Q3 2022 Salesforce.Com Inc Earnings Call

November 30, 2021

Speaker 1: Brett Taylor, Vice Chair and Co-CEO, Amy Weaver, Chief Financial Officer, and Gavin Patterson, Chief Revenue Officer.

Bret Taylor, Vice-Chair and co CEO, Amy Weaver, Chief Financial Officer, and Gavin Patterson Chief Revenue Officer. As a reminder, our commentary today will primarily be in non-GAAP terms. Reconciliations between our GAAP and non-GAAP results and guidance can be found in our earnings press release.

Speaker 1: As a reminder, our commentary today will primarily be in non-GAAP terms. Reconciliations between our GAAP and non-GAAP results and guidance can be found in our earnings and press release.

Under our commentary today will primarily be in non-GAAP terms 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 that are subject to risks uncertainties and assumptions. In particular, our expectations around the impact of the COVID-19 pandemic on our business, acquisition, results of operations and financial condition and none of our customers and partners are uncertain and subject to change. Should any of these materialize, or assumptions prove to be incorrect actual company results could differ materially from these forward-looking statements.

Speaker 1: Some of our comments today may contain forward-looking statements that are subject to risks, uncertainties, and assumptions. In particular, our expectations around the impact of COVID-19 pandemic on our business, acquisition, result of operations, and financial condition, and that of our customers and partners are uncertain and subject to change. Should any of these materialize, or should our assumptions prove to be incorrect, actual company results could differ materially from these forward-looking statements.

Our assumptions prove to be incorrect actual company results could differ materially from these forward looking statements.

Speaker 1: A description of these risks from certainties and assumptions and other factors that could affect our financial results is included in our SEC filings, including our most recent report on Form 10-K . With that, let me hand the call to Mark.

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 Form 10-K. With that, let me hand the call to Marc. Well thanks, so much. I hope everyone on the call and all your families had a wonderful Thanksgiving and happy Hanukkah, everyone celebrating the festival of lights this week.

Well thanks, so much.

Speaker 2: Well, thanks so much, Evan, and I hope everyone on the call and all your families had a wonderful Thanksgiving and Happy Hanukkah to everyone celebrating the Festival of Lights this week.

I hope everyone on the call and all your families had a wonderful Thanksgiving and happy Hanukkah, everyone celebrating the festival of lights. This week.

Speaker 3: Now, this year I'm grateful for many things, but I'll have to tell you, I'm very grateful for my good friend who I'm sitting here with, Brett Taylor. And Brett, congratulations on becoming the co-CEO of Salesforce. Thank you, Mark. It's really an honor in a lifetime. Thank you. Thanks aboard. And most importantly, thank you to our customers and Trailblazers. I'm honored to be a part of you in this next chapter of Salesforce.

Now this year I am grateful for many things, but I'll have to tell you I'm very grateful for my good friend, who I'm sitting here with Bret Taylor and Brett, congratulations on becoming the co CEO of Salesforce. Thank you, Marc, it's really in honor of a lifetime. Thank you. Thank the board and most importantly, thank you to our customers and trailblazers. I'm honored to be a part of you in the next chapter of Salesforce.

This year I am grateful for many things, but I'll have to tell you I'm very grateful for my good brand, who I'm sitting here with Bret Taylor and Brett Congratulations on becoming the co CEO of Salesforce. Thank you Mark it's really in honor of a lifetime. Thank you. Thank the board and most importantly, thank you to our customers and trailblazers.

I'm honored to be a part of you in the next chapter of Salesforce.

Speaker 2: Well, Brett, you know, I first met you, you were at Google, you did an amazing job with Google Maps, and you started your, your own company, then I was acquired by Facebook, you became the CTO of Facebook and

Bret, you know, the first time I met you you are at Google. You did an amazing job with Google maps and you started your own company than it was acquired by Facebook you became the CTO of Facebook. And then use Facebook and started another company in Salesforce was very lucky to buy that company quick.

First met you you are at Google you did an amazing job with Google maps and he started here at your own company than it was acquired by Facebook you became the CTO of Facebook and <unk>.

And then use Facebook and started another company in Salesforce was very lucky to buy that company quip.

Speaker 2: And then you left Facebook and started another company and Salesforce was very lucky to buy that company quick.

Speaker 2: And then you've had an amazing run here over the last five, five and a half years at Salesforce.

And then you had an amazing run here over the last five, five and a half years at Salesforce and most recently as our Chief operating officer, and now as co CEO, we couldn't be more grateful for you and your leadership and congratulations and it's just amazing to watch you grow.

Speaker 2: And most recently as our Chief Operating Officer and now as.

Most recently as our Chief operating officer, and now as co CEO, we couldnt be more grateful for you and your leadership and congratulations and it's just amazing to watch it grow.

Speaker 2: co-CEO, we couldn't be more grateful for you and your leadership and congratulations and it's just amazing to watch you go. Well Mark, I don't know if you know if you were the first person I called when I started that second company because I wanted your mentorship and advice. So for me this partnership is really the culmination of a decade-long friendship and I'm just grateful so excited for this next chapter. Well it's super exciting and I'll tell you you know we're going to get into this Brett but you know you you've had a lot of great experiences with customers this quarter and also with all of our

I don't know if you know, you are the first person I called when I started the second company because I wanted your Mentorship and advice for me. This partnership was really the culmination of a decade long friendship and I'm just grateful and excited for this next chapter. Super exciting and I'll tell you, we're going to get into this breath, but you had a lot of great experiences with customers this quarter and also with all of our own. Just give us one insight out of the quarter. Tell us about the world and what's one thing you learned this quarter that that really has surprised you or might you that you can share with all of us. Well actually Gavin Patterson and I, we took a trip to Europe together. We visited London, Paris, Amsterdam Frankfurt and that makes a rollercoaster. From the more than 60 customers, we've talked to you on that trip is a sense of really moving forward. Lots to take into account and health and safety, we have to really think about the pandemic is endemic but two parts coming out before moving forward. They're focused on growth and they are focused on this new normal and I have a very optimistic view of the future. Despite this rollercoaster of the pandemic.

Super exciting and I'll tell you, we're going to get into this breath, but.

<unk> had a lot of great experiences with customers this quarter and also with all of our own.

Speaker 2: You know, just give us one insight out of a quarter. Tell us about the world and what's one thing you learned this quarter that really has surprised you or enlightened you that you can share with all of us.

Just give us one.

One insight out of the quarter tell us about the world and what's one thing you learned this quarter that that really has.

Surprised you or might you that you can share with all of us well actually Gavin Patterson.

Speaker 3: Well, actually, Gavin Patterson and I, we took a trip to Europe together. We visited London, Paris.

We took a trip to Europe, together, London, Paris Ams.

Speaker 3: Amsterdam, Frankfurt, and, you know, there's this pandemic's a rollercoaster.

Amsterdam Frankfurt and.

That makes a rollercoaster.

Speaker 3: but what I heard from the more than 60 customers we talked to on that trip is a sense of really moving forward that you know what the

From the more than 60 customers, we've talked to you on that trip is a sense of really moving forward.

Speaker 3: you know, take into account health and safety. We have to, you know, really think about this pandemic as an endemic. But people are shutting down, people are moving forward. They're focused on growth and they're focused on this new normal. And I have a very optimistic view of the future despite this rollercoaster of a pandemic.

Taking into account and health and safety, we have to really think about the pandemic is an endemic but two parts coming out before moving forward. We're focused on growth and they are focused on this new normal and I have a very optimistic view of the future. Despite this rollercoaster of doubt about it.

Speaker 2: It is a rollercoaster of a pandemic, you're absolutely right. Well, it's been an amazing six quarters, and I'll tell you the last six quarters, well, that's even unlike anything Salesforce has ever been through that I've ever been through.

It is a roller coaster with the pandemic, you're absolutely right. Well, it's been an amazing six quarters and I will tell you the last six quarters, they've been unlike anything Salesforce has ever been through that I've ever been through. I'd say this as you know things are still changing and transforming almost in a pandemic age and we're kind of getting used to what does it mean to be inside of a pandemic.

I will tell you the last six quarters, they've been unlike anything salesforce has ever been through that I've ever been through.

Speaker 2: And, you know, we, I would say this is, you know, things are still changing and transforming. We're almost in a pandemic age.

We.

I'd say this as you know things are still changing and transforming almost in a pandemic H and we're kind of getting used to what does it mean to be inside of a plant.

Speaker 2: And we're kind of getting used to what it would mean to be inside of a pandemic. And yet at the same time, Salesforce has never been more successful.

And yet at the same time, Salesforce has never been more successful and I think, Bret, when you look at the financial results I am sure you would agree. This was an amazing third quarter. Revenue in the quarter was $6.8 billion up 27% year over year, and it's really driven by all of these amazing products, but really by this incredible customer success and we can see it where we're number one again for the eighth year in a row.

Speaker 2: And I think, Brett, when you look at the financial results, I'm sure you'd agree, this was an amazing third quarter. Revenue in the quarter was $6.86 billion, up 27%.

This was an amazing third quarter revenue in the quarter was $6 8 billion up 27% year over year, and it's really driven by all of these amazing products, but really by this incredible customer success and we can see it where we're number one again for the eighth year in a row.

Speaker 3: year over year, and it's really driven by all these amazing products, but really by this incredible customer success. We can see it. We're number one again for the eighth year in a row in CRM, according to IDC, it's really exciting. Were you surprised to see that? Not surprised at all, but it's something I look forward to every year, every time those numbers come out. Wasn't that just awesome? And you know, our sales and service clouds.

In CRM according to IDC, it's really exciting we are surprised to see that? Not surprised at all but it's something I look forward to every year, every time those numbers come out. Wasn't in this awesome and our sales and service clouds, well they become massive individual businesses at this point and generating more than $6 billion each. That's bigger than a lot of cloud companies by themselves and they're continuing to grow in the double digits. It's amazing I mean sales cloud is amazing this quarter.

Speaker 2: Well, they've become massive individual businesses at this point generating more than $6 billion each.

Speaker 2: I mean, that's bigger than a lot of cloud companies that I know of by themselves, and they're continuing to grow to double digits. It's amazing. I mean, Sales Cloud is amazing this quarter.

Bigger than a lot of cloud companies.

By themselves and Theyre continuing to grow in the double digits. It's amazing I mean sales cloud is amazing this this quarter and <unk>.

Speaker 2: Operating in the margin in the quarter was also very good at 19.8% and that exceeded my expectations.

Operating in the margin in the quarter was also very good at 19.8% and that exceeded my expectations and we delivered $404 million in operating cash flow, up 19% year over year. And now, for fiscal year '22 we are raising our revenue guide again, just raised at an Investor Day, a couple of weeks ago and now we're raising it again to $26.4 billion at the high end of the range.

Speaker 2: and we delivered $404 million in operating cash flow of 19% year over year.

Speaker 2: And now for fiscal year 22, we're raising our revenue guide again, just raised it in Investor Day a couple of weeks ago.

Speaker 2: And now we're raising it again to $26.4 billion at the high end of the range.

Representing 24% projected growth year over year. That's a $100 million raise since Q2 when we initiated guidance for revenue in December of last year. We've now raised guidance since that initial initiation. $850 million is pretty awesome. And we're delighted to raise our full-year operating margin once again to 18.6%.

Speaker 2: representing 24% projected growth year over year.

Speaker 2: You know, that's $100 million raised since Q2 when we initiated guidance.

Speaker 2: for revenue in December of last year, we've now raised guidance.

Speaker 2: that initial initiation, $850 million. Pretty awesome.

Speaker 2: And we're delighted to raise our full year operating margin once again to 18.6%. You know, we have obviously a new team, we have a new structure now, we're in a new world, we're talking about that. But we have an incredible new model and it's really reflected in this incredible operating margin performance really for this year and also the operating margin guide for next year as well. And this is really an incredible reflection of this.

And we're delighted to raise our full year operating margin once again to 18 six.

We have obviously a new team. We have a new structure now. We're gonna do world, we're talking about that but we have an incredible new model and it's really reflected in this incredible operating margin performance really for this year and also the operating margin guide for next year as well. And this is really an incredible reflection of this new way that we have, a new way we are thinking and how we're driving and leading the Salesforce and as we shared at our Investor Day in September we're expecting fiscal year '23 revenue guidance of $31.8 billion. That's the high end of our range. And an operating margin of 20%. Now as everyone knows no other software company of our size scale is really performing at this level, we know that because we're talking to other clouds CEOs every day.

<unk> new way that we have the new way, we are thinking and how we're driving and leading the sales force and as we shared at our Investor Day in September we're expecting fiscal year 'twenty three revenue guidance of $31 8 billion. That's the high end of our range and operating margin of 20% now as everyone knows no other software company of our size.

Speaker 2: new way that we have, the new way we're thinking and how we're driving and leading a tailgater.

Speaker 2: And as we shared at our investor day in September , we're expecting fiscal year 23 revenue guidance of $31.8 billion. That's the high end of our range and operating margin of 20 percent. Now, as everyone knows, no other software company of our size and scale is really performing at this level. We know that because we're talking it.

Scale is really performing at this level, we know that because we're talking.

Other cloud deals every day.

Speaker 2: other Cloud CEOs every day. And I'll tell you, I couldn't be more proud of our Ohana and that Salesforce is soon going to enter the Fortune 100. Really, if you think about it, we only spent two years in the $20 billion. I think about how long I was waiting to get into the $20 billion in revenue for Salesforce.

And I'll tell you we couldn't be more proud of our ohana and Salesforce is soon going to enter the fortune 100. We've only really if you think about it we only spent two years in the $20 billion. I think about how long I was waiting to get into the $20 billion in revenue for Salesforce. And [we're done with it]. I don't like that we're talking about being in the $30 billion. And I kind of wonder wow. This is amazing. How long are we going to end up in the $30 billion? So you've got to enjoy every moment because it goes fast.

Be more proud of our ohana and Salesforce is soon going to enter the fortune 100, we've only really if you think about it we only spent two years in the $20 billion I think about how long I was waiting to get into the $20 billion.

Revenue for Salesforce.

Speaker 2: and work done with it. It's kind of like, now we're talking about being in the 30 billion and I'm kind of like, well, I wonder, wow, this is amazing. How long are we going to end up in the 30 billion? So you got to enjoy every moment because it goes fast.

And work backwards.

I don't like that we're talking about being in the $30 billion kind of YY I wonder.

wow. This is amazing. How long are we going to end up in the $30 billion? So you've got to enjoy every moment because it goes fast.

Speaker 2: And you look at the growth, and I really think it's all about this customer success. It's been awesome. I know we're going to tell some great stories here on the call, LVMH and VMware and ADT.

You look at the growth and I really think it's all about this customer success. It's been awesome I know we're going to sell some great stories here on the call. That will be made should Vmware and ADT. And so many of our customers and we're hearing some great stories from slack customers too. I'm looking forward to Bret telling you a couple of great stories. I haven't had a great story yesterday from a friend of mine who is at a check-in counter for an airline and they were using Slack entirely to make the reservation and book the ticket. Incredible story with this company.

And so many of our customers and we're hearing some great stories from slack customers two I'm looking forward to Brett telling you a couple of great stories I haven't had a great story yesterday from a friend of mine who is at a check in counter for an airline and they were using slack entirely to make the reservation and booked the ticket is incredible story with this company.

Speaker 2: and so many of our customers, and we're hearing some great stories from Slack customers, too. I'm looking forward to Brett telling you a couple of great stories. I even had a great story yesterday from a friend of mine who was

Speaker 2: at a check-in counter for an airline, and they were using slack entirely to make the reservation and book the tickets. Incredible story with this company. So, well, I guess all of this is just an overnight success story for Salesforce, doing it now almost a quarter of a century, and it's been a great quarter. All right, well, Brett, congratulations, and why don't you take it?

So well I guess all of this is just an overnight success story for Salesforce doing it now almost a quarter essentially. And it's been a great quarter, alright, well Bret. Congratulations and why don't you take it from here? Thank you.

Congratulations and why don't you take it from here. Thank.

Speaker 3: Thank you, Mark. You know, as Mark said, we had another phenomenal quarter driven by our new operating models, our new management team, and a product portfolio that's just increasingly relevant to every company looking to thrive in this new world.

Thank you, Marc. As Marc said, we had another phenomenal quarter driven by our new operating model, our new management team at a product portfolio that is increasingly relevant to every company looking to thrive in this new world. Through this pandemic our customer's success has fueled our success. We have hired more than 30,000 people remotely. We've launched more products than we ever have before and we've connected with more customers than we ever have before. We've also proven that we can come together safely in person. We just didn't dream force in San Francisco, a couple of months ago.

As Mark said, we had another phenomenal quarter driven by our new operating model, our new management team at a product portfolio that is increasingly relevant to every company looking to thrive in this new world.

Speaker 3: Through this pandemic, our customer success has fueled our success.

Through this pandemic our customer's success have fueled our success, we have hired more than 30000 people remotely we've launched more products than we ever have before and we've connected with more customers than we ever have before we've also proven that we can come together safely in person. We just didn't dream force in San Francisco, a couple of months ago.

Speaker 3: We have hired more than 30,000 people remotely. We've launched more products than we ever have before. And we've connected with more customers than we ever have before. We've also proven that we can come together safely in person. We just did Dreamforce in San Francisco a couple of months ago. We're doing Dreamforce in New York. That's going to be amazing. Right. It's amazing. Might as well have another Dreamforce next week. Dreamforce all year long, Mark.

We're doing [Dreamforce] in New York. Amazing, it's amazing. They might as well have another Dreamforce next week. All year long merger. And we also have opened 65 of our offices as I mentioned galvanized took a trip through Europe talked over 60 customers and really interesting to see a wide range of industries going through different issues, whether it's the supply chain or the great resignation. But there was one theme in all of those conversations. Every customer reinforce that work is not somewhere you go but something you do. Every single company I spoke with are building their digital headquarters.

Amazing, it's amazing they might as well have another dream force next week all.

All year long merger.

Speaker 3: And we also have opened 65 of our offices. And you know, as I mentioned, Gavin and I took that trip through Europe , talked to over 60 customers, and really interesting to see a wide range of industries going through different issues, whether it's the supply chain or the great resignation. But there was one theme in all of those conversations.

And we also have opened 65 of our offices as I mentioned galvanized.

A trip through Europe talked over 60 customers and really interesting to see a wide range of industries going through different issues, whether it's the supply chain or the great resignation, but there was one theme in all of those conversations every customer reinforce that work is not somewhere you go but something you do every single company I spoke with them building their digital head.

Speaker 3: Every customer reinforced that work is not somewhere you go, but something you do. Every single company I spoke with is building their digital headquarters because they know their teams need to be successful from their home or from this office in this new era of hybrid.

Because they know their teams need to be successful from their home or from this office and this new era of hybrid work. And customer 360 and Slack are powering this transformation for companies in every industry in every region of the world and you can really see it in our results. In the quarter, we saw strong growth across the region. 23% in the Americas, 38% in EMEA and 26% in APAC. What really stands out to me Mark is the strength of our core organic CRM business.

Speaker 3: And Customer 360 and Slack are powering this transformation for companies in every industry, in every region of the world, and you can really see it in our results.

Speaker 3: In the quarter, we saw strong growth across regions, 23% in the Americas, 38% in India, and 26% in APAC. And what really stands out to me, Mark, is the strength of our core organic CRM business.

In the quarter, we saw strong growth across the region, 23% in the Americas, 38% in EMEA and 26% in APAC.

We're really stands out to me Mark is the strength of our core organic CRM business.

That is it. Actually sales and service club together. Sales accelerated to 17% year over year growth as Marc mentioned now exceeding the $6 billion business just like service cloud.

Actually sales and service club together sales accelerated to 17% year over year growth as Mark mentioned now exceeding the $6 billion business just like service.

Speaker 3: especially sales and service cloud together. Well, the sales cloud is accelerating to 17% year-over-year growth, as Mark mentioned, now exceeding a $6 billion business just like service cloud. And service cloud, which is actually continuing to grow above 20% year-over-year. Yeah, that's just awesome. Congratulations. That was just beyond my expectation. Yeah, it really shows the strength in our core organic business, and it's just phenomenal to see this kind of growth at that kind of scale.

And service cloud, which is actually continuing to grow above 20% year over year. That's just awesome. So it was just beyond my expectation, yes. It really shows the strength of our core organic business and it's just phenomenal to see this kind of growth at that kind of scale. And there's nothing like the start of the holiday shopping season which started last week.

Speaker 3: And there's nothing like the start of the holiday shopping season which started last week to make me appreciate just how mission critical our commerce and marketing clouds are on Black Friday and Cyber Monday. Cyber Week runs on Salesforce for the world's greatest retailers.

To make me appreciate just how mission-critical our commerce and marketing clouds are on Black Friday and Cyber Monday. Cyber week runs on Salesforce for the world's greatest retailers. What we saw was just incredible so commerce cloud processed more than 100 million orders in November powering the shopping experiences for brands like Ralph Lauren, Puma Crocs, Lv MH and get this Marc, this year, we have sent over a trillion messages from our marketing cloud and in cyber week alone we delivered 40 billion messages up 34% year over year.

Speaker 3: What we saw was just incredible. So Commerce Cloud processed more than 100 million orders in November , powering the shopping experiences for brands like Ralph Lauren, Puma, Crocs, LVMH.

We saw was just incredible so commerce cloud processed more than 100 million orders in November powering the shopping experiences for brands like Ralph around the Puma Crocs, Lv MH and get this mark this year, we have sent over a trillion messages from our marketing cloud and cyber week alone. We delivered 40 billion messages up 30.

Speaker 3: This year, we have sent over a trillion messages from our marketing cloud. And in Cyber Week alone, we delivered 40 billion messages of 34% year over year. Incredible. And, you know, we're lapping the pandemic. Last year, digital was the only way people were shopping, and we're growing 34% on top of that. Our message platform... And also, you have to give a call out here on reliability.

Incredible. And they were laughing the pandemic. Last year digital is the only way that people are shopping and were growing 34% on top of that. Our message platform. We also you have to give a call out here and reliability because both of us went through some very difficult moments in the weekend getting calls from customers who are not using our marketing cloud, but are good customers of ours. Because of products that they chose from other vendors, we're not working on Black Friday, and cyber Monday and were like. While we were just so grateful to all of our ohana for the tremendous.

Speaker 2: You know, both of us went through some very difficult moments in the weekend, getting calls from customers who are not using our marketing cloud, but are good customers of ours.

Cloud, but are good customers of ours.

Speaker 2: because products that they chose from other vendors were not working on Black Friday and Cyber Monday.

<unk> products that they chose from other vendors, we're not working on.

Black Friday, and cyber Monday and were like.

While we were just so grateful to all of our ohana for the tremendous.

Speaker 2: Wow, we were just so grateful to all of our Ohana for the tremendous, tremendous performance.

Tremendous performance has delivered over the weekend. I just wanted to give a special thank you to every member itself, particularly the engineering teams. Get back kind of reliability when so much of our customers' business is happening over a day or a weekend, it's crucial that the system stays up and I'm so proud of the team. And hopefully, some of those customers will become customers of marketing cloud.

Speaker 3: Well, I just want to give a special thank you to every member of Salesforce, but particularly the engineering teams, to get that kind of reliability when so much of our customers' business is happening over a day or a weekend. It's just crucial that these systems stay up. And I'm so proud of the team. And hopefully some of those customers will become customers of Marketing Cloud next year. I hope so. You know, and one thing I really want to call out is this move towards mobile commerce continued. Mobile push notifications set for our Marketing Cloud grew over 94% year over year. But we're just seeing the smartphone continue to transform commerce.

Get back kind of reliability when so much of our customers' business is happening over a day or a weekend, it's crucial that the system stay up and I'm. So proud of the team and hopefully some of those custom custom.

Customers will become customers of marketing cloud.

And one thing I really want to call out is the move towards mobile commerce [contangence]. Mobile push notifications set for our marketing cloud grew over 94% year over year but we're just seeing the smartphone continue to transform commerce. All in our commerce and marketing cloud grew 25% year over year in our third quarter, continuing an amazing 20 month run as the global economy continues to digitize.

The move towards mobile Commerce continued mobile push notifications set for our marketing cloud grew over 94% year over year, but were just seeing the smartphone continue to transform commerce all in our commerce and marketing cloud grew 25% year over year in our third quarter, continuing an amazing 20 months.

Speaker 3: All in, our commerce and marketing class grew 25% year-over-year in our third quarter, continuing an amazing 20-month run as the global economy continues to digitize.

the global economy continues to digitize.

Speaker 3: I also wanted to talk about Slack. So Slack outperformed our expectations in the first full quarter as a part of the Salesforce family. The number of customers on Slack who spent over $100,000 was up 44% year-over-year. And adoption of Slack Connect was up an astonishing 176% year-over-year. Slack is not just a product, Slack is a network. And it's just incredible to see that grow.

I also wanted to talk about Slack. So Slack outperformed our expectations in the first full quarter as a part of the Salesforce family. The number of customers on Slack who spent over $100,000 was up 44% year over year. And the adoption of slack connect was up an astonishing 176% year over year. Slack is not just a product. Slack is a network and it's just incredible to see that growth. Slack also continues to innovate at an unbelievable pace. Huddles, which is slack to new real-time audio capability is already used weekly by over a third of Slack users. And Slack cliffs, the new asynchronous video capability is being played nearly 1 billion times a week.

Adoption of slack connect was up an astonishing 176% year over year stock is not just a product slack as a network and it's just incredible to see that growth.

<unk> also continues to innovate.

Speaker 3: Slack also continues to innovate at an unbelievable pace. Slack's Huddle, which is Slack's new real-time audio capability, is already used weekly by over a third of Slack users. And Slack Cliffs, the new asynchronous video capability, are being played nearly 1 million times a day.

An unbelievable pace.

Huddles, which is slack to new real time audio capability is already used weekly by over a third of slack users and slack cliffs. The new asynchronous video capability are being played nearly 1 billion times a week.

Speaker 3: And this month at Slack Frontiers, which I hope all of you have watched. If any of you haven't, you can watch it online. Stuart and the team announced the next generation of Slack's platform, and it's going to truly transform the way companies think about workflows and automation.

This month at Slack Frontiers, which I hope all of you have watched as any of you haven't you can watch it online Stuart and the team announced the next generation of Slack platform. And it is going to truly transform the way companies think about workflows and automation. Well, I think that that is definitely what I saw firsthand, where I was like how could it be that in airlines basically front-ending their entire system was flat. That was just a shock to me. Slack in the system of engagement for every workflow, every application every person your price, it's really an amazing platform vision, absolutely watch Slack frontiers, if you haven't seen it but I think it will blow your mind. Well, it is pretty cool. What an incredible new part of our portfolio.

Speaker 3: Well, I think that that is definitely what I saw firsthand where I was like, how can it be that an airline is basically front-ending their entire system with Slack? That's a shock to me. Slack is a system of engagement for every workflow, every application, every person you're trying. It's really an amazing platform vision and absolutely watch Slack Frontiers if you haven't seen it. I think it'll blow your mind. Well, it's pretty cool. What an incredible new part of our portfolio. Well, essentially, Slack has already transformed the way we work.

Saw firsthand, where I was like how could it be that in airlines basically front ending their entire system was flat.

To me slack in the system of engagement for every workflow every application every person your price, it's really an amazing platform vision, absolutely watch slack frontiers, if you haven't seen it but I think it will blow your mind well is pretty cool.

What an incredible new part of our portfolio.

Slack had already transformed the way we work at Salesforce. Since we've deployed Slack internally, we sent 46% fewer emails and in the last 30 days alone our employees who've spent nearly 60 million Slack messages and conducted 500000 slack huddle. We run salesforce on slack and every CEO and every board I've talked to is focused on how they can succeed in this era of flexible work. According to Slack research, 93% of workers are looking for flexibility when they work and 76% are looking for flexibility where they work. Companies need to connect their employees or partners or customers from anywhere because we all know we are not going to be in the office five days a week. Right, it really flies in the face of all of these kind of, you hear companies like an Seo so everyone has to come back in the office now, this is a mandate.

Speaker 3: Salesforce. Since we've deployed SOC internally, we send 46% fewer emails.

46% fewer emails and in the last 30 days alone our employees who've spent nearly 60 million slack messages and conducted 500000 slack huddle, we run salesforce on slack and every CEO and every board I've talked to is focus on how they can succeed in this era of flexible work according to slack research.

Speaker 3: And in the last 30 days alone, our employees have sent nearly 60 million Slack messages and conducted 500,000 Slack huddles. We run Salesforce on Slack. And every CEO and every board I talk to is focused on how they can succeed in this era of flexible work. According to Slack's research, 93% of workers are looking for flexibility when they work, and 76% are looking for flexibility where they work.

93% of workers are looking for flexibility when they work and 76% are looking for flexibility where they work. Companies need to connect their employees or partners or customers from anywhere because we all know we are not going to be in the office five days a week. Right, it really flies in the face of all of these kind of, you hear companies like an Seo so everyone has to come back in the office now, this is a mandate.

Speaker 3: Companies need to connect their employees, their partners, their customers from anywhere because we all know we're not going to be in the office five days a week. Right. It really flies in the face of all of these kind of.

Speaker 2: You know, you hear companies like and CEOs say, oh, everyone has to come back in the office now. This is a mandate. Mark, do you know what happens when they say that? Well, their employees leave and go to the company next door. Well, you know, I have to be very careful because when I say like on a broadcast television or at a conference, hey, employees are going to have flexibility in how they work. And they're going to have a digital headquarters. They're going to have a physical headquarters. They're going to mix and match. They're going to move around a little bit. I get phone calls. And it just, it's just.

You hear companies like an Seo so everyone has to come back in the office now this is a mandate mark.

Well, they're employed we even go to the company next. Well, I have to be very careful because when I say like on broadcast television or at a conference, hey, employers are going to have flexibility in how they work and they're going to have a digital headquarters and in the physical headquarters is going to mix and match. They're going to move around a little bit. I get phone calls and it's just so contrary to what we see in our own business. Our offices aren't going away, it's just that your digital headquarters, which is going to be more important because it is truly the infrastructure that connects all of it. Especially in this new normal and Slack and customer 360 together are really powering this transformation. You can see in the results of the third quarter per spot, but the $280 million of revenue 30 million of guidance.

Broadcast television or at a conference. He employers are going to have flexibility in how they work and they're going to have a digital headquarters and in the physical headquarters is going to mix and match they're going to.

They're going to move around a little bit I think.

Phone calls and.

It's just so.

Speaker 3: contrary to what we see in our own business. Well, our offices aren't going away. It's just that your digital headquarters is going to be more important because it is truly the infrastructure that connects all of it, and especially in this new normal. And Slack and Customer 360 together are really powering this transformation. You can see in the results of the third quarter for Slack. Slack did $280 million of revenue, $30 million of head of guidance.

Contrary to what we see in our own business.

Offices arent going away, it's just that your digital headquarters, which is going to be more important because it is truly the infrastructure that connects all of it especially in this new normal and slack and customer 360, together are really powering. This transformation you can see in the results of the third quarter per spot, but the $280 million of revenue 30 million.

Retailers like Slack. Slack is an innovative companies like the South East Asian ride sharing and food delivery outcrop. They're relying on slack every day to collaborate to automate workflows and to connect with their partners. And what's exciting to me, Marc, is that these product integrations we're building between Slack and customer 360 are already driving success for our customers. I had a great time working with Vmware as new CEO Roger, Roger on this quarter as you spun Vmware out of Bell. And Rogers team is already using Slack in service cloud for case were made to decrease the time to resolution for their customers.

Speaker 3: Retailers like SAC, SACs, and innovative companies like the Southeast Asian ride-sharing and food delivery, AppGrab, they're relying on Slack every day to collaborate, to automate workflows, and to connect with their partners.

<unk>, an innovative companies like the South East Asian ride sharing and food delivery outcrop theyre relying on slack everyday to collaborate to automate workflows and to connect with their partners and.

Speaker 3: And what's exciting to me, Mark, is the deep product integrations we're building between Slack and Customer 360 are already driving success for our customers.

What's exciting to me Mark deep product integrations, we're building between slack and customer 360 are already driving success for our customers I had a great time working with Vmware as new CEO Roger Roger on this quarter as you spun Vmware out of Bell and Rogers team is already using slack in service cloud for case, we're going to decrease the time to resolution for their customers.

Speaker 3: I had a great time working with VMware's new CEO , Raghu Raghuram, this quarter as he spun VMware out of Dell. And Raghu's team is already using Slack and Service Cloud for case forming to decrease the time to resolution for their customers. I could not be more excited for the momentum we see in the Slack business, and in particular, Slack's integration into Salesforce.

I could not be more excited for the momentum we see in the Slack business in particular Slack integration into Salesforce. As Marc said, we're in the new world. We have a new operating model, that's driving durable growth and our team continues to deliver incredible success for our customers during these unprecedented times. Our core business is stronger than ever and it's experiencing incredible growth at scale.

As Mark said, we're in the new World, we have a new operating model, that's driving durable growth and our team continues to deliver incredible success for our customers. During these unprecedented times, our core business is stronger than ever and it's experiencing incredible growth at scale.

Speaker 3: As Mark said, we're in a new world. We have a new operating model that's driving durable growth. And our team continues to deliver incredible success for our customers during these unprecedented times.

Speaker 3: Our core business is stronger than ever and it's experiencing incredible growth at scale.

Speaker 3: Slack and Customer 360 have never been more relevant, and we're playing a pivotal role in supporting our customers' next phase of growth. And I'm excited to hand it over to Gavin to bring this to life and talk about what he's seen with our customers around the globe. Gavin?

Slack and Customer 360 have never been more relevant and we're playing a pivotal role in supporting our customers' next phase of growth. And I'm excited to have hand it over to Gavin to bring this to life and talk about what he's seeing with our customers around the globe. Gavin.

Thanks, Bret. And I'd like to add my congratulations on your promotion. Thank you, Gavin. As Mark and Bret said, we are in a new world and I've seen it through the eyes of our customers. Which have recently been visiting New York, San Francisco, Frankfurt, Paris, Amsterdam, Zurich Middle East and, of course, London. I'm very excited by the early results of how our new operating model is playing out. The strength of our core business is incredible and the power of Salesforce Customer 360 and Slack together is creating the digital HQ that he is enabling our customers to get back to growth.

Speaker 4: Thanks, Brett, and I'd like to add my congratulations on your promotion.

To add my congratulations on your promotion.

Saturday Java.

As Mark.

Speaker 4: As Mark and Brett said, we are in a new world and I've seen it through the eyes of our customers, which I've recently been visiting in New York, San Francisco, Frankfurt, Paris, Amsterdam, Zurich, Middle East and of course London.

Mark Congrats said.

We are in a new world and I've seen it through the eyes of our customers.

Which have recently been visiting in New York, San Francisco, Frankfurt, Paris, Amsterdam, Zurich modulation of course, London.

Speaker 4: I am very excited by the early results of how our new operating model is playing out. The strength of our core business is incredible, and the power of Salesforce Customer 360 and Slack together is creating the digital HQ that is enabling our customers to get back to growth. And as Brett said, Salesforce has never been more relevant.

I'm very excited by the early results of how a new operating model is playing out the strength of our core business is incredible and the power of Salesforce customer 360, and slack together is creating the digital HQ that he is enabling our customers to get back to growth.

As Brett said, Salesforce has never been more relevant. In the quarter, we saw strong growth in every region, especially in the Americas. We grew relationships with Amazon, [inaudible], Nvidia, Sunbelt rentals tapestry and so many more. In EMEA, we deepened relationships with incredible brands like [inaudible] and in APAC, We had significant wins with Folks tell Fujitsu, Hitachi and the New Zealand Ministry of Health.

In the quarter, we saw strong growth in every region, especially in the Americas.

Speaker 4: In the quarter, we saw strong growth in every region, especially in the Americas.

Speaker 4: We grew relationships with Amazon, Builders First Source, Ikevia, Sunbelt Rentals, Tapestry, and so many more. In EMEA, we deepened relationships with incredible brands like Fenya, Primark, and Puma. And in APAC, we had significant wins with Foxtel, Fujitsu, Hitachi, and the New Zealand Ministry of Health.

We grew relationships with Amazon build is to source it.

Sunbelt rentals tapestry and so many more in EMEA, we deepened relationships with incredible brands like Fannia Prime off <unk> and in APAC, We had significant wins with folks tell Fujitsu Hitachi and the New Zealand Ministry of Health.

Now, we all know that incredible security company ADT. They are using Salesforce Customer 360 to unify their entire customer experience comparing 4,000 customer service agents and 7,000 field service agents with a complete view of their customers, which is driving operational efficiencies as well as growth.

Speaker 4: Now, we all know the incredible security company ADT. They are using Salesforce Customer 360 to unify their entire customer experience, empowering 4,000 customer service agents and 7,000 field service agents with a complete view of their customers, which is driving operational efficiencies as well as growth.

They are using salesforce customer 360 to unify their entire customer experience comparing 4000 customer service agents and 7000 field service agents with a complete view of their customers, which is driving operational efficiencies as well as Greg.

And as Bret said, we expanded our partnership with VMware, which is been a Salesforce customer since 2008. This quarter they kicked off a pilot as Slack plus service cloud to accelerate customer support. They also partnered with tableau to extend data and analytics across their entire business, enabling the presentation of deep analytics to help innovate even faster. LVMH continues to expand with salesforce to deliver luxury goods from anywhere globally 40,000 retail associates and customer service agents use Salesforce to deliver personalized retail journey for their customers. And our win with the <unk> group, which is a leading UK based online fashion retailer uses our technology to deliver them incredible online shopping experience with commerce cloud do who is now expanding shopping by social media marketplaces as they look to build for the future.

Speaker 4: And as Brett said, we expanded our partnership with VMware, which has been a Salesforce customer since 2008. This quarter, they kicked off a pilot of Slack plus Service Cloud to accelerate customer support.

Speaker 4: They also partnered with Tableau to extend data and analytics across their entire business, enabling the presentation of deep analytics to help innovate even faster.

They also partnered with tableau to extend data and analytics across that entire business, enabling the presentation, it's deep analytics to.

To help innovate even faster.

<unk> continues to expand with salesforce to deliver luxury goods from anyway.

<unk> 40000, retail associates and customer service agents use salesforce to deliver personalized retail journey, so that customers.

Speaker 4: And our win with the Boohoo Group, which is a leading UK-based online fashion retailer, uses our technology to deliver their incredible online shopping experience. With Commerce Cloud, Boohoo is now expanding shopping via social media marketplaces as they look to build for the future.

And our win with the <unk> group, which is a leading UK based online fashion retailer uses our technology to deliver them incredible online shopping experience with commerce cloud do who is now expanding shopping by social media marketplaces.

to build for the future.

And the state of Nevada is the department of Motor vehicles is another great story in the quarter. They selected salesforce as the platform to power its digital transformation across its entire business. This will mean a whole new experience for our residents renewing driver's licenses. Credentialing, titling and registering vehicles and so much more. And this is another great example of digital transformation powered by Salesforce and of course, another great reason to move to Las Vegas. These are all great organizations that have pivoted that business to navigate this new world and deliver customer success from anyone.

Speaker 4: And the state of Nevada's Department of Motor Vehicles is another great story in the quarter. They selected Salesforce as the platform to power its digital transformation across its entire business.

Digital transformation across its entire business.

This will mean, a whole new experience for our residents renewing driver's licenses.

Speaker 4: This will mean a whole new experience for residents renewing driver's license.

Credentialing titling and registering vehicles and so much more and this is another great example of digital transformation powered by Salesforce and of course, another great reason to move to Las Vegas.

Speaker 4: credentialing, titling and registering of vehicles and so much more and this is another great example of digital transformation powered by Salesforce of course another great reason to move to Las Vegas.

Speaker 4: These are all great organizations that have pivoted their business to navigate this new world and deliver customer success from anywhere. They're relying on us more than ever and inspiring us to leverage the power of Salesforce, Customer 360, Slack and so much more to continue to fuel their business.

These are all great organizations that have pivoted that business to navigate this new world and deliver customer success from anyone.

They're relying on us more than ever and inspiring us to leverage the power of our Salesforce Customer 360, Slack so much more to continue to fuel that business. And finally, a word on Q4. I'm really encouraged about how we started the quarter. Demand and pipe look strong and we are looking forward to a great finish to what has been an exceptional year.

And finally, a word on Q4 I'm really encouraged about how we started the quarter demand and pipe looks strong and we are looking forward to a great finish to what has been an exceptional year.

Speaker 4: And finally, a word on Q4. I'm really encouraged about how we started the quarter. Demand and pipe look strong, and we're looking forward to a great finish to what has been an exceptional year.

I want to thank our incredible team for continuing to do such a great job in the midst of a massive global change. The work they do and the technology, they deliver power as our customers' success, and we couldnt be more grateful. Amy, over to you to share the financial details of our quarter. Great. Thank you, Gavin. And hello, everyone. As we discussed a few months ago at our analyst day, we are in a new world and we showed our ability to execute in this new world once again in Q3. We delivered on key metrics strong top and bottom line and cash clatter. And our focus remains on disciplined and profitable growth. Q3 was also a milestone quarter as it was our first full quarter with Slack. Building on our strong performance over the last several quarters Slack's early results reinforces our confidence in the strategic importance of this best in class asset.

Speaker 4: I want to thank our incredible team for continuing to do such a great job in the midst of a massive global change. The work they do and the technology they deliver powers our customers' success and we couldn't be more grateful.

Our incredible team for continuing to do such a great job in the midst of a massive global change.

They do and the technology, they deliver power as our customers success, and we couldnt be more grateful.

Amy over to you to share the financial details of our quarter.

Speaker 4: Amy, over to you to share the financial details of our quarter.

Great. Thank you Gavin and Hello, everyone.

Speaker 5: Great, thank you, Gavin, and hello, everyone. As we discussed two months ago at our Analyst Day, we are in a new world, and we showed our ability to execute in this new world once again in Q3. We delivered on key metrics, strong top and bottom line, and cash flows, and our focus remains on disciplined and profitable growth.

As we discussed a few months ago at our analyst day.

And we showed our ability to execute in this new filed once again in Q3, we delivered on key metrics strong top and bottom line and cash clatter.

And our focus remains on disciplined and profitable path.

Q3 was also a milestone quarter as it was our first full quarter with slack.

Speaker 5: Q3 was also a milestone quarter, as it was our first full quarter with Slack. Building on their strong performance over the last several quarters, Slack's early results reinforce our confidence in the strategic importance of this best-in-class asset.

Building on our strong performance over the last several quarters collect early results reinforce our confidence in the strategic importance of the best.

Some of that.

Now, let me walk you through some of the results for Q3 fiscal '22. Beginning with top-line commentary. Total revenue for the third quarter was $6.86 billion which includes $280 million from Slack. And this is up 27% year over year or 26% in constant currency. The strong demand environment and new business pipeline that we've highlighted on the last few earnings calls, continue allowing us to outperform topline expectations again. A few key highlights from the quarter.

Speaker 5: Now, let me walk you through some of the results for Q3 Cisco 22, beginning with top line commentary.

Beginning with top line commentary.

Total revenue for the third quarter was $6.

Speaker 5: Total revenue for the third quarter was $6.86 billion, which includes $280 million from Slack. This is up 27% year over year, or 26% in constant currency. The strong demand environment and new business pipeline that we've highlighted on the last few earnings calls continued, allowing us to outperform top-line expectations again.

Valeant, which includes $280 million some slack and this is up 27% thereafter year or 26% in constant currency.

Truong demand environment, and new business pipeline that we've highlighted on the last few earnings calls continue allowing us to outperform topline expectations again.

A few key highlights from the corner.

First launched 22 years ago, the sales cloud became a 6 billion dollar run rate business this quarter and grew rapidly 17%. Sales cloud now joined service cloud, which became a $6 billion business just two quarters ago. And Service cloud continues to grow over 20% at scale. These are two massive business is growing in the double digits. Their success is a testament to the strength of our core. Our Americas business is performing extremely well. And we see a healthy demand environment in front of us. New business in North America was especially strong. Our largest market that we've been operating for over 20 years. And as you heard from Bret, Slack continues to outperform our expectations.

Speaker 5: First launched 22 years ago, Sales Cloud became a $6 billion run rate business this quarter and grew revenue 17%.

6 billion dollar run rate businesses and grew rapidly 17%.

Sales cloud now joined service cloud, which became a $6 billion business, Jeff two project in Macau.

Speaker 5: Sales Cloud now joins Service Cloud, which became a $6 billion business just two quarters ago.

Speaker 5: and Service Cloud continues to grow over 20% at scale.

Service cloud continues to grow over 20, 20% now.

Please go to market business is growing in the double digits.

Speaker 5: These are two massive businesses growing in the double digits and their success is a testament to the strength of our core.

Success is a testament to the strength of our core.

Speaker 5: Our American business is performing extremely well, and we see a healthy demand environment in front of us. New business in North America was especially strong. Our largest market that we've been operating in for over 20 years.

Our Americas business is performing extremely well and we see a healthy demand environment in front of that new business in North America was especially strong.

Is this market that we've been operating for over 20 years.

Speaker 5: And if you heard from Brett, Black continues to outperform our expectations.

And as you heard from drought to how to continue to outperform our expectations.

So that's a strong customer acquisition with notable strength in the enterprise. The number of paid customers spending greater than $100,000 annually accelerated for the fourth consecutive quarter, up 44% year over year. Slack Connection adoption remains strong with a number of connected endpoints reaching a record level of 176% year over year. And we've been able to introduce Slack to new customers. Already four of our top 10 deals this quarter included a new Slack win. Once again, we saw strong growth in our multi-cloud deal as our customers continue to ask for more than point solutions. In Q3, we recorded 33% year over year in the number of fields containing five or more clouds. We did see some headwinds this quarter to our MuleSoft business. When a business is growing as quickly as MuleSoft is, there are scaling challenges you can face, and we experienced some of the challenges this quarter.

Speaker 5: slacks off strong customer acquisition with notable strength in the enterprise.

Number of paid customer spending greater than $100000 annually accelerated for the fourth consecutive quarter up 44%.

Yeah.

Slack <unk> adoption remains strong with a number of peanuts at the endpoint, reaching a record level of 176% year over year.

Speaker 5: Slack's connect option remains strong, with a number of connected endpoints reaching a record level of 176% year over year.

Speaker 5: And we've been able to introduce Slack's new customers. Already, four of our top 10 deals this quarter included the new Slack plan.

And we've been able to execute slack new customer already four of our top 10 deals this quarter and created a new clan.

Once again, we saw strong growth in our multi cloud deal as our customers continue to ask for more than installation.

Trading recorded 33% year over year closing the warmer NPS component. Furthermore, cloud.

We did see some headwinds this quarter too on your thoughts there.

Speaker 5: We did see some headwinds this quarter to our mule socks dip.

Speaker 5: When a business is growing as quickly as MuleSoft is, there are scaling challenges you can face, and we experienced some of those challenges this quarter. We are confident in the changes that we have made going forward.

When our business is growing as quickly at Neal.

There are scaling challenges in Kentucky, and we experienced.

Talent at the corner.

We are confident in the changes that we have made going forward. As a reminder, a large portion of our MuleSoft revenue [was recognised in a period], which has an outsized impact to our second-half revenue. MuleSoft remains a critical part of our Customer 360, allowing our customers to integrate all of their data and systems. Beginning this quarter with the incorporation of Slack into our financial results, we are providing investors with updated revenue by service offering disclosure. Going forward, Slack will be recorded in platform and other. We are also creating a new revenue category, data, which will incorporate MuleSoft and Tableau, including Tableau CRM, all of which were previously included in platform and other. We believe this will provide greater transparency into our results. A historical recap using our new revenue breakdown is available in the earnings deck that we published alongside our press release. And we continue to make great progress on attrition.

As a reminder, a large portion of our meals soft revenue respected bank empyrean, which hasnt archive impact choice.

Speaker 5: As a reminder, a large portion of our MuleSox revenue is recognized in period, which has an outsized impact to our second half revenue.

<unk>.

Speaker 5: MuleSoft remains a critical part of our Customer 360, allowing our customers to integrate all of their data in.

<unk> remains a critical part of our customer Facebook, allowing our customers to integrate all let's say bolt ons.

Speaker 5: Beginning this quarter with the incorporation of Slack into our financial results, we are providing investors with updated revenue by service offering disclosure. Going forward, Slack will be recorded in Platform and Other. We are also creating a new revenue category, Data, which will incorporate MuleSoft and Tableau, including Tableau CRM, all of which were previously included in Platform and Other. We believe this will provide greater transparency into our results.

Beginning this quarter with the incorporation of slack into our financial results, we are providing investors with updated revenue by service offering.

Going forward slack will be recorded and platform and other.

We are also creating a new revenue category, data, which will incorporate MuleSoft and Tableau, including Tableau CRM, all of which were previously included in platform and other. We believe this will provide greater transparency into our results. A historical recap using our new revenue breakdown is available in the earnings deck that we published alongside our press release.

We believe this will provide greater transparency in China right now.

Speaker 5: A historical recast using our new revenue breakdown is available in the earnings deck that we published alongside our press.

Historically, using our new revenue breakdown was available in the earnings deck.

Published alongside our press release.

And we continue to make great progress on attrition.

Speaker 5: And we continue to make great progress on attrition. For the first time in company history, revenue attrition was below 8%.

For the first time in the company's history, revenue attrition with below 8%. Q3 attrition was between 7.5% and 8%, an improvement versus last quarter's 8% to 8.5%. Our remaining performance obligation, representing all future revenue under contract, ended at Q3 at approximately $36.3 billion, up 20% year after year. The current remaining performance obligation or CRPO, which represents future revenue under contract that is expected to be recognized as revenue in the next 12 months was approximately $18.8 billion. Up 23% year over year and in constant currency. Slack represents four points of growth in line with my guidance.

Q3 attrition was between 7% and <unk>.

Speaker 5: Q3 attrition was between 7 1?2 to 8%, an improvement versus last quarter's 8 to 8 1?2.

Chris I think this last quarters.

Great.

Our remaining performance obligation, representing all future revenue under contract and as of Q3 at approximately $36 3 billion.

Speaker 5: Our remaining performance obligation, representing all future revenue under contract, ended at Q3 at approximately $36.3 billion, up 20% year over year.

Up 20% year after year.

Remaining performance obligation or CRP, IL, which represent future revenue under contract that is expected to be recognized as revenue.

Speaker 5: The current Remaining Performance Obligation, or CRPO, which represents all future revenue under contract that is expected to be recognized as revenue in the next 12 months, was approximately $18.8 billion, up 23% year-over-year and in constant currency. Slack represents four points of growth.

The market 12 months was approximately $18 8 billion.

Up 23% year over year and in constant currency.

Slack represents four points of growth in line with my guidance.

Turning to operating margin. Q3 non-GAAP operation margin was 19.8%, which continues to benefit from revenue outperformance, efficiency from a work-from-anywhere world, and a focus on disciplined spending. Q3 GAAP EPS was $0.47 and non-GAAP EPS was $1.27. The outperformance in the quarter was primarily due to stronger revenue and expense deficiencies, as well as realized and unrealized gains on our strategic investment portfolio. These mark-to-market adjustments benefited GAAP EPS by approximately $0.27 and non-GAAP EPS by approximately $0.28.

Speaker 5: Turning to operating margin, Q3 non-gap operating margin was 19.8%, which continues to benefit from revenue outperformance, efficiency from a work from anywhere world, and a focus on discipline spending.

Speaker 5: Q3 GAAP EPS was $0.47, and non-GAAP EPS was $1.27.

Q3, GAAP EPS was <unk> 47, and non-GAAP EPS was $1 27.

The outperformance in the quarter was primarily due to stronger revenue and expense sufficiency as long as realized and unrealized gains on our strategic investment portfolio.

Speaker 5: the outperformance in the quarter was primarily due to stronger revenue and expense efficiencies, as well as realized and unrealized gains on our strategic investment portfolio. These mark-to-market adjustments benefited GAAP EPS by approximately 27 cents and non-GAAP EPS by approximately 28.

These mark to market adjustment benefited GAAP EPS by approximately 27 and non-GAAP EPS by approximately <unk> 28.

Turning to cash flow. Operating cash flow in the third quarter with $404 million, up 19% year over year. Capex for the quarter was $166 million, resulting in free cash flow of $238 million up 11% year after year. Now turning to guidance. We expect Q4 revenue of $7.224 billion to $7.234 billion or approximately 24% growth year over year. This guidance assumes a $285 million contribution from Slack in the fourth quarter. For the full year, we are raising our fiscal '22 revenue guidance by another $50 million to $26.39 billion to $26.4 billion. This equates to a total of $100 million weighted to our revenue guidance since Q2. Our guidance now includes a $565 million contribution from Slack for the fiscal year. This fiscal year revenue contribution from Slack represents a $35 million increase from our previous guidance. Our full-year guidance continues to include 200 million from Acumen. For Q4, we expect it to deliver CRPO credits of approximately 19%. This includes four points of growth from Slack.

Speaker 5: Turning to cash flow, operating cash flow in the third quarter was $404 million, up 19% year over year.

Yeah.

Capex for the quarter was $166 million, resulting in free cash flow was $238 million up 11% year after year.

Speaker 5: CapEx for the quarter was $166 million, resulting in free cash flow of $238 million, up 11% year over year.

Now turning to guidance.

We expect Q4 revenue of $7 to Q4, two seven to three 4 million or.

Speaker 5: we expect Q4 revenue of $7.224 to $7.234 billion or approximately 24% growth year over year. This item assumes a $285 million contribution from SLAC in the fourth quarter.

Approximately 24% year over year.

Sure.

I understand the $285 million contribution black.

<unk>.

For the full year, we are raising our fiscal 'twenty revenue guidance by another $50 million to $26 three $926 4 billion.

Speaker 5: For the full year, we are raising our fiscal 22 revenue guidance by another 50 million to 26.39 to 26.4 billion. This equates to a total $100 million raise to our revenue guidance since Q2.

This equates to a total of $100 million relative to our revenues.

Our guidance now includes $565 million contribution from slack per year.

Speaker 5: Our guidance now includes $565 million contribution from SLAC for the fiscal year.

This fiscal year revenue contribution from cloud represents a $35 million increase from our previous data.

Speaker 5: The fiscal year revenue contribution from SLAC represents a $35 million increase from our previous guidance. Our full year guidance continues to include $200 million from that.

Full year guidance continues to include 200 million from Oracle.

For Q4, we expect it to deliver CRP out credits of approximately 19%. This includes four points of drag from slack.

Speaker 5: For Q4, we expect to deliver CRPL growth for approximately 19%. This includes four points of growth from SLAC.

One thing I will call attention to is that we remain mindful of the strengthening US dollar in our foreign operations, which may impact our financials. We continue to monitor foreign exchange as we execute on what is typically the largest quarter in our fiscal year. We expect Q4 GAAP EPS of negative $0.24 to negative $0.23 and non-GAAP EPS of $0.72 to $0.73. In full year, this translates to GAAP EPS guidance of $1.28 to $1.29 and non-GAAP EPS guidance of $4.68 to $4.69. We expect recent M&A will be approximately $0.49 headwind to non-GAAP diluted EPS. And please recall that our OIE and EPS guidance assume no further contribution from mark-to-market accounting as required by ASU 2016-01.

Speaker 5: One thing I will call attention to is that we remain mindful of the strengthening U.S. dollar in our foreign operations, which may impact our financials. We continue to monitor foreign exchange as we execute on what is typically the largest quarter in our fiscal year.

We continue to monitor foreign exchange, if we execute on what is typically the largest corner market per year.

We expect Q4, GAAP EPS of negative $21 23, and non-GAAP EPS.

Speaker 5: we expect Q4 GAAP EPS of negative 24 to negative 23 cents and non-GAAP EPS of 72 to 73 cents. The full year, this translates to GAAP EPS guidance of $1.28 to $1.29, and non-GAAP EPS guidance of $4.68 to $4.69.

70 273.

Full year this translates to GAAP EPS guidance of $1 28 to $1 29.

And non-GAAP EPS guidance of $4 68 to $4 69.

We expect recent M&A will be approximately 49 headwind non-GAAP EPS.

Speaker 5: We expect recent M&A will be at approximately $0.49 headwinds to non-GAAP-double-digit EPS. And please recall that our OIE and EPS guidance assume no further contribution from loss-to-market accounting, as required by ASP's 2016-01.

And please because I E EPS guidance assume no further contribution from mark to market accounting as required by ASU 2016.

Speaker 5: We are also raising our fiscal 22 non-GAAP operating margin guidance to 18.6%, representing an expansion of 90 basis points year-over-year. The raise in our operating margin guidance is due to refined assumptions around slack and acumen. We now expect 140 basis points headwind or 10 basis points less headwind than our previous guidance.

We are also raising our fiscal '22 non-GAAP operating margin guidance to 18.6%, representing an expansion of 90 basis points year after year. The raise in our operating margin guidance is due to refined assumptions around Slack and Acumen. We now expecting 140 basis point headwinds or 10 basis points less headwinds than our previous guidance. I'd like to call out that our guidance continues to incorporate expense seasonality that is weighted to Q4, including investments in both our workforce and growth opportunities and the T&E expectations.

The reason our operating margin guidance, it seems a refined assumptions around platform to them.

Now expecting 140 basis point headwind or 10 basis points, rather than our previous guidance.

Speaker 5: I'd like to call out that our guidance continues to incorporate expense seasonality that is weighted to Q4, including investments in both our workforce and growth opportunities and T&E expectations.

I'd like to call out that our guidance continues to incorporate expense seasonality weighted to Q4, including investments in both our workforce both Apis.

And the expectation.

Speaker 5: We are raising fiscal 22 operating cash flow guidance by four points, now expecting 18 to 19% growth year over year. The increase from our previous guide is primarily driven by strong revenue performance and lower headwinds from M&A.

We are raising fiscal '22 operating cash flow guidance by four points, now expecting 18% to 19% growth year over year. The increase from our previous guidance, primarily driven by strong revenue performance and lower headwinds from M&A. The diluted cash flow impact of Slack and Acumen now represents a headwind to our year over year growth of approximately five points. Excluding the anticipated impact of M&A, operating cash flow growth would be 23% to 24%. We continue to expect Capex to be approximately 3% of revenue in fiscal 2022, resulting in a free cash flow growth rate of approximately 19% to 20% for the fiscal year. Excluding the anticipated impact of M&A, as previously noted. This rate would be 25% to 26%. As I shared with you two months ago, it is incredibly important to drive the kind of decision making in every aspect of the company. This new mindset will enable a more durable company as we approach $50 billion and fiscal '22 represents how we can deliver profitable growth in this new world.

The increase from our previous guidance, primarily driven by strong revenue performance and lower headlines come out of that.

Speaker 5: The dilutive cash flow impact of Slack and Acumen now represents a headwind toward year-over-year growth of approximately five points.

To deliver cash flow impact of blocking antibody now.

As the headline trend year over year approximately five points.

Speaker 5: excluding the anticipated impact of M&A, operating cash flow growth would be 23 to 24%.

Excluding the anticipated impact of operating.

Operating cash flow growth would be 23% to 24%.

Speaker 5: We continue to expect CapEx to be approximately 3% of revenue in fiscal 22, resulting in a free cash flow growth rate of approximately 19% to 20% for the fiscal year.

We continue to expect capex to be approximately 3% of revenue in fiscal 2000 accounts.

Melting and free cash flow growth rate of approximately 19% to 20% for the fiscal year.

Excluding the anticipated impact of M&A previously.

Speaker 5: excluding the anticipated impact of M&A as previously noted. This rate would be 25 to 26%.

This rate would be 25% to 26 breakdown.

As I shared with you two months ago. It is incredibly important to drive the kind of decision, making in every aspect of the company.

Speaker 5: As I shared with you two months ago, it is incredibly important to drive disciplined decision-making in every aspect of the company. This new mindset will enable a more durable company as we approach 50 billion, and Cisco 22 represents how we can deliver profitable growth in this new world.

This new mindset will enable online travel company hopefully approach 50 billion in fiscal 'twenty two represents how we can deliver profitable growth.

<unk>.

Speaker 5: Turning to Cisco 23, we were pleased to provide our initial revenue and non-GAAP operating margin guidance during our investor day.

Turning to fiscal '23. We are pleased to provide our initial revenue and non-GAAP operating margin guidance during our Investor day. Today, we are initiating Q1 fiscal '23 revenue guidance of $7.215 billion to 7.25 or approximately 21% to 22% growth year after year. As Gavin mentioned, we're off to a strong start in Q4 and will provide you with our complete fiscal '23 guidance as part of our Q4 earnings in February. So to close, our business is performing well and we continue to see record levels of revenue and operating margin. Our flagship product and sales cloud saw a third consecutive quarter of acceleration. And we now have two 6 billion-dollar businesses in sales and service. Slack is outperforming our expectations, and the integration continues to progress well. And we remain incredibly well-positioned with our broad products portfolio and global reach to be able to serve all of our customers. Our products are more relevant than ever.

'twenty three we are pleased that we were pleased to provide our initial revenue and non-GAAP operating margin guidance during our Investor day.

Today, we are initiating Q1 fiscal 'twenty three revenue guidance of $7 215 billion to seven to five or approximately 21% to 22% growth year after year at.

Speaker 5: Today, we are initiating Q1 Fiscal 23 Revenue Guidance of $7.215 billion to $7.25 or approximately 21 to 22% growth year over year. As Gavin mentioned, we're off to a strong start in Q4 and we'll provide you with our complete Fiscal 23 Guidance as part of our Q4 earnings in February .

As Gavin mentioned, we're off to a strong start in Q4 and will provide you with a complete fiscal 'twenty guidance is kind of our Q4 earnings and popular.

So to close our business is performing well and we continue to see record levels of revenue and operating margin.

Speaker 5: So to close, our business is performing well, and we continue to see record levels of revenue and operating margin.

Speaker 5: Our flagship products and sales cloud saw a third consecutive quarter's acceleration, and we now have two $6 billion businesses in sales and service.

Flagship product in sales cloud third consecutive quarter of acceleration and we now have two 6 billion dollar businesses and sales and Starbucks.

Slack is outperforming our expectations on the integration continues to progress well.

Speaker 5: Slack is outperforming our expectations and the integration continues to progress well.

Speaker 5: And we remain incredibly well positioned with our broad product portfolio and global reach to be able to serve all of our customers. Our products are more relevant than ever.

And we remain incredibly well-positioned with our broad products portfolio and global reach to be able to serve all of our customers. Our products are more relevant than ever.

Portfolio and global reach to be able to serve all of our customers.

A more relevant than ever.

Finally, on a personal note, I want to congratulate both Marc and Bret in their new co-CEO partnership. I have been privileged to work closely with both of them for many years and I cannot begin to tell you how excited I am for both of them and even more for Salesforce. So Jeff, why don't I take it back to you, and we can open it up for questions. Jeff? Operator?

Speaker 5: Finally, on a personal note, I want to congratulate both Mark and Brett on their new co-CEO partnership. I have been privileged to work closely with both of them for many years, and I cannot begin to tell you how excited I am for both of them and even more.

So Jeff why don't I take it back dealer looking open it up for questions.

Speaker 5: So, Jeff, why don't I kick it back to you, and we can open it up for questions.

Yes, operator.

As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Please standby while we compile the Q&A roster. Your first question will come from Brad Zelnick from Deutsche Bank. Please proceed with your question.

Speaker 6: As a reminder, to ask a question, you will need to press star 1 in your telephone. To withdraw your question, press the pound key. Please stand by while we compile the candidate roster.

Your first question will come from Brad Zelnick from Deutsche Bank. Please proceed with your question.

Speaker 6: Your first question will come from Brad Zelnick from Deutsche Bank. Please proceed with your question. Great. Thank you so much.

Great. Thank you so much and congrats on a good quarter and to Bret on being named co-CEO. I actually have two questions, maybe one for Mark and for Amy. And for Marc on the co-CEO structure, how do you envision breaking down CEO responsibilities amongst yourselves? And maybe what have you learned in the past about having co-CEOs that will make the structure even better than it was last time around? And then pressed for Amy. Amy, the guidance that you've given us for CRPO in Q4 seems to imply a meaningful deceleration. What factors contribute to this? Is there anything anomalous to call out perhaps in addition to FX? And is there anything at all that impacts the confidence level that you have in your forecast? Thank you so much.

Speaker 7: and to Brett on being named co-CEO. I actually have two questions, maybe one for Mark and for Amy. And for Mark.

Speaker 7: On the co-CEO structure, how do you envision breaking down CEO responsibilities amongst yourselves? And maybe what did you learn in the past about having co-CEOs that will make this structure even better than it was last time around? And then perhaps for Amy, the guidance that you've given us for CRPO and Q4 seems to imply meaningful deceleration.

This structure, even better than it was last time around and then pressed for Amy Amy the guidance that you've given us for CRP Oh in Q4 seems to imply a meaningful deceleration what factors contribute to this is there anything anomalous to call out perhaps in addition to FX and is there anything at all that impacts the confidence level that you have in your <unk>.

Speaker 7: What factors contribute to this? Is there anything anomalous to call out perhaps in addition to FX? And is there anything at all that impacts the confidence level that you have in your forecast? Thank you so much.

Okay. Thank you so much.

Well, first of all, congratulations again, Bret. It's super exciting. And, you know, you're right. Salesforce, you know, has had an evolving leader substructure several times, and we have also had tremendous success previously with the co-CEO structure. And, of course, probably those folks that benefited the most were really our shareholders and all of our stakeholders as we've seen. You know, as we've changed these structures, it's actually been an acceleration of the company. So, I'm very excited about the co-CEO structure. These jobs are big jobs and being able to have a partner that you can share it with makes it a lot easier. And when Keith decided to retire, I was back in this job, it was very lonely. And now, to have a partner with Bret, I couldn't be more excited. So, I want to congratulate him again.

Speaker 2: First of all, congratulations again, Brett. It's super exciting. And you know, you're right, Salesforce, you know, has had an evolving leadership structure several times, and we have also had tremendous success previously with the Co-CEO structure. And of course, probably those.

First of all congratulations again, Brett it's super exciting.

Right Salesforce has had an evolving.

Leadership structure several times and we have also had tremendous success previously with the co CEO structure and of course, probably those folks had benefited the most of it is really our shareholders and all of our stakeholders and we've seen as we've changed the structures. It's actually been an acceleration of the company. So I have.

Speaker 2: folks have benefited the most was really our shareholders and all of our stakeholders. As we've seen, you know, as we've changed these structures, it's actually been an acceleration on the company.

Speaker 2: So I'm very excited about the Co-CEO structure. These jobs are big jobs and being able to have a partner that you can share it with makes it a lot easier. And when Keith decided to retire, I was.

Very excited about the co CEO structure of these jobs are big jobs and being able to have a partner that you can share what makes it a lot easier and when he has decided to retire I was back in this chart. It was very lonely.

Speaker 2: back in this job and it's very lonely. And now to have a partner with Brett, I couldn't be more excited. So I want to congratulate him.

Now to have a partner with Brett I couldnt be more excited so I want to congratulate them together.

Speaker 5: Great. And Brad, hi. Nice to hear from you. On CRPO, business is strong. We've raised FY22 revenue by $300 million three months ago, another $50 million just two months ago, and now another $50 million today. And this is even with some of the headwinds I described from you all, and as you noted, some uncertainty on FX.

Great. And Bra. Hi. Nice to hear from you. You know, on CRPO, business is strong. We've raised the FY '22 revenue by $300 million three months ago, you know, another $50 million just two months ago. And now, another $50 million today. And this is even with some of the headwinds I've described from Mule. And as you've noted, some uncertainty on FX. So, overall, you know, I believe our CRPO guidance is in line with our guidance revenue growth rate for the quarter and for the year. We believe it's appropriate. And, of course, with that, Q4 is our largest new business quarter.

<unk> business is strong we've raised FY 'twenty revenue by 300 million three months ago, another $50 million, a few months ago and now another $50 million and this is even with some of the headwinds I described to you all and as you know there's some uncertainty on FX.

Speaker 5: So overall, I believe our CRPO guidance is in line with our guided revenue growth rate for the quarter and for the year. We believe it's appropriate. And of course, as we said, Q4 is our largest new business.

Overall I believe <unk> guidance is in line with our guidance about the new growth rate for the quarter and for the year. We believe that's appropriate and if prices with that Q4 is our largest new business corner.

Your next question will come from the line of Raimo Lenschow from Barclays. Please proceed with your question. Hey, thanks. Congrats, Bret, to the expanded role, and congrats on a great quarter from me as well. Can I ask around Slack? One of the main exciting points around Slack was the shared channel. And especially if you think about it on the field side, that should be kind of really interesting. Can you talk to that, what you're seeing there in the market, and the feedback you get from customers? And a follow-up question for Amy is it looked you beat the operating margins this quarter. Can you talk a little bit about the linearity of spending in Q4, you know, because this one was so much better so you must be spending or hiring quite a bit in Q4? Thank you.

Speaker 6: Your next question will come from the line of Ramo Lenshaw from Barclays. Please proceed with your question.

Hey, Thanks, Congrats Brett.

Speaker 7: to the expanded role in Congress and a great quarter for me as well. Can I ask around Slack, one of the main exciting points around Slack was the church channel.

Two the expanded role and congrats on a great quarter from me as well.

Can I ask about slack and one of the mean exciting points wrong slack, whereas the <unk> channel.

Speaker 8: And especially if you think about it on the sales side, that should be kind of really interesting. Can you talk to that, what you're seeing there in the market and the feedback you get from customers? And the follow-up question from Amy, if I look, you beat the operating margins this quarter. Can you talk a little bit about the linearity of spending in Q4? Because this quarter was so much better, so you must be spending or hiring quite a bit in Q4. Thank you.

And especially if you think about it on the sales side that should be kind of really interesting can you talk to that what you're seeing there in the market and the piece that you get from customers and then follow up question from Amy If I look your beta operating margins. This quarter can you just talk a little bit about the linearity of spending in Q4.

Because that's what it was so much better so you must be spending or hiring quite a bit in Q4. Thank you.

Yeah. Thank you for your question about Slack. And you're right, the shared channel, which the brand name is called Slack Connect, is just one of the most differentiated and exciting cards of Slack as a platform, particularly if you think about the opportunity to integrate Slack with Customer 360. Because as I said, Slack is not just a platform for communicating with fellow employees. It's a platform to engage with your partners, with your customers, and integrate with every single application of your company. I think the best measure of it in this quarter, I mentioned in my script, was Slack Connect was up an astonishing 176 percent year over year in the quarter. And, you know, I think behind that, what's really exciting, and Stewart articulated it so well is there's a really strong network effect. When, you know, multiple companies and multiple partners are using this service, it makes the service more valuable. We use Slack Connect with our customers now. I mean, I think probably the best example this past week was Cyber Week. So many of the retailers that I work with use Slack as their command center for Cyber Week. They would have Salesforce and then they would have the agencies running their campaigns, their merchandisers. All of these folks are coordinated to drive as much GMV growth as they can on a short period of time. Slack was really at the center of that. And as you said, really about our shared channel with multiple stakeholders. So, it's a big part of our product strategy, a big part of the strategy for Slack to continue to grow. Candidly, I don't think there's an enterprise product like this in the marketplace that really has network effects from company to company, and we're really excited about it.

Speaker 3: Yeah, thank you for your question about Slack. And you're right, the shared channel, which the brand name is called Slack Connect, is just one of the most differentiated and exciting parts of Slack as a platform, particularly if you think about the opportunity to integrate Slack with Customer 360. Because as I said,

Speaker 3: Slack is not just a platform for communicating with fellow employees, it's a platform to engage with your partners, with your customers, and integrate with every single application at your company. I think the best measure of it in this quarter, I mentioned it in my script was.

Fellow employees, it's a platform to engage with your partners with your customers and integrate with every single application at your company I think the best measure of it in this quarter I mentioned that in my script was soft connect was up an astonishing 176% year over year in the quarter and I think behind there.

Speaker 3: Slack Connect was up an astonishing 176%.

Speaker 3: year over year and the quarter. And, you know, I think behind that was really exciting that Stuart articulated it so well.

That was really exciting that Stuart articulated so well those are really strong network effects with multiple companies in multiple partners are using this service. It makes our service more valuable we use slack connect with our customers now.

Speaker 3: There's a really strong network effect when you know multiple companies and multiple partners are using this service. It makes the service more valuable. We use Slack Connect with our customers now and I think probably the best example the past week was Cyber Week.

Probably the Best example, this past week with cyber week.

Speaker 3: So many of the retailers that I work with use Slack as their command center for CyberWeek. They would have Salesforce in there. They would have the agencies running their campaigns, their merchandisers. All of these folks are coordinated to drive as much GMB growth as they can in a short period of time.

So many of the retailers that I work with use slack as Theyre tremendous center for cyber week, they would have salesforce and neither one of the agencies running their campaigns that are merchandisers. All of these folks are a coordinated to drive as much GMB growth as their candidate short period of time soccer is really at the center of that and as you said really about shared channels.

Speaker 3: Slack was really at the center of that. And as you said, really about a shared channel with multiple stakeholders. So it's a big part of our product strategy and it's a big part of the strategy.

With multiple stakeholders. So it's a big part of our product strategy is a big part of the strategy for slack to continue to grow and candidly I don't think there's an enterprise product like this in the marketplace, but really those network effects from company to company and we're really excited about it.

Speaker 3: Slack to continue to grow. Candidly, I don't think there's an enterprise product like this in the marketplace that really has network effects from company to company. We're really excited.

Great. I'll hit the second part of your question on operating margins. So, overall, this year, still pleased with our FY '22 operating margin trajectory. You know, as a reminder, we started off the year at 17.7% guidance and we've raised consistently, now up to 18.6% for the full year. And, you know, we really focus on delivering operating margin for the year and not for any particular quarter. You know, that's it. We're coming off a very, a third great op margin quarter and well. And there is some seasonality to our margin. So, in Q4, we are expecting to see additional investments in our workforce and our growth, and also some modest increased T&E expectations. And that's going to cause the quarter-over-quarter decline in operation, operating margin. But again, we're really excited about the full-year number and proud to be guiding to 18.6%.

Speaker 5: Great, I'll take the second part of your question on operating margins. So overall this year, I'm so pleased with our FY22 operating margin trajectory. You know, as a reminder, we started off the year at 17.7% guidance and we've raised consistently now up to 18.6% for the full year.

Speaker 5: And, you know, we really focus on delivering operating margin for the year and not for any particular quarter. You know, that said, we're coming off a very, a third grade up margin quarter in a row, and there is some seasonality to our margin.

We really focus on delivering operating margin for the year and not for any particular quarter that they were coming off a very a certain degree op margin quarter in a row and there is some seasonality to our margin.

Speaker 5: So in Q4, we are expecting to see additional investments in our workforce and our growth, and also some modest increased T&E expectations, and that's gonna cause the quarter-over-quarter decline in operating margin. But again, we're really excited about the full year number and proud to be guiding the 18.5.

Q4, we are expecting to see additional investments in our workforce and our cloud and also some modest increase tam expectations and thats going to cause the quarter over quarter decline in operation operating margin, but again, we're really excited about the full year number and I am proud to be guiding to $18 checks.

Your next question will come from the line of Brent Thill from Jefferies. Please proceed with your question. Good afternoon. Just given Gavin's comments on Q4 demand and pipeline strength. Many are asking given the bookings growth was 23 percent, you know, the 19 percent guide for Q4. Why such a sharp decel? Anything that we should consider as it relates to the guidance and what you're seeing going into the fourth quarter? Thanks.

Speaker 6: Our next question will come from the line of Brent Phil from Jeffries. Please proceed with your question.

Good afternoon, just given common stock Kevin's comments on Q4 demand and pipeline shrank. Many are asking given the bookings growth was 23% the 19% guide for Q4 White why such a sharp diesel and thing that we should consider as it relates to the guidance and what youre seeing going into the into the fourth quarter.

Speaker 9: Good afternoon. Just giving Gavin's comments on Q4 demand and pipeline strength. Many are asking, given the bookings growth was 23 percent, you know, the 19 percent guide for Q4, why such a sharp decel, anything that we should consider as it relates to the guidance and what you're seeing going into the fourth quarter? Thanks.

Thanks.

I think Amy should directly address and then Gavin can come in as well. Amy? Hi, Brent. Talking about Q4, we actually feel very, very good about that. And as Gavin said, he can tell you more, we feel very strongly about the demand environment. When I look at revenue for the year, again, I want to emphasize that we've raised $100 million since Q2. We raised $50 million at Investor Day, which is about halfway through Q3. And we could see a very strong quarter coming, as well as an additional $50 million right now. So, I do believe that both our guides for CRPO and for revenue are supportive and reflect what we're seeing in the market. So, Gavin, why don't I give this to you for a little bit more color in what you're seeing?

Speaker 2: I think Amy should directly address that and then Gavin can come in as well, Amy.

As well Ami.

Hi, Brent.

Speaker 5: Hi, Brent. Talking to Q4, we actually feel very, very good about this. You know, as Gavin said, and he can tell you more, we feel very strongly about the demand environment. When I look at revenue for the year, again, I want to emphasize that we've raised $100 million since Q2. We raised $50 million at Investor Day, which is about halfway through Q3. And we could see a very strong quarter coming, as well as an additional $50 right now.

In Q4, we actually feel very very good about that guys Galvin.

Are you more we feel very strongly about the demand environment.

When I look at revenue for the year again, I want to emphasize that we've raised 100 million in Q2, we raised $50 million at Investor Day, which is about halfway Christian train, we can see a very strong quarter coming as well as an additional 50 right now.

So I do believe that both our guide for the IPO and <unk> revenue.

Speaker 5: So I do believe that both our guides for CRPO and for revenue are supportive and reflect what we're seeing in the market. So Gavin, why don't I give this to you for a little bit more color in what you're saying.

A supportive and I reflect 12, we're thinking the market Katherine why don't I give it to you for a little bit more color on what you're saying.

Sure. Well, in a word, we started the fourth quarter really strong. And as I said in my comments, demand is stronger across the piece. The pipe looks very good. Americas is particularly strong and parts of Europe, I think, are performing equally well. There's a good performance across the verticals. And so, it's a balanced performance across the piece. So, we're feeling confident about the fourth quarter. There's no question about it. So, we don't give you any specifics, of course, at this stage. But as I say, I'm very pleased with the way we start in the first few weeks.

Speaker 4: Sure. Well, in a word, we've started the fourth quarter really strong.

In a word we started the fourth quarter really strong.

Speaker 4: And as I said in my comments.

And as I said in my comments.

Speaker 4: Demand is stronger across the piece. The pipe looks very good.

<unk> is strong across the piece the pipe looks very good.

Americas is particularly strong.

Speaker 4: America's is particularly strong and parts of Europe , I think, are performing equally well. There's a good performance across the verticals.

And in parts of Europe I think.

Performing equally well.

It is a good performance across the verticals.

Speaker 4: and so it's a balanced performance across the piece. So, we're feeling confident about the fourth quarter. There's no question about it. So we don't give you any specifics, of course, at this stage, but as I say, I'm very pleased with the way we saw it in the first few weeks.

And so it's a balanced.

Our balance performance across the piece so yes, we're.

We're feeling confident about the fourth quarter. There is there's no question about it.

So we don't give you any specifics of course at this stage, but.

As I said I'm very pleased with the way we saw in the first few weeks.

Our next question will come from the line of Keith Weiss from Morgan Stanley. Please proceed with your question. Thanks, and thank you taking the question and a very nice quarter. And my congratulations to Bret as well. And it's just two questions for Amy. One in terms of the Q4 guide that's getting a lot of attention. FX is kind of working against us on a go-forward basis. Can you talk to us to the degree that there's any FX impacts already incorporated into the Q4 guide? And to what extent have you incorporated the strong U.S. dollar into the margin commentary and the forward FY '23 guide? And then the second question is a little bit broader. You guys have been working on this new philosophy of a better balance between growth and profitability for a couple of quarters now. How is that progressing? Can you give us kind of a status update in terms of, are you finding this to be an easier, harder job than you originally anticipated in terms of pivoting the company with, to more of an efficiency focus? Thank you.

Speaker 6: Our next question will come from the line of Keith Weiss from Morgan Stanley . Please proceed with your question. Thanks, everyone. Thank you for taking the question.

Excellent. Thank you for taking the question.

Very nice quarter, and my congratulations to Brett as well.

Speaker 7: as well. I think this is two questions for Amy. One, in terms of the Q4 guide that's getting a lot of attention, FX is kind of working against us on a go-forward basis. Can you talk to us to the degree that there's any FX impacts already incorporated into that Q4 guide? And to what extent have you incorporated the Stronger U.S. Dollar into the margin commentary and the Forward FY23 guide? And then the second question is a little bit broader. You guys have been working on this new philosophy of a better balance between growth and profitability for a couple of quarters now. How is that progressing? Can you give us kind of a status update in terms of are you finding this to be an easier, harder job than you originally anticipated in terms of pivoting the company to more of an efficiency focus? Thank you.

Just two questions for Amy.

One in terms of the Q4 guide that's getting a lot of attention.

FX is kind of working against us on a go forward basis can you talk to the degree that there is any FX impacts already incorporated into the Q4 guide.

And to what extent have you incorporated on the stronger U S dollar into the margin commentary and the Florida FY 'twenty three guide and then the second question is a little bit broader.

You guys have been working on this new philosophy of a better balance between growth and profitability for a couple of quarters. Now how is that progressing can you give us kind of a status update in terms of.

Are you finding this to be an easier harder job than you originally anticipated in terms of pivoting the company with to more of an efficiency focus. Thank you.

Speaker 5: Thank you for both questions. So let me start with foreign exchange. As you know that I think that any global CFO who you speak to this week is watching foreign exchange very, very closely. And it has had a modest impact to our guidance. And we're going to be monitoring that going forward. Just to give you an idea of the volatility.

Great. Hi, Keith. Thank you for those questions. So, let me start with foreign exchange. As you noted, I think that any global CFO that you speak to this week is watching foreign exchange very, very closely. And, you know, it has had a modest impact to our guidance, so we're going to be monitoring that going forward. You know, just to give you an idea of the volatility, just this Investor Day, we've seen the euro devalued narrowly, you know, I think between four percent and five percent right now. And the great British pound is down about two percent. And we this, too, have modest impact on us. Now, we don't give our detailed information about our currency split but, you know, I can tell you our international revenue is chiefly driven by foreign currency. It would be the euro, the British pound, the yen, and then to a lesser extent, the Australian dollar. So, if you know, you know, we don't explicitly guide the FX, but we certainly do factor that into our planning processes and build out our guide based on those projections.

As you know that I think.

Global CFO.

Typically it kept watching point exchange very very closely and yes. It has had a modest impact to our guidance and we're going to be monitoring that going forward just to give you an idea of the volatility.

Speaker 5: Just since Investor Day, we've seen the euro devalue nearly, I think it's between 4% and 5% right now, and the Great British Pound is down about 2%, and these do have modest impacts on us. Now, we don't give detailed information about our currency split, but I can tell you our international revenue is chiefly driven by four currencies. It would be the euro, the British pound, the yen, and then to a lesser extent, the Australian dollar.

Just since Investor day, we've seen the euro the values generally I think it's between four and 5% right now and the great. British pound is down about 2% and we still have minus impact on us.

Now, we don't give out detailed information about our currency flat, but I can tell you our international revenue is chiefly driven by foreign currency.

The euro the British pound the yen and then to a lesser extent the Australian dollar.

So as you know, we don't explicitly tied to FX, but we certainly do factor that into our planning processes and build out our guide based on our projections.

Speaker 5: So as you know, we don't explicitly guide the effects, but we certainly do factor that into our planning processes and build out our guide based on those projects.

Second question, and the second, sorry. Go ahead. Yeah. He wants to talk about our kind of march toward greater efficiencies. Yeah.I mean, I think this has been really a highlight, you know, of the last six quarters which is, you know, we took advantage of the pandemic to reset our model. We've talked about that we have a new model. We're taking that extremely seriously, not only just in how we budgeted fiscal year '22, which is what we're finishing right now. But also, you know, we're finishing up our budget for fiscal year '23. That, obviously, also takes into consideration these changes in foreign exchange. The strengthening of the U.S. dollar is something that I'm sure all of you are watching, and we watch it well. We're a global company. These things matter to us. How our numbers shake out always depend on currencies, and there can be variation of quarter to quarter based on that. So, when we look at efficiency, you know, we saw an opportunity when the pandemic hit to really look at how we're spending money overall. And we were really taken by, you know, changes in the pandemic cycle, T&E, the use of our real estate, our marketing spend. And we started to rebalance, to reshape. To rethink about how do we look at our model, our overall model, not just our revenue model but our expense model. You know, since we started the company, I would say, we've never really had an opportunity to look at it. You're on a train, the train is going, the train is working. Why would you make changes to the train? Unless there's a pandemic. That's when you say, well, I guess we're going to get rid of these stupors. So, the reality is we have the opportunity to start to make changes that we didn't have that opportunity before. And now, we've been able to really learn and, I mean, you know, we kind of gone over it a couple of times. But we, what we have seen in the year where we acquired this incredible company.

Speaker 2: He wants to talk about our kind of march towards greater efficiencies. Yeah. I mean, I think this has been really a highlight, you know, of the last.

I'm sorry go ahead, he wants to talk about our kind of March towards greater efficiencies.

This has been really a highlight.

No.

Six quarters, which is we took advantage of the pandemic to reset our model we've talked about so we have a new model, we're taking that extremely seriously not only just in how we budget at fiscal year 'twenty, two which is what we are finishing right now but also you know, we're finishing up our budget for fiscal year 'twenty three that all.

Speaker 2: quarters, which is, you know, we took advantage of the pandemic to reset our model. We've talked about that. We have a new model. We're taking that

Speaker 2: extremely seriously not only just in how we budgeted fiscal year 22, which is what we're finishing right now, but also, you know, we're finishing up our budget for fiscal year 23. That obviously also takes into consideration the

Obviously also takes into consideration these.

Speaker 2: Changes in foreign exchange, the strengthening of the US dollar is something that I'm sure all of you are watching and we watch as well. We're a global company. These things matter to us. How our numbers shake out always depend on currencies. And there can be variation quarter to quarter based on that. So when we look at efficiency, you know, we saw an opportunity when the pandemic hit to really look at how are we spending money overall?

Changes.

Foreign exchange the strengthening of the U S. Dollar is something that I'm sure. All of you are watching and we watch as well we are a global company. These things matter to us how our numbers shake out always depend on currencies and there can be variation quarter to quarter based on that.

When we look at efficiency.

We saw an opportunity when the pandemic hit if you really look at how are we spending money overall.

And we were really taken by.

Speaker 2: And we were really taken by, you know, changes in the pandemic cycle, T&E, the use of our real estate, our marketing spend, and we started to rebalance.

Changes in the pandemic cycle T&D the use of our real estate.

Marketing spend and we started to rebalance to reshape the rethink about how do we look at our model. Our overall model not just our revenue model, but our expense model. Since we started the company I would say, we've never really had an opportunity to look at it you're on a train. The train is going to train is working why would you.

Speaker 2: to reshape, to rethink about how do we look at our model, our overall model.

Speaker 7: not just our revenue model, but our expense model. You know, since we started the company, I would say we never really had an opportunity to look at it. You're on a train, the train is going, the train is working. Why would you make changes to the train?

Changes to the train.

Speaker 2: unless there's a pandemic. That's when you say, well, I guess we're going to get rid of this, please. So

Unless there's a pandemic that's easy to say well I guess, we're going to get rid of it so.

Speaker 2: the reality is we have the opportunity to start to make changes that we didn't have that opportunity before and Now we've been able to really learn

The reality is we have the opportunity to start to make changes that we didn't have that opportunity before and now we've been able to really learn.

Speaker 2: You know, we've kind of gone over it a couple of times, but we haven't seen in a year what we acquired this incredible company.

We've kind of gone over in a couple of times, but.

In the year, when we acquired Accretable company.

The 18.6%, it's pretty awesome. And, you know, we've also given really strong guidance for next year with 20%, and you can see the tremendous operating margin that we've delivered in each of the last six quarters. So, we have a tremendous feeling of optimism to the future as we look to having this incredible new model. And is efficiency part of that model? Absolutely. But really, the best part of the model is really optimizing the company in ways that only the pandemic let us do that. And I'd love for Amy and Bret to both come in and maybe Gavin, too. Because this has been a very important part of the management team's work in the last several quarters as we've realized, there's some knobs that we can turn but we were just never really allowed to do before, and now we can. So, you want to comment on that, Bret?

Speaker 2: you know, the 18.6% is pretty awesome. And, you know, we've also given really strong guidance for next year with 20%. And you can see the tremendous operating margin that we've delivered in each of the last six quarters. So.

Speaker 2: tremendous feeling of optimism to the future as we look to having this incredible new model. And is efficiency part of that model? Absolutely. But really the best part of the model

New model and efficiency part of that model, absolutely, but really the best part of the model is really optimizing the company in ways that only the pandemic, let us do that and slow for avian Brett to both come in may be gathered two because this has been a very important part of the management team.

Speaker 2: is really optimizing the company in ways that only the pandemic let us do that. And I'd love for Amy and Brett to both come in, maybe Gavin too, because this has been a very important part of the management team's work in the last several quarters, as we've realized, oh, there's some knobs that we can turn that we were just never really allowed.

Work in the.

In the last several quarters as we've realized well theres some knobs that we could turn but we're just never really allowed to do before and now we can so do you want to comment on that Brett.

Speaker 3: for and now we can. So do you want to comment on that, Brett? Yeah, I mean, I'll just start first. I just wanted to give a special thank you to Amy. I think, you know, we talked a lot about top line revenue performance.

Yeah. And before I start, first, I just want to give a special thank you to Amy. I think, you know, we talked a lot about top-line revenue performance, the pandemic, and a number of other factors, you know, leading to the operating margin delivery that we've delivered. But I think the most important part of it is discipline. And, you know, fundamentally, as a company, we are a growth company, we're all good growth company. But what we want to prove, you don't need to choose between growth and operational efficiency, and you're receiving both the top-line growth and the bottom-line growth. And I think a lot of that is due to Amy's leadership. And really, the work of the entire management team to transform the way we operated. I think as Marc alluded to, the trade with one pure of a business, as you put it, I think is set up to grow even faster coming out of this pandemic.

Speaker 3: the pandemic and a number of other factors, you know, leading to the operating margin delivery that we've delivered. But I think the most important part of it is discipline. And, you know, fundamentally as a company

<unk> in a number of other factors.

We didn't but the operating margin delivery that we've delivered but I think the most important part of it is disciplined and fundamentally as a company. We are a growth company, we will always be a growth company, but we are a water fruit and don't need to choose between growth and operational efficiency and you'll see it in both the top line growth in the bottom line growth I think a lot of that is due to amy's leadership and really are working.

Speaker 3: We are a growth company, we always be a growth company, but we're one of groups. You don't need to choose between growth and operational efficiency. And you're seeing in both the top line growth and the bottom line growth. And I think a lot of that is due to Amy's leadership and really the work of the entire management team to transform the way we operate. And I think, as Mark alluded to, this train with one peer to boost, as you put it, I think it's set up to grow even faster coming out of this pandemic.

The entire management team to transform the way, we operate and I think as Mark alluded to the trade with one carrier introduced as you put it I think I've set up to grow even faster coming out of this endeavor.

Speaker 5: good. So Brett, Mark, I think you both said it very, very well. You know, kids, if we look at this, we continue to benefit from the revenue outperformance, from everything we've learned in the pandemic, from a new way to work, and really from, I think, a heightened sense of discipline.

That's good. So, Bret, Marc, I think both said it very, very well. You know, typically, look at this, we continue to benefit from the revenue outperformance from everything we've learned in the pandemic from the new way to work. And really, from I think a heightened sense of discipline, what I would emphasize most of all is that this is really a commitment by the entire management team. And what has really impressed me as we've been putting, you know, putting in place the policy of tightening the, tightening up budget is the fact that every team has really stepped up and shared in the commitment and shared in the changes. You know, before we go on to the next question, we have a tremendous executive, Gavin Patterson as our chief revenue officer, who's formerly a public company CEO of British telephone. And, you know, Gavin has been the chief revenue officer, as all of you know, through the pandemic. And he also brought tremendous insights into managing this new model and the efficiency and optimization. Gavin, I'd love it if you'd give us a few words as well on your vision on how this new model is working for you and maybe to touch on, you know, what the new sales model is as part of this.

Typically look at that we continue to benefit from revenue outperformance from everything we've learned in the pandemic from new way to work and really from I think a heightened sense of discipline.

Speaker 5: But what I would emphasize most of all is that this is really a commitment by the entire management team. And what has really impressed me as we've been putting, you know, putting in place new policies, cutting the, cutting up budgets, is the fact that every team has really stepped up and shared in the commitment and shared in the changes.

But I would emphasize most about is that this is really a commitment by the entire management team and reconciling impressed me as we've been putting.

Putting in place a policy of having the cutting our budget is the fact that every team has really got gap and shared and the commitment and shared them with Tanger.

Speaker 2: You know, before we go on to the next question, we have a tremendous executive, Gavin Patterson, who's our chief revenue officer, who is formerly a public company CEO of British Telephone. And, you know, Gavin has been the chief revenue officer, as all of you know, through the pandemic.

Before we go on to the next.

Question, we have a tremendous executive Gavin Patterson Who's our Chief revenue Officer, who was formerly a public company CEO of British telephone and Gavin has been the Chief revenue officer as all of you know through the pandemic and he also brought tremendous insights into managing this new model and the efficiency and optimization.

Speaker 10: And he also brought tremendous insights into managing this new model and the efficiency and optimization. Gavin, I'd love it if you'd give us a few words as well on your vision on how this new model is working for you, and maybe you could touch on, you know, what the new sales model is as part of this. Sure.

<unk> galvanized love it if you could give us a few words as well on your vision on how this new model is working for you and maybe you could touch on what the new sales model as part of us.

Thanks, Marc. Well, this is something I touched on at Investor Day. I truly believe that we can continue to drive growth and that will continue to be our No. 1 priority. But we could do so at the same time as driving efficiencies through the business and through disciplined decision making. You heard it from Amy and it's a mantra that we're using throughout the business. And some of the things I talked about then are really to do with, you know, providing, you know, a tighter grip across the business, deploying best practice across our operating units. When we've got a successful model, how do we replicate it across the operating units around the world. You know, I put a lot more focus on things like participation and driving productivity so ensuring that we're getting the most value out of our 10,000-person Salesforce, which is one of our sources of competitive advantage. But how do we make sure everybody is contributing every quarter and that we're looking to eke out, you know, both small deals and big deals throughout the year. And then finally, you know, how do we open up new channels. So, you know, the direct model continues to be our, you know, our strongest muscle. There's no question about that.

Well this is something I touched on at Investor Day.

I truly believe that we can continue to drive growth.

We'll continue to be our number one priority.

Could do so at the same time as <unk>.

<unk> efficiencies through the business and through disciplined decision, making you heard it from avionics.

<unk> mentioned that were using throughout the business.

Speaker 4: Some of the things I talked about then are really to do with providing a tighter grip across the business, deploying best practice across our operating units when we've got a successful model. How do we replicate it across operating units around the world? I put a lot more focus on things like participation and driving productivity, so ensuring that we're getting the...

And some of the.

The things I talked about then.

I really could do with providing.

Hiseq risk across the business.

Deploying best practice across our operating units when we've got a successful model how do we replicated across operating units around the world.

I put a lot more focused on things like participation and driving productivity, so ensuring that we're getting the.

The most value out of all 10000.

Speaker 4: the most value out of our 10,000 person sales force, which is one of our sources of competitive advantage, but how do we make sure?

And Salesforce, which is one of our sources of competitive advantage, but how do we make sure everybody is contributing every quarter.

Speaker 4: everybody is contributing every quarter and that we're looking to eke out, you know, both small deals and big deals throughout the year.

We're looking to eat out.

Small deals or big deals throughout the year and then finally, how do we open up new channels. So the direct model continues to be.

Speaker 4: And then finally, how do we open up new channels? So the direct model continues to be our strongest muscle. There's no question about that. But we're finding that customers, and not just small customers.

Strongest muscle there's no question about that.

But, you know, we're finding that customers, and not just small customers, are keen to use more and more or purchase more and more through digital and online. And that's an area that we're revamping. It's going to be a bigger part of our overall delivery of new bookings going forward. So, you know, the focus for me has been about driving best practices across the Salesforce ecosystem and having a flatter organization that allows for trusted decision making and stronger leadership within the units themselves.

Speaker 4: more and more through digital and online and that's an area that we're revamping and it's going to be a bigger part of our overall delivery of new bookings going forward. So, you know, the focus for me has been about driving best practice across the cell.

We will purchase more and more through digital and online and that's an area that we revamped and you're just going to be a bigger part of our overall delivery of new bookings going forward. So.

The focus for me has been about driving.

Best practices across the sandals boots.

Speaker 4: ecosystem and having a flatter organization that allows

Ecosystem.

And having a flatter organization that allows us to.

Speaker 4: faster decision-making and stronger leadership within the units themselves.

Faster decision, making.

And stronger leadership within the units themselves.

Yeah. Thank you so much, Gavin. And I think, you know, the commentary from Gavin, Amy, and Bret, you know, should indicate to you, you know, how fortunate I am to have this great management team running Salesforce during this pandemic. And then this ability to have not only of this great team but to put in the new model during this, and now, this new structure as well. Look, we're in a new world. We all know that and, you know, we've all seen this, all the things that are supposedly happening this week. Who knows how much of it is actually true? So, we have the ability to adjust and to run the company dynamically, and I think that's why you see such incredibly strong quarter here in Q3. And, you know, I believe we're going to have a world-class quarter in the fourth quarter and a great fiscal year next year as well.

Speaker 10: Yeah, thank you so much, Gavin, and I think, you know, the commentary from Gavin, Amy, and Brett, you know,

Speaker 10: should indicate to you, you know how fortunate I am to have this great management team, uh, running sales force during this pandemic. And then this about this, this ability to have not only have this great team, but to put in the new model during this and, uh, and now this new structure as well. Look, we're in a new world. We all know that.

You should indicate to you know how fortunate I am Deb just great management team.

And Salesforce during this pandemic and then is this ability to have not only of this great team.

To put it in the new model during this and and.

And now this new structure is well look we're in a new world, we all know that.

Speaker 10: We've all seen all the things that are supposedly happening this week. Who knows how much of it is actually true. So we have the ability to adjust and to run the company dynamically. And I think that's why you see such an incredibly strong quarter here in Q3. And I believe we're gonna have a world-class quarter in the fourth quarter and a great fiscal year next year as well.

We've all seen this.

All the things that are supposedly happening this week, who knows how much of it is actually true. So we have the ability to adjust.

Adjust and to run the company dynamically and I think that's why you see such an incredibly strong quarter here in Q3.

I believe we're going to have a world class quarter in the fourth quarter and a great fiscal year next year as well.

Our next question will come from the line of Kash Rangan from Goldman Sachs. Please proceed with your question. Hi. Thank you very much. Congratulations to Bret on becoming co-CEO. One for the co-CEOs, and one for the CFO. When you look at the operating model of the company, it is working quite well. You're pretty close to 20 percent organic growth rate, give or take. Your margins are pretty close to 20 percent. In fact, you absorbed Slack and did margins that were on par with your best margins before. So, everything's going well. Do you feel the need to make any acquisitions? Or even if you do, you feel like you can contain all this with the current margin structure. And one for Amy. When you look at the tremendous operating efficiencies you've been able to experience in a very short period of time, does that increase your confidence in the longer-term outlook granted that you don't have a specific margin target for the longer term? How should we think about the sustainability of the improvement of margins in the longer term as we watch the incredible success you've had in a very short span of time? Thank you so much.

Speaker 6: Our next question will come from the line of Cash Rangan from Goldman Sachs. Please proceed with your question.

Alright, Thank you very much congratulations to Brett on becoming CEO.

Speaker 11: Thank you very much. Congratulations to Brett on becoming co-CEO. One for the co-CEOs and one for the CFO . When you look at the operating model of the company, it is working quite well. You're pretty close to 20% organic growth rate, give or take. Your margins are pretty close to 20%. In fact, you absorbed slack and did.

One one for the co Ceos and one for the CFO.

But when you look at the operating model of the company. It is working quite well and you're pretty close to 20% organic growth rate give or take your margins are pretty close to 20% fact, you absorb slack and did margins that were on par with your best margins before so everything is going well do you feel the need to make any acquisitions or even if you do it.

Speaker 11: margins that were on par with your best margins before. So everything's going well. Do you feel the need to make any acquisitions? Or even if you do, you feel like you can contain all this with the current margin structure? And one for Amy.

Feel like you can contain all of this with the current margin structure and one for Amy.

Speaker 11: When you look at the tremendous operating efficiencies you've been able to experience in a very short period of time, does that increase your confidence in the longer term, granted that you don't have a specific margin target for the longer term? How should we think about the sustainability of the improvement of margins in the longer term as we watch the incredible success you've had in a very short span of time? Thank you so much.

When you look at the you.

Look at the tremendous operating efficiencies.

The expansion of a very short period of time.

Does that increase your confidence in the longer term outlook granted that you don't have a specific margin target for the longer term how should we think about the sustainability of the improvement of margins in the longer term is as is.

We watched the incredible success you've had in a very.

A short span of time, thank you so much.

Well, I think you're right, Kash. We're doing a very good job of absorbing Slack and integrating their people into the company. Not only into the distribution organization with Gavin and not just with its financial characteristics with Amy, but you can see the tremendous vision, especially if you watch the Dreamforce keynote that Bret brought to Slack and Salesforce together with Slack-First. And I'd love for him to talk about that because I think when we get to Dreamforce New York City, which is going to happen on December 8 at Javits Center, and I hope all of you will join us there. We'll have 2,000 customers there with us.

Speaker 10: Well, I think you're right, Cass. We're doing a very good job of absorbing slack and integrating that deeply into the company, not only into the distribution organization with

Speaker 10: with Gavin and not just with its financial characteristics with Amy, but you can see the tremendous vision, especially if you watch the Dreamforce keynote, that Brett brought to Slack and Salesforce together with Slack First and I'd love for him

With Gavin and not just with this financial characteristics with Amy, but you can see the tremendous vision, especially if you watch the dream force that.

But brett brought to slack and Salesforce together with slack first and I'd love for him to talk about that because I think when we get to Dream of course, New York City, which is going to happen on December eight.

Speaker 10: talk about that because I think when we get to Dreamforce New York City, which is going to happen on December 8th at Javits Center, and I hope all of you will join us there. We'll have 2,000 customers there with us.

At job et cetera, and I hope all of you will join US there we will have 2000 customers there with us.

Speaker 10: and we'll be broadcasting that all over the world as well. Well, I think that you'll see that this has fundamentally changed the tone.

And we'll be broadcasting that all over the world as well. Well, I think that you'll see that this has fundamentally changed the tone and tempo and future of Salesforce, you know, that we're really a very different kind of company because of this amazing acquisition. That said, this is a large acquisition, it is taking a lot of work and time from the management team to absorb it, and it still will take several more quarters before we can tell you that we're really, you know, running deeply integrated with Slack. And Bret, you've done so much of the leadership here with Slack and with Stewart. So, maybe you could just address where we are and how you see the future acquisition environment. Yeah. Well then I'll start with three remarks that we're just, right now our focus is in integrating Slack and not on any near-term M&A. As Marc said, it's really important. What sets Salesforce apart is how successful we've been able to integrate and grow our acquisitions. My favorite slide at Investor Day was Amy when she talked about the growth of ExactTarget, of MuleSoft, and Tableau. And now, seeing that early returns from Slack I think is, well, our superpowers as an organization is that it really requires a lot of focus from the management team. On Slack, there's no really special, though, as Marc expounded.

Speaker 10: tempo and future of Salesforce, you know, that we're really a very different kind of company because of this amazing acquisition. That said, this is a large acquisition. It is taking a lot of work and time for the management team to absorb it. And it still will take several more quarters before we can tell you that we're really...

<unk> for the management team to absorb it and it still will take several more quarters before we can tell you that we're really running.

Speaker 3: you know, running deeply integrated with Slack. And Brad, you've done so much of the leadership here with Slack and with Stuart, so maybe you could just address where we are and how you see the future acquisition environment. Yeah, well, I'll start just reiterating what Mark said, which is right now our focus is integrating Slack and not on any near-term.

We're running deeply integrated with the with slack and Brad.

So much of the leadership here with slack and what Stuart. So maybe you could just address where we are and how you see the future acquisition environment, Yeah, well I'll start just to reiterate Mark said, which is right now.

Great and slack and not on any near term.

Speaker 3: M&A, as Mark said, it's really important. What sets Salesforce apart is how successful we've been able to integrate and grow our acquisitions. My favorite slide at Investor Day was Amy's, when she talked about the growth of the exact target of MuleSoft to Tableau. And now seeing the early returns from Slack, I think it's one of our superpowers as an organization, and it really requires a lot of focus from the management team.

And as Mark said, it's really important whatsapp.

Salesforce apart. It is how successful have you been able to integrate and grow our acquisitions my favorite slide at Investor Day, with NV energy, we've talked about the growth of exact target of dual source with tableau and now see the early returns from slack I think is.

Superpowers as an organization and it really requires a lot of focus from the management to answer.

It's just a moment in time where the way we've worked, which has sort of been, as Marc said, it's not what we all planned. We just showed up at work one day and that's the way work was done, and the whole world is reimagined at the same time. And it was incredible opportunity to partner with our customers and help them with this transformation. No one knows where the world is going. We know we're not going back to the office five days a week. And Slack has just become such a strategic part of every single customer conversation. And as Marc said, I encourage everyone to either come in person to Javits Center on December 8th or watch online in Salesforce+ and really see the power of Salesforce Customer 360 and Slack together. And I think you can see why we're so excited about it and see, as you can see some of the early returns this quarter as we beat guidance.

Speaker 3: Slack does feel really special, though, as Mark said. It's just a moment in time where the way we've worked, which has sort of been, as Mark said, it's not something we all planned, we just showed up at work one day, and that's the way work was done. And the whole world is reimagined at the same time. And we have this incredible opportunity to partner with our customers and help them with this transformation. And no one knows where the world is going. We know we're not going back to the office five days a

Boeing we know we're not going back to the office five days a week.

Speaker 3: And Slack has just become such a strategic part of every single customer conversation. As Mark said, I encourage everyone to either come in person to Javits Center on December 8th or watch online on Salesforce Plus and really see the power of Salesforce Customer 360 and Slack together. And I think you can see why we're so excited about it and see, as you can see, some of the early returns this quarter as we beat guidance.

If I could just become such a strategic part of every single customer conversation.

As Mark said.

Average everyone's here either come in person to Java Center.

On December 8th or watch online and Salesforce, plus and really see the power of Salesforce customer 360 is back together and I think you can see why we're so excited about it and see as you can see some of the early returns this quarter as we as we'd be got it.

Speaker 10: Yeah, I'll really add to that. You've seen us do so many incredible acquisitions, starting with ExactTarget, moving on to MuleSoft, to Tableau, Slack. But let me tell you, there's no finish line on these acquisitions. They're...

Yeah. I'll really add, too, that, you know, you've seen us cast you so many incredible acquisitions starting with ExactTarget, you know, moving on to MuleSoft to Tableau to Slack. You know, but let me tell you there is no finish line on these acquisitions. There, it's a lot of work, it's a lot of, it's skill, it's art, it's luck also to keep them all going. Because look, we're innovating organically and also, we have innovated inorganically. And then we're deeply integrating these acquisitions into a Customer 360. Our ultimate vision of where all of that is going? Well, that's still something that works, you know, continuing to reveal and is being revealed to us. So, you know, it's a dynamic process and it requires all of our attention, and we're very excited about Slack and how far we've been able to come in such as short period of time. Okay. You know, Kash, following up on your second question about operating margin. You know, we had, we've had a great year on that. I'm really delighted to predict that we're going to end the year around 18.6 percent.

You've seen us cash use so many incredible acquisitions, starting with exact target.

Now moving on to our mill saw tableau slack, but let me tell you. There is no finish line on these acquisitions there.

It's a lot of work a lot of its scale. Its art. It's luck also to keep them all going because look we're innovating organically and also we have.

Speaker 10: It's a lot of work, it's skill, it's art, it's luck also.

Speaker 10: keep them all going because look we're innovating organically and also we have innovated inorganically and then we deeply integrating these acquisitions into a customer 360. Our ultimate vision of where all of that is going well that's still something that we're you know continually to reveal and it's being revealed to us.

Innovated Inorganically and then we deeply integrating these acquisitions into our customer 360, our ultimate vision of where all of that is going well, that's still something that we're continuing to reveal and athene reveal to us. So.

Speaker 10: It's a dynamic process and it requires all of our...

It's a dynamic process and it requires all of our attention and we're very excited about slack and how far we've been able to come in such a short period of time and cash.

Speaker 10: attention and we're very excited about Slack and how far we've been able to come in such a short period of time.

Speaker 5: Great. Cash, following up on your second question about operating margin, we've had a great year on this. I'm really delighted.

Cash following up on your second question about operating margin, Yes, we had we've had a great year on marathon willing to ligand.

Speaker 5: to predict that we're going to end the year around 18.6.

I predict that we're going to end the year around 18.6.

Speaker 5: And as you know, at Investor Day, I was thrilled to announce a guide to 20% next year, which I think symbolically is a key number for us. And we're doing that despite it being a full year with slack and what I'm hoping will be some moderately increasing T&E expenditures.

And as you know, at Investor Day, I was thrilled to announce a guide to 20% next year, which I think symbolically, is key endeavor for us. And, you know, we're doing that despite it being a full year with Slack, and what I'm hoping will be some modestly increasing T&E expenditures. But we're very much committed to doing that. now, we have not given long-term guidance beyond FY '23 but I will say we are committed to continuing to improve the operating margin. As Bret said, you know, there's a reimagination going on. We're having a chance to reimagine everything about how we operate, and I want to be able to make sure that we're using that to look at operating margin and look at how we're running the company with fresh eyes and continue to improve.

We're very much committed to dealing with that now we have not given long term guidance beyond FY 'twenty three but I will say, we are committed to continuing to improve the operating margin as Bret said, yes. There is a re imagination by not having a chance to re imagine everything about how we operate and I won't be able to make sure that we're using that to look at operating margin.

Speaker 5: But we're very much committed to doing that. Now, we have not given long-term guidance beyond FY23.

Speaker 5: But I will say we are committed to continuing to improve operating margin. As Brett said, you know, there's a reimagination going on. We're having a chance to reimagine everything about how we operate. And I want to be able to make sure that we're using that to look at operating margin and look at how we're running a company with fresh eyes and continue to

We're running a company with fresh eyes.

And continue to prep.

Your next question will come from the line of DJ Hynes from Canaccord Genuity. Please proceed with your question. Hey. Thanks for taking the questions. Bret, I was hoping you could touch on some of the growing pains that were alluded to with MuleSoft. I think you also mentioned that there were some changes made in that business that you feel pretty good about. So, maybe just unpack that a little bit. And Amy, maybe as a follow-up to that question, how should we think about the seasonality and modeling of the data cloud business just given it's the first time that you're breaking that out?

Speaker 6: Your next question will come from the line of D.J. Hines from Canaccord Genuity. Please proceed with your question.

<unk> will come from the line of D. J Hynes from Canaccord Genuity. Please proceed with your question.

Hey, thanks for taking the questions.

Speaker 7: Okay, thanks for taking the questions. Brett, I was hoping you could touch on some of the growing pains that were alluded to with MuleSoft. I think you also mentioned that there were some changes made in that business that you feel pretty good about. So maybe just unpack that a little bit. And Amy, maybe as a follow up to that question, how should we think about the seasonality and modeling of the data cloud business, just given it's the first time that you're breaking that out?

I was hoping you could touch on some of the growing pains that were alluded to with with Neil soft I think you also mentioned that there were some changes made in that business that you feel pretty good about so maybe just unpack that a little bit and Amy maybe as a follow up to that question. How should we think about the seasonality and modeling of the data cloud business just given it's the first time that you're breaking that out.

I appreciate the question. As Marc said, there's really no finish line with integrating our acquisitions and, you know, we've, you know, made some changes that we think are right for the long term. And what it's been, I think, maybe, perhaps, Marc, our fastest growing acquisition today to decide Amy's slide at Investor Day. So, we feel very confident that decisions we've made and, you know, how to get through a bit of this changed management what we're seeing in the short-term results. But we feel very confident in the future of MuleSoft. And certainly, no change to the demand environment. Actually, Gavin and I were just talking about that just before the earnings call just how important MuleSoft is a lot in our Q4 deals, particularly the Customer 360 deals where, you know, our customers are connecting multiple cloud to multiple backend systems and how much integration is just such an important part of our customer conversation. So, we feel confident in the long term of the business and recognize, you know, some short-term guidance as we integrate our acquisitions. Yeah. And Gavin, could you come in here and kind of address that directly and just tell us, you know, tell us about the demand environment for the fourth quarter and next year and what kind of a pipeline and capabilities you're seeing with customers today.

Speaker 3: I appreciate the question. As Mark said, there's really no finish line with integrating your acquisitions. And, you know,

Uh huh.

Made some changes that we think are right for the long term and what has been I think maybe perhaps mark our fastest growing acquisition today to do sard, Amy a slide at Investor day. So we feel very confident that decisions, we've made and you're going to have to get through a bit of this change management, where you are seeing in the short term results, but we feel very confident in the future of yours.

Speaker 3: changes that we think are right for the long-term and what has been, I think, maybe, perhaps, Mark, our fastest-growing acquisition to date, as you saw in Amy's slide at InvestorDay. So we feel very confident in the decisions we've made and have to get through a bit of this change management we were seeing in the short-term results, but we feel very confident in the future of MuleSoft and certainly know a change to the demand environment. Actually, Gav and I were just talking about this just before the audience call, just how important MuleSoft is a lot in our Q4 deals, particularly the Customer 360 deals, where our customers are connecting multiple clouds to multiple back-end systems, and how much integration is just such an important part of our customer conversation. So we feel confident in the long-term of the business and recognize we have some short-term growing pains as we integrate our acquisitions.

And certainly no change the demand environment actually Gavin and I were just talking about this just before the earnings call just how important meal sauces, a lot in our Q4.

Deals, particularly the customer 360 deals where.

Our customers are connecting multiple clouds multiple backend system and how much integration is such an important part of our customer conversation. So we feel confident in the long term of the business and recognize there are some short term growing pains.

Integrator acquisition Gavin could you come in here and kind of address that directly and just tell US you know.

Speaker 2: Yeah, Gavin, could you come in here and kind of address that directly and just tell us, you know, tell us about the demand environment for the fourth quarter next year and what kind of pipeline and capabilities you're seeing with customers today?

Tell us about the demand environment for the fourth quarter and next year, and what kind of pipeline capabilities, you're seeing with customers today.

Well, I'm not going to give specific numbers, but you can hopefully tell from my tone and conviction that the demand environment is strong, the pace is strong, and we're feeling pretty confident about Q4 and looking into Q1 as well. I think Bret said it very, very eloquently. We've gone through a little bit of, I would say, growing pains this quarter with Mule. Their operational challenges, the actions that need to be taken are very clear. But it does not change in any way our belief that Mule is fundamental to our ability to deliver our Customer 360. So, I see its role in, you know, solving customer problems and creating value for customers is absolutely fundamental. And I'm confident we'll be able to work through these over the next quarters. So, you know, across the board, Marc, the business and demand environment looks strong. And as we cycle through another wave of COVID, I don't see that changing fundamentally. We have reached the end of the allotted time for questions.

Speaker 4: Well, I'm not going to give specific numbers, but you can hopefully tell from my tone and conviction that the demand environment is strong, the pipe is strong, and we're feeling pretty confident about Q4 and looking into Q1 as well.

I'm not going to give specific numbers.

But you can hopefully tell from my tone.

And conviction.

That environment is strong the pipe is strong.

And we're feeling pretty confident about Q4 and looking into Q1 as well.

Speaker 4: I think Brett said it very eloquently, we've gone through a little bit of, I would say, growing pains this quarter with Mule, their operational challenges, the actions that need to be taken are very clear, but it does not change in any way.

I think Brett said, it's a very very eloquently.

We've gone through a little bit of I would say growing pains this quarter with you.

Their operational challenges.

The actions that needs to be taken a very clear.

It does not change in any way.

Speaker 4: our belief that Mule is fundamental to our ability to deliver our customer 360. So I see its role in solving customer problems and creating value for customers is absolutely fundamental.

Our belief.

New is fundamental to <unk>.

Ability to deliver on customer 360, so I see its role in solving customer problems and creating value for customers is absolutely fundamental.

And I'm confident we will get to work through these over the next over the next quarter or so.

Across the board Mark business and demand environment looks strong.

As we cycled through another wave of Covid I don't see that changing fundamentally.

We have reached the end of your allotted time for questions.

Speaker 6: We have reached the end, we have a lot of time for questions.

We'd like to answer the second part of that question, please. Yeah. If I may just add, to quickly respond to that, you asked about the seasonality of data in our new reporting matrix. One of the advantages of breaking up the revenue this way is I think it really provides greater transparency to all of our investors. And what this will do is it will put Tableau and MuleSoft, which are two primarily license-based offerings together in the same line. So, I don't think it's so much a question of seasonality but it's a question actually of lumpiness. Because of the way that we recognize the revenue in periods, you are simply going to see more variability in those, in that line than you would in other areas. I really think it's an advantage to everyone to be able to have that be isolated going forward.

Well, we'd like to answer the second part of that question. Please yes, let me just quickly respond to that you asked about the seasonality of data in our new reporting matrix.

Speaker 5: We'd like to answer the second part of that question, please. Yes, let me just quickly respond to that. You asked about the seasonality of data in our new reporting matrix. So one of the advantages of breaking up the revenue this way is I think it really provides greater transparency to all of our investors. And what this will do is it will put Tableau and MuleSoft which are two primarily license-based offerings together in the same line.

What are the advantages of Brighton breaking up the revenue.

Just with I think it really provides greater transparency to all of our investors and what this will do well.

<unk> can you tell us which are two primary license base.

Offering together in the same line.

Speaker 5: So I don't think it's so much a question of seasonality, but it's a question actually of lumpiness because of the way that we recognize the revenue in period, you were simply going to see more variability in that mine than you would in other areas. I really think it's an advantage to everyone to be able to have that be isolated going forward.

Don't think that's too much of question seasonality like if the person actually it's lumpy because of the way that we recognize the revenue in period.

Simply can see more variability in those in that mine, but we went in other areas I really think its any borrowings to everyone to be able to have that be isolated going to huawei.

Yeah.

All right. Thank you for joining us on the call today. If you have any other follow-up questions, please email us at investor@salesforce.com. Look forward to speaking with you next quarter. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker 12: All right. Thank you for joining us on the call today. If you have any other follow-up questions, please email us at investor at salesforce.com. Look forward to speaking with you next quarter.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.

Speaker 6: Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

Okay.

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