreamforce. I'm right now at the top of Salesforce Tower in San Francisco. We're going to bring you up here. We'll bring you through Moscone. We'll show you our incredible downtown. And I'll tell you this isn't just the largest enterprise tech conference this year. It's going to be the world's largest AI conference and the largest gathering of AI experts. We'll have many of the world's top AI thinkers, including Sam Altman and his amazing OpenAI company, incredible what he's doing. Anthropic CEO, Dario Amodei, |
1,801 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | top AI thinkers, including Sam Altman and his amazing OpenAI company, incredible what he's doing. Anthropic CEO, Dario Amodei, who's one of his alumni who left OpenAI to start Anthropic, amazing company. Stanford's Fei-Fei Li, amazing researcher and visionary leader of AI and presenting some of the -- into some of the 1,500 Dreamforce Conference sessions, it's really awesome what we're going to see here with AI and Dreamforce. And we're going to take everyone's skills to a whole another level. And we'll also share our vision for the future of CRM, the next generation of Data Cloud and Einstein. And we're also going to have the Foo Fighters, they are going to play our Dreamforce Benefit Concert. Dave Matthews is going to play my dinner the night before. Hopefully, we're going to see him at the conference, some incredible ways. And we can't wait to get you all here and to show you what's happening at Salesforce, what's happening in AI, what's happening in San Francisco. And it's going to be an amazing event, and we're just a few days away. And now let me turn it over to Brian. |
1,802 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | Brian Millham: Thanks, Marc, particularly for the sandbagging comment. I really appreciate it. Our focus on --
Marc Benioff: It wasn't me. It was Einstein. So just you know it is what it is, Brian.
Brian Millham: Got it. Our focus on operational --
Marc Benioff: That's the AI revolution coming at you, baby. So get ready. |
1,803 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | Brian Millham: Okay. Our focus on operational excellence, high performance and growth initiatives drove another strong quarter. We continued our disciplined approach to cost management and efficiencies, removing complexity from our business to drive top and bottom line improvements. Every customer I met within the quarter made it clear they are laser-focused on driving greater productivity, quick time to value and business growth. We see AI CRM as the answer, they all see AI CRM as the answer to those priorities, and we're making it easier and faster for our customers to unleash the power of trusted generative AI safely and at scale. We're innovating faster than ever with AI plus data plus CRM plus the Trust platform. We also have the most complete product portfolio with Customer 360 delivering mission-critical outcomes for our customers. And you've heard from Marc, Data Cloud is supercharging our product portfolio, servicing real-time customer data in the flow of work around sales, service, marketing and commerce. That's why more than 90% of the Fortune 100 rely on Salesforce and average more than five of our clouds. Amid the ongoing measured buying environment, compression of larger transformational deals continued in the quarter, affecting our professional services growth. Despite that, we exceeded top and bottom line expectations in Q2. This is a reflection of our proven go-to-market strategy and focus on customer success. Our high-performance culture continues to drive results and I'm proud of how well the team executed in the quarter. Our growth initiatives across core products, data, AI, services, industries and international are driving our success. In the quarter, we saw consistent demand in our core business, and we continue to benefit from customers consolidating their technology platforms to reduce complexity, drive efficiency and growth. Six of our top 10 wins in the quarter included five or more clouds. And as you'll hear from Amy or deepening our relationships with multi-cloud customers who are |
1,804 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | included five or more clouds. And as you'll hear from Amy or deepening our relationships with multi-cloud customers who are running their businesses on Salesforce and realizing tremendous value from having one integrated AI-powered CRM platform. Schneider Electric has been using Customer 360 for over a decade, enhancing customer engagement, service and efficiency. With Einstein, Schneider has refined demand generation, reduced close times by 30%. Through Salesforce Flow, they've automated order fulfillment. And with Service Cloud, they're handling over 8 million support interactions annually, much of it done on our self-service offering. In Q2, Schneider selected Marketing Cloud to further personalize the customer experience. In the quarter, we saw add-on products like sales performance management, digital service, self-service and marketing engagement grow 40%. And to help our smaller business customers achieve faster time to value, we introduced a new product called Salesforce Starter in Q2, bringing sales, service and marketing into one integrated offering for our small business customers. As Marc said, Data Cloud is one of our fastest-growing organic innovations ever, and it lets customers unlock the power of their data to supercharge every application and customer experience with AI, automation and analytics. This is driving our strong momentum. Data Cloud was in five of our top 10 deals in the quarter, and we saw great wins at companies like SiriusXM and KPMG. In the quarter, FedEx made a significant investment in Salesforce by adding Data Cloud, FedEx has long relied on multiple clouds from Salesforce, including sales, service, marketing and Einstein. Now with Data Cloud turned on, every part of Salesforce is deeply integrated to drive growth and deliver more targeted customer engagement and personalized experiences. We're also seeing strong customer momentum on Einstein generative AI. PenFed is a great example of how AI plus Data plus CRM plus Trust is driving growth for our customers. PenFed is one of |
1,805 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | AI. PenFed is a great example of how AI plus Data plus CRM plus Trust is driving growth for our customers. PenFed is one of the largest credit unions in the US, growing at a rate of the next nine credit unions combined. They're already using Financial Services Cloud, Experience Cloud and MuleSoft, and our Einstein-powered Chatbots handling 40,000 customer service sessions per month. In fact, today, PenFed resolves 20% of their cases on first contact with Einstein-powered Chatbots resulting in a 223% increase in Chatbot activity in the past year with incredible ROI. In Q2, PenFed expanded with Data Cloud to unify all the customer data from its nearly 3 million members and increase their use of Einstein to roll out generative AI assistant for every single one of their service agents. In the quarter, we also had great wins in Tableau, Slack and MuleSoft. With Tableau continuing to be a tailwind to our revenue growth. In Q2, nearly half of our greater than $1 million deals included MuleSoft. And as customers bring together data from all sources to fuel efficiency, growth and insights, MuleSoft has become mission-critical for them and was included in half of our top 10 deals. We've seen excellent usage growth in our automation products, including Slack, which now which has now launched nearly 8 million workflows weekly, 71% increase year-over-year. Our industry verticals continue to be a growth lever for us. And for the third consecutive quarter, eight of our industry clouds grew at ARR above 50%. We also saw -- we saw strong growth internationally with wins like Hargreaves Lansdown in EMEA, Department of Education in Victoria and APAC, Banco Carrefour and LatAm. And I'm excited to reiterate Marc said earlier about Japan now being the second largest software business in the country, just incredible growth. As we head into the second half of the year, we are leading the way as the number one AI CRM with a path, sorry, with the pace of innovation at an all-time high. Our focus on customer success drives our own |
1,806 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | one AI CRM with a path, sorry, with the pace of innovation at an all-time high. Our focus on customer success drives our own success, accelerating revenue and profitability. The full power of Salesforce and our incredible community of Trailblazer's experts and partners will be on display at Dreamforce next month. I hope to see you all there. Amy, over to you. |
1,807 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | Amy Weaver: Thank you, Brian. Our Q2 results show that we continue to make great progress in our four, now five, key areas of transformation, delivering another quarter of top and bottom line expansion. As you can see in our results, we're delivering against our transformation, driving profitable growth and shareholder value, and we are well positioned for the future with the number one AI CRM. Our execution against our profitable growth framework drove our Q2 results. So let's start with the top line commentary. For the second quarter, revenue was $8.6 billion, up 11% year-over-year and the same in constant currency. The growth was primarily driven by continued MuleSoft momentum, solid sales and service performance and a modest FX tailwind. This was partially offset by some continued weakness in professional services. The durability of our business model and our continued multi-cloud expansion strategy reflects the mission-critical nature of our unified platform. This is evidenced by the more than 450 customers who invest more than $10 million annually and average seven clouds. And in the last five years, the number of $10 million plus customers has tripled and their average number of clouds has nearly doubled. From a geographic perspective, the Americas revenue grew 10%. EMEA grew 13% or 11% in constant currency, and APAC grew 20% or 24% in constant currency. We saw strong new business growth internationally, highlighted by Canada, France and India. While the United States continues to be constrained. From an industry perspective, manufacturing, automotive and energy saw greater resilience, while high tech and retail and consumer goods were more measured. Q2 revenue attrition ended the quarter at approximately 8%. In Q2, our non-GAAP operating margin rose to 31.6%, up 1,000 basis points or more for the second quarter in a row. The margin improvement was driven by savings from our restructuring actions, strength in revenue and investment timing. I am very proud of our progress. Our disciplined approach to cost |
1,808 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | actions, strength in revenue and investment timing. I am very proud of our progress. Our disciplined approach to cost management has allowed us to exceed our 30% non-GAAP margin target three quarters early. Q2 operating cash flow was $808 million, up 142% year-over-year. Q2 free cash flow was $628 million, up 379% year-over-year. The upside in cash flow was driven by stronger collections than expected and lower cash outflows tied to the Q2 margin benefits we just discussed. Now turning to remaining performance obligation, RPO, which represents all future revenue under contract ended Q2 at $46.6 billion, up 12% year-over-year. Current remaining performance obligation, or CRPO, ended at $24.1 billion, up 12% year-over-year and 11% in constant currency. This was ahead of expectations, notably due to the momentum in MuleSoft. As we called out last quarter, CRPO growth did include a one point headwind from professional services. And finally, we continue to deliver on our capital return commitment. In Q2, we returned $1.9 billion in the form of share repurchases, bringing the total return to more than $8 billion, representing more than 48 million shares since the program was initiated just last August. Before turning to guidance, I wanted to briefly touch on the current macro environment. As you heard from Brian, the measured macro environment continues to impact customer decision-making. And we are still seeing elongated sales cycles, additional deal approval layers and deal compression in our subscription and support and professional services businesses. These factors are incorporated in our guidance. Let's start with fiscal year '24. On revenue, we are raising our guidance to 34.7% to 34.8%, representing 11% growth year-over-year in both nominal and constant currency. The increase is driven by strength in our subscription and support revenue, particularly in MuleSoft. We are accelerating our transformation to profitable growth. For fiscal year '24, we are pleased to raise non-GAAP operating margin guidance to 30%, |
1,809 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | transformation to profitable growth. For fiscal year '24, we are pleased to raise non-GAAP operating margin guidance to 30%, representing a 750 basis point improvement year-over-year. As Marc highlighted, we're in a new AI era, a new innovation cycle that we will continue to invest into as we have over the last decade. As a result, we expect nonlinear quarterly margins in the back half of this year, driven by investment timing, specifically in AI-focused R&D. We also remain focused on stock-based compensation and expected to improve this year to slightly above 8% as a percent of revenue. As a result of these updates, we now expect fiscal year '24 GAAP diluted EPS of $3.50 to $3.52, including estimated charges for the restructuring of $1.11. Non-GAAP diluted EPS is now expected to be $8.04 to $8.06. We are raising our fiscal year '24 operating cash flow growth guidance to approximately 22% to 23%. This continues to include a 14 to 16 point headwind from restructuring. As a reminder, we expect to see an increase in our cash taxes in fiscal year '24 as we draw down our remaining net operating losses. We expect an even greater cash tax headwind next fiscal year as we draw down our remaining tax credit carryforward. CapEx for the fiscal year is expected to be slightly below 2.5% of revenue. This results in free cash flow growth of approximately 24% to 25% for the fiscal year. Now to guidance for Q3. On revenue, we expect $8.7 billion to $8.72 billion growth of approximately 11% or 10% in constant currency. CRPO growth for Q3 is expected to be slightly above 11% year-over-year in nominal and slightly above 10% in constant currency. We continue to expect professional services headwinds of approximately one point to CRPO growth. As a reminder, Q3 is the first full quarter we lapped the measured buying environment that we first began to see in July of last year. While we expect bookings growth to begin to normalize, CRPO will continue to be materially impacted by the cumulative effect of the previous five quarters of |
1,810 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | to begin to normalize, CRPO will continue to be materially impacted by the cumulative effect of the previous five quarters of measured sales performance. For Q3, we expect GAAP EPS of $1.02 to $1.03. And non-GAAP EPS of $2.05 to $2.06. And as we focus on shareholder return and disciplined capital allocation, we continue to expect to fully offset our stock-based compensation dilution through our share repurchases in fiscal year '24. In closing, I want to thank our shareholders for their continued support. As we laid out for you two quarters ago, we have radically accelerated our transformation to profitable growth. We've maintained our disciplined approach to cost management while continuing to make strategic investments, notably in our new data and AI capabilities. And finally, I hope you're able to attend Dreamforce whether in person or virtually, to hear the latest on the incredible AI innovation our team is delivering. As Marc said, it's going to be the AI event of the year. Now, Mike, let's open up the call for questions. |
1,811 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | Mike Spencer: Thanks, Amy. Emma we'll go to move to Q&A portion of our call now. Out of respect for others on the call, we ask everyone to ask only one question. Emma, please.
Operator: Thank you. [Operator Instructions] Your first question comes from the line of Kash Rangan with Goldman Sachs. Your line is open.
Kash Rangan: Hi. Thank you very much. The team has done a spectacular job doing a soft landing, not to use an overused term with respect to the economy. It's cost controls, operating discipline, et cetera. So really congratulations on that. And I hope that Dreamforce continues to stay in San Francisco, Marc. A question for you is we got all this tremendous new product excitement. We've got generative AI capabilities. The spending environment seems to be sort of stabilizing the economy does have a soft landing. Do you think Salesforce has maximized its customer wallet share or do you think there's more share to gain and therefore, there are better days ahead, because we've seen the margin story play out very, very impressively. Is there -- is -- can Salesforce get back to the days of growth, not hyper growth, but is there enough room in the market, enough customer wallet share and seemingly there's enough product excitement with generative AI. So if you net it all out, can we still do a nice job with margins while still having a shot at growing even faster when economic conditions are no longer a constraint. Thank you so much and congratulations. |
1,812 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | Marc Benioff: Kash, thanks so much, and we're looking forward to seeing you at Dreamforce. We're really excited, and I think you're going to be super excited when you see these new AI products. And when we talk about growth, I think it's going to start with AI. I think that AI is about to really ignite a buying revolution. I think we've already started to see that with our customers and even some of these new companies like OpenAI. And we certainly see that in our customers' base as well. I think you also know we've definitely seen in the last several quarters a measured buying environment, that's also been true, not just at Salesforce, but I think for the vast majority of our peers that you follow. And I think that you've also called that out a number of times. And I certainly expect that to abate, especially as customers begin to adopt these new AI technologies and understand they need to invest and grow to be able to achieve this kind of next level of productivity. Now all that said, we've also seen this amazing growth in a number of our core technologies and our products, and I would especially like to call out the incredible success of MuleSoft over the last several quarters because that is a product that is far exceeded our expectations, especially and including several of our geographies as well. So this is not something that is quite permeated everywhere, but there are some isolated areas. And I really think that Dreamforce is going to become a catalyst for our customers to see this opportunity to grow with us to see these new products, these new technologies. Data Cloud is just one example of many new areas that Salesforce investments can happen with customers. And I'm sure that as they start to reignite their IT buying budgets in this kind of post-pandemic hangover that's kind of occurred. I think as we kind of get to this next level, we're going to see it driven by artificial intelligence. Brian, what's your perspective? |
1,813 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | Brian Millham: Yes, Kash, thanks for the question. I think we've outlined in previous calls a growth strategy, it's three-pronged, one around expanding our multi-cloud customers and with new technology like AI and Data Cloud, there's a huge opportunity for us to go back to our customers and expand the number of clouds that they're using a big growth opportunity to drive more value for our customers and certainly more success for us as well. International acceleration continues a big opportunity for us, and we think there's plenty of room to run in the international markets. We're going to continue to focus our efforts there and make investments as we see appropriate. Obviously, we'd love to see the economy turn a bit. And then finally, on industries. You heard me say eight of our industry clouds grew greater than 50% in the quarter. It's remarkable the impact we're having with our industry products. So deeper investments in industries as well will continue to propel the growth of this business.
Marc Benioff: And I think I would be remiss if I didn't call on an Ariel Kelman who's sitting here at the table with us to talk about Dreamforce and also talk about a number of the incredible new technologies that are turning to -- Ariel, can you give us a little bit of an insight to what we're going to see in some of these catalysts remains the next level of growth for Salesforce that are going to occur. |
1,814 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | Ariel Kelman: Yeah, we're very excited about next week's Dreamforce conference. Hopefully, all of you can join us. As Marc said, it's going to be the biggest AI event of the year. We have a tremendous lineup of speakers, both some of the most technical companies and the technical speakers of those companies and people to help the broader business community understand what they can do with AI all across our Customer 360 range of products. We're going to have sessions for salespeople, for marketing people, for customer service people, to really teach them and inspire them on how they can use AI to really advance their capabilities with the technology we've built directly in our product in the flow of work. So they can take advantage of it immediately.
Marc Benioff: Ariel, you've been back now for what has been, a couple of months now, one month? How long has it been?
Ariel Kelman: It has been since the beginning of June, it's about three months.
Marc Benioff: Three months. So tell us what's been your biggest surprise being back at Salesforce?
Ariel Kelman: My biggest surprise is that the energy of all the people here is, in some ways, just as inspiring and energizing as it was when I was here 12 years ago that this passion about the mission we're on and the high standards for the technology that we build is really has been very, very refreshing from having been in some other companies.
Marc Benioff: Well, we were sorry to lose you to Amazon and then to Oracle, but we're happy to have you back here. So welcome back.
Kash Rangan: Thank you.
Marc Benioff: Okay, Michael.
Mike Spencer: Thanks, Kash. Emma we'll take the next question please.
Operator: Your next question comes from the line of Keith Weiss with Morgan Stanley. Your line is open. |
1,815 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | Operator: Your next question comes from the line of Keith Weiss with Morgan Stanley. Your line is open.
Keith Weiss: I just want to thank you guys for taking the question and I echo Kash's, congratulations on a solid quarter, particularly on the margin side of the equation, where you guys really outperformed expectations. And my question is around kind of margins on a go-forward basis. You achieved your targets well ahead of plan, 3/4 ahead of the plan, as you guys stated. But there's also a big opportunity ahead. And Marc, you talked a lot about this transformational opportunity ahead with generative AI. So how should we be thinking about the balance between investing for that generative AI opportunity versus further kind of margin gains on a go-forward basis into the back half of this year and potentially into next year as you guys balance these two opportunities and goals. |
1,816 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | Marc Benioff: Well, I really would like to just directly address that, which is what you're really speaking to is this incredible opportunity ahead, and generative AI is really that opportunity, but also many other opportunities, including data. I really think that there are some unbelievable opportunities ahead. It's going to be incredible to see what we're going to be able to do. And I think that the question is, exactly as you said it, how much are we going to really unleash -- the fundamental growth of the company against commitments that we have made to our investors to continue to deliver profitable growth. I think that at the very fundamental level, starting with our Investor Day last Dreamforce, we told you that we are committed to profitable growth. And now you can see that we were serious. It wasn't a joke. We did a number of things. We curtailed things. We made changes structurally to the company, short-term and long-term issues. And we're still doing things, by the way, to do that. At the same time, we see this incredible opportunity that's out in the industry, new companies that are emerging as well as, of course, all kinds of unusual public company dislocation. So we're watching all of those things. But number one is going to be our commitment to you. Nothing is more important than the trust that we have with our investors. Number two is, we are very thirsty to make sure that Salesforce is the number one AI CRM, and we have done a lot organically to do that in the last six months. Of course, there's things out there that we could do to help us with inorganic as well. We're looking at those things. We're looking at everything, but nothing is going to ever trump the trust that we have with all of you. |
1,817 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | Amy Weaver: Keith, I would just add, when we did the restructuring, it was never just for the bottom line. We also made changes so that we were -- we have the resources to invest in the areas that we believe are going to drive the highest growth for the company. And we've been very disciplined in our approach to spending this quarter, but we want to lean into these opportunities, especially around AI, around data and around their core. And as a result, you will see that our increase in guidance to 30% does imply slightly nonlinear progression this year. And in terms of the future, as we look forward, underscore everything Marc said about our commitments. And as I said last time, I really believe 30% annually is a floor, not a ceiling.
Mike Spencer: Thanks, Keith. Emma, we'll take the next question, please.
Operator: Your next question comes from the line of Kirk Materne with Evercore. Your line is open.
Kirk Materne: Yeah, thanks very much. I guess, Amy, I've had a lot of questions just on the impact of the pricing actions that you all announced earlier this -- over the summer. How that -- if that had any impact on the quarter? And then how are you thinking about that in terms of the guidance for the back half of this year? Thanks.
Amy Weaver: Great. Thanks for the question. So on guidance for this year, I have taken into account the pricing uplift as well as any changes from our new or opportunities around AI. I will say that neither has a significant influence on our guidance for this year. I think that those opportunities really take a while to roll through our customer base, particularly on pricing as we look to renewal. Brian, anything else you would like to add?
Brian Millham: Exactly. We're going to see the impact of our price increase really hit the customer base over the next one to two to three years. So no big material change in this fiscal year. Appreciate the question, Kirk.
Mike Spencer: Thanks, Kirk. Emma, next question please. |
1,818 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | Mike Spencer: Thanks, Kirk. Emma, next question please.
Operator: Your next question comes from the line of Karl Keirstead with UBS. Your line is open.
Karl Keirstead: Thanks. Maybe to Marc and/or Amy, with head count down 11% now, and as you talked about, Marc, welcoming back from our employees, do you feel like you've right-sized the head count now at the 70,000 level? Has it sort of bottomed? And if you feel like there's an opportunity for it to stabilize or start growing again, is that a signal, Marc, that you feel like your growth rate here at 11% this year is at or near a bottom? Thanks so much.
Marc Benioff: Well, I think it's such a great question. It's something the management team is talking about every single day because we are continuing to grow and invest in our headcount, especially in AI. Also, I think I mentioned we are doing so much incredible innovation work on our core, and we've commanded our engineering teams to accelerate their work in moving all of our acquisitions into our core, especially our marketing products and commerce products and Data Cloud, all of which we plan to show you at Dreamforce and to accelerate that work, and that's extremely important to us. And also Brian has a number of products and geographies that are growing and we've also committed him to invest in his growth. So we are continuing to grow our headcount, but we are also facing normalized attrition, of course, with headcount, that's also part of it. And so as those -- both of those things get rebalanced, you'll continue to see our head count adjust and move forward. I don't know if we can call this as a bottom exactly yet or if it's -- but we're not planning any other major restructuring efforts in the company today, like what we saw earlier this year, we hope that, that is one and done and behind us.
Mike Spencer: Thanks, Karl. Emma, we'll take the next question.
Operator: Your next question comes from the line of Brad Sills with Bank of America Securities. Your line is open. |
1,819 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | Operator: Your next question comes from the line of Brad Sills with Bank of America Securities. Your line is open.
Brad Sills: Wonderful. Thank you so much. I wanted to ask another question here on AI. The opportunities here are just so exciting across the stack. With Sales GPT, you've highlighted content automation, call summary, sales assistance, Service GPT, auto replies, summaries and scheduling. Just when you look across the Salesforce stack, where do you see the most opportunity here across sales, service, marketing, commerce in the core based on the activity that you're seeing today from customers with the early release of the product? |
1,820 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | Marc Benioff: Well, thank you so much for that. And let me just say, we're at the beginning of quite a ballgame here and we're really looking at the evolution of artificial intelligence in a broad way, and you're really going to see it take place over four major zones. And the first major zone is what's played out in the last decade, which has been predictive. That's been amazing. That's why Salesforce will deliver about a trillion transactions on Einstein this week. It's incredible. These are mostly predictive transactions, but we're moving rapidly into the second zone that we all know is generative AI and these GPT products, which we've now released to our customers. We're very excited about the speed of our engineering organization and technology organization, our product organization and their ability to deliver customer value with generative AI. We have tremendous AI expertise led by an incredible AI research team. And this idea that we're kind of now in a generative zone means that's zone number two. But as you're going to see at Dreamforce, zone number three is opening up with autonomous and with agent-based systems as well. This will be another level of growth and another level of innovation that we haven't really seen unfold yet from a lot of companies, and that's an area that we are excited to do a lot of innovation and growth and to help our customers in all those areas. And then we're eventually going to move into AGI and that will be the fourth area. And I think as we move through these four zones, CRM will become more important to our customers than ever before. Because you're going to be able to get more automation, more intelligence, more productivity, more capabilities, more augmentation of your employees, as I mentioned. And you're right, we're going to see a wide variety of capability is exactly like you said, whether it's the call summaries and account overviews and deal insights and inside summaries and in-product assistance or mobile work briefings. I mean, when I look at things like |
1,821 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | and deal insights and inside summaries and in-product assistance or mobile work briefings. I mean, when I look at things like service, when we see the amount of case deflection we can do and productivity enhancements with our service teams not just in replies and answers, but also in summaries and summarization. We've seen how that works with generative and how important that is in knowledge generation and auto-responding conversations and then we're going to have the ability for our customers to -- with our product. We have an open system. We're not we're not dictating that they have to use any one of these AI systems. We have an ecosystem. Of course, we have our own models and our own technology that we have given to our customers, but we're also investing in all of these companies, and we plan to be able to offer them as opportunities for those customers as well, and they'll be able to deliver all kinds of things. And you'll see that whether it's going to end up being contract digitization and cost generation or survey generators or all kinds of campaign assistance. And the most recently in our world tour in London, we showed how our Data Cloud did automatic marketing segmentation that was incredible. And you're going to see a lot more that's going to happen in all of these things. A lot of it, you can see happening in Slack. Slack has become incredible for these AI companies, every AI company that we've met with is a Slack company. All of them make their agents available for Slack first. We saw that, for example, with Anthropic, where Cloud really appeared first and Cloud 2, first in Slack. And Anthropic, as a company uses Slack internally and they have a -- they take their technology and develop news digest every day and newsletters and they do incredible things with Slack -- Slack is just a treasure trove of information for artificial intelligence, and you'll see us deliver all kinds of new capabilities in Slack along these lines. And we're working, as I've mentioned, get Slack to wake up and become more |
1,822 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | of new capabilities in Slack along these lines. And we're working, as I've mentioned, get Slack to wake up and become more aware and also for Slack to be able to do all of the things that I just mentioned. One of the most exciting things I think you're going to see at Dreamforce is Slack very much as a vision for the front end of all of our core products. We're going to show you an incredible new capability that we call Slack Sales Elevate, which is promoting our core Sales Cloud system running right inside Slack. That's going to be amazing, and we're going to also see how we're going to release and deliver all of our core services in sales force through Slack. This is very important for our company to deliver Slack very much as a tremendous easy-to-use interface on the core Salesforce, but also all these AI systems. So all of that is that next generation of artificial intelligence capability, and I'm really excited to show all of that to you at Dreamforce as well as Data Cloud as well. |
1,823 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | Mike Spencer: Thanks, Brad. Emma, we'll take the next question now please.
Operator: Your next question comes from the line of Brad Sills -- Brad Zelnick with Deutsche Bank. Your line is open.
Brad Zelnick: Great. Thanks very much and congrats in particular to Amy and the whole team on overachieving on profitability. My question, Marc, is for you. I wanted to drill down at the Data Cloud because the things we keep hearing from partners suggest that the interest level just keeps building and building, can you talk about the pipeline and scope of these projects and how this generative AI moment is impacting the opportunity? And why Salesforce is well positioned as the partner of choice, especially in the context of trust? |
1,824 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | Marc Benioff: Well, especially as we said on the call as well, which is that we've said this is about AI, this is about data, this is about CRM and this is about trust. Those 4 things have to come together as one thing. And that's what we call Salesforce. That's a modern version of Salesforce. It's AI plus Data plus CRM plus Trust. And I think that is really a moment that we have to like really get clear and show that to customers. We've tried to really book the last six months. Obviously, we're going through a huge transformation with all of you. But you can see we've also gone through an incredible technology transformation around artificial intelligence to the point where we got these products out was awesome and let our customers really get into it and see what they can and cannot do and what they're excited about and how they want to move these products forward and what we think is going to be the future of AI. And it's these 4 things together that are going to fundamentally help us. And I think Data Cloud, you're 100% right, is going to be the heart of it. Well, certainly, it's a huge revenue opportunity for us because as you heard from Brian, customers who have Sales Cloud and they've got Service Cloud and they've got Marketing Cloud, and they're using our platform. Maybe they have Commerce Cloud as well, and now they're adding Data Cloud. And as these clouds get stacked with these customers', attrition falls, customers become more successful, they develop a single source of truth. And our job is to get all of these things running on our core and getting all of these things ignited with artificial intelligence. So I was very excited to recruit back as my Chief of Staff and as my Chief Business Officer, Kendall Collins. So Kemble, can you just give us a little insight on the vision of Dreamforce and what we're going to see for Data Cloud and some of these amazing clouds and why everyone should get excited about what's about to happen over the next couple of weeks when everyone gets here into San Francisco |
1,825 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | should get excited about what's about to happen over the next couple of weeks when everyone gets here into San Francisco on September 12? |
1,826 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | Kendall Collins: Yes, Marc, it's great to be back. It's been about four months and just amazing to see the energy of Salesforce, a company with the right values and I think the right people and really at the right time to generative. What you said about AI is so compelling because it's not just about one cloud. It's about making every cloud better. We're seeing that Sales GPT, Marketing GPT, Commerce GPT went live last week. And Dreamforce is going to be exciting.
Marc Benioff: Well, I'm really excited as well. And I'll tell you, you're sitting next to Sabastian Niles, our new Chief Legal Officer, just joined us from Wachtell. Sabastian, we're happy to have you here live for the first earnings call and welcome to Salesforce. And I know this is going to be your first Dreamforce and give us a vision of what you're excited about for the future.
Sabastian Niles: I'd say whether it's Dreamforce or sort of looking ahead, what I've been most excited about is how our values, trust, customer success, innovation, equality, sustainability are truly infused within our culture. And that these values, they're powering our customer journeys, they're powering our commitment to our investors, they're powering our commitment to all stakeholders. I think certainly, as we look ahead, whether it's in the next several months, the next several years, the next 10 years and beyond, it's these values that are going to underlie how AI evolves. And how at least for sophisticated enterprises, and I think for all enterprises and even individual human beings, they will choose to partner with the companies and organizations who are putting trust first and are deploying and incorporating trust throughout the technology life cycle, whether that's design of technology, deployment of technology, development, service and monitoring, and I could not be more excited by what I see ahead. |
1,827 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | Marc Benioff: Well I couldn't be more excited to have you on our new management team and kind of the evolution of our team here at Salesforce. And thank you for all the help that you've given us also in the last six months, especially with all of our investors. Michael?
Mike Spencer: Okay. Thanks, Brad. Emma we'll take our last question now please.
Operator: Your question comes from Brent Thill with Jefferies. Your line is open.
Brent Thill: Marc, 12% CRPO growth the last two quarters. With AI building into the model, do you believe long-term you can reaccelerate this to a 15% to 20% growth business? |
1,828 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | Marc Benioff: Well, I'll tell you that's certainly on my mind every single day. And you're right, I'm a growth CEO. So that's what I like to do. I like to grow. I mean that's been about growing margins for the last six months, so that's a reframe for me. But we've grown this business to these incredible revenue numbers this year, third largest software company in the world. And as we kind of head into these incredible next levels of capability, I'm very excited about the future. And there's lots and lots of ways to move the top line forward. But I'll tell you, now I am quite addicted to the bottom line as well. And also, as I said earlier, there's nothing more important than the trust that I have with all of our stakeholders, including our investors. So I want to make sure that we fulfill our commitments and promises to all of you, just as we have in the last three earnings calls, we've delivered exactly as we've told you we are going to do, and we're going to continue to do that. At the same time, you know that I am thinking about how are we going to move this ball forward and down the field with these incredible opportunities in front of us. So it's very much has to be a balanced equation to make this right, to make it right for us and to make it right for you, and I'd love to have that conversation in more depth in the next couple of weeks. As we all come to Dreamforce, I hope you'll seek me out and find me and let's have that conversation one-on-one, just as we have been having in the last six months. I want to do what I've been doing for the last couple of quarters, which is to express my sincere gratitude to all of you and our investors have been a critical part you've had key insights, many of which we did not have ourselves on things that we could do to make us an even stronger company. And we've done that, I'm sure you can see that in the numbers. There's never been a software company quite like this at this level even now as we start to cross into these incredible numbers in the mid-$30 billion |
1,829 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | company quite like this at this level even now as we start to cross into these incredible numbers in the mid-$30 billion numbers, the strength of the company has never been higher, and now we have this incredible opportunity with AI ahead. |
1,830 | CRM | 2 | 2,024 | 2023-08-30 17:00:00 | Salesforce, Inc. | 122,917 | Mike Spencer: Thanks, Brent, and thanks, everyone, for joining us today. We look forward to seeing everyone hopefully at Dreamforce in a few weeks.
Operator: This concludes today's conference call. You may now disconnect. |
1,831 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Operator: Welcome to Salesforce Fiscal 2024 First Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. [Operator Instructions] I would like to hand over the conference to your speaker, Mike Spencer, Executive Vice President of Investor Relations. Sir, you may begin.
Mike Spencer: Good afternoon and thanks for joining us today on our fiscal 2024 first quarter results conference call. Our press release, SEC filings, and a replay of today's call can be found on our website. With me on the call today is Marc Benioff, Chair and CEO; Amy Weaver, President and Chief Finance Officer; and Brian Millham, President and Chief Operating Officer. As a reminder, our commentary today will include non-GAAP measures. Reconciliations between our GAAP and non-GAAP results and guidance can be found in our earnings and press release. Some of our comments today may contain forward-looking statements and are subject to risks, uncertainties, and assumptions, which could change. Should any of these risks materialize or should our assumptions prove to be incorrect, actual company results could differ materially from these forward-looking statements. A description of these risks, uncertainties, and assumptions and other factors that could affect our financial results is included in our SEC filings, including our most recent report on Forms 10-K, 10-Q, and any other SEC filings. Except as required by law, we do not undertake any responsibility to update these forward-looking statements. And with that, let me hand the call to Marc. |
1,832 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Marc Benioff: Thanks, Mike, and thank you all for being on the call. On our last call in March, we told you about how Salesforce had radically accelerated our transformation to profitable growth. We share with you how we hit the hyperspace button across the key areas of our transformation, restructuring for the short and long-term, reigniting our performance culture by focusing on productivity, operational excellence, and profitability, prioritizing our core innovations that drive customer success, building even stronger relationships with you, our investors. Our Q1 results show that we continue to make great progress. As I said in March, we're just getting started with this incredible transformation. We continue to scrutinize every dollar investment, every resource, and every spend and we're transforming every corner of our company. Our progress over the last 5 months, while it's very impressive and I cannot be more grateful to our entire team for their leadership. In fact, you may hear me say that several times on this call. Our transformation drove our Q1 financial results. As I said, on our last call, well improving profitability is our highest priority. As a result, we significantly exceeded our margin target for the quarter, delivering a non-GAAP operating margin of 27.6%, up 1,000 basis points year-over-year, incredible. And there's no greater point of evidence to our transformation than this amazing result following the tremendous operating margin Q4. In Q1, we delivered 8.2 billion in revenue, up 11% year-over-year and 13% in constant currency. We had some amazing wins in the quarter with Northwell Health, Paramount, Siemens, Spotify, NASA, and the U.S. Department of Agriculture, among others. We delivered 4.5 billion in operating cash flow up 22% year-over-year. Our remaining performance obligation ended the quarter at 46.7 billion, an increase of 11% year-over-year. And through Q1, we've now returned more than $6 billion in share repurchases. As a result for the third quarter in a row, we ended the |
1,833 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Q1, we've now returned more than $6 billion in share repurchases. As a result for the third quarter in a row, we ended the quarter with fewer shares year-over-year another amazing point of evidence on this incredible transformation. Now, turning to our financial guidance, while the economy is not in our control, our margins are, which is why we're raising our margin target for the full fiscal year. For FY 2024, we're raising our non-GAAP operating margin to 28%, an improvement of 550 basis points year-over-year and we remain confident that we'll hit 30% non-GAAP operating margins in the first quarter of fiscal year 2025. We could not be more excited about our progress. We're maintaining our fiscal year 2024 revenue guidance of approximately 34.5 billion to 34.7 billion over 10% projected growth year-over-year. I couldn't be more proud of how our team has come together, stepped up, and delivered these results. I've also been asked numerous times this quarter by our investors and our customers, how we're able to make so much progress so fast and deliver these incredible numbers? It's very simple. It's our Ohana culture. It's our superpower. And again, I'd like to thank our amazing team for this incredible accomplishment. Last quarter, I told you of how our AI team is getting ready to launch Einstein GPT, the world's first genitive AI for CRM. At TrailheadDX in March in front of thousands of trailblazers here in San Francisco, that's exactly what we did. At its foundation, Einstein GPT is open and extensible. Customers can connect to multiple large language models, including from partners like OpenAI and Tropic and others. This is a whole new way to work for our customers, users, and trailblazers. Users on Salesforce are seeing new AI generative features across all of their most common workflows. And while many of these will be created by Salesforce developers, far more will be created by our incredible trailblazer ecosystem. For low code of trailblazers, Einstein GPT will provide a toolset to design generative AI |
1,834 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | our incredible trailblazer ecosystem. For low code of trailblazers, Einstein GPT will provide a toolset to design generative AI apps built on [reusable props] [ph]. For pro code trailblazers, Einstein GPT will offer an extensible ecosystem of LLM providers with configurable grounding. And Einstein GPT is the combination of tremendous research and engineering by our world-class AI team, and I'd like to congratulate them on this amazing result. And one more amazing result, this week, Einstein, Salesforce Einstein that we've been talking about for so many years on these calls, will generate an incredible 1 trillion predictions for our customers, an incredible milestone on our AI journey. We saw more of the incredible work of our AI team at our New York City world tour this month when we demonstrated Slack GPT. Slack is a secure treasure trove of company data that generative AI can use to give every company and every employee their own powerful AI assistant helping every employee be more productive and transforming the future work. Slack GPT can leverage the power of generative AI to deliver instant conversation summaries, research tools, and writing assistance directly in Slack, and you may never need to leave Slack to get a question answered. Slack is the perfect conversational interface for working with LLMs, which is why so many AI companies are Slack first and why OpenAI, ChatGPT, and Anthropic Squad can now use Slack as a native interface. Slack is also delivering integrated sales and service experiences powered by native GPT to be the best interface for all of our Salesforce customers and there's a lot more magic to come with Slack and generative AI. In this month, we also announced Tableau GPT. At our Tableau conference, we had over 8,000 in-person attendees. Tableau GPT simplifies data analysis for all of our users enabling anyone to inquire about their data using Einstein GPT and obtain AI driven insights at scale. The intelligence and automation that Tableau GPT provides is tremendously important in this |
1,835 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | obtain AI driven insights at scale. The intelligence and automation that Tableau GPT provides is tremendously important in this area of hyperscale data that we're all entering. The coming wave of generative AI will be more revolutionary than any technology innovation that's come before in our lifetime or maybe any lifetime. Like Netscape Navigator, which opened the door, to a greater Internet, a new door has opened with generative AI and it is reshaping our world in ways that we've never imagined. Every CEO realizes they're going to have to invest in AI aggressively to remain competitive and Salesforce is going to be their trusted partner to get them to do just that. Every CEO I've spoken with sees AI as a revolution beginning and ending with the customer, and every CIO I've spoken with wants more productivity, more automation, and more intelligence through using AI. A great example [of deploying] [ph] this technology is Gucci. We're working with them to augment their client advisors by building AI chat technology that creates a Guccified [indiscernible] service, well, incredible new voice, amplifying brands, storytelling and incremental sales as well. It's an incredibly exciting vision for generative AI to transform which was customer service into now customer service, marketing, and sales, all through augmenting Gucci employee capabilities using this amazing generative AI, but we can only do all of this with trust. Our customers need to understand where their data is going and they must be able to maintain data integrity and access and privacy controls. Large customers must maintain data compliance as a critical part of their governance, while using generative AI and LLMs. This is not true in the consumer environment, but it is true for our customers, our enterprise customers who demand the highest levels of this capability. Where customers who for years have used relational databases as the secure mechanism of their trusted data, they already have that high level of security to the row and sell level. We all |
1,836 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | as the secure mechanism of their trusted data, they already have that high level of security to the row and sell level. We all understand that. And that is why we have built our GPT trust layer into Einstein GPT. The GPT trust layer gives connected LLM secure real time access to data without the need to move all of your data into the LLM itself. It's an incredible breakthrough for our customers and working with LLMs in a secure and trusted way. While they're using the LLMs, the data itself is not moving and being stored in the LLM. That is what our customers want. They can be sure that the customer data is where they know it is, where they can be assured that it is for their compliance and for their governance. And I cannot be more excited about our AI CRM and delivering on this future of trusted AI through our new Salesforce GPT trust layer. Finally, I can't talk about AI without talking about the success of our data cloud. Data Cloud is the heart of customer 360 and now our fastest growing cloud ever. Data Cloud created a real-time Intelligent Data Lake that brings together and harmonizes all of our customers' data in one place. In Q1, we closed one of our largest healthcare industry deals ever with Northwell Health, New York's largest private employer. They have 21 hospitals, 900 patient – 900 outpatient facility or ambulatory facilities, and their own medical school all in New York. By integrating DataCloud with Health Cloud, Tableau, MuleSoft, while our entire customer 360, Northwell is improving patient care by bringing together its vast data resources to create a single source of truth and using AI to govern data, use, and maintain regulatory compliance. This is the future of our customers and our industry. It's AI, plus data, plus CRM. And of course, this AI revolution is just getting started, which is why we've invested 250 million in our new AI venture fund to fuel startups developing our trusted generative AI vision. We'll be talking more about this at our AI Day event on June 12th in New York City, |
1,837 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | our trusted generative AI vision. We'll be talking more about this at our AI Day event on June 12th in New York City, and I hope that you'll join me there. To wrap up, we’re transforming every corner of our company. We're laser focused on our short-term and long term restructuring, improving productivity and performance, prioritizing our core innovations and delivering for our shareholders. As a result, productivity is up, profitability is up, revenue is up, cash flow is up, and we dramatically increased our margin guidance. And just like the cloud, mobile and social well, AI, this revolution is a new innovation cycle. It's going to be a new spending cycle as well, which is going spark a massive new tech buying cycle. And we've led the industry through each of these cycles and I couldn't be more excited for our future as we continue on a path to our long-term goal to make Salesforce the largest most profitable enterprise software company in the world, and the number 1, safest and most trusted AI CRM. With that, Brian, I'll turn it over to you. |
1,838 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Brian Millham: Thanks, Marc. As Marc said, we're continuing our transformation across every part of our company. Our focus on performance culture and operational excellence contributed to our strong first quarter results. Since our last call, we've removed layers to get closer to our customers and to complexity out of our business to help us accelerate through the rest of the year. We clearly defined our return and remote office guidelines for our employees, and it's been great to get together even more in our offices and with our customers around the globe. I had the chance to visit [many of our office] [ph] this quarter and the energy is incredible. As you heard from Marc, our transformation plan continues to deliver top and bottom line growth as we help our customers increase productivity, drive efficiency, and become AI First Companies. But we're still operating in an uncertain macro environment. Customers continue to scrutinize every deal, and we see elongated deal cycles and deal compression, particularly in our more transactional revenue streams like SMB, create and close, and self-serve. Also in Q1, our professional service business started to see less demand for multi-year transformations, and in some cases delayed projects as customers focused on quick wins and fast time to value. But for this reason, we saw strong performance from some of our fast time to value efficiency focused products with sales performance management, sales productivity, and digital service all growing annual recurring revenue above 40% in the quarter. As customers look to reduce complexity and achieve faster time to value, they're expanding their adoption of Salesforce clouds, a key growth strategy for us. The world's most recognized companies are relying on Salesforce more than 90% of the Fortune 100 used Salesforce and they average more than five of our clouds. This is why we're so excited about our AI plus data plus CRM strategy. As Marc explained, we're building Einstein GPT and Data Cloud into every cloud and our Customer |
1,839 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | AI plus data plus CRM strategy. As Marc explained, we're building Einstein GPT and Data Cloud into every cloud and our Customer 360 and we're perfectly positioned to help our customers harness the phenomenal power of AI. Our core offerings remain resilient. In Q1, 9 of our top 10 deals included sales, service, and platform. Industry clouds continue to be a tailwind to our growth, and we saw momentum with great customers like Northwell, USDA Rural Development, and NASA who we showcased at World Tour DC in April. Once again, eight of our industry clouds grew ARR above 50%. I met with hundreds of customers in the quarter and we hosted 700 meetings in our innovation centers with our top customers and prospects. Generative AI is top of mind for all of them. As they look to benefit from the intelligence automation and cost savings that Salesforce is uniquely positioned to deliver. We're seeing tremendous appetite for our new generative AI products starting with Einstein GPT, Slack GPT, and Data Cloud. Our generative AI products will be a catalyst for our future growth. As Marc mentioned, Data Cloud continues to be one of our fastest growing products and we had great wins in the quarter with companies like Major League Soccer and Giorgio Armani. Armani uses Data Cloud to deliver hyper personalized online and in-store experiences, real time engagement, and curated shopping recommendations. We can see how Data Cloud and Einstein GPT are going to create experiences that weren't possible before and really drive growth. In an environment where customers are optimizing their current [tech stacks] [ph], integration and automation continue to be efficiency drivers. MuleSoft again delivered strong results with wins at Siemens, [Cinnova] [ph], and Vodafone. For the first time, Salesforce was ranked number 1 in integration by market share in the latest IDC software tracker, a great testament to our MuleSoft team. Tableau is unleashing the power of our Data Cloud, unlocking customer data and delivering actionable real time |
1,840 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | MuleSoft team. Tableau is unleashing the power of our Data Cloud, unlocking customer data and delivering actionable real time insights. In the quarter, we had great wins at customers like Union Bank of the Philippines, Discovery Financial Service, Moderna, ADT Solar, and Alaska Air. We've made great investments to reaccelerate Tableau, including new leadership along with product innovations like Tableau GPT, and revenue intelligence, now one of our fastest growing add-ons. I’m really encouraged by the Slack team who has created an ambitious product roadmap with generative AI at the center. In Q1, we saw amazing momentum with customers like the California Office of Systems Integration, Paramount Global, Breville, and OpenAI, and rolled out an AI ready platform, Slack Canvas, and app integrations with ChatGPT in Anthropic’s Claude. Overall, I could not be more thrilled with our offerings and the market position, especially as it relates to delivering on the promise of AI. We're looking forward to continuing the energy and momentum at our AI day in just a couple of weeks. I'm very proud of the teams and of our partners. Their focus on customer success continues to be outstanding. As Marc said, our productivity is up, profitability is up, revenue is up, cash flow is up. We're increasing our margin guidance and sales forces leading the way as the number one AI CRM. Now, over to you Amy. |
1,841 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Amy Weaver: Thank you, Brian. As Marc said, a key part of our transformation to profitable growth is short and long-term restructuring of the company. We have now largely completed the restructuring announced in January, and we're completing our comprehensive operating and go to market review. As we shift to the implementation phase, we're executing against three key pillars, optimization of resources and organization structure, product investment prioritization, and operational rigor. We continue to view sales and marketing and G&A as the primary drivers of leverage. While R&D remains an important investment area. Our profitable growth framework, disciplined capital allocation strategy, and opportunity to drive shareholder value are represented in our actions and in our results. Now, turning to our results for Q1's fiscal year 2024, beginning with top line commentary. For the first quarter, revenue was 8.2 billion, up 11% year-over-year or 13% in constant currency with the beat primarily driven by strong momentum in MuleSoft, and more resilient core performance. Geographically, we saw strong new business growth in parts of EMEA and LatAm, specifically Switzerland, Italy, and Brazil, while we experienced continued pressure in the United States. In Q1, the Americas revenue grew 10%, EMEA grew 12% or 17% in constant currency. And APAC grew 16% or 24% in constant currency. From an industry perspective, manufacturing, automotive, and energy all performed well, while high-tech and financial services remained under pressure. Q1 revenue attrition ended the quarter at approximately 8%. As expected, we saw a modest increase in Q1. Partially attributed to the inclusion of Tableau in the metric. We also noted some incremental weakness in our marketing and commerce attrition. As Marc said, non-GAAP operating margin finished strong in Q1 at 27.6%, driven by our disciplined investment strategy and accelerating our restructuring efforts. Q1 operating cash flow is 4.5 billion, up 22% year-over-year. This includes a 910 basis |
1,842 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | accelerating our restructuring efforts. Q1 operating cash flow is 4.5 billion, up 22% year-over-year. This includes a 910 basis points headwind from restructuring. Q1 free cash flow was 4.2 billion, up 21% year-over-year. Turning to remaining performance obligation or RPO, which represents all future revenue under contract. This ended Q1 at 46.7 billion, up 11% year-over-year. Current remaining performance obligation or CRPO, ended at 24.1 billion, up 12% year-over-year in both nominal and constant currency, ahead of expectations driven by strong core performance, partially offset by continue, create, and close softness. And finally, we continued to deliver on our capital return commitment. In Q1, we returned 2.1 billion in the form of share repurchases bringing the total returned to more than 6 billion since the program was initiated last August, representing more than 38 million shares. Before moving to guidance, I wanted to briefly touch on the current macro environment that Brian discussed. The more measured buying behavior persisted in Q1. And as Brian noted, in Q1, we started to see weakness in our professional services business. We expect these factors to persist, which is incorporated in our guidance. Let's start with fiscal year 2024. On revenue, we are holding our guidance of 34.5 billion to 34.7 billion, representing over 10% growth year-over-year in both nominal and constant currency. The strength in our Q1 performance is offset by the pressure in our professional services business previously discussed. For fiscal year 2024, we are raising non-GAAP operating margin guidance to 28%, representing a 550 basis points improvement year-over-year. This guidance increase is driven by the acceleration of our restructuring efforts and also includes reinvestment in targeted areas, namely in R&D. I'm proud of our progress and remain confident in our trajectory as we progress towards our 30% non-GAAP operating margin target in Q1 2025. We also remain focused on stock based compensation and continue to expect it |
1,843 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | 30% non-GAAP operating margin target in Q1 2025. We also remain focused on stock based compensation and continue to expect it to improve this year to below 9% as a percent of revenue. Before moving to EPS, on restructuring, we now expect the charges in FY 2024 to come in towards the higher end of the range previously provided in our last earnings release. As a result of these updates, we now expect fiscal year 2024 GAAP EPS of $2.67 to $2.69, including estimated charges for the restructuring of a $1.11. Non-GAAP EPS is now expected to be $7.41 to $7.43. And we are raising our fiscal year 2024 operating cash flow growth to be approximately 16% to 17%, which now includes a 14 point to 16 point headwind from restructuring. As a reminder, we will see an increase in our cash taxes in fiscal 2024 as we draw down our remaining net operating losses. CapEx for the fiscal year is expected to be slightly below 2.5% of revenue. This results in free cash flow growth of approximately 17% to 18% for the fiscal year. Now to guidance for Q2. On revenue, we expect $8.51 billion to $8.53 billion, growth of approximately 10% in both nominal and constant currency. CRPO growth for Q2 is expected to be approximately 10% year-over-year in nominal and constant currency. Our guidance incorporates the momentum of our execution in Q1, offset by the persistent measured buying behavior and a decline in professional services fixed fees contribution. The professional services impact represents approximately a 1 point headwind to growth. For Q2, we expect GAAP EPS of $0.79 to $0.80 and non-GAAP EPS of $1.89 to $1.90. And as we focus on shareholder return and disciplined capital allocation, we continue to expect to fully offset our stock based compensation dilution through our share repurchases in fiscal year 2024. In closing, we continue to transform every corner of the company. We are hyper focused on delivering the next wave of innovation led by Data Cloud and Einstein GPT. And Salesforce is well-positioned to remain the market leader in this |
1,844 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | wave of innovation led by Data Cloud and Einstein GPT. And Salesforce is well-positioned to remain the market leader in this new AI first world. We are committed to delivering long-term shareholder value, and I personally want to thank our shareholders for their continued support. Now, Mike, let's open up the call for questions. |
1,845 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Mike Spencer: Thanks, Amy. Operator, we'll move to questions now. I ask that everyone only ask one question in respect for others on the call. In addition, I'd like to introduce Srini Tallapragada, our Head of Engineering, who will be joining us for Q&A today. With that Emma, let's move to the questions.
Operator: Thank you. [Operator Instructions] Your first question today comes from the line of Kirk Materne with Evercore. Your line is open.
Kirk Materne: Hi, yes. Thanks very much and congrats on a good start to the year. Marc, you've been through a number of cycles from a technology perspective. I was just kind of curious where you think we are in terms of people investigating AI versus when the spending cycle around it might kick-in? Can you just give us an idea of, you know, sort of your thoughts on that and really just the opportunity for you all to monetize AI with your product base? Thanks. |
1,846 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Marc Benioff: Well, I think this is the absolute question of the day, which is we are about to enter an unbelievable super cycle for tech and everyone can see that. This is an incredible opportunity for not only Salesforce, but our entire industry. I mean, perhaps only a year ago or less than a year ago, no one on this call even knew what GPT was. Today, ChatGPT is the fastest growing consumer product of all time, and has transformed many, many lives. It's definitely not just the technology of this lifetime, but maybe any lifetime. It's an incredible technology. And every company is going to have to transform because every company is going to have to become more productive or automated more intelligent through this technology to be competitive with other companies. And just yesterday, I'm in a room here at the top of Salesforce Tower on the 60th floor, and we have the CEO of a very large bank here. And like every other sales call I've made in the last quarter, there's only one thing that customers want to talk about, and that's artificial intelligence and specifically, generative AI. Of course, we have been a leader in this area with Einstein, more than 1 trillion transactions delivered this week, but these are primarily predictive transactions built on machine intelligence, machine learning, and deep learning. But in 2018, deep learning evolved and became much more sophisticated and became generative as these neural networks expanded their capabilities and also the hardware went to another level as well. So, now we have this incredible new capability. It's a new platform for growth, and I couldn't be more excited. But yesterday, there were many questions from my friend who I'm not going to give you his name because he's one of the – the CEO of one of the largest and most important banks in the world. And I'll just say that, of course, his primary focus is on productivity. He knows that he wants to make his bankers a lot more successful. He wants every banker to be able to rewrite a mortgage, but not every |
1,847 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | that he wants to make his bankers a lot more successful. He wants every banker to be able to rewrite a mortgage, but not every banker can, because writing the mortgage takes a lot of technical expertise. But as we showed him in the meeting through a combination of Tableau, which we demonstrated and Slack, which we demonstrated, and Salesforce's Financial Services Cloud, which he has tens of thousands of users on, that banker understood that this would be incredible. But I also emphasize to him that LLMs, or large language models, they have a voracious appetite for data. They want every piece of data that they can consume, but through his regulatory standards, he cannot deliver all that data into the LLM because it becomes amalgamated. Today, he runs on Salesforce, and his data is secure down to the row and cell level. He knows that readers don't block [riders] [ph] that there's all types of security provisions and regarding who can see what data about what account or what customer. And when you put it into an LLM, those permissions are not understood. So, that is a very powerful moment to realize that the way that LLMs operate is in a way state where they're kind of consuming all this data and then giving us that information back out, well, that Salesforce's opportunity. That's why we built this GPT trust layer. And through the GPT trust layer and rebuilding all of our apps, including Slack and Tableau, but as we demonstrated him yesterday, a new Sales Cloud, a new Service Cloud, a new marketing cloud, and what we'll show on June 12 in New York City, a complete reconceptualization of our product line. What that means for this customer and for every customer is that they have an opportunity to transform their business. And for Salesforce, that also means an opportunity to transform ourselves and for our industry, a new super cycle where every company will have to transform to be AI first. |
1,848 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Operator: Your next question comes from the line of Keith Weiss with Morgan Stanley. Your line is open.
Elizabeth Porter: Great. This is Elizabeth Porter on for Keith Weiss. Thanks for the question. I wanted to ask on the potential disruption from rebooting the sales enablement process. Are we past the point of seeing disruption or could that be a future risk? And if so, how is it included in guidance. The CRPO guidance for 10% looks like a bit of a slowdown despite the easier comp. And Amy, you called out pro services a one-point headwind. But just any other factors we should keep in mind that may create a challenge over the next couple of months? Thank you.
Marc Benioff: Well, I'll tell you that. I think that as you know, in Q1, we went through tremendous disruption with human resources in our company, and it was very disruptive to all of our Ohana. And I'm so grateful to them for how they supported the whole company, all the customers and themselves during what was probably one of the most disruptive quarters that I've seen and yet we delivered these incredible numbers and this incredible technology vision going forward. In terms of enablement of the sales organization, its ability to kind of move forward, that is not, I would say, a material part of what happened in the quarter or what's going to happen for the year. Our sales organization remains with a very high level of productivity, but let me turn it over to Brian to speak directly to his strategy on delivering the year. |
1,849 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Brian Millham: Yes, Marc, thank you. I appreciate it. And Elizabeth, thank you for the question. I think you're referencing some comments we made on previous calls about enablement being an important strategy for us as we saw during the pandemic, not as many of our AEs and SEs and leaders were as enabled as we would like. We've made those changes, and we've really invested in the time to make sure our AEs understand our product portfolio, the entire customer 360, and we're on sort of the next generation of enablement. As Marc just talked about, this new AI wave is going to create a huge opportunity for us. And we need to make sure that we're investing in the enablement to bring our teams along. It's been a very short window around this innovation, and we've got some work to do on this, but we're very, very excited with our path forward, our position in the market. All that we're doing with our customers, the demand we're feeling from our customers. Marc mentioned it, and I had the same experience, every CEO in the world is talking to us about generative AI right now, and we are investing heavily to make sure our account executives, our sales teams, in fact, the entire company is able to articulate our value proposition to our customers. So, Amy, I don't know if you have any further comments there? |
1,850 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Amy Weaver: Sure. Elizabeth, you mentioned CRPO in professional services, so let me jump in on that. For our guide for this next quarter, we are seeing some pressures from the macro situation and then also specifically from professional services. And there's a bit of a nuance with ProServ that I want to make sure people understand. So, if you back up, our customers can contract for professional services in two ways, either on a time and materials basis, which is typically used for smaller projects or on a fixed fee, kind of milestone basis. For purposes of CRPO, we only include projected revenue from fixed fee deals. One of the things that we are seeing right now is not only a professional services as a whole same pressure, but more customers are choosing to contract on a time and materials basis, which is not included in our CRPO. So, as a result, we're seeing, kind of a double pressure there. And I'm expecting a full one-point headwind to CRPO for the quarter from professional services.
Mike Spencer: Thanks Elizabeth. Emma, let’s move to the next question please.
Operator: Your next question comes from the line of Brad Sills with Bank of America. Your line is open.
Brad Sills: Oh, wonderful. Thanks. I wanted to ask a question to Brian, I think, here on the efforts here to improve productivity. You mentioned removing some layers here. My question is, we think of all these actions that you're taking as drivers of margin expansion, but are you starting to see some early traction here on the sales productivity front, such that perhaps that's driving some upside here across the business, perhaps larger deals now that you're seeing coming out of the field and pipeline and some of the deal closure? Thank you so much. |
1,851 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Brian Millham: Thanks, Brad, for the question. I really appreciate it. As you know, we're operating in a constrained environment right now. And so, we are really focused on this productivity measure and metric for our organization right now, investing heavily, as I mentioned earlier, and the enablement part of our organization. Also looking at other ways to drive productivity. And one of the things that we're talking quite a bit about right now is pricing and packaging, bringing together logical products that we can be selling in a single motion versus our go-to-market, which is largely aligned by product., how do we focus on a larger average deal size for every transaction, and so big investments on that front, really a strong focus on productivity as it relates to moving people up market as well. We're thinking about self-serve in the bottom end of our market. How do we drive a self-serve motion, automated motion at the low end of our market to bring our account executives upmarket to drive higher productivity in the sales organization? So clearly, a big motion for us right now. Feel very good about our big deal motion. Actually in Q4, we saw some – sorry, in Q1, we saw some very good big deal execution from the team. That is not really an area that has held us back. We feel very good about our ability to transform companies and transact these large businesses. It really is the velocity business that has held us back a bit on our create and close some of the SMB transactions. So, we have a clear focus in this area to drive the productivity with our plans going into Q2 and beyond into Q4.
Mike Spencer: Thanks, Brad. Emma, next question please.
Operator: Your next question comes from the line of Brent Thill with Jefferies. Your line is open. |
1,852 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Operator: Your next question comes from the line of Brent Thill with Jefferies. Your line is open.
Brent Thill: Amy, regarding Americas, that was a pretty large decel, one of your slowest growth quarters, I think, ever in Americas. The rest of the world did decel, but maybe not quite as the magnitude of the Americas. Can you just speak to what happened there in that region?
Amy Weaver: Sure. So thanks, Brad, for the question. The Americans did see a deceleration, a 10% year-on-year revenue growth, compared to 17% in EMEA and about 24% in nominal APAC. We are continuing to see most of the pressure in North America. There were some real pockets of acceleration in EMEA and in LatAm, particularly in Switzerland, I think Brazil, Italy. So, we are seeing some good things, but North America has taken the brunt of the deceleration. Brian, do you want to come in and see if you can address that in more detail?
Brian Millham: Sure. Yes. I think when we think about our business from an industry perspective, we have a very nice footprint of our great technology companies and financial services company, both of which were a bit slower than we would have liked in the Americas in Q1. And so, as we think about the all-in size of our Americas business, those industries felt a little bit more of the economic headwinds in the quarter in Q1. And so, I think a bit of a slowdown from that perspective is a result you're seeing in the Americas business.
Mike Spencer: Thanks, Brent. Emma, next question please.
Operator: Your next question comes from the line of Mark Murphy with JPMorgan. Your line is open. |
1,853 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Operator: Your next question comes from the line of Mark Murphy with JPMorgan. Your line is open.
Mark Murphy: Thank you very much. And I'll add my congrats. So Marc, it feels like the tech and software industry has had a recession without the broader economy being in a recession quite yet, and that's very unusual. Do you think with all the purging and optimizing of IT budgets, which is already taking place, plus Salesforce's headcount optimization already being underway that perhaps the next recession might actually be more manageable or easier to navigate than what you had seen in some of the prior cycles?
Marc Benioff: Well, I think that this is a great question. And I tried to address it on the last call. I just really think you have to look at 2020, 2021 was just this massive super cycle called the pandemic. I don't know if you remember, but we had a pandemic a couple of years ago. And during that, we saw tech buying like we never saw. It was incredible and everybody surged on tech buying. So, you're really looking at comparisons against that huge mega cycle. And that is what I think is extremely important to understand, the relative comparisons. And that is where my head is at, which is I am constantly comparing against what happened in 2021, but also looking at 2020 and 2019. That's a little bit different than 2008 and that's a little bit different than 2001. We didn't exactly have these huge mega cycles that kind of we were exiting. And I – that's also what gives me tremendous confidence going forward and what we're really seeing is that customers are absorbing the huge amounts of technology that they bought. And that is about to come, I believe, to a close. I can't give you the exact date, and it's going to be accelerated by this AI super cycle.
Mark Murphy: Thank you.
Mike Spencer: Thanks, Mark. Emma, next question please.
Operator: Your next question comes from the line of Brent Bracelin with Piper Sandler. Your line is open. |
1,854 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Operator: Your next question comes from the line of Brent Bracelin with Piper Sandler. Your line is open.
Brent Bracelin: Good afternoon. I wanted to circle back to the generative AI discussion, if we could. I totally understand how large enterprises are turning to Microsoft, given the productivity tools and suite that they have, but as you start to engage with customers, what's resonating relative to the Salesforce Gen AI journey? Is it the data layer and Customer 360 messages resonating? Is it the app layer around sales automation functionality that you're going to offer? Just double quick on what customers are coming to Salesforce and engaging the you around some of the new things that we'll hear about it sounds like in June.
Marc Benioff: Well, I think that when you look at our artificial intelligence strategy, which we're talking to the largest, most important companies and governments in the world, it has to be architected around security. It has to be architected around compliance, around trust. It has to be architected around governance. And this is very important. And of course, we're also architecting it around being open. That is, we're working with many AI companies to provide the best solutions for our company. Of course, we have a tremendous relationship with OpenAI. We also just invested in Anthropic [indiscernible] many of these companies. But I think ultimately, this is going to be a solution that enterprise customers are going to come in and make sure that their data is protected. And it's also protected down at the user level. And Srini, do you want to come in and talk about exactly what we're doing to make sure that we're delivering the best possible solutions for our customers for AI? |
1,855 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Srini Tallapragada: Yes, Marc. So, I think I met about 70 customers in the last quarter. And like Marc was saying, the only conversation everybody is interested is on – and while everybody understands the used cases, they're really worried about trust. And what they are looking for us is guidance on how to solve that. For example, so we are doing a lot of things as the basic security level, like we are really doing tenant level isolation coupled with zero retention architecture, the LLM level. So the LLM doesn't remember any of the data. Along with that, they – for them to use these used cases, they want to have – they have a lot of these compliances like GDPR, ISO, SOC, [Quadrant] [ph], they want to ensure that those compliances are still valid, and we're going to solve it for that. In addition, the big worry everybody has is, people have heard about hallucinations, toxicity, bias, this is what we call [model trust] [ph]. We have a lot of innovation around how to ground the data on 360 data, which is a huge advantage we have. And we are able to do a lot of things at that level. And then the thing which I think Marc hinted at, which is LLMs are not like a database. These intra-enterprise trust, even once you have an LLM, you can't open the data to everybody in the company. So, you need ability to do this – who can access this data, how is it doing both before the query and after the query, we have to build that. And then we have to be not only open, but also optimized. We are running an open – the way we'll run is, we'll run like a model [indiscernible] because one of the things everybody has to watch out is it's great, but what about the cost to serve, not all models are equal. So, we are going to run this and pick very – we are going to pick a very cost-optimized curve, so the value is very high. And our Salesforce AI research has a lot of sales for state-of-the-art models and industry cases, which we are optimizing to run at very low cost and high value. Add to that, we've got the Trailblazers platform, which |
1,856 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | cases, which we are optimizing to run at very low cost and high value. Add to that, we've got the Trailblazers platform, which allows low code, high code, and many other things, and we're going to optimize sort of jobs to be done for each industry and jobs. That's really what they're looking for because they have been using our AI platform. Like Marc mentioned, we already do 1 trillion transactions per day. And by the way, the data cloud, just in a month, we are importing more than 7 trillion records into the data layer, so which is a very powerful asset we have. So, coupled with all of this is what they are looking for guidance and how we think we can deliver significant value to our customers. |
1,857 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Marc Benioff: Srini, I want to ask you a question. In January, you published a paper in nature from your research team, which was called large language models, generating functional protein sequences across diverse families, and you really showed something amazing, which was that deep learning language models have shown this incredible promise that you just articulated in various biotechnological applications, including protein design, engineering, and you also described very well one of our models that we've created internally, ProGen, which was a language model that can generate protein sequences with predictable function across large protein families. I was very impressed with that. And the entire research team deserves a huge amount of congratulations. So, when you look at that, especially dramatically and semantically correct natural language sentences for diverse topics or how you're going to use that inside our platform against other models that you're seeing like Llama, OpenAI's model, Anthropic and others, when will Salesforce use our own models like [CoGen] [ph], ProGen, T-code, our lit model, when will we use an outside commercial model like an OpenAI or an Anthropic? And when will we go to an open source model like we've seen emerge so many of those, including like Llama. |
1,858 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Srini Tallapragada: Yes. I think you hinted something very important. I think, as you know, Marc, we have – our I research team is one of the best-in-class model – state-of-the-art models from different areas. The way we are thinking of it is like anything else, where the world is going to go, which we strongly believe is going to be multiple models. And depending on the used case, you will pick the right models, which will provide you the value at the lowest cost. Where we have to run with highly regulated industries, where the data cannot leave the trust boundary or where we have significant advantage, where we can train on industry-specific data or Salesforce-specific – 360-specific data, like, for example, our FX model are helping our customers implement or our flow, we will use our internal model. Where we need more generated image models or something where it needs public image databases, we may use a coherent or an OpenAI. It depends on the use case and which is why, at a given request, a secure trusted gateway will decide smartly which is the best used case, which is the model, and we always keep running the [indiscernible], which is what I mean. So today, one particular model may be good. Tomorrow, something else will come, and we'll behind the team flip it, but our customers don't need to know that. We will handle all of it. We'll handle the model trust. We'll handle all the compliances and all behind the scenes. And this is always what we promise to our customers, we'll always future-proof. That's the Salesforce promise to our customers so that they can focus on the business used cases. |
1,859 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Marc Benioff: So just one last follow-up question. You've described very well the GPT trust layer, which I think is going to be a significant amount of value added that we're going to provide to our customers that's going to be quite amazing. And then you develop these specific grounding techniques, which are going to allow us to keep our customers' data safe and not be consumed by these voracious large language models, which are so hungry for all of our customers' data. What is going to be the key to actually delivering this now across regulated industries?
Srini Tallapragada: I think the key is innovations we are doing, which people will see starting next month is around what we call [from generation] [ph] and grounding. These are techniques, which we'll have to do, but it will work only because we have – all of this as based on underlying data. We have the Data Cloud, where we have all the 360 data, which is there. So, we're able to ground these models and do it. So, there are a lot of other techniques, which are very technical, which we put it on our block. But that's the innovation that we're doing. And you have to remember that Salesforce also is a metadata model. So, we have a semantic understanding of what our customers are trying to do. We're going to leverage the Metadata platform and do this grounding automatically for our customers, of course, while keeping the trust. That's the base line.
Marc Benioff: Absolutely. Thank you so much, Srini.
Mike Spencer: Emma, next question please.
Operator: Your next question comes from the line of Raimo Lenschow with Barclays. Your line is open.
Raimo Lenschow: Hi, thank you. Question for Amy or Brian maybe more. The improvement in profitability or the raised guidance for profitability and cash is that all timing? Can you talk a little bit about that? Is it just timing or are there other factors we should consider in here? Thank you. |
1,860 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Amy Weaver: So Raimo, well I’ll start and then I can turn it over to Brian for a little bit more color. So, in terms of the great Q1 that we just saw, really pleased to see us coming in at 27.6% and also really pleased about the 28% – [the raise] to 28% for the full-year. What really drove the 27.6 was two things. It were the actions that we took that we announced in January with the restructuring. Executing on that, as well as having a very disciplined reinvestment strategy, and that led to that. And that's also where we're going to see this going through the rest of the year, driving the expansion 28% and then also putting us on track for the 30% margin in Q1 of next year. As I look through overall at transformation, I would really divide it into two stages benefits that we're getting from that initial transformation. And again, that's what you're seeing in Q1 and this year. And then the second stage, which is really as we've been going through this comprehensive operating and go-to-market review, that review is going to enable the second phase of our transformation, and that's something that's going to be ongoing and long-term over the next few years. You'll see benefits to our margin in outer years beyond FY 2024. Brian, anything you would add?
Brian Millham: Yes, thanks for the question. When we think about longer-term structures, we obviously took the action in Q1. But longer term, we're looking at things like how do we leverage comp plan redesign to drive better efficiencies in our organization going forward. How do we continue to look at self-serve at the low end of the market to drive better efficiencies in our organization. So, resellers as a potential investment that we'll make in emerging markets is long-term leverage on the efficiency gains. So lots of things that we're doing that will be in sort of the Phase 2 oriented around process improvement and systems improvement. And again, as I mentioned, top plan design that will drive better efficiencies in the organization. |
1,861 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Mike Spencer: Thanks, Raimo. Emma, let’s go to next question please.
Operator: Your next question will come – is from Karl Keirstead with UBS. Your line is open.
Karl Keirstead: Okay. Great. I'll direct this to Amy as well. Amy, congrats on that margin improvement. I've got a two-parter both related to margins. First, what is the timing of the receipt of that Bain operational review that might ostensibly kick off the second phase of cost cutting? And then secondly, you and Brian talked about this reinvestment in R&D and investing heavily around AI. I'm wondering if those planned investments are greater than you anticipated when you initially set the guidance three months ago, such that you need to run a little bit harder on OpEx management to offset it and keep delivering on your stated margin targets? Thanks so much.
Amy Weaver: Great. Thanks, Karl. So first on the timing. As I mentioned, we've been doing this end-to-end comprehensive operating and go-to-market review. The entire company has been involved in that. There's really no stone unturned. We're getting close to the end of that process, and then we will be moving into the implementation. You'll be hearing more about that in future quarters. Turning to reinvestment. We are keeping a very close eye on reinvestment, very excited particularly about artificial intelligence. So, much of what Srini has been talking to you about, I don't view this as a greater investment from what we were looking at earlier. We're really going along with our current plans. We are looking at operating expenses management, and we're looking at it seriously every day, but that's not something that has changed.
Mike Spencer: Thanks, Karl. Operator, we'll move to our last question now, please.
Operator: Our last question comes from the line of Kash Rangan with Goldman Sachs. Your line is open. |
1,862 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Operator: Our last question comes from the line of Kash Rangan with Goldman Sachs. Your line is open.
Kash Rangan: Hi, thank you very much team. Congratulations on putting up terrific operational results, and a good cash flow, good margins, et cetera. Marc, you talked about a super cycle of buying and technology in the years ahead. Can you just parse for us, if you don't mind, what is new about generative AI as far as Salesforce as opportunities are concerned, netting out against what Einstein has been able to accomplish for you – for the company? And how does it show up in the product in terms of productivity? What are the scenarios by which customers can experience this amazing productivity? And how can you charge more for delivering that, kind of value? Thank you so much. |
1,863 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Marc Benioff: Well, thanks, Kash, for giving me the opportunity to talk about our AI vision, and I'm also going to ask Srini again to fill in some of the details. But I think it started to occur to me – I think folks know, I have – my neighbor is Sam Altman is the CEO of OpenAI, and I went over to his house for dinner, and it was a great conversation as it always is with him. And he had – he said, Oh, just hold on one second, Marc, I want to get my laptop. And he brought his laptop out and give me some demonstrations of advanced technologies that are not appropriate for the call. But I did notice that there was only one application that he was using on his laptop and that was Slack. And the powerful part about that was I realized that everything from day 1 at OpenAI have been in Slack. And as we kind of brainstormed and talked about – of course, he was paying a Slack user fee and on and on, and he's a great Slack customer. We've done a video about them, it's on YouTube. But I realize that taking an LLM and embedding it inside Slack, well, maybe Slack will wake up. I mean there is so much data in Slack, I wonder if it could tell him what are the opportunities in OpenAI? What are the conflicts, what are the conversations? What should be his prioritization? What is the big product that got repressed that he never knew about? And I realized in my own version of Slack at Salesforce, I have over 95 million Slack messages, and these are all open messages. I'm not talking about closed messaging or direct messaging or secure messaging between employees. I'm talking about the open framework that's going on inside Salesforce and with so many of our customers. And then I realized, wow, I think Slack could wake up, and it could become a tremendous asset with an LLM consuming all that data and driving it. And then, of course, the idea is that is a new version of Slack. Not only do you have the free version of Slack, not only do you have the per user version of Slack, but then you have the additional LLM version of Slack. And |
1,864 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | of Slack, not only do you have the per user version of Slack, but then you have the additional LLM version of Slack. And for each one of our products in every single one of our categories, there's that opportunity to upsell and cross-sell into the next version of generative AI, not just with Slack, but you can also imagine, for example, even with Salesforce, the ability as we're going to see in June, that many of our trailblazers are amazing low-code, no-code trailblazers, but soon they'll have the ability to tap in to our LLMs like ProGen and Cogen that have the ability to code for them automatically. They aren't coders. They didn't graduate computer science degrees. And if they need to write a sophisticated Apex code or other code, it can be a challenge for them, but because you know what is there only 8 million or 10 million coders in the whole world – but now with LLMs, everybody can start to code. That's an amazing productivity and augmentation of everybody's skill set. And that's a great way to look at what could happen, for example, with our core products, but even with Tableau, which has tremendous programmatic engine as well or even MuleSoft, which is a highly programmatic product that then coupled with an LLM can have the ability to go forward. But of course, those LLMs are highly trained models for those specific types of code, and then that is something that we would add on either through partnership or through our own LLM, as Srini described, it's another layer of value that we can provide to our customers. In all cases, customers are going to be more productive. They're going to be more automated, and they're going to be more intelligent. And as we look at some of the examples that we've given like at the New York World Tour, you saw our Marketing Cloud do something very cool that it couldn't do even just 6 months ago. It segmented the database on its own. It wrote an e-mail on its own. Of course, it required editing, and it also built a landing page on its own. That was amazing. Or as we saw at |
1,865 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | on its own. Of course, it required editing, and it also built a landing page on its own. That was amazing. Or as we saw at the Tableau conference, we saw Tableau being able to create its own visits or visualizations that was incredible. And what we saw at our Trailhead DX, we saw Einstein GPT which started to do these amazing next-generation things. And I think in each of these areas, we can offer more value, but we must do it in the auspices of trust, data integrity and governance. And that is what we have been working on now for a considerable amount of time. Of course, we've led – we have always wanted to be the Number 1 AI CRM. And we are, if you look at Einstein's transaction level, I think that that's enough evidence right there. But I think this idea of generative AI, this starts to reconceptualize every product and we will start to build and develop not only extensions to all of our current products, but entirely new products as well. And we have a lot of exciting ideas of things that we can do to help our customers connect with their customers in a new way using generative AI. Srini, do you want to come in and talk about that? |
1,866 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Srini Tallapragada: Thanks, Marc. So, I think the way I see it is this AI technologies are a continuum that is predictive then they generate, and the real long-term goal is autonomous. The initial version of the generative AI will be more in terms of assistance. And like Marc was saying, we are seeing like the most common used case everybody understands implicitly is self-service bots or in the call center or agent-assistant assistance, which I think really helps productivity. But the other used cases, which we are going to see, and in fact, I have rolled out our own code LLMs in our engineering organ, we are already seeing minimum 20% productivity. And in those cases...
Marc Benioff: Well, that's a very key point. Isn’t it? That you're seeing a 30% productivity increase in your own engineers using our own LLM.
Srini Tallapragada: 20%, we are seeing minimum. In some cases, up to 30%. Now, a lot of our customers are asking the same. We are going to roll Einstein GPT for our developers in the ecosystem, which will not only help not only the local developers to bridge the gap, where there's a talent gap, but also reduce the cost of implementations for a lot of people. So there's a lot of value. This assistant model is where we'll see a lot of uptick. And then I think the fully autonomous cases, for example, in our own internal used cases with our models, we are able to detect 60% of instance and auto remediate. That requires a little bit more fine-tuning and we'll have to work with specific customers to get to that level of model performance. So, I see this is just the start of this [cut] [ph]. The resistant model is the initial thing to build trust and a human in the loop and validate it. And then as the models get better and better, we'll keep taking used cases where we can fully automate it. |
1,867 | CRM | 1 | 2,024 | 2023-05-31 17:00:00 | Salesforce, Inc. | 122,917 | Marc Benioff: And address this one issue that a lot of customers come in like they did yesterday, and they tell us they think they're just going to take all of their data, all their customer data, all of their information and put it into an LLM and create a corporate knowledge base, and it's going to be one amalgamated database. Why is that a false prophecy?
Srini Tallapragada: Because even today, any example you see, even though we have hundreds of Slack channels, there are a lot of specific Slack channels, which only you want access to. You don't want that. LLM doesn't know. There is no concept of – it combines all this information. So, unless you put the layer both before who can access the data and then when it generates response, what he can do, you don't want one wealth manager to generally generate a report, an account report where you're mixing customers' balances. So there are a lot of trust issues we have to solve. So, LLMs are good for a lot of very creative generative used cases, initially, where it's public data that everybody can use it. Those are used cases. I think there is enough of low-hanging fruit in the initial phases with assistant model, which we'll solve. The really complex automated cases, the role level, record level sharing, we have a lot of techniques, which we are developing, which we will do. It's also a research area, too. That one, I think we should be tempered with expectations, but there's enough of, like I said, the develop, for example, I gave product example there's enough of productivity which we will get.
Marc Benioff: Well, we're really excited to show all of this technology at our AI Day on June 12 in New York City. And then also when we get to [Dreamforce GPT] [ph], we're going to have an incredible demonstration of this technology.
Mike Spencer: So with that, we want to thank everyone for joining us today, and we look forward to seeing everyone over the coming weeks. Have a great one.
Operator: This concludes today's conference call. You may now disconnect. |
1,868 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | Operator: Good day, everyone. Welcome to Salesforce's Fourth Quarter and Full Year Fiscal 2025 Results Conference Call. [Operator Instructions] Also, this call is being recorded. I would now like to hand the conference over to your speaker, Mike Spencer, Executive Vice President of Finance and Strategy and Investor Relations. Sir, you may begin.
Michael Spencer: Good afternoon and thanks for joining us today on our Fiscal 2025 Fourth Quarter Results Conference Call. Our press release, SEC filings, and a replay of today's call can be found on our website. Joining me on the call today is Marc Benioff, Chair and CEO; Amy Weaver, President and Chief Financial Officer; and Brian Millham, President and Chief Operating Officer. In addition, we also have Robin Washington, our Board Member and Incoming Chief Operating and Finance Officer here with us today. As a reminder, our commentary today will include non-GAAP measures. Reconciliations between our GAAP and non-GAAP results and guidance can be found in our earnings materials and press release. Some of our comments today may contain forward-looking statements that are subject to risks, uncertainties, and assumptions, which could change. Should any of these risks materialize or should our assumptions prove to be incorrect, actual company results could differ materially from these forward-looking statements. A description of these risks and uncertainties, and assumptions and other factors that could affect our financial results is included in our SEC filings, including our most recent report in Forms 10-K, 10-Q, and any other SEC filings. Except as required by law, we do not undertake any responsibility to update these forward-looking statements. And with that, let me hand the call over to Marc. |
1,869 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | Marc Benioff: Well, hey, thanks so much, Mike. And I'm so excited about this call and reading the script with you because this was just the best quarter we've ever had. And I think you're going to see that as we kind of unfold what's happening here. And I'm sitting here with Amy and Brian and Mike and Sebastian is also on the table and our new MOFO I mean COFO, Robin Washington is here. So welcome, Robin. We're thrilled to have you here as well. And look I'm really excited about this. I really think that, we have something incredible to talk about and obviously, this was the quarter of Agentforce. We're going to talk about that, but it was really just another incredible quarter. And really it's been another incredible year of growth and innovation. I'm sure you all can see we've had a really strong performance across all of our key metrics on revenue, on margin, EPS, cash flow, cRPO. We've passed some amazing milestones, including more than $60 billion in RPO, and this has been the highest cash flow in our company history. You can see we exceeded our cash flow guidance. I think Amy did about $12.9 billion last quarter, but I think we delivered $13.1 billion-ish. And that was just incredible for the quarter and now we're giving guidance. I think it's around $14.5 billion in guidance for next year on the cash flow guidance. So just awesome cash production. Few enterprise software companies have really ever delivered these kind of numbers and I guess only a couple have ever delivered guidance in the $40 billions which is where we are. And our two newest major products are Data Cloud and Agentforce, AI product line now, we can see as a multibillion dollar product line. So we're excited to be in that kind of rarefied air of delivering a multibillion dollar AI product line. We ended this year with $900 million in Data Cloud and AI. ARR, it grew a 120% year-over-year. We've never seen products grow at these levels, especially, Agentforce. And Data Cloud and AI, Agentforce, this is now going to be incredible coming into |
1,870 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | grow at these levels, especially, Agentforce. And Data Cloud and AI, Agentforce, this is now going to be incredible coming into fiscal year '26. As we begin this year and well since our founding, I couldn't be more excited about what's ahead. It's this is a moment like we've just never seen before. And in just a few months, we've seen this addressable market go from hundreds of billions of dollars and I'm sure you saw those ARC slides that got released over the weekend where she said that she thought this digital labor revolution, which is really like kind of what we're in here now. This digital labor revolution, this looks like it's anywhere from a few trillion to 12 trillion. I mean I kind of agree with her. I think this is much, much bigger than software. I mean for the last 25 years, we've been doing software to help our customers manage their data. That's very exciting. I think building software that kind of prints and deploys digital workers is more exciting and you're going to hear some of these incredible stories in a second. Our formula now really for our customers is this idea that we have these incredible Customer 360 apps. We have this incredible Data Cloud, and this incredible agentic platform. These are the three layers, but it's this that it is a deeply unified platform. It's a deeply unified platform. It's just one piece of code. That's what makes it so unique in this market and that is why customers are having so great success with it. It's not a collection of disjointed parts. You're going to have to kind of self-assemble, DIY it, all kinds of how do you get the security running, how do you do this, how do you do that. It's this idea that it's a deeply unified platform with one piece of code all wrapped in a beautiful layer of trust. And that's what gives Agentforce this incredible accuracy that we're seeing. I'm going to talk about even what we've seen at Salesforce with that is amazing. And I'll tell you that, our customers are just seeing some great success with it. And that's why just 90 |
1,871 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | with that is amazing. And I'll tell you that, our customers are just seeing some great success with it. And that's why just 90 days after it went live, we've already have 3,000 paying Agentforce customers who are experiencing unprecedented levels of productivity, efficiency and cost savings. No one else is delivering at this level of capability and we're really seeing a level of integration, simplicity, intelligence, power. I mean, customers are really telling us that we're light years ahead of other providers, and their feedback really speaks volumes. So exciting to go on the web and see Agentforce delivering labor for companies like Equinox, OpenTable, Jacuzzi, and others. I mean, I go to their sites. I'm going to their, to their X feeds, their social media presence and you see Agentforce running. And look a lot of other vendors are talking about their Agent capabilities, but few are able to show that they've got this really running at scale. And, as you're about to hear from Brian, we're seeing some amazing results on Salesforce's Customer Zero for Agentforce. Our digital labor force is resolving tens of thousands of customer service inquiries, freeing our human employees to focus on the most nuanced issues and customer relationships. We're seeing tremendous momentum and success stories emerge as we execute our vision to make every company, every single company, every customer of ours an Agentforce company. That is we want every customer to be an Agentforce customer. We want every trailblazer to be an Agentblazer. And I want to share some of these amazing stories with you today. But first, let's hit a couple of these incredible numbers. We closed out fiscal year '25 with $10 billion in revenue. That's amazing. Our first $10 billion quarter. I remember we had our first $10 billion a year. Kind of amazing. $10 billion quarter up 8% year-over-year, 9% in constant currency. And what I think we even lost, Amy, is that right like a couple hundred million dollars in foreign exchange for the year as well. In Q4, we |
1,872 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | we even lost, Amy, is that right like a couple hundred million dollars in foreign exchange for the year as well. In Q4, we closed more than 400 deals over a million. All of our top 10 wins included Data and AI. Brian, 400 deals over a million dollars. Pretty awesome. And we also continued phenomenal growth with Data Cloud this year, which is the heart Agentforce. Data Cloud is the fuel that powers Agentforce and our customers are investing in it. And Data Cloud surpassed 50 trillion, that's trillion with a T, records doubling year-over-year as customers increase their consumption investment in our data platform and that is just becoming a critical and essential part of our solution. Because as customers turn on AI and Agentforce, if they don't have the data we've been talking about this, I guess, for almost two years. If you don't have the data, you're not going to get the AI that you so badly want. And nearly a quarter of those 50 trillion records, that was trillion with a T, were ingested from outside of Salesforce through our zero copy partner network, which is amazing. We'll see increased investments in software to build and agentic layer as AI continues to advance and handle a higher percentage of workloads. And we're taking advantage of the huge investments that these infrastructure companies we just we'll work with. We'll have of course we have, two substrates, live where we have Amazon and we have Alibaba. Both companies are making huge investments in infrastructure. And the third one, Google, is making a huge in infrastructure investment. We're really getting great prices from these companies. Our deployment our ability to deploy at a really low cost is just awesome and it's just driving down our cost for our customers. So that's so exciting. Look, for the full year, we delivered $37.9 billion in revenue. It's up 9% year-over-year, operating cash flow reaching $13.1 billion up 28% year-over-year. It's really one of the best performances, I think, of any software company. And with our continued |
1,873 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | up 28% year-over-year. It's really one of the best performances, I think, of any software company. And with our continued disciplined approach to margin expansion, our non-GAAP operating margin closed at 33%. That was 250 basis points for fiscal year '25. I think it's 50 basis points higher than we even gave you guidance for a year ago. Is that right, Amy? Yep. And that's awesome, but we also passed an incredible milestone with more than 60 billion in RPO. That, I don't think we could have expected. So this is this milestone isn't just a number. It's a clear signal that our customers are trusting us, deploying us, getting great value from us, and continuing to invest in our vision for digital labor. I mean, I think it's going to be that digital labor vision, that revelation that we're able to provide digital labor at scale with this trinity of apps, data, and agents that is going to drive this fiscal year '26 success. We expect to deliver fiscal year '26 subscription support revenue of 9% year-over-year in constant currency. We remain deeply, deeply committed to profitable growth and expect fiscal year '26 non-GAAP operating margin of 34%. We're going to deliver another 100 basis points of expansion following two years where we expanded more than 1,000 basis points. The pace of change, the focus on productivity, profitability, the speed of innovation, the trinity of apps, data, and agents, it's all coming together. As I mentioned, we're seeing customers deploy Agentforce across every industry. Let's talk about a couple of examples. We've been working with Lennar, the nation's largest home builder. And most of you know Lennar is really an incredible company and they've been a customer of ours for about eight years. They came to Dreamforce. And when they came to Dreamforce, they obviously got their hands like many of you did on Agentforce, got super excited, went back to Miami, talked to their Co-CEOs. You probably know Stuart Miller, Jon Jaffe, amazing CEOs. And those Co-CEOs called me and said listen. These guys |
1,874 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | Co-CEOs. You probably know Stuart Miller, Jon Jaffe, amazing CEOs. And those Co-CEOs called me and said listen. These guys have done a hackathon around Agentforce. We've got five use cases. We see incredible opportunities on our margin, incredible opportunities in our revenue. And do you have our back if we're going to deploy this? And we said, absolutely. We've deployed it ourselves, which is the best evidence that this is real. And they are just incredible. Their vision as a home builder providing 24/7 support, sales leads through all their digital channels. They're able to sell all kinds of new products. I think they're going to sell mortgages and insurance and all kinds of things to their customers. And the cool thing is they're already using our sales product, our service product, marketing, MuleSoft, Slack, Tableau. They use everything. But they are able to leverage it all together by realizing that just by turning it on, they get this incredible Agentforce capability. All right. I want to tell you another story, not just about Lennar and transforming a home builder, but I don't know how many of you know about Pandora. You've been to a shopping center. You will see the Pandora store. You walk in. They have this gorgeous jewelry. They have this cool charm bracelets. They have amazing products. And if you know their CEO, Alex, he's absolutely phenomenal. I think he's based over in Amsterdam or he's in the Netherlands. I can't remember where it is, but one of the Northern European countries, incredible CEO. Time actually just gave them an award as one of the most sustainable companies in the world. Great company. They're in a hundred countries. They'd employ 37,000 people worldwide. And Alex has this great vision to augment their employees with digital labor. And this idea that whether you're on their website or in their store or whatever it is, that they're going to be able to do so much more with Agentforce. They already use first of all they already use Commerce Cloud. So if you've been to Pandora.com and |
1,875 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | much more with Agentforce. They already use first of all they already use Commerce Cloud. So if you've been to Pandora.com and bought their products and, if you have it, by the way, it's completely worthwhile. It's great. And you can experience our Commerce Cloud, but it's deeply integrated with our Service Cloud with Data Cloud. It's the one unified platform approach. And now they're just flipping the switch, turning agents on, and they're planning to deliver 30% to 60% of their service cases with Agentforce. That is awesome and I really love Alex's vision of what's possible. And then the last customer I really want to hit on, which I'm so excited about is Pfizer. And Albert is an incredible CEO. They are doing unbelievable things. They've been a tremendous customer, but now they're really going all in on our Life Sciences Cloud. We're seeing so many, yes, I was in the business council last week in Washington, D.C., met with hundreds of CEOs and so many of the CEOs of Life Sciences industry are going with our Life Sciences Cloud. It was incredible. And you can see why because it's just a natural upgrade of what they're already doing with us. And then this idea that our Life Sciences Cloud becomes this highly differentiated capability from everything currently available in the market and then allows these pharma, medtech companies, so many, to be able to streamline not just their clinical operations, all their customer facing even the ones who want to go to direct to consumer, even the ones who want to do clinical trials. And this idea that agents are going to make all of that so much better. And with Agentforce sales agents, for example, with Pfizer, that's they've got 20,000 customer facing employees and customer facing folks. That is just a radical extension for them with agents. And I'll have to slot in one last one because I'll tell you, I'm sure a lot of you like I have flown in Singapore Air. You know what? It's a great airline. The COGO is amazing. And he has a huge vision that also came out of |
1,876 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | in Singapore Air. You know what? It's a great airline. The COGO is amazing. And he has a huge vision that also came out of Dreamforce where they've already delivered the probably the best service of any airline in the world. They want to deliver it through agents. So whether you're doing it with service or sales or marketing or commerce or all the different things that Singapore Air is doing with us, you're going to be able to do this right on Singapore Air. All right. Well, I know all of you want to see this in-person. Talk to these customers yourself. You can go to help.salesforce.com. Brian's going to talk about that. When you hear the numbers we delivered in the quarter there, you're not going to believe it. And listen a lot of people say to me, hey, how are you different from these other agent companies? Number one. Go to those other vendors. Go to their sites. Are they running their agent technology? You've all been on help.salesforce.com. You all know this incredible capability that we're delivering. You've seen it deployed by these other customers like Equinox and Remarkable and others. You've got your hands on. Do you see the other scale vendors delivering this capability or are they just using the word agent? I think you got to beware of the false agent. Because the false agent is out there where people can use the word agent or they got to, you know, they're trying to whitewash all the agent, the thing everywhere. But the reality is there is the real agents and there are the false agents, and we're very fortunate to have the real stuff going on here. So we've got a lot more groundbreaking AI innovation coming. I can't wait for you to see it at our TrailheadDX event next week and that's going to be March 5th and 6th in San Francisco. Looking forward to seeing all of you there and showing you that. And I'll tell you while you're there, and I didn't hit it, you've got to see this new product we've just built, which is Tableau Next. I'm sure a lot of you know Tableau. You probably use it every day. When |
1,877 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | new product we've just built, which is Tableau Next. I'm sure a lot of you know Tableau. You probably use it every day. When you see what we have built, which is the new Tableau built with Agentforce on Data Cloud and how it's deeply integrated into our product line, it is going to blow your mind. It is incredible. You've got to make sure you get a demo of Tableau Next. You won't believe it. You're going to see the new Slack. You're going to see the new Sales Cloud, Service Cloud, Marketing Cloud, Commerce Cloud, the Platform, Agentforce, all the products. This new field service product, which is incredible. You might get a glimpse of the new ITSM product that's coming if you look hard. But the big thing that I'm excited about, okay, the big thing that I'm really excited about is Tableau Next because that's about to deploy to customers at scale and I think people are going to be absolutely blown away. All right. Now before I do that, I have to get out the Kleenex because I have to say goodbye to Brian and Amy who you know it's kind of a moment in time here where Brian has been here for, I think, 25 years, 26 years. He's just wearing one of the many watches that I've given him to recognize his performance. Amy is here as well. She's not wearing one of her watches, but she has them at home, probably in her jewelry case or safe or something. And Amy's, how long has been Amy? 12 years? 11 years with Amy. And we're going through a little bit of a transition of our management team between fiscal year '25 and '26 and we want to say goodbye and thank you. We want to say Mahalo and we want to say goodbye, which is a Hui Hou. And thank you so much for everything, and we're going to let them talk and also say their goodbyes. But we're so grateful to everything that you've done for us every single day over the last 25 and 11 years. And it's been great to have you part of our management team, and you're welcome back anytime. So if you get lonely out there on the golf course or I know Amy's got some big plans that she's not |
1,878 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | welcome back anytime. So if you get lonely out there on the golf course or I know Amy's got some big plans that she's not ready to announce yet in the NGO world, but I'll tell you that, if you guys get lonely or you're missing the thrill of the hunt, come back and see us because, we're going to be, ready for you to come back. Okay. All right. Brian. |
1,879 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | Brian Millham: I really appreciate it. It's been a privilege of a lifetime to work here for more than 25 years. Very few people get to start at a company that has zero revenue and help it grow to 38 billion. The journey has been remarkable and this year was certainly the capstone. As you heard from Marc, in just one quarter, Agentforce has been deployed by thousands of brands worldwide, becoming an incredible lever for productivity, growth, and efficiency. It's happened faster than we ever expected. With our deeply unified platform seamlessly integrating our Customer 360 apps, Data Cloud, and Agentforce, we're leading the digital labor revolution. Customers of every size across every industry are seeing immediate and substantial value with Agentforce. We're setting new standards in the industry. OpenTable is a great example of how Agentforce is having immediate impact in just three weeks of handling 73% of all restaurant web queries, a 50% improvement over their previous tool. And they're not alone. The Futurum Group surveyed customers and found that Agentforce can achieve ROI five times faster than DIY while lowering costs by 20%. And technology analyst Valoir found Agentforce delivers autonomous AI agents 16 times faster versus DIY approaches with 75% increased accuracy. We continue to see significant increase in large multi-cloud transactions as companies look to accelerate faster time to value, efficiency, and growth. Goodyear is partnering with us on their transformation using Agentforce to automate and increase the effectiveness of their sales efforts. With Agentforce for field service, Goodyear will be able to reduce repair time by assisting technicians with answers to vehicle related questions and autonomously scheduling field techs appointments. We also continue to embed an agentic layer across our own business. Today, we're live on Agentforce across service and sales, our business technology organization, customer support, and more, and the results are phenomenal. Since launching on our Salesforce help |
1,880 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | technology organization, customer support, and more, and the results are phenomenal. Since launching on our Salesforce help portal in October, Agentforce has autonomously handled 380,000 service requests, achieving an incredible 84% resolution rate and only 2% of the requests require human escalation. And we're using Agentforce for quoting, accelerating our quoting cycles by more than 75%. In Q4, we increased our AE capacity while still driving productivity up 7% year-over-year. Agentforce is transforming how we do outbound prospecting, already engaging more than 50 leads per day with personalized outreach and timely follow ups, freeing up our teams to focus on high value conversation. Our reps are participating in thousands of sales coaching training sessions each month. Data Cloud has a powerful network effect. As usage expands, the platform becomes more intelligent and more valuable, and that's why we're seeing companies around the world, including Maserati, Bell Canada, Dolce & Gabbana, continue to invest in Data Cloud and to build the foundation to implement agents at scale. CaixaBank, which happens to be Spain's leading bank is using Data Cloud to create a robust data infrastructure that supports its agentic transformation and enables them to drive faster and more consistent customer experiences. As you know, the true value of AI is in the data. Nearly half of the Fortune 100 are both AI and Data Cloud customers, and all of our top 10 wins in Q4 included Data Cloud and AI. Agentforce is revolutionizing how our customers work by bringing AI powered insights and actions directly into the workflows across the Customer 360 applications. This is driving strong growth across our portfolio. Sales Cloud and Service Cloud both achieved double-digit growth again in Q4. We're seeing fantastic momentum with Slack with customers like ZoomInfo, Remarkable and MIMIT Health using Agentforce Slack to boost productivity. Once again, Slack was included in over a third of our deals over a million dollars and its contribution |
1,881 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | to boost productivity. Once again, Slack was included in over a third of our deals over a million dollars and its contribution to the overall deal size increased double-digit year-over-year. With nearly 5 billion messages sent weekly, Slack is central to how people work. Going forward, we're confident Slack will be the place where every company brings digital labor to all of their employees, enabling collaboration with Agentforce to get work done. Tableau and MuleSoft are mission-critical to our customers with each feature to nearly half of our greater than $1 million deals. Tableau, now integrated with Data Cloud and Agentforce on the Salesforce core platform will transform how customers like EchoStar, Goosehead Insurance, and Keller Williams Realty take action on their data. Customers can now unlock actual insights from conversational analytics, manage and analyze data using AI assistance, and build analytical agents with integrated workflows. Similarly, MuleSoft is transforming how industry leaders like Banco Bradesco, Fujitsu, and Sony Honda Mobility approach enterprise integration. With agent driven integration and out-of-the-box connectors for every major system, customers simply describe their needs in natural language and our AI automatically builds the solution. Agentforce is also enabling us to deliver truly transformative solutions for every industry and region. In Q4, nearly half of our top 100 wins were international, including wins with companies like One New Zealand, LG Electronics, and Versace. Our industry business, along with public sector and .org finished the year at an incredible $5.7 billion in ARR, up 20% year-over-year. All of our top 10 deals and nearly 75% of our top 100 deals included in Industry Cloud. To meet this demand, we prebuilt over 170 specialized Agentforce industry skills and a team of 400 specialists supporting transformations across sectors and geographies. Our new channels and partner ecosystem anchored by our amazing 19 million trailblazers are unlocking customer spend |
1,882 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | Our new channels and partner ecosystem anchored by our amazing 19 million trailblazers are unlocking customer spend and driving Agentforce adoption. And we're leaning into our ecosystem. In fact, partners were involved in 50% of our Agentforce wins and 70% of our Agentforce activations in Q4. We're also working with our partners to become Agentforce companies themselves. Accenture is using Agentforce Sales Coach, which provides personalized coaching and recommendations for sales teams, which is expected to lead to higher win rates. And Deloitte is projecting significant productivity gains and saved workforce hours as they roll out Agentforce over the next few years. Over 127,000 system integrated employees have completed Agentforce training and more than 1,000 ISVs and technology partners are building and selling agents. Our Agentforce partner network allows customers to deploy pre-built agents and use agent actions from partners like AWS, Google, IBM, Workday and more. Earlier this week, we announced expanded partner with Google that Marc mentioned to empower customers to use Agentforce with Gemini, their multimodal models, and to deploy Salesforce on Google Cloud. AWS is a huge growth engine for us, helping us close a number of large deals. In fact, in Q4, we closed 25 transactions over a million dollars including three that were more than $10 million. We're starting off FY'26 in an incredible position with a highly accomplished and technical leadership team ready to guide us through this pivotal moment in AI and agents. I'm incredibly grateful for the opportunity and to all the leaders who have gotten us here, especially Marc and Amy. It's been an honor to work alongside both of you. Thank you to our employees, customers, partners, and shareholders. I couldn't be more proud of what we've accomplished or more excited about what's ahead for Salesforce. And with that, I'll turn it over to you, Amy. |
1,883 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | Amy Weaver: Great. Thanks, Brian. I wanted to start also by expressing my gratitude to Marc and Brian for their partnership and for their deep friendship over many, many years. It's been an incredible journey, and I'm truly thankful for the opportunity. I am also absolutely thrilled to welcome Robin to the team as our new Chief Operating and Financial Officer. Fiscal year '25 was a year of incredible change with new innovation beyond anything we could have expected just 12 months ago, requiring persistence and urgency in our execution. Q4 is a reflection of that focus across the business and you can see it in our results. Let's start with revenue. For the full year, revenue was $37.9 billion, up 9% year-over-year in both nominal and constant currency. Subscription and Support revenue grew just over 10% in constant currency. Q4 revenue was $10 billion, up 8% year-over-year in nominal. This includes approximately $75 million of incremental FX headwinds since our last guidance, resulting in 9% growth year-over-year in constant currency. Subscription and Support revenue grew 9% year-over-year in constant driven by stability in sales, service and platform partially offset by MuleSoft and Tableau, who had very tough prior year compares. From a geographic perspective, Americas revenue grew 8% in nominal and constant currency. EMEA grew 6% or 7% in constant currency and APAC grew 10% or 14% in constant currency. We saw strong new business growth in LatAm, Japan and Canada, while parts of EMEA remain constrained. Of note, the United States saw some stabilization in the quarter. From an industry perspective, in Q4, Health and Life Sciences, Communications and Media, both performed well, while Tech and Manufacturing, Automotive and Energy were more measured. And as you heard from Brian, our multi-cloud momentum continues as customers turn to our deeply unified platform. That's why our top 100 deals in the quarter averaged six clouds and all of our top 10 wins included AI, Data Cloud, Service Platform and Industry Clouds. |
1,884 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | in the quarter averaged six clouds and all of our top 10 wins included AI, Data Cloud, Service Platform and Industry Clouds. Our Data and AI momentum continues as we move towards a world where AI is ubiquitous and embedded in everyday workflows. Our investments in this space have been deliberate and focused and we are now starting to yield strong returns. We ended the year with $900 million in Data Cloud and AI annual recurring revenue, growing nearly 120% year-over-year. As Marc shared, we closed more than 3,000 paid Agentforce deals in the quarter. As customers continue to harness the value of AI deeply embedded across our unified platform, it is no surprise that these customers average nearly four clouds. And these customers came from a diverse set of industries with more than half in technology, manufacturing, financial services and HLS. Q4 revenue attrition ended the quarter slightly above 8%, in line with recent quarters. Q4 non-GAAP operating margin was 33.1%, up 170 basis points year-over-year, driven by topline outperformance and disciplined expense management. GAAP operating margin was 18.2%, up 70 basis points year-over-year. And for the full year, I am very pleased with our non-GAAP operating margin of 33%, up another 250 basis points year-over-year. GAAP operating margin was 19%, up 460 basis points year-over-year, inclusive of incremental restructuring charges we incurred in Q4. Q4 operating cash flow was nearly $4 billion, up 17% year-over-year. Q4 free cash flow was $3.8 billion, also up 17% year-over-year. And for the full year, operating cash flow was a record $13.1 billion, up 28% year-over-year, and that's inclusive of a predicted 10 point cash tax headwind. And as we said, driving strong free cash flow remains a key component of our profitable growth strategy. Fiscal year '25 free cash flow was $12.4 billion, up 31% year-over-year. Turning to remaining performance obligation, RPO, which represents all future revenue under contract. We passed $60 billion for the first time in company history. |
1,885 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | RPO, which represents all future revenue under contract. We passed $60 billion for the first time in company history. Q4 finished at an incredible $63.4 billion, up 11% year-over-year, representing our customers' long-term commitment to Salesforce and the durability of our business model. Current RPO or cRPO ended at $30.2 billion, an increase of 9% year-over-year in nominal currency. This includes a $300 million FX headwind, which results in an 11% year-over-year growth in constant currency, driven by strong performance in Data Cloud and AI and Slack. Q4 cRPO also benefited significantly from strong early renewals. Within our bookings this quarter, we again saw continued stabilization in our transactional businesses including create and close and SMB. On capital return, in fiscal '25, we executed $7.8 billion in share repurchases and issued $1.5 billion in dividends. Through our capital return program, we more than fully offset dilution from FY'25 stock-based compensation. And since the inception of our capital return program, we have now returned more than $21 billion to shareholders. Now let's turn to guidance. Starting with full fiscal year '26. We expect revenue of $40.5 billion to $40.9 billion, growth of approximately 7% to 8% year-over-year in nominal and constant currency. And for Subscription and Support revenue, we expect growth of approximately 9% year-over-year in constant currency. Now I want to pause and give a few important notes on this guidance. First, on foreign exchange. As Marc noted, we've seen the US dollar strengthen considerably. And even since our last earnings call, that movement has driven an incremental $200 million headwind to fiscal '26 revenue. Our revenue guidance now incorporates an approximately 0.5 point year-over-year headwind. Second, as we experienced in fiscal '25, we continue to expect our professional services business to be a headwind to growth this year, which is reflected in our guidance for total revenue. Note that as part of our overall implementation strategy, we |
1,886 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | this year, which is reflected in our guidance for total revenue. Note that as part of our overall implementation strategy, we are leaning more on our partner ecosystem. As you heard from Brian, partners were involved in 50% of our Agentforce wins and 70% of Agentforce activations in Q4. Third, we expect subscription and support revenue to be lifted by momentum in Data Cloud and some contribution from Agentforce this year, partially offset by weakness in marketing and commerce and slower growth in our exploration base in FY'26. Finally, on Agentforce, we are incredibly excited about the customer momentum we are seeing. However, the adoption cycle is still early as we focus on deployment with our customers. As a result, we are assuming a modest contribution to revenue in fiscal '26. We expect the momentum to build throughout the year, driving a more meaningful contribution in fiscal '27. And on attrition, we expect attrition to remain consistent, slightly above 8% for the full year. Now turning to profitability and cash flow. On margins, I want to reiterate that the company remains committed to ongoing expansion. The company has laid a strong foundation for continued margin progression, efficiency and disciplined investments. Fiscal year '26 non-GAAP operating margin is expected to be 34%, representing another 100 basis points of expansion year-over-year. This incorporates intentional investments in high-growth opportunities, most notably in Agentforce and Data Cloud. And I'd like to call out that from a pace perspective, we do expect a ramp in margins throughout the year. Stock-based compensation is expected to stay relatively flat year-over-year as a percent of revenue. We expect fiscal year '26 GAAP operating margin of 21.6%, representing more than 250 basis points of improvement year-over-year. We expect fiscal year '26 GAAP diluted EPS of $6.95 to $7.03. Non-GAAP diluted EPS is expected to be $11.09 to $11.17. As we have mentioned over the last few years, we remain focused on driving durable cash flow growth. |
1,887 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | to be $11.09 to $11.17. As we have mentioned over the last few years, we remain focused on driving durable cash flow growth. We expect fiscal year '26 operating cash flow growth of approximately 10% to 11% and we are not expecting a material headwind from cash taxes this year. We expect CapEx for the fiscal year to be approximately 2% of revenue again. This results in free cash flow growth of approximately 9% to 10% for the fiscal year. Now to guidance for Q1. On revenue, we expect $9.71 billion to $9.76 billion, up 6% to 7% year-over-year in nominal and 7% in constant currency. As a reminder, we are lapping the one point leap year benefit we noted last Q1 as well as the benefit from license revenue timing. cRPO growth for Q1 is expected to be approximately 10% year-over-year in nominal, including a $100 million FX headwind, resulting in slightly above 10% in constant currency. For Q1, we expect GAAP EPS of $1.49 to $1.51 and non-GAAP EPS of $2.53 to $2.55. In closing, I'm very pleased with our strong finish to the year and the foundation we have set in place for continued success and I want to thank our employees for their dedication and execution throughout the year. I also want to extend my gratitude to our shareholders and investment community for your continued support. It has really been a privilege working with all of you. Now Mike, do you want to open up the call for questions? |
1,888 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | Michael Spencer: Thanks. Operator, we're ready to take questions now. As a reminder, we ask everyone to limit to one question and we'll take the first question now.
Operator: Thank you, sir. And the first question today comes from Keith Weiss, Morgan Stanley.
Keith Weiss: Excellent. Thank you guys for taking the question and congratulations on a really strong end to FY'25. I wanted to dig into the Agentforce opportunities, some really big numbers there in terms of the number of deals signed and really good revenue momentum there. Investors are asking me a lot and have a lot of questions on how the pricing model?
Marc Benioff: Hey, Keith.
Keith Weiss: Yes. Can you hear me?
Marc Benioff: Keith, sorry, the first part of your question. Yes, I can hear you now. The first part of your question cut out. So could you start over please?
Keith Weiss: Sure. Thanks. So congratulations on the very strong quarter. A lot of focus on Agentforce and a lot of big numbers there. Investors are asking me a lot of questions about the changing pricing model dynamics going from a seat-based model to one that includes consume developments and how that nets out. So I was hoping you could give us some color in terms of what you guys are seeing thus far when you're doing these Agentforce contracts? Is it expanding the overall contract size? What kind of expansions are you seeing if you are seeing expansions and does the math net to be a good positive for Salesforce as we move to a more consumptive model or are there any bumps in the road that we should be aware of? |
1,889 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | Marc Benioff: Okay. Well, I'd love to address that directly and then I'm going to ask Brian to come in with some specifics and examples because I think it's so exciting. I think, of course, we've kind of started the company out with the per-user pricing model, and that's about humans. We price per human. So you kind of pricing per human. And then we have products though that are also in the consumption world as well. And, of course, those started in the early days, things like our sandboxes, even things like our Commerce Cloud, even our email marketing product, our Marketing Cloud, these are consumption based products we've had for years and it's always been a mix of products that we have for humans and then products that we have for computers. Now we have these kind of products that are for agents also and agents are also a consumption model. So when we look at our Data Cloud, for example, that's a consumption product, Agentforce is a consumption product. But it's going to be a mix. It's going to be a mix between what's going on with our customers with how many humans do they have and then how many agents are they deploying? I think in one example that I can personally tell you about in the quarter, we did a large transaction with a large telecommunications company. It's incredible. And when I was talking to their CEO, she was asking me how are we going to price the transaction and so forth. And I can't remember the exact number of the deal. I think it was Brian maybe it was about $20 million in ACV something like that for the year maybe a $60 million TCV transaction. And then as part of that transaction, it's a mix of you know we're rebuilding this telecommunications company, so it's Sales Cloud, it's Service Cloud, it's Marketing Cloud. It's all of our core clouds, but then also it's Agentforce. And the Agentforce component, I think, was maybe $7 million in the transaction. So she was buying $7 million of Agentforce. She bought $13 million in our products for humans. And I think that was about $20 million in |
1,890 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | buying $7 million of Agentforce. She bought $13 million in our products for humans. And I think that was about $20 million in total. These are about approximate numbers. I think that's kind of the idea that you're going to see us be able to deliver the right package for the right customer. Even if you look at Salesforce, as I mentioned, here we are working in this world and kind of Brian has hit on it, we did, what 360,000 transactions in the quarter with Agentforce on help.salesforce.com. And then what do you have about several thousand customer support reps and so we have our Service Cloud running, we have Agentforce running. We have our different products running than our, of course, our Service Cloud is deeply integrated with our Sales Cloud and other products. So it's going to be a mix. And I think that the mix is the most exciting thing. I don't know any company that's 100% agents. I don't know of any company that doesn't need automation for its humans. I don't know any company that doesn't need a Data Cloud where it needs a consistent common data repository for all of its agents to gain their intelligence. And I don't know any company that's not going to need an agentic layer. And that idea of having apps, data and agents, I think, is going to be the winning combination. Do you want to actually give the real details, Brian. |
1,891 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | Brian Millham: No. Exactly right. There's trinity, as you called it, Marc, CRM plus data plus agents is really what our customers are coming to us for. Keith, our objective is how do we serve the customers and focus on customer success, how do we give them what they need to go drive their business forward, both from a productivity and from an efficiency perspective. The pricing models will change over time. There's no doubt about it. The nice thing that we've seen with our customers is they really understand the ROI associated with digital labor, what we're able to provide with agents is really driving the velocity of transactions that we've seen. Marc mentioned the 3,000 transactions that we closed in the fourth quarter, really driven on our ROI model that people understand that they can get a tremendous amount of benefit from agents. We will probably move into the near future from conversations as we price most of our initial deals to Universal Credits will allow our customers formal flexibility in the way they transact with us. But we see this as significant upside to our pricing structures going forward. And that's what we've seen in the early days with our engagement with customers.
Marc Benioff: We directly address like here's a transaction that you're doing, let's say, a customer comes in, they're very interested in building an agentic layer on their company. Is that bringing other human-based clouds along with it?
Brian Millham: No doubt. And I think what we've seen is that we have incremental strength in our core technology, the CRM core technology you saw in the quarter, we had some good performance in both Sales and Service Cloud, both above 10% growth in the quarter. And so we are seeing people leverage our core technology, the named pricing models with our core apps and agents together to go drive the efficiencies that they're looking for. |
1,892 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | Marc Benioff: I think you're going to really play it out. I mean you do come to TrailheadDX and you do see that new Tableau Next. I think what you're going to see is a Tableau that was only built for humans before but now is deeply integrated in the Data Cloud and has a deep agentic layer as well. So you're going to be able to come to your own conclusions, get your hands on these products, talk to the customers for an exciting moment.
Michael Spencer: Thanks, Keith. Operator, we'll take the next question please.
Operator: Thank you, sir. And our next question comes from Kirk Materne, Evercore ISI.
Kirk Materne: Yes. Thanks very much for taking the question. Brian and Marc, I was wondering if you could just talk about, you referred to it a little bit, but as Agentforce builds, obviously, not every company is going to be ready to potentially go agentic today. But is Agentforce having a bit of a halo effect around some of your other products, meaning as we are on the journey to get more monetization from Agentforce, are you seeing pickups or at least higher activity levels in some of your other products that to Brian to your point sort of form this holy this trinity? Thanks.
Brian Millham: Sure. Exactly right. And we're seeing it in the way that our customers are using our technology, new ideas, new workflows, new engagements. We talked about Lennar, as an example, their ability to handle leads after hours that they weren't able to get back to or respond to in a quick time frame are now able to touch and engage with those leads and then that, of course, flows into their Salesforce automation system. And so we are seeing this halo effect with our core technology. It is making every single one of our core apps better as they deliver intelligence underpinning these applications. And so it is the message that we're delivering this trinity of apps, data and agents that is really compelling to our customers.
Kirk Materne: Thank you.
Michael Spencer: Thanks, Kurt. Operator, we'll take the next question please. |
1,893 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | Kirk Materne: Thank you.
Michael Spencer: Thanks, Kurt. Operator, we'll take the next question please.
Operator: The next question is Raimo Lenschow, Barclays.
Raimo Lenschow: Hey, perfect. Congrats from me as well. And Marc like with Amy and Brian you lose some very experienced people on the team. What was the thinking in terms of combining those two roles? And how do you see that playing out going forward? Thank you.
Marc Benioff: Well, I'm so excited to have Robin come in as our new COFO. And I really think it's exciting because Robin really has this kind of unique capability to deliver the Chief Operating Officer position and Chief Financial Officer position. And I'll tell you, as we did the search, one of the really top candidates that we saw come through held this position in another company. And I think as Robin and I were talking about that, the leverage of having a COFO, this idea that the Financial Officer and the Chief Operating Officer really come together as this incredible partnership to deliver this capability just was a perfect match for us. I was thinking about going with it with this outside candidate and that's where I was fortunate to be able to convince Robin to take the job. And Robin would you like to just say something and just kind of come in here and just tell us about how excited you are to be part of the management team.
Robin Washington: Sure, Marc. As you've heard Brian, Amy and Marc talk about it is an exciting opportunity for us right now with Agentforce. So I'm elated to be able to join forces with the operating team. It's an exciting time in our industry as well. And as you've heard us talk about the trinity and our deeply unified platform, I think, we clearly are able to have something that's going to support our customers' growth and productivity in this new area, in this new era, I should say, with the result of sustainable and profitable revenue growth for Salesforce long-term. |
1,894 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | Marc Benioff: Yes. And I just want to also -- I should also really think Miguel Milano, as you probably know came back as our Chief Revenue Officer about a year ago and he decided to rejoin us after some cajoling. And I've asked him to work directly for me, running our worldwide sales organization and so I've been so thrilled about that. And I also have to thank Srini, who's our Chief Engineering Officer is now our Chief Engineering and Services Officer, who's taken on customer service and support. And it's been a rebalancing of our management team. So we have this amazing new executive with Robin. I couldn't be more excited to be have her by my side. And just as a little side note, Robin will tell you, I've been trying to convince her to join the company for over a decade. And so I finally got her and after a lot of selling. So we're thrilled to have Robin with us and joining us direct operating executive from the Board. And then having Miguel is so exciting, of course, having Parker with me as well is so critical. And also, as I mentioned, Srini is running Services and Engineering; and Steve Fisher, being promoted recently to our Chief Product Officer or actually our Chief Technology Officer, running Products; and our Chief Product Officer, David Schmaier, also with expanded responsibilities working directly for me. David is now our Chief Product and Impact Officer. And this is, I couldn't be more thrilled. I also have a great Chief Of Staff Kendall and a whole team around me with so many incredible functions and capabilities. And of course smiling and waving at me across the table is Sebastian Niles, my Chief Legal Officer, who has done an unbelievable job since joining the company. So I don't think I've ever had a better management team. I mean it's hard to beat Amy and Brian, but I think maybe we did it. We're really thrilled. So sorry Amy and Brian to see you go, a Hui Hou, but welcome to the new management team and we're so thrilled to have them with us and we're so excited to start fiscal year '26 with |
1,895 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | to the new management team and we're so thrilled to have them with us and we're so excited to start fiscal year '26 with an absolute bang. And Robin did you want to end with any parting comments. |
1,896 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | Robin Washington: No. We'll go to next.
Marc Benioff: All right. Very good. She's ready for the next question.
Michael Spencer: Thanks, Raimo. Let's go to the next question please operator.
Operator: Up next is Brent Thill, Jefferies.
Brent Thill: Thanks. Marc just on DOGE and the impact of what the federal state [Technical Difficulty]. I'm curious if you can discuss your role and what you think this means for Salesforce?
Marc Benioff: Well, I don't have any role. I think, of course, I'm coming at this with the beginner's mind like I'm sure all of us are that we want to see what they are able to deliver with the new administration. We're huge fans of the United States of America. We want us to be a successful country as we possibly can be and that also includes having something that I think is critically important for us, which is a balanced budget, something I've encouraged every president that I worked with for quite a few administrations to achieve. We're thrilled with our relationship with the government. You know that we have so many agencies that depend on us from providing support for veterans through our veterans administration and so many other groups. And I think even DOGE just using Slack to manage their communication and coordination. So we'll work closely with the government. We'll do anything we can to help them succeed and we wish them only the best and we're here to help at every step of the way, and we want the US to be as successful as it possibly can.
Michael Spencer: Thanks, Brent. Operator, we'll go to the next question please.
Operator: Next up from JPMorgan, it's Mark Murphy. |
1,897 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | Operator: Next up from JPMorgan, it's Mark Murphy.
Mark Murphy: Thank you so much. Marc, you had mentioned this labor arbitrage and the jobs are going to evolve. When you think through the scale of that kind of an opportunity, how much labor do you think you can augment to replace, for instance, could a company with 1,000 employees, slow its hiring or stop its hiring and just layer in a couple of hundred Agentforce spot and maybe accelerate its growth. And then further to Brent's point, can we apply that concept to federal government agencies. If they have 3 million workers and some of them are going to leave voluntarily, could they layer in hundreds of thousands of these Agentforce bots and see some greater efficiency. |
1,898 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | Marc Benioff: Well, I think, that I could wave you away and say I don't really know yet, but I will tell you that since I'm the CEO of a 75,000 person company or how many employees do we have now? 75,000, 76,000. So let's just look at us. So we have, what, 9,000 support agents. We really are seeing tremendous efficiency with help.salesforce.com, so we may see the opportunity to rebalance some of those folks in the sales and marketing and other functions. We're really excited about that. I would say that we're definitely have seen a lot of efficiency within engineering and with some of the new tools that I've seen especially some of these high performance coding tools. One of the key members of my staff who's here in the room with us has just showed me one of his new examples of what we're able to do with these coding tools is pretty awesome. And we're not going to hire any new engineers this year. We're seeing 30% productivity increase on engineering and we're going to really continue to ride that up. And we're going to grow sales pretty dramatically this year. Brian has got a big vision for how to grow the sales organization, probably another 10% to 20%, I hope this year because we're seeing incredible levels of demand. I think every company who is our customer or prospect wants us to come in and start talking about what we're going to do with them and how we're going to transform them. Everybody sees the opportunity. I think that the big message I have for a lot of CEOs that I meet with is, hey, we're the last generation of CEOs to only manage humans? I think every CEO going forward is going to manage humans and agents together. I know that's what I'm doing. So this is what I have to think about every single day as a CEO. And I think everyone is going to have to start to think about that. It's definitely starting because, as I mentioned, I was with a large CEO group last week, and it was a topic of conversation in every single person that I met with. And with whether it's those life science CEOs that we |
1,899 | CRM | 4 | 2,025 | 2025-02-26 17:00:00 | Salesforce, Inc. | 122,917 | it was a topic of conversation in every single person that I met with. And with whether it's those life science CEOs that we mentioned or financial services CEOs or manufacturing CEOs. And every example, they can see how agents are going to be able to augment their workforce. And I think you can see it also in the global economy that I think productivity is going to rise without additions to more human labor, which is good because human labor is not increasing in the global workforce. So you have a stagnant human workforce worldwide. So if you want productivity to go up and you want GDP to grow up and you want growth, I think, that digital labor is going to be one of the catalysts to make that happen and I was talking with a significant economist and economic leader last week. And I think that -- I think everyone's on the same page that we could see something really dramatic. And this is our main focus as a company. We aren't building huge $10 million, $20 million, $30 million, $100 billion data centers. We're not doing some of these kind of engineering efforts that may or may not have some kind of huge payoff, but is going to take down all of our cash and all of our margin for the next several years. We're like augmenting our existing product line with artificial intelligence, taking advantage of these incredible investments that are being made in infrastructure by others and we're going to deliver the digital labor revolution. This is our goal. Our goal is to be the number one provider of digital labor in the world. That's it. I don't think there really is another goal. You can say we're the number one AI CRM, which we already are. But when you're the number one AI CRM, you're also going to lead the digital labor revolution. And that is going to be the focus of fiscal year '26. As I said, this is the year of digital labor and it is going to be the year where every Trailblazer is going to become an Agentblazer. |
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