Q3 2020 Earnings Call

Ladies and gentlemen, thank him for standing by welcome to the fiscal third quarter earnings Conference call. At this time, all participants are in listen only mode.

After the speaker presentation, there will be a question and answer session.

That's a question during this session even beat the press star one on your telephone please be advised stuff today's conference is being recorded.

If you recall or 30 assistance, Please press star zero.

It would have put it in my a bunch of hand over to confidence comes to John Cummings Senior Vice President Investor Relations. Sir. Please go ahead.

Thanks, so much in a good afternoon, everyone and thanks for joining us for fiscal 2023rd quarter results Conference call.

Results press release FCC filings on a replay of todays call can be found on an hour IR website at Salesforce Dot com slash investor.

Now on the call today's Marc Benioff, Chairman and co CEO , Keith Block co CEO , Mark Hawkins, President and CFO , Bret Taylor, President and Chief product Officer, and Amy Weaver, President legal and corporate affairs.

As a reminder, a commentary today will primarily be a non-GAAP turns reconciliations between our GAAP and non-GAAP results and guidance can be found in our earnings press release. Some of our comments today may contain forward looking statements, which are subject to risks uncertainties assumptions should.

<unk> any of these materialize, we should our assumptions prove to be incorrect actual company results could differ materially from these forward looking statements.

Description of these risks uncertainties and assumptions and other factors that could affect our financial results are included in our SEC filings, including our most recent report on Form 10-Q with that let me turn the call over to Marc Benioff.

Very good thanks, everyone and good afternoon, and thank you for joining us for fiscal 2023rd quarter results.

For example, I am delighted to be with you.

Thanks, John John is what Keith block and they are in Phoenix, and we are here in San Francisco the topic Salesforce tower. It's been just two weeks since I saw most of your Dreamforce and I hope you've all had an amazing.

Hi, I'm thrilled to share that our Q3 results were outstanding revenue Rose to 4.5 billion up 34% in constant currency. We ended the quarter with more than 25.9 billion. A total of many performance obligation up 22% versus last year as we announced a couple of weeks ago, we've raised our full year fiscal year revenue.

Guidance to 70 billion at the high end of the range that represents 20% growth for the year. We also did she ended fiscal year 21 revenue guidance of 20.9 billion at the high end of the range were approximately 23% growth for the year.

It's more significant an extremely exciting to me is that we are also intend to double the company by fiscal year 24, where the revenue target of 34 to 35 billion, making us the fastest enterprise software company to reach that milestone, it's really incredible and it's really exciting for all of our on it.

And as we continued to deliver record revenue yearend and you're out we continue to we committed we are committed to balancing this growth incremental operating margin.

This growth is driven by the success of our incredible customers companies are coming to Salesforce transformation, because every digital transformation starts and ends with the customer that's why for the six year in ROE Salesforce is the number one CRM.

Provider by Marketshare. According to latest I'd see worldwide somebody on the all software tracker worried a leading trusted solution sales service marketing and model driven application platforms and its meal soft untapped well, we have the leading solutions data integration and now analytics to.

Extremely valuable components of every digital transformation and two very valuable components at every one of our customers strategic information technology architecture every company needs an intelligent 360 degree view of their customer and that's the power of customer Threesixty.

Our vision for bringing companies and their customers together you saw this at Dreamforce with companies like State farm in energy and Louis Vuitton now they can personalize every customer experience they can predict customer behavior and anticipate their needs. They can build modern mobile apps absent any device the magic and customer through six.

He is now customer grew 60 crude which we unveiled at Dreamforce. It connects all the data from a cross.

Sales <unk> marketing and commerce, our entire customer threesixty to build an integrated single source true, we're giving companies a complete you every customer making it possible deliberate highly personalized highly intelligent and highly connected experiences across every customer touch points and it's still grow.

It into the sales were platform. This is what our customers have been asking for and we're making it available in every one of them no. Other company could do this and by bringing all of this data together and Salesforce, we can acquire powerful analytics solutions tableau Eisenstein dataram when others that allow anyone inside the company to see if I understood.

The other data to make smarter decisions. We know this data is not just itself sports we know our customers have many platforms. That's why we're open and why we work with all of our strategic partners idea Amazon, Google, Microsoft Apple HP Dell.

And many others because it's a critical for us to work with these strategic partners to deliver a working incredible solution for our customers. That's what our customers want these partnerships continue to deliver incredible innovation and success.

We're doing all of this a tremendous scale. This look at our customer threesixty fueled our customer growth juried cyber week commerce cloud process more than 30 million orders up 27% year over year Amazing. It also powered more than 614 million retail site.

Thats up 17% year over year also incredible digital sales on commerce cloud were up 13% marketing cloud delivered more than 24 billion emails there in cyber week up 18% and service cloud processed more than 428 million agent interactions. During this critical time.

For our customers. We also saw 9% of digital orders during the cyber week driven by our Einstein product recommendations that is incredible to see the velocity of I'd start and the new Weinstein voice skills any company can build their custom voice powered salesforce apps given employee personalized CRM.

At Dreamforce, we showed you and I understand speaker demonstrated how weinstein could work on any smart speaker and now you could ask your speaker Hey, Ards died what's my forecast and I've said, we'll tell you whether or not you're going to make your numbers for the quarter.

The heart of the customer Threesixty is our incredible community of Trailblazers, We now have 1.8 million learners changing their careers and lives on drill Ed and free online learning platform, that's because salesforce ecosystem will contribute 4.2 billion jobs and 1.2 trillion, a new business revenues worldwide.

From 2019 through 2024, we continue to invest in trailhead enable more people to participate in the digital economy before handing off the Keith.

I want to take a moment and remember our lobbied friend and board member Bernard Tyson.

We dedicated Dreamforce bernards memory.

Now did sell much for others and for the World. He was one of the greatest Ceos, but he was a very close friend.

Of mine and it's very sad to see him leave us we have incredible gratitude for Bernard's incredible contributions to the Salesforce board as well as to the World Economic Forum to healthcare industry and the Kaiser we will miss him dearly.

Now over to Keith.

Thanks March.

Well, everybody I want to Echo Mark's comments on Bernard he was an incredible CEO .

Great community leader in.

As Mark said, a close friend of many of us at Salesforce. So we're all going to Miss him in our hard certainly go out to his family.

Now as you just heard from March we had another great quarter, a in really an amazing Dreamforce last month and is really just a few short weeks ago. You saw that we continue to innovate.

Harnessing the power of cloud and social and mobile and AI and voice and other amazing technologies to fuel customer growth and success.

During the quarter in at Dreamforce, Mark and I met with hundreds of Ceos and they clearly understand that the speed of innovation is increasing and that digital transformation is absolutely an imperative.

[noise] all companies want to become more customer centric they want to deliver experiences that exceed expectations and that's why more and more companies across every industry in geography, or making major sustained investments and salesforce, but they're turning to salesforce for more than just our technology. There also coming to us as their trusted advisor and today.

Together.

We are absolutely reorienting their businesses around the customer.

Working with them on all three pillars of digital transformation technology.

Business model and culture, and we're helping them breakdown silos, let Richard data <unk> legacy obstacles. These three pillars are absolutely essential to achieving a 360 degree view of each customer every customer and that is the Holy Grail of digital transformation and as you saw this quarter we continue to.

Build and expand relationships with leading brands across industries and geographies.

We expanded with nationwide now historically, most touch points with nationwide customers and wealth managers happened on the phone now they're expanding with salesforce to take advantage of the digital channels to providing more consistent personalized experience for customers.

Carmax largest dealer a pre owned vehicles in the United States expanded with us in the quarter as well with Salesforce reps will have a 360 degree view of the customer whether they're shopping online or in dealerships and they ensure a seamless buying experience.

Excel energy now excel powers millions of homes and businesses across United States. They expanded their use of salesforce the delivered a unified experience for customers across all channels.

And then this quarter.

Global Agriculture company focused on seed and crop production. They also expanded with us in the quarter to continue to modernize its business and better serve the farming community.

As we discussed during our analyst day at Dreamforce. The international expansion is one of our key growth levers and we continue to make investments across the world and see great results. In Q3, we grew 33% in the Americas, 28% in APAC and 42% in EMEA all in constant currency and that of course is with our ROE.

In acquisition of tableau benefiting year over year growth in the Americas EMEA.

In EMEA, we expanded with LNG, a global provider of low carbon energy in services headquartered in France.

Deliver a 360 degree view of customers energy consumption. So they can provide a personalized set of recommendations and define new solutions to reduce carbon footprints.

Siemens one of the world's great brands, one of the largest industrial manufacturing companies in Europe also expanded with Salesforce in the quarter and we've been a strategic partner to Siemens is the 170 year old company addresses the double digital Revolution transformation.

And its industry.

We also expanded with British Airways and food services companies the deck. So in an APAC there was a NZ bank.

Fundings and Super retail group. They also chill salesforce in the quarter and we have wins with like solutions Company, Panasonic Corporation and beyond in Japan.

Finally in Latin America, we had to win with Suraj, Colombia, leading insurance company.

Speaking of the language of our customer.

I continues to propel or industry momentum in our success in our customer success in the quarter. We introduced two new industry clouds, very proud that innovation manufacturing cloud and the consumer goods club.

We also rolled out new insurance capabilities for our financial services cloud one of our most successful clouds. We also in a number of strategic wins around the industries in Q3.

Ameriprise financial which manages more than $875 billion with assets. They expanded with FSC financial services cloud. We also formed a new relationship with farm credit services of America, which also chose financial services.

In health care children's health, one of the largest pediatric providers in the nation, Joe Salesforce, including health cloud to help them reach more patients and provide even better care experiences.

We continue to see significant opportunity in the public sector. In fact, two of our largest customers aren't U.S. government agencies.

In the quarter, we expanded our relationship with the United States Department of Veterans Affairs, enabling the agency to provide the highest level of service to 20 million veterans for a variety of programs and this isn't just a business opportunity. It's a moral obligation to better serve those who have sort of us.

Dreamforce, we heard incredible and powerful and inspirational stories from our veterans and these are people who are transitioning from serving their nation to new careers and the salesforce ecosystem.

I truly believe that all of us should be focusing on hiring veterans.

We also extended our relationship with the state of Colorado, which is implementing you'll sauce to integrate seven health and human services engine sees.

To give country excuse me county workers, a single view into key aspects of all these agencies to better engage in search citizens.

Our partners they continue to help drive our growth as well.

20% more partners certified individuals year over year or I, it's being consulting partners have contributed more than 5000 listening to the op exchange and that is with a 20% increase year over year end customer installs.

Turning to integration.

Soft has been an incredibly successful acquisition, allowing our customers to unlock and unified data across their enterprises. It's strategic every conversation we've been having and adoption continues to accelerate.

See a very similar opportunity with tableau I spent some time with Adam who is excellent. His management team is excellent and their entire team the tableau conference and Dreamforce last month, and I will tell you I could see the tremendous impact tableau is having on customers like Nissan at Morgan Stanley and home depot and many many others.

We are just beginning this integration process, but we have clear synergies from a distribution product developed and cultural standpoint, and our customer are very very excited and sort of way. So in closing I want to thank our customers our partners our employees for their trust and continued support and with that I'll turn the call over to Mark.

Well, thanks, Keith So we delivered another great quarter in Q3 with strong topline revenue growth on both the reported and organic basis as well as strong operating cash flow growth.

For a few highlights total revenue grew 33% dollars and 34% in constant currency.

Total revenue grew 21% in dollars and 22% in constant currency, excluding acquired revenue from tableau and Salesforce dot or.

CRP over 28% in dollars and 28% in constant currency.

Sure PEO grew 22% dollars and 22% in constant currency, excluding the impact of acquired CRP go from tableau and Salesforce Dot work.

Let me take you through some of the details in the quarter starting with revenue.

Total revenue for the third quarter was 4.513 billion, including approximately 327 million from tableau and 80 million from Salesforce dot or.

Just as we saw in Q1 in Q2, we continue to experience FX headwinds and revenue in the third quarter of approximately 29 million year over year, and approximately 19 million sequentially.

Looking at the drivers of growth by cloud, we continue to see strong subscription and support revenue growth with year over year growth for sales cloud at 15%.

Service cloud growth of 24% marketing and cloud commerce cloud growth of 32% and platform and other at 73% well as a reminder, our acquisition of tableau added approximately 308 million platform and other while meal soft grew 77% year over year.

Contributing approximately 185 million to platform and other.

Lower attrition continue to support our growth and the third quarter with dollar attrition down modestly year over year remaining below 10% and continuing downward trend we've seen in the last several quarters.

Turning to operating margins Q3, non-GAAP operating margin was 19.4% of 250 basis points year over year.

Our Q3 non-GAAP operating margin reflects the timing of Dreamforce in Q3 last year versus Q4, this year as well as the variations in the timing of sales and marketing other investments in the quarter.

Q3, GAAP loss per share was 12 cents and non-GAAP diluted EPS with 75 cents.

In Q3 below the line Mark to market adjustments benefited the GAAP loss per share and the non-GAAP diluted EPS by approximately one cents.

In addition business performance in the quarter.

Including better than anticipated results from tableau as well as better than expected shares outstanding benefited GAAP loss per share and non-GAAP diluted EPS by approximately eight cents.

Now turning to cash flow third quarter operating cash flow was 298 million up 108% year over year.

Operating cash flow in the quarter was driven by one the timing of collections due to a number of renewals which occurred earlier than planned.

And number two cash contributions from tableau in terms of operating cash.

On a trailing 12 month basis, we were pleased to deliver operating cash flow growth of approximately 30%.

Capex for the quarter was 170 million, leading to a free cash flow, which is defined as operating cash flow less capex of 128 million.

On a trailing 12 month basis, we were pleased to deliver free cash flow growth of approximately 31%.

Now remaining performance obligation ended the third quarter at approximately 25.9 billion up 22% versus last year.

Current Arpaio was approximately 12.8 billion up 28% year over year.

On a constant current basis share PEO growth was up 28% year over year, tableau and Salesforce dot or contributed approximately 600 million.

This amount.

Turning to guidance as we discussed at our analyst day on November Twentyth, we're pleased to be raising our full year.

Or 20 to 16.99 billion to 17 billion for a full year revenue growth of approximately 28%.

Excluding topline revenue contributions from tableau of approximately 650 million and Salesforce Dot org of approximately 220 million, we expect topline growth of approximately 21% year over year. This outlook reflects approximately 160 million in FX headwinds for the full year.

Turning to our outlook for operating margins, we continue to expect Nongaap operating margins to be approximately 16.6% got roughly 50 basis points year over year.

Excluding the impact of acquisitions. This year, we continue to expect our flight 29, GAAP operating margin improvement year over year could be more than 150 basis points.

For EPS were updating our fytwenty GAAP diluted EPS to 44 to 45 cents and our non-GAAP diluted EPS to $2, an 89 to $2 a 90 sites.

Property, bringing cash flow, we're pleased to be raising RF, why 20 operating cash flow growth guidance to 22% to 23% year over year.

For Q4, we expect revenue in the range or 4.743 billion, the 4.753 billion or 32% growth year over year.

This guidance assumes approximately 320 million from tableau and approximately 80 million from Salesforce Dot or we also expect Q4 GAAP loss per share of four cents to three cents a non-GAAP diluted EPS of 54 to 55 cents.

We expect CRP OER growth of approximately 21% year over year in the fourth quarter. This guidance assumes approximately five points of growth of recent acquisitions before I close I'd like to provide some additional insight into our guidance reflect went to work.

As you will have seen in our press release. We're also provide your revenue guidance for Q1 flight 21 of 4.800 billion to 4.35 billion up 28% to 29% year over year, we're providing this one time guidance for Q1 of which 21 given the newly acquired businesses.

Especially tableau, which have more seasonal revenue profiles in the first quarter to wrap up we delivered another quarter of strong topline organic and reported revenue growth with continued organic margin progression and strong cash flow growth.

I'd like to thank our employees customers partners and shareholders for your continued support into issue a wonderful holiday season, and a happy new year, and where that will open up the call for questions.

As a reminder to ask a question you will need to press star one on your telephone to withdraw your question. Please press about key.

Your first question is from Brent Bracelin from Piper Jaffray.

Great and thank you for taking my question.

I guess the first one here you're coming out of hundreds of copper customer conversations at Dreamforce I was hoping you could just maybe rank order that the top two or three salesforce products, where the customer appetite seems to be the highest invest next year any color you could provide us on where.

Customers. We're most excited from a pop perspective would be very helpful. Thanks.

Sure I'm I'm happy to take that and then I'd love to pass that on C.. Brett also so number one I would say that.

For me Dreamforce is an amazing process, it's not the event that is the most impactful for me I'm sure that is for everybody else. It's the conference that's extremely impactful for me, it's the process coming up to it.

Before Dreamforce I have the opportunity to get on the road with my team.

And we take the keynote out and we meet with.

Hundreds of customers and in my case I personally have the opportunity to have one on one conversations and in this case I had conversations with almost 100 customers directly about salesforce their experience what theyre using in technology, where theyre going with there.

Yes.

Over and over again. It's this is the most important thing I do every single year is this deep work and I have many of my key executives Whitney.

What I was most focused on this year is of course females present. These incredible strategic changes that we've made to our business.

Especially meal Sop, especially tablo.

But also to be able to communicate what our core strategy is in terms of customer threesixty.

And.

What I took away with it was that customers today.

View.

At Salesforce as their trusted digital advisors.

And.

Also.

Look to us to help them have a clear vision connecting with their customers.

Thats what customer Threesixty is all about it's really bifurcated, they're looking for a trusted advisor relationship and many times as Keith mentioned at the CEO level, but it's also at.

Other.

Archie the organization, where there's been so much change in the industry, they're looking for companies that they can rely on that on.

And the second side it was really customer threesixty that chest. So amazing to me that customers are really implementing customer threesixty, but every customer can start at a different place.

Sales service marketing you probably noticed that one of the things that we focused on is the new sales for 360 truth profile.

This is the Holy Grail for me.

During the single source of true when customers saw this.

The comments were paraphrase what.

What an exit large financial service company in New York said to me.

This is for US the single most important thing in our company, we need a single source a true of our customer information that all of these apps can come together in a powerful way and deliver that single source of truth.

That is what customers were just amazed by and I have to take my hand off to my engineering team because I didn't think it was really possible to see it all come together.

Some of these products organic some of them or inorganic, but now that they are integrated and have a clear architecture and that they have the ability for the customer to have extreme value that was incredible and then I have to add to that.

And I think Keith touched on this.

I definitely agree.

Hello far exceeded my expectations from a customer reception.

So many of our customers have tableau.

Could not believe it and in many cases, because tableau is been a much smaller company that we are for example, they don't have a direct relationship with Tablo. They don't have an executive relationship.

The number as chief executive officers and CIO shows.

Directly come to me and my management team and ask US to go wall to wall with tableau has far exceeded any expectation that we could have had.

That combination of those three things one our trusted relationship with a customer to customer 360, resolving the truth profile and three Abelow has a huge catalyst for growth that.

To me is what I tried to then get onstage and present in the keynote.

But I can tell you that after talking to these hundreds of customers now both before Dreamforce and after.

This is a highly differentiated position and then street no. One else is working on this nobody has this division no. One else has trying to help these customers solved. This problem. We are in a very unique position with a highly stratified position of customers.

Globally and by industry. So that's really my takeaway I hope I answered it for you I mean, it's been a very powerful several weeks for me.

And it's also been extremely emotional moment, because I'm sure you note the day before the keno.

That might one of my very closest friends Memorial.

And then I came into that keynote and I just felt all those customers there and I want Wow.

This is just incredible what was happening and I really tried to.

Open myself up to really express what I had heard over those proceeding few weeks that we are just in an unprecedented moment and and salesforce ability to execute for our customers needs.

And Brett do you want to fill in the details I'd love for you to talk about practice.

Decode Yeah, Mike as Mark said, it's really transitioning from being about cloud the being around this customer grew 60, the single source and true.

It's really about not just selling a product to our customers were really helping them digitally transform their business around their customers and the single source of the truth mean that easier than ever for customers to go from unit sales customer to be in sales and service are being a service customer to be service and commerce.

And marketing and you're seeing that it's I think particularly on the cyber Monday statistics, which we're really proud of.

I also want to highlight there really are made differentiator, which as I sign or AI capabilities are coming through stronger than ever I heard that from every single customer that mark and I talk to and keep an eye talk to on that road show before Dreamforce. Those 24 billion messages, we sent over cyber week, those 32 million orders there, albeit personalized.

As Mark mentioned over 10% of those orders are being driven by on spend recommendation. We're doing over 10 billion predictions per day to personalize every single one of those email engagement with a personal to the person receiving the amended the innovation that we highlighted in the keynote I'm really Einstein came through really strongly across.

This customer through 60, I think in a really differentiated way with our sales cloud we introduced Einstein call coaching to help telesales teams through the power of Einstein automatically coach every sales representative to become like the best sales representative I'm in marketing, we introduced interactive email I think bringing one of the most.

Tried and true digital marketing mechanisms really into the next century with some amazing new capabilities I'm, even in our industry portfolio that consumer goods cloud that you've talked about really proud about Einstein vision as a key part of that could enable every consumer goods company in the retail execution to use Einstein vision to make sure their products are placing.

The right place on the cells with all the retail partner, so I really want to highlight I think we have transitioned I'm sorry for being this vision to every customer adopting it really being a key differentiated part of this customer Threesixty vision no. Brett before you have your narrative I just have to ask you. The same question, but I got asked which was.

Before Dream for you are also on the road with me Yeah.

You did you might break I think you did either additional two or three major focus groups.

So you've been in front of hundreds of customers as well what was your biggest surprise talking to them Rolling all of this technology and version out and demonstration over the last month I think the biggest prize for me was just how much of this customer threesixty single source of truth resonated in fact that phrase single source of group came from our customers.

Is.

They were describing their challenges and their digital transformation as breaking down the silos of their company, they're silos come in the form of technology third data OSI load across a number of different systems. They're also organizational silos. So different department that previously operated with autonomy now need to come together to produce the singles.

Seamless customer experience.

Well I think our strategy is really focused on that singular vision, we want to bring all that data together technically with the power fuel. So we want enable people to see it understand that data with tableau and we want to enable people to personalized every aspect of their customers experience of the customer Threesixty, we really feel like all of these components are coming together to really match that appetite from our customers.

Brett I haven't seen you work harder than you have the last month, so I want to thank you for everything that you're doing.

The next question is from brand hail from Jefferies.

Thanks for Mr. Hawkins. The renewals you mentioned came in earlier than planned can you just talk too.

Given that anomaly that was.

In just the impact for before that pull forward.

Yes for sure. Thank you Brent and basically what happened is where we have an early renewal from a customer that's a really good event as you can imagine but they were ahead of plan and you can see that when they happen because our Rps CRP show and Q3 was even higher.

And so it has an effect is kind of a timing effect between Q3 in Q4 for share IPO, but we really like what happened. It's a good customer sign when people come in there and they do early renewals and so that had had had a bearing on that and Oh, we're glad to see it shows up on our cash flow.

And it shows up in CRP, only one quarter and little bit of timing between the two quarters, but.

Yes, that's that's how it works out there Brian .

Thank you for the question. Thank you.

Your next question is from Karl Keirstead from Deutsche Bank.

Hi, Mark what am I, just pick up on that question, a little bit more so relative to the 22% to organic CRP outperformance you put up in Threeq, you, which was terrific. The the 16% to guide for Fourq, you feels a little bit light. So you just touched on perhaps one explanation.

Is it possible to quantify how big that impact was and if there are other factors maybe driving your guidance for that 16% number maybe being a little extra careful given macro or maybe there was some contract duration changes. Thank you.

Yes, sure let me let me just address a couple of things here.

Carl for sure glad to do it I think the first thing I would say as the early renewals.

Impacted the growth rate by let's say approximately at point.

Or so and.

And that type.

Measurement in terms of quantification number one number two I want to call out that this is the first time, we've actually ever guided Scorpio for Q4, it's kinda and new event for us and we're doing it for the first time by adding then tableau and so our business come but compositions also evolving and so when we looked at that and we looked at.

The fact that when you look at what actually happened and Q3 and the guide in Q4. It works out just you can see kind of the timing issue that all we feel like it's a it's a it's a good and reasonable guidance its appropriately conservative given that this is the biggest quarter for both new business and renewals, we look forward to.

Putting up the result in talking about the actuals in Q4, but we think thats appropriate.

The next question is from satellite completion from Macquarie.

Okay. Thank you question for Mark the Marquiss noticed over the past 18, 18 months or so maybe a little longer a growing importance of customers first party data versus third party data, but maybe in the past that you've been purchasing to augment gaps from platforms that are.

Increasingly being regulated or commodity size. So we believe customers are putting their most valuable data into CRM and we'd like to know how you're going to help customers realize the value of their own first party data are we going to be able to truck business with multi cloud adoption or customer threesixty I'm, just sort of a little bit of a fall.

All the won.

The data mosaic he'd been building between Neal Sop Einstein customer Threesixty and Tablo do you feel you have the right data mosaiq in place today help customers realize that value.

All right. This is a great question and I'm going to address part of that but I'm also going have Brett is right here address part of it and also Amy lever also speak to it is our president and Chief legal officer.

Because she is so involved with so many customer conversations exactly like this so you're right.

Companies have.

More customer information than ever before it's a critical part of their trusted relationship with their customers. Every company is building a one on one relationship with their consumer it has moved from being a non I Miss to know.

This is.

Critical for them to then build a journey that then allows them to take those customers to understand their products or to buy those products or get their service from their products upgrade those products.

That that could even include.

Renewing the customer retaining the customer or even getting the customer back all of this is going to be driven much more effectively much more efficiently.

And in a much more dynamic way by using a customer threesixty platform like Salesforce.

This is why we built customer re 60 true.

Because at that moment those customers have to be able to rely on a single source accrue to go to maximize their relationship with their customers, where regardless of where the customer touch points.

Yes.

This is a phenomenon that has occurred over the last.

I would say five years.

And Salesforce is really the company that companies are coming to and saying help us to provide that.

Unique customer 360, so Brett give us your.

Take on exactly where are we in terms of that move from third party to first party data how customers are implementing this platform I didnt address the tableau part up or question I think Thats important then I think we'll have the me address the components and route.

We've seen here in California, the California privacy at GDPR as well because these are all related to the importance of having authenticated and.

Basically data that your customers authorized go ahead, Brett Yeah. The wonderful question I really agree with the trend that you mentioned it I would say Phil first started its been a you know system of record for sales, but not every single aspect of CRM had been served equally to help handle this first part.

The customer data and where the customer threesixty, we really feel like we can bring it to every aspect of this customer through 60 from sales to service could commerce to marketing as an example, with customer through 60 audiences, which we announced a dream force, we're bringing a single sorts of truth to marketers as well this customer data platform that so many marketers are core.

Before we really recognize that every one of our constituents in every department of every company needs. The single sorts of true to do their jobs and we really like the power is unlock a win that known customer data is accessible across all the different departments to create a seamless experience instead of a fragmented experienced the we feel like what I'm hearing from.

Our customers and that's really what differentiates salesforce, we're not just doing this for one department were doing that's where an entire company. So you can have a single view of all of you know in customer data and I think one of the interesting things is by bringing this together, it's enabling our customers can navigate all become amazingly complex regulatory landscape that Amy will speak to.

You about the first step complying with DCP I would GDPR is really having a map of where customer data with and we feel privileged to partner with our customers to help them navigate the landscape and we feel like what are the best way to comply with the TV landscape of consumer privacy legislation there could be on the salesforce customer through fixed.

I mean, we really think that's one of the value propositions of our platform and I'll pass it over to EBITA for speak more about it.

Great. Thanks, Brett Thanks, Mark I think it's really interesting questions when looking forward.

All of this personalization, because consumer expectations that privacy and how big data. If you could add an all time high like same kind of consumers have high expectations about personalization.

The information, it's not follow that.

And they want their experiences with companies that they trust picking standby.

I think he is that we believe that the personalization and building maintain traffic not mutually exclusive and take a pipe became purchasing cycle.

That's my successor platforms again.

In the country for help our customers trusted and personalized for license customers and former.

For example, with ducking robust features they help our customers determine how they want thanks.

And we'll let me say to partner with our customers on their compliance sharing as well.

Now Mark briefly mentioned at the CPPL, which is the California out consumer privacy and that's going into effect in January 1st Yes that is really important step forward in the U.S. privacy landscape.

But as I've said before we really appreciate the all Americans and not just doesn't California.

Is there strong private the pretax sense and that is why we are continuing to appetite I became quite comprehensive echo.

Okay. Thank you.

Yeah and to add the EMEA. That's also why I called for a U.S. national privacy laws, we do not want a patchwork of like what we've seen in California personal involved I think it's extremely important what has happened in California I I.

I have worked with the team to get that done as did Amy, but we don't want to patchwork across the United States, we badly need a national privacy law. That's why it's great that we have GDPR. It gives us the ability to help our customers comply so anyway. Thank you let me clear leadership I really appreciate it.

Your next question is from Keith Weiss from Morgan Stanley .

Excellent. Thank you thanks for taking the question.

I wanted to touch a little bit on the European business EMEA up 42% was a really impressive result, given the that kind of macro uncertainty in does for closing the quarter in October which had a lot of Brexit uncertainty.

Is it is it just a better environment than we're thinking about over in Europe or is the sort of.

D.

Priority from the CIO just over over sort of former taking any uncertainty people have about that spending environment.

Well I think that Theres, a couple of different ways that you have to look at it number one is that.

For all customers, we really believe that digital transformation is the last thing they would stop investing in I mean, I look at all your own companies look at our company digital transformation is number one and everybody is list and everybody wants.

Trusted digital advisor.

At the beginning in end of every digital transformation is the customer so that that's why we're especially well position and why you're seeing these strong results.

On the macro side I said this also at the analyst day, which is.

We look strongly at the macro environment and you see what and how Guerrero said at the OE CB global growth is dropping from 4% to 3% this year.

That's a 25% reduction year over year of course, that's going to impact different.

Geographic environments differently and for US our job is to manage a full portfolio of countries across the world. We are in the major technology buying centers.

In whether it is in the United States are in Asia, or Japan, we have also implemented.

A new structure in Europe , we had our on Brexit. If you will you know that we have hired Jane and good idea to be the chief Executive officer of Salesforce, UK and Ireland.

I believe that's a very critical.

Change for us and we're continuing to invest aggressively.

In Europe , and in the UK and Ireland through their own transition and transformation. So that we can align with our customers because they all need to invest to be able to take advantage of what's happening in the European environment.

Let me also turn it over to Mark is going to have more detail. Thank you Mark and I I agree with your comment that.

The digital transformation is mix you want and people are asking more and more from us Merck.

In terms of how we can help them obviously as described by you and bright.

The thing that I would say is you know it was really pleased to put up the 42% growth rate in aggregate, but even if you back I mean did that surprise you would you look at these numbers and then some of them are just incredible that number it was a really big number mark So I clicked in it and I wanted to share with people, even if you back out all the count will affect.

It's up 31%. So that's a number that really happy that we're we're hitting strong across the different geos in the world as you said in Asia in Americas and.

Our Europe with or without tableau, and then also the cloud our growth what I really like is to see the sales progress that 2% is our material for me Hutchens My eyes that when our foundation quality is growing at that level I was glad to see that.

Incredible growth, especially by cloud I just went through all the numbers, but let me ask you. What is your biggest surprise April quarter, but the from Dreamforce. We've heard that question question. A couple of times. When I think you should have the ability to sure no I get a chance as you know to spend a lot of time that customers are addition, investors.

I think the thing that I like it's just the constant.

Focus on digital transformation.

Ask for us to do more is probably the biggest surprise me is that people when they see progress they want more progress and I think your point single source of truth and when you spoke a couple of times people pickup on that and so I think the few more is the thing that really caught my attention.

In terms of the quarter, what I like the balance across clouds across geos amongst.

Thank you.

Your final question is from cash Wilan from Bank of America.

Congratulations again on a spectacular dreamforce team one for Binney off from one for Keith Markey look at customer to 60, the industry's tried to do this execute this concept going back to the days of see mostly spock or so.

Do we think of Threesixty does that allow sales force to participate in bigger opportunities.

To be executed faster or just allow me to just staying the game because it's something with customers sort of expect sales force you to.

Proactive versus.

Active as I guess, a spectrum that I'm, hoping for you to fund then that's what give a keith congratulations on meals talk to me, it's been accelerating and estimates are under sales force. How would you play this model to tableau and what's really going to think about how tableau could end up being successful or maybe even more successful if an acquisition acquisition as well as meals off I think.

So much.

Mark when you take pull as part of their 100%.

Right, which is that for customer 360.

We really entered a unique position with our customers are customers today.

They're looking to us as their provider of that platform that's really.

A critical and unique position you mentioned siebel of course, there's been many companies have been in the CRM market may be in service maybe on sales I don't think theres ever been a vendor who has tried to execute this vision before and tie it all together.

With a single source of truth for their customers and.

Going to ask Keith that take this next but you mentioned meal soft you mentioned Tablo. This is critical for our customers to move forward, we needed meal soft as the next step to be able to help us bring all this together tableau is critical as our customers want to be able to go wall to wall to understand all of this.

Data.

And that has really shifted our position with our customers and I love for key to talk about his his experience as well Keith.

Yeah. Thanks, Mark So cash next to the question.

A couple of things just some commentary on Mark's comment and of course I'll try to address the the the other question so like in my entire career.

The industry has been yearning.

For the 360 degree view of the of the customer.

And as time has gone on the companies recognize the importance of this and the power of it.

Few weeks back I was with the CEO , where the largest insurance companies in the world and we were having a conversation about how overtime.

That company has grown up in silos and Brad alluded to this earlier.

They're organizational silos process Islands bills business model silos data silos.

Add those companies grew up with a product out to the market view of the world instead of a customer in view of the world and so every company has to go through that huge digital transformation and to be able to to make that journey work. They have to embrace the platform. The notion the promise of the 360 degree view of the customer I mean that has an impact.

Active so people have been talking about this it hasn't become a reality that's why we're excited about it because the very first time in this industry.

The company that's us at Salesforce has been able to provide the technology to give the customers what they've been looking for for so long. So it's very very exciting.

And when you think about how these companies grow up with data all over the place and all the in Consistencies and no single source of the truth. They just want the truth like we all want the truth, our customers expect the truth their customers expect the true. So it is a very very powerful thing that we're able to provide them with.

As it relates.

To tableau.

Super excited about tableau being part of the Salesforce family and again, if you think about the evolution of where the technology is going we you think about the systems of record will the systems of record or nothing without data and the systems of engagement or nothing without data and the systems of intelligence or nothing about data and the power of visualization.

Patients with analytics and intelligence.

Is that an incredibly unique opportunity and we'd run a playbook.

In all of our acquisitions, which had been very very successful certainly mule soft has been the most successful that we've run so far.

Where customers are looking for that holistic view, they're looking for solutions, they're not looking for piece parts and if you can bring together the best of breed solutions in an integrated way.

That is what customers want so the playbook that we ran with Newell, we will run the exact same playbook I would echo both mark and Brets comments earlier the enthusiasm.

For tableau alone was great I mean, it's a great was a great company is a great company, Great management team great community.

But when you combine that with all of the promise of the 360 degree view of the customer and being able to serve that up in an intelligent way in a visualize way. So we can process it digest it.

It's just a very compelling offerings. So thats why the combination of Salesforce and tableau, we think we'll be very very successful.

Well. Thank you Keith I just wanted to thank you so much for that and I completely agree and I think that you could see it really from the the lines.

At Dreamforce around the tableau blues and on analytics falls in other parts of Dreamforce I know what surprised many of us and many of you to see the huge I guess, if I was not a surprise to me.

Because of what was.

What was happening.

In the focus groups before Dreamforce.

While we wrap up the called now I just want to thank all of you for coming to Dream Force.

Today is giving Tuesday were coming into the holiday season.

I want to specialty thank all of our on I. Thank all of you for your support.

Thank you for everything that you do for US every single day.

Also especially want to thank our Dod Oregon at this time of the year, who has run over 45000 nonprofit and higher education customers for free.

We've now done over four and a half million hours of volunteerism and do our local communities and given away more than $310 million in direct grants. So thank you to all of you. Thank you are a Honda and we'll look forward to see new on the 19th in the New York City World too.

Sure Yeah.

New York, Thank very much.

Ladies and gentlemen. This concludes today's conference call. Thank you for your participation and had a wonderful day.

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