Q4 2024 Salesforce Inc Earnings Call
Operator: Welcome to Salesforce's fiscal 2024 fourth quarter and full year results conference call. Please note today's call is being recorded. All lines have been placed on mute to prevent any background noise.
Welcome to sales forces fiscal 'twenty, 'twenty, four fourth quarter and full year results conference call.
Please note today's call is being recorded all lines have been placed on mute to prevent any background noise.
After the Speakers' remarks, there will be a question and answer session.
Operator: [inaudible] If you would like to ask a question, please press star followed by the number one on your telephone keypad. To withdraw your question, press star a second time. I would now like to hand the conference over to your speaker, Mike Spencer, Executive Vice President of Finance and Strategy and Investor Relations. Sir, you may begin. Thank you. Good afternoon.
If you would like to ask a question. Please press star followed by the number one on your telephone keypad.
To withdraw your question press Star a second time.
I would now like to hand, the conference over to your Speaker, Mike Spencer Executive Vice President of Finance and strategy and Investor Relations. Sir you may begin.
Michael Spencer: Thank you and good afternoon, and thanks for joining us today on our fiscal 'twenty 'twenty four fourth quarter results Conference call. Our press release SEC filings and a replay of today's call can be found on our website. Joining me on the call today is Marc Benioff, Chairman and CEO, Amy Weaver, President and Chief Financial Officer, and Brian Miller, President and Chief operating Officer as.
Michael Spencer: Thanks for joining us today on our fiscal 2024 fourth quarter results conference call. Our press release, SEC filings, and a replay of today's call can be found on our website. Joining me on the call today is Marc Benioff, Chairman and CEO, Amy Weaver, President and Chief Financial Officer, and Brian Millham, President and Chief Operating Officer. As a reminder, our commentary today will include non-GAAP measures. Reconciliations between our GAAP and non-GAAP results and guidance can be found in our earnings materials and press releases.
Michael Spencer: As a reminder, our commentary today will include and will include non-GAAP measures reconciliations between our GAAP and non-GAAP results and guidance can be found in our earnings materials and press release.
Michael Spencer: Some of our comments today may contain forward-looking statements that are subject to risks, uncertainties, and assumptions, which could change. Should any of these risks materialize or should our assumptions prove to be incorrect, actual company results could differ materially from these forward-looking statements. A description of these risks, uncertainties, and assumptions and other factors that could affect our financial results is included in our SEC filings, including our most recent reports on Forms 10-K, 10-Q, and any other SEC filings. Except as required by law, we do not undertake any obligation to update these forward-looking statements.
Michael Spencer: Some of our comments today may contain forward looking statements that are subject to risks uncertainties and assumptions, which could change should any of these risks materialize or should our assumptions prove to be incorrect actual company results could differ materially from these forward looking statements a description of these risks uncertainties and assumptions and other factors that could affect our financial results is included in our SEC filings.
Michael Spencer: Including our most recent report on forms 10-K, 10-Q, and any other SEC filings, except as required by law, we do not undertake any responsibility to update these forward looking statements and with that let me hand, the call over to Mark.
Marc R. Benioff: And with that, let me hand the call over to Marc. All right. Hey, thanks so much, Mike. And hey, thanks, everyone, for being on the call. Look, as you can see from these numbers, we've had just an incredible, an incredible quarter. Well, actually, we've just had an incredible year here at Salesforce with strong performance across all of our key metrics, revenue margin, EPS, cash flow, and, of course, our CRPO. Look, it's been an extraordinary year of transformation for Salesforce. You all know that. You've all been there with us.
Mark: Alright, hey, thanks, so much Mike and Hey, thanks, everyone for being on the call look as you can see from these numbers. We've had just an incredible an incredible quarter well actually we've just had an incredible year here at Salesforce with strong performance across all of our key metrics revenue margin and EPS cash flow and of course, our CRP Oh look.
Mark: It's been an extraordinary year of transformation for Salesforce, you all know that you've all been there with us you've been the support that we have needed. During this year. Thank you to all of our shareholders and thank you to all of our stakeholders.
Marc R. Benioff: You've been the support that we have needed during this year. Thank you to all of our shareholders, and thank you to all of our stakeholders. It's been a year of incredible transformation for our industry, with the emergence of this next generation of artificial intelligence as well. It's really two unbelievable things happening at once, the total transformation of Salesforce and the total transformation of our industry. All right, let's start with the transformation of Salesforce. OK, look, it was over a year ago we said Salesforce had to transform, and you, many of you came to me, came to our whole team, and you said, look, we're going to transform the whole company. We did it together.
Mark: Okay.
Mark: And so they are in a year of incredible transformation for our industry with the emergence of this next generation of artificial intelligence is as well, it's been really too unbelievable things happening at once the total transformation of the sales force and the total transformation of our industry all right, let's start with the transformation of Salesforce. Okay look it it was over a year ago.
Mark: So we said sales force had to transform and you. Many of you came to me came to our whole team and you said look we're going to transform the whole company. We did it together we could not have done it without you. We said we will restructure our business for the short and long term. We did that we said we would place a laser focus on increasing productivity.
Marc R. Benioff: We could not have done it without you. We said we would restructure our business for the short and long term. We did that. We said we would place a laser focus on increasing productivity and operational excellence across the board. We've done that. We said we were going to double down on innovation to make our core products even better. We've done that, and when you see what's coming in Trailhead DX next week, you're not going to believe it.
Mark: And operational excellence from across the board. We've done that we said, we're going to double down on innovation to make our core products, even better we have done that and when you see what's coming and trailhead Dx next week youre not going to believe it not just our next generation artificial intelligence not just I would not just our prompt builder not just our co pilot, but this.
Marc R. Benioff: Not just our next-generation artificial intelligence, not just our prompt builder, not just our co-pilot, but this data cloud, which I'm going to get to in a second, our fastest, most exciting new product ever, fastest growing, and most customer traction that I have ever seen. That has been incredible. So let's talk about all of this, and let's also talk about how we have also strengthened our relationships with our investors. Thank you, Mike, for everything you've done.
Mark: Data cloud, which I'm going to get to in a second our fastest.
Mark: Most exciting new product ever fastest growing most customer traction now that I have ever seen that has been incredible so let's talk about all of this and but.
Mark: Talk also about how we have also strengthened our relationships with our investors. Thank you Mike for everything you've done and Amy together with the management team with our board, we've really focused on you and the Investor community. We've accomplished all of that together, we have completely transformed this company together and we're very grateful to each and every one of you in that transformation.
Marc R. Benioff: And Amy, together with the management team, and our board, we've really focused on you, the investor community. We've accomplished all of that together. We've completely transformed this company together, and we're very grateful to each and every one of you. And that transformation has brought incredible results. Since you've seen, productivity is up, profitability is up, margins are up, and revenue is up. And you're going to see it again in our results for our quarter. You're going to be looking at these full-year numbers with phenomenal cash flow, with incredible margin growth, margin growth that I've never seen in any software company over the last 12 months, 18 months. It's completely unprecedented.
Mark: It has driven incredible results since they are seeing.
Michael Spencer: Productivity is up profitability is up margins up revenues up and youre going to see it again in our results for a quarter you are going to be looking at these full year numbers with phenomenal cash flow with incredible margin growth or margin growth that I've never seen in any software company over the last 12 months or 18 months that's completely unprecedented.
Marc R. Benioff: And you can see the incredible speed and success of the transformation that we've undertaken. Now, we believe that Salesforce not only needs to be a great software company for our customers, our employees, and our communities, but also a great company for our shareholders as well. We've certainly seen that with the exceptional performance of our equity over the last few months. Now, I'm thrilled that we're opening the door to another incredible part of our ongoing transformation today with the introduction of our first-ever dividend.
Michael Spencer: And you can see the incredible speed and success of the transformation that we've undertaken now we believe that sales force not only needs to be a great software company for our customers our employees our communities, but also a great company for our shareholders as well we are certainly seeing that with exceptional performance of our equity over the last few months.
Michael Spencer: Now I'm thrilled that we are opening the door to another incredible part of our ongoing transformation today with the introduction of our first ever dividend and that's amazing to say that word for the first time in 25 years in sales for our history, our first ever dividend, what youre going to hear more about from Amy in a moment and if this year is.
Marc R. Benioff: And that's amazing, to say that word for the first time in 25 years of Salesforce history, our first-ever dividend, which you're going to hear more about from Amy in a moment. And if this year has shown anything, if it's shown anything at all, it really shows that we've committed to serving all of our stakeholders. We closed out fiscal year 24 with $9.29 billion in revenue for the fourth quarter.
Michael Spencer: Your own anything if it's shown anything at all it really shows that we've committed to serving all of our stakeholders. We closed out fiscal 'twenty four at $929 billion in revenue for the fourth quarter, that's up 11% year over year, 10% in constant currency pretty awesome at our size and scale incredible eight of our top 10 deals in the quarter <unk>.
Marc R. Benioff: That's up 11% year-over-year, and 10% in constant currency. Pretty awesome, right? At our size and scale, incredible. Eight of our top 10 deals in the quarter included six or more of our clouds, really showing the depth and breadth of our product line and our portfolio. And all of our top 10 wins included sales, service, and platform, and our deals were greater than 10 million. And they grew nearly 80% year over year in fiscal year 24. That was also amazing.
Michael Spencer: <unk> six or more of our cloud is really showing the depth and breadth of our product line in our portfolio and all of our top 10 wins included sales service and platform and we're really focused on delivering that forecast sale of all of our clouds to all of our customers and our deals greater than 10 million, while they grew nearly 80.
Michael Spencer: Per said year over year in fiscal year 'twenty for it that was also amazing our customers just get so much more value and they can do so much more when they take the full advantage of our Istent one platform and I wanted to explain that to you because we have such a rich set of applications that when we're working with all of these employees through the whole company.
Marc R. Benioff: Our customers just get so much more value, and they can do so much more when they take the full advantage of our Einstein One platform. And I want to explain that to you, because we have such a rich set of applications that when we're working with all of these employees across the whole company, and also with customers as well, we're filling our platform with the data and the metadata that our customers need to be successful. And there is no other time in the history of our industry where that rich data and metadata together in one place is so important. Because that is what you're going to need to drive this artificial intelligence.
Michael Spencer: And also the customers as well, we're filling our platform with the data and the meta data that our customers need to be successful and there is no. Other time in the history of our industry that rich data and metadata together in one place is so important because that is what youre going to need to drive this artificial intelligence and youre going to see that next.
Marc R. Benioff: And you're going to see that next week at Trailhead DX, as we show you our co-pilot for the first time, prop builder for the first time, and data cloud for the first time, and how it works together so that you can get the insights that you need. Now, this is all possible because we're delivering this Einstein One platform. But before I get to that, I just want to make this one last point. For the full year, we delivered $34.9 billion in revenue, up 11% year over year, one of the best performances of any enterprise software company ever. With our continued disciplined approach to margin expansion, non-GAAP operating margin for fiscal 24 was also 30.5%, up 800 basis points year over year.
Michael Spencer: Weak AD trailhead Dx as we show you our co pilot for our first time and prompt builder for the first time and data cloud for the first time and how it works together. So that you can get the insights that you need now this is all possible because we're delivering this einstein one platform, but before I get to that I just wanted to make this one.
Michael Spencer: Last point for the full year, we delivered a $34 9 billion in revenue up 11% year over year, one of the best performances of any enterprise software companies ever with our continued disciplined approach to margin expansion non-GAAP operating margin for fiscal 'twenty. Four it was also a 35% up 800 basis point.
Michael Spencer: Year over year, we close fiscal year 'twenty four with operating cash flow, reaching 10 2 billion operating cash flow up 44% year over year major goal for the company this year, well well done highest cash flow in our company's history.
Marc R. Benioff: We closed fiscal year 24 with operating cash flow reaching 10.2 billion, up 44% year over year, a major goal for the company this year. Well done, highest cash flow in our company's history. CRPO, our current remaining performance obligation was $27.6 billion, up 12% and 13% in constant currency year-over-year. A fantastic display on CRPO. And total remaining performance obligation ended the fourth quarter at $56.9 billion, an increase of 17% year-over-year. Now, let me just say this again: $57 billion in RPO, amazing. For fiscal year 25, we expect free cash flow to grow between 23% to 26%.
Michael Spencer: <unk> our current remaining performance obligation was $27 6 billion up 12% and 13% in constant currency year over year fantastic display on <unk> in total remaining performance obligations ended the fourth quarter at $56 9 billion, an increase of 17% year over year now let me just say this again.
Michael Spencer: 57 billion in RP O amazing for fiscal year 'twenty, five we expect free cash flow to grow between 23% to 26% for fiscal year 'twenty five that is for fiscal year 'twenty five weeks by free cash flow to grow between 23% to 26% and we're guiding revenue to $38 billion at the high end of our range.
Marc R. Benioff: That is, for fiscal year 25, we expect free cash flow to grow between 23% to 26%, and we're guiding revenue to $38 billion at the high end of our range, 9% year-over-year. They expect to deliver fiscal year 25 in subscription and support revenue growth of above 10% year-over-year in constant currency. We're going to get to that detail in a second. We're committed to delivering a non-gap operating margin of 32.5%. All told, an unbelievable year, a transformation.
Michael Spencer: <unk>, 9% year over year expecting to deliver fiscal year 'twenty five in subscription and support revenue growth of about 10% year over year in constant currency, we're going to get to that detail on our second were committed delivering non-GAAP operating margin of 32, 5% all told an unbelievable year of transformation from the financial.
Marc R. Benioff: From the financial metrics, we're going to get to the technology now, but before I move on, let me just say, I've never seen anything like it over the last 25 years as CEO of Salesforce. The pace of change, the focus on productivity, profitability, the speed of innovation, the quality of the management team, people coming back to help us get there. Just look at where we are now. Salesforce is the world's number one AI CRM, number one in sales, number one in service, number one in marketing, and number one data cloud. And since the start of the pandemic in 2020, we've doubled the size of the company. That's amazing!
Michael Spencer: <unk>, we're going to get to the technology now.
Michael Spencer: Before I move on let me just say I've never seen anything like it over the last 25 years as CEO of Salesforce the pace of change the focus on productivity profitability. The speed of innovation the quality of the management team people coming back to help us get it done or Boomerangs. Our O'hara. Thank you to everyone who has made this possible just look at where we.
Michael Spencer: We are now Salesforce is the world's number one AIC are number one in sales number one in service number one in marketing number one data cloud.
Michael Spencer: Incredible and since the start of the pandemic in 2020, we've doubled the size of the company. That's amazing we doubled the size of the company at scale since the pandemic started which was about four years ago. That's incredible at our scale. We are the largest enterprise applications company in the World. We passed as a pea that was amazing that was a huge huge.
Marc R. Benioff: We doubled the size of the company in scale since the pandemic started, which was about four years ago. That's incredible at our scale. We're the largest enterprise applications company in the world. We passed SAP. That was amazing.
Marc R. Benioff: That was a huge, huge accomplishment this year. But now we're the third largest enterprise software company in the world and the second largest in Japan. And to all of my Japanese colleagues, domo arigato gozaimashita, for what you have done with the Japanese market is incredible.
Michael Spencer: Accomplishment this year, but now we're the third largest enterprise software company in the World and the second largest in Japan and to all of my Japan, Hong I don't want to add to that.
Michael Spencer: So much for what you have done with the Japanese market is incredible we're not stopping our management team and our extraordinary employees are focused everyday to make our business as strong as it can be personally I've never been more excited about the future of Salesforce youre about to hear why it's not just the incredible financial results not just the unrivaled success of our customers.
Marc R. Benioff: We're not stopping. Our management team and our extraordinary employees are focused every day on making our business as strong as it can be. Personally, I've never been more excited about the future of Salesforce. And you're about to hear why.
Marc R. Benioff: It's not just the incredible financial results, not just the unrivaled success of our customers, but it is the incredible door that has opened through artificial intelligence once again and the evolution of our entire technology platform. What our engineering and product teams have done in the last 12 months is nothing short of amazing. I am so grateful for their leadership and to David and Srini and to all of your employees. Thank you for what you have done for Salesforce, your leadership, your vision, your insights, your creativity in rebuilding the platform so quickly and Data Cloud for artificial intelligence, for Steve, for what you have done, for Jujar, for my whole team. It's incredible!
Michael Spencer: But it is the incredible door that has opened through artificial intelligence once again and the evolution of our entire technology platform. It's what our engineering and product teams have done in the last 12 months is nothing short of amazing I am so grateful to their leadership and David and shiny and to all of your employees. Thank you for what you have done for Salesforce.
Michael Spencer: Your leadership your vision your insights your creativity it rebuilding the platform so quickly and data cloud for artificial intelligence for Steve What you have done for <unk> for my whole team. It is incredible as I said, it's not only a remarkable year of transformation for Salesforce, it's been an amazing year of transformation.
Marc R. Benioff: As I said, it's not only a remarkable year of transformation for Salesforce, but it's been an amazing year of transformation for our entire industry. As I talk to CEOs around the world, they tell me they want three things. You may have heard me say this already, but I'll say it again. First, they want more productivity, and they're going to get that productivity through the fundamental augmentation of their employees through artificial intelligence. It's happening. It's empirical.
Michael Spencer: For our entire industry as I talk to Ceos around the world. They tell me. They want three things you may have heard me say this already but I'll say it again, one they want more productivity and theyre going to get that productivity through the fundamental augmentation of employers through artificial intelligence. It's happening. It's empirical number two is they want higher value customer.
Michael Spencer: <unk> chips, which is also going to happen through this AI and they want higher margins, which we are seeing empirically as well during the when they use this artificial intelligence in these next generation products as we look at productivity as we look at higher value customer relationships as we look at higher margins, how do our customers get these things how are they achieving these goals. It is.
Marc R. Benioff: Number two is that they want higher-value customer relationships, which is also going to happen through this AI, and they want higher margins, which we are seeing empirically as well when they use this artificial intelligence in these next-generation products. As we look at productivity, as we look at higher-value customer relationships, as we look at higher margins, how do our customers get these things? How are they achieving these goals?
Michael Spencer: AI. It is why every CEO and company knows they need to make major investments in AI right now and I believe this is the single most important moment in the history of the technology industry, it's giving companies an unprecedented level of intelligence that will allow them to connect with their customers in a whole new way and with our Einstein one platform.
Michael Spencer: We're helping our customers transform for the AI future now many of our customers are inspired by <unk>, four I have and cohere IHOP.
Marc R. Benioff: It is AI. It is why every CEO and company knows they need to make major investments in AI right now. And I believe this is the single most important moment in the history of the technology industry. It's giving companies an unprecedented level of intelligence that will allow them to connect with their customers in a whole new way. And with our Einstein One platform, we're helping our customers transform for AI. Now, many of our customers have been inspired by OpenAI's GPT-4, I have, and Cohere, I have, and Anthropic, I have, and Inflection, I have, and also all the amazing models on Hugging Face and other AI models. All these things, it's amazing. And everyone has been wowed by what these AIs can do. Incredible things, and a lot of party tricks, a lot of magical things, but then we also realize there are some other things too.
Michael Spencer: And in profit I have an inflection I have and also all the amazing models on hygiene facing other AI models all of these things it's amazing.
Michael Spencer: Everyone has been wowed by what is AI is can do incredible things and a lot of party tracks a lot of magical things things and then we also realized or some other things to let's talk about the truth.
Michael Spencer: The truth is that these AI models are all traded on amalgamated public data you all understand that you've all seen the New York times lawsuit.
Michael Spencer: <unk> open AI or others, who are really going to Taxane. Hey. This is all this amalgamated stolen public data much of it used without permission unlicensed, but amalgamated into the single consolidated data stores now some of my people even say this just stolen data, but all of this public data has been <unk>.
Michael Spencer: <unk> into what they call training sets and these training sets then get turned into what we call inference, which is how the AI that is able to start to deliver.
Marc R. Benioff: Let's talk about the truth. The truth is that these AI models are all trained on amalgamated public data. You all understand that, you've all seen the New York Times lawsuit against OpenAI or others who are really going to task saying, hey, this is all this amalgamated stolen public data, much of it used without permission, unlicensed, but amalgamated into these single consolidated data stores. Now, some of my people even say this is just stolen data, but all this public data has been amalgamated into what they call training. And these training sets then get turned into what we call inference, which is how the AI is then able to start to deliver, you know, its insights. But there are other things that it's providing besides insights. These AI models, well, they could be considered very confident liars, producing misinformation and hallucinations. Hallucinations are not a feature, okay?
Michael Spencer: Insights, but theres other things that is providing besides insights. These AI models, what they could be considered very confident liars.
Michael Spencer: <unk> misinformation hallucinations solicitations are not a feature okay, and I'm going to get to that point in a second and I think you all understand it that already because at this point, we all have a high level of experience with AI don't wait everyone has had that experience and there is a danger, though for companies for enterprises for our customers that these.
Michael Spencer: We're not trusted solutions and let me point out why that is especially for companies who are unregulated markets. Why this is a big big deal. These models don't know anything about the company's customer relationships and in some cases are just making it up enterprises need to have the same capability.
Michael Spencer: <unk> that are captivating consumers those amazing amazing things, but they need to have it with trust and a new debit with security. It is not easy look we all read the story now just happened last week and airline chatbot and airline chatbot prompts by a passenger to book a flight.
Marc R. Benioff: And I'm going to get to that point in a second. And I think you all understand it already because, at this point, we all have a high level of experience with AI, don't we? Everyone has had that experience.
Marc R. Benioff: And there's a danger, though, for companies, for enterprises, for our customers, that these are not trusted solutions. And let me point out why that is, especially for companies who are in regulated markets. Why this is a big, big deal.
Michael Spencer: With a 90 day refund window it turns out the chatbot.
Michael Spencer: Running on one of these big models, we won't have to use any brand names here, we all know who it was hallucinated the option. It did not exist. We all know what that's like we've all had the experience so here's the chatbot and hallucinates the option, it's working with the customers. It didn't exist. It did not exist the airline said Oh listen.
Marc R. Benioff: These models don't know anything about the company's customer relationships and, in some cases, are just making it up. Enterprises need to have the same capabilities that are captivating consumers, those amazing, amazing things, but they need to have it with trust, and they need to have it with security, and it's not easy. Look, we all read the story. Now, it just happened last week.
Michael Spencer: That was just the chat bot it gets that way some time, we're so sorry, that's just a separate technical entity a separate legal entity and the airline.
Michael Spencer: We're not giving hope liable for that well guess what that defense did not work in a court of law. The court of law said that that AI chatbot that made up.
Marc R. Benioff: An airline chatbot. Prompt. Ask a passenger to book a flight with a 90 day refund window.
Michael Spencer: That incredible new policy for that company well that companies can be held responsible liable for that policy that they were gonna be held liable for the work that chatbot.
Marc R. Benioff: It turns out that the chat box, running on one of these big models, we won't have to use any brand names here, we all know who it was, hallucinated the option. It did not exist.
Michael Spencer: Just as they would for a human employee they were being held liable for digital employee. The reality for every enterprise is that to deliver trusted AI experiences you need. These three essential components now you need that compelling user interface Theres no question, a natural and effortless experience at Salesforce, we have some of them.
Marc R. Benioff: We all know what that's like. We've all had the experience. So here's the chatbot. It hallucinates the option. It's working with the customers. But it didn't exist. It did not exist.
Marc R. Benioff: The airline said, oh, listen, that was just the chatbot. It gets that way sometimes. We're so sorry. You know what? That's just a separate technical entity, a separate legal entity, and the airline, oh, we're not gonna be held liable for that. Well, guess what? That defense did not work in a court of law.
Michael Spencer: Most intuitive user interfaces that deliver insights and intelligence across sales and service and marketing and Commerce and industries. Many of you are on slack right. Now many of you were on tableau of many of your annual software one of our other products. Okay. Now what else do you need number two you need a world class AI model.
Marc R. Benioff: The court of law said that that AI chatbot that made up that incredible new policy for that company, well, that company was gonna be held responsible for that policy, liable for the work of that chatbot. Just as they would for a human employee, they were being held liable for a digital employee. The reality for every enterprise is that to deliver trusted AI experiences, you need these three essential components now. You need that compelling user interface. There's no question. It's a natural and effortless experience.
Michael Spencer: And now we know Theres. Many many more models available just go to hugging face, which is a company that we are investor in or look at all the other models and by the way not only the thousands of bottles right now, but there are tens of thousands hundreds of thousands of models coming in all the models that are available today or will be obsolete 12 months from now.
Michael Spencer: So we have to have an open extensible and trusted framework.
Michael Spencer: Inside salesforce to be receptacles for these models, that's why I'm, saying one is so important.
Michael Spencer: Then you have to be able to use these AI models.
Michael Spencer: The ones that Salesforce is developing or these public models on how can face or other things or even bring your own model customers, we've been making their own models fantastic of course.
Marc R. Benioff: And at Salesforce, we have some of the most intuitive user interfaces that deliver insights and intelligence across sales and service, marketing, commerce, and industries. Many of you are on Slack right now. Many of you are on Tableau. Many of you are on MuleSoft or one of our other products. Okay, now, what else do you need?
Michael Spencer: We have great partnerships with open AI with profit with go here with many other AI models.
Michael Spencer: This is the second key component one is the UI.
Michael Spencer: Dennis Tomorrow, Alright, now for those of their throughput like for example, a co pilot on our phone or any one of the co pilots on the App store, we have a compelling UI and we know underneath there there is a compelling model, but third we also know there is a huge dataset there but here. We go now we're in the enterprise and the <unk>.
Marc R. Benioff: Number two, you need a world-class AI model. And now we know there are many, many models available. Just go to Hugging Face, which is a company that we're an investor in, or look at all the other models.
Marc R. Benioff: And by the way, not only are there thousands of models right now, but there are tens of thousands, hundreds of thousands of models coming. And all the models that are available today will be obsolete 12 months from now. So we have to have an open, extensible, and trusted framework inside Salesforce to be receptacles for these models. That's why Einstein One is so important. Then you have to be able to use these AI models. The ones that Salesforce is developing or these public models on Hugging Face or other things, or even bring your own model.
Michael Spencer: Apprise, you need deep integration of data and metadata for the AI to understand and deliver the critical insights and intelligence that customers need across their business across sales service marketing commerce whatever it is.
Michael Spencer: That deep integration of the data and metadata that's not so easy that's not just some amalgamated stolen public datasets in the enterprise that deep integration of data met data and metadata Oh, that's what salesforce dose we are a deep integration of data and metadata that is why it's very very exciting you know I like to say I love It video by the way in which.
Marc R. Benioff: Customers are even making their own models. Fantastic. Of course. We have great partnerships with OpenAI, with Nethropic, with Cohere, with many other AI models. This is the second key component. One is the UI, and the second is the model, all right?
Michael Spencer: Janssen has done is amazing and they are delivering very much in the era of the gold rush.
Michael Spencer: The Levi's jeans until the gold miners, but we all know where the goal is the data. The gold is the data and that's why we're so excited about salesforce because we are one of the very largest repositories of enterprise data and metadata in the world for our customers and customers are just starting to realize this right now and they try to stitch together.
Marc R. Benioff: Now, for those of us who have put, for example, a co-pilot on our phone, any one of the co-pilots on the App Store, we have a compelling UI, and we know underneath there is a compelling model. But third, we also know there's a huge data set there. But here we go, now we're in the enterprise.
Michael Spencer: There are variety of AI tools and co pilots and this and that and whatever I've had so many if any conversations with so many customers who come to me with their experts in AI in the release and then I would just say to them, but how are you going to deliver this experience and then finally, they realize oh I need the deep integration with the data and the metadata. The reason why the metadata. So important is because it describes the data.
Marc R. Benioff: In the enterprise, you need deep integration of data and metadata for the AI to understand and deliver the critical insights and intelligence that customers need across their business, across sales, service, marketing, commerce, whatever it is. That deep integration of data and metadata is not so easy. That's not just some amalgamated, stolen public data set.
Michael Spencer: That's why so many companies are turning to salesforce for their AI transformation only salesforce offers these critical layers of AI for our customers <unk> their model and the deep integration of the data and the metadata and make the AI smart and intelligent and insightful and without those nations and without all of this.
Marc R. Benioff: In the enterprise, that deep integration of data and metadata, oh, that's what sales is. We are a deep integration of data and metadata. That is why it's very, very exciting. You know, I like to say, and I love NVIDIA, by the way, and what Jensen has done is amazing. And they are delivering very much. In the era of the gold rush, Levi's jeans were given to the gold
Michael Spencer: These other all the other problems.
Michael Spencer: For more than two decades, we've been trusted with our customers' data and metadata and we have a lot of it and a lot of your customers do you understand what I'm, saying, but many of our customers also have islands and thousands of systems of trapped data now what I'm going to say is very simple trapped data is all over the enterprise now what trapped data could be as you.
Michael Spencer: Might be using a great company like Snowflake, and I love Snowflake or data breaks or Microsoft or you might be using.
Michael Spencer: Amazon.
Michael Spencer: System or even something like Google.
Marc R. Benioff: But we all know where the gold is data. The gold is data. And that's why we're so excited about Salesforce. Because we are one of the very largest repositories of enterprise data and metadata in the world for our customers. And customers are just starting to realize this right now.
Michael Spencer: Big query all these various databases, but put your hand up if you're using snowflake everyday put your hand up if you are using one of these other systems put your hand up if they're using salesforce sales cloud service cloud tableau slack.
Marc R. Benioff: And they try to stitch together a variety of AI tools and co-pilots and this and that. And whatever. I've had so many funny conversations with so many customers who tell me that they're experts in AI, and they're this. And then I just say to them, but how are you going to deliver this experience? And then, finally, they realize, oh, I need deep integration with the data and the metadata. The reason why metadata is so important is that it describes the data.
Michael Spencer: We need to be able to through our zero copy.
Michael Spencer: Automatically integrates into our data cloud all of those systems and then seamlessly provide that data back into these amazing tools and that is what we're doing because so many of our customers have islands of trapped data in all of these systems, but AI is not going to work because it needs to have.
Michael Spencer: This seamless amalgamated data experience of data and meta data and that's why our data cloud is like a rocket ship the entire AI Revolution is built on this foundation of data and it's why we're so excited about this incredible data cloud is now deeply integrated into all of our apps into our entire platform.
Marc R. Benioff: That's why so many companies are turning to Salesforce for their AI. Only Salesforce offers these critical layers of AI for our customers, the UI, the model, and the deep integration of the data and the metadata to make the AI smart and intelligent and insightful, and without the hallucinations, and without all the other problems. For more than two decades, we've been trusted with our customers' data and metadata, and we have a lot of it. And a lot of you are our customers, so you understand what I'm saying. But many of our customers also have islands and thousands of systems full of trapped data. Now, what I'm going to say is very simple.
Michael Spencer: Its self service for all of our customers to turn on it is our fastest growing product ever. It's our total focus for fiscal year 'twenty five with Salesforce data cloud Salesforce can unlock the trapped data and bring together all of their business and customer data into one place for AI, all while keeping their data safe and secure and it.
Marc R. Benioff: Trapped data is all over the internet. Now, what a trap data could be is you might be using a great company like Snowflake, and I love Snowflake, or Databricks, or Microsoft, or you might be using an Amazon system, or even something like Google, what do you think, BigQuery, all these various databases, but put your hand up if you're using Snowflake every day, put your hand up if you're using one of these other systems, We need to be able to do so through our zero copy. They automatically integrate all of those systems into our data cloud and then seamlessly provide that data back into these amazing, And that is what we're doing because so many of our customers have islands of trapped data in all of these systems.
Michael Spencer: All running inside our Einstein trusts layer and we've deployed it to all of our customers. We unleashed now the co pilot as well to all of our customers deeply built in a pilot on our data and meta data and while other co pilots to sit and spin because they can't figure out what the data means that if you haven't seen the demonstration D. C. These copilot spin.
Michael Spencer: But when they use sales force that all of a sudden becomes intelligent and that is the core of the answer in one platform.
Michael Spencer: All of our apps all of our AI capabilities all of the customer data and one deeply integrated trusted metadata platforms and that's why we're seeing incredible demand for data cloud data cloud brings it altogether.
Marc R. Benioff: But the AI is not going to work, because it needs to have this seamless, amalgamated data experience of data and metadata. And that's why our data cloud is like a rocket. The entire AI revolution is built on this foundation of data, and it's why we're so excited about this incredible data cloud. It's now deeply integrated into all of our apps, and into our entire platform. It's self-service for all of our customers to turn it on.
Michael Spencer: And we're so blessed to have their part in our company.
Michael Spencer: And it's also why in Q4, 25% of our deals are already over $1 million of included data cloud and we've recently added over 1000, new customers a data card we've never seen traction like this or a new product because you can just easily turn on the data cloud and add huge value to sales clouded add huge value the service cloud the marketing cloud with this.
Michael Spencer: <unk>, you've all seen in the Gartner Magic quadrant that got published last week about the data cloud or if you Havent go to my Twitter feed and Youll see how amazing that MQ is and it's the fastest growing organic product in the history of Salesforce. This last quarter and more than seven trillion Records seven trillion records were in.
Marc R. Benioff: It is our fastest-growing product ever. It's our total focus for fiscal year 25 with Salesforce Data Cloud. Salesforce can unlock this trapped data and bring together all of their business and customer data into one place for AI, all while keeping their data safe and secure, and it's all running inside our Einstein trust layer.
Michael Spencer: Adjusted and the data cloud.
Michael Spencer: Unbelievable seven trillion records ingesting data cloud with over a trillion activations driving customer engagement lighting up all of those sales service marketing cloud users all the platform tableau, it's all integrated into data cloud and because data cloud and all of Einstein. One is built on our metadata framework as I just described.
Marc R. Benioff: And we've deployed it to all of our customers. We unleash the co-pilot now to all of our customers, deeply built on our pilot, on our data and metadata. And while other co-pilots just sit and spin because they can't figure out what the data means, and if you haven't seen the demonstrations, you just see these co-pilots spin, but when they use Salesforce, it all of a sudden becomes intelligent. And that is the core of the Einstein One platform.
Michael Spencer: Every customer App can securely access and understand the data and use any bottle use any UI workflow integrated with the platform that means less complexity and more flexibility faster innovation, but also.
Marc R. Benioff: All of our apps, all of our AI capabilities, all of the customer data in one deeply integrated, trusted metadata platform. And that's why we're seeing incredible demand for Data Cloud. Data Cloud brings it all together.
Speaker Change: I wanted to say goodbye to the solicitations, we wanted to say goodbye to all of these crazy experiencing are having with these parts that don't know what they're doing because they have no data and metadata.
Speaker Change: Okay or the data that they have metadata like productivity data or like the highest level data does not deeply integrated data.
Marc R. Benioff: And we are so blessed to have Data Cloud in our company. And it's also why, in Q4, 25% of our deals already over a million dollars have included Data Cloud. And we've recently added over 1,000 new customers to Data Cloud. We've never seen traction like this for a new product. Because you can just easily turn on Data Cloud, and it adds huge value to Sales Cloud.
Michael Spencer: So only salesforce can do this only salesforce has this vision of this kind of platform and only has we've been working on this for 25 years and we are not done we are just starting.
Michael Spencer: Because let me tell you know of a story of how we're delivering a high quality trusted AI for our customers. We all know the HR and payroll leader ADP and their incredible new CEO Murray Amazing ADP has been a great sales cloud customer for two decades.
Marc R. Benioff: It adds huge value to Service Cloud, to Marketing Cloud, to the CDP. You've all seen the Gartner Magic Quadrant that got published last week about the Data Cloud. Or if you haven't, go to my Twitter feed, and you'll see how amazing that MQ is.
Michael Spencer: Einstein for years. They are one of the first customers. We ever have are so grateful to ADP amazing and work with so many of their great Ceos over the decades in.
Marc R. Benioff: And it's the fastest growing organic product in the history of Salesforce. This last quarter, more than 7 trillion records were ingested into Data Cloud. Unbelievable, 7 trillion records ingested in the data cloud with over a trillion activations, driving customer engagement, lighting up all of those sales, service, marketing, cloud users, all the platform, Tableau, it's all integrated into the data cloud. And because the data cloud and all of Einstein One is built on our metadata framework, as I just described, every customer app can securely access and understand the data and use any model, use any UI workflow That means less complexity, more flexibility, and faster innovation, but also, we want to say goodbye to these hallucinations. We want to say goodbye to all of these crazy experiences that we're having with these bots that don't know what they're doing because they have no data or metadata. Okay, or the data that they have in their metadata is like productivity data or like the highest level data, that's not deeply integrated data. So only Salesforce can do this.
Michael Spencer: And the company wanted to transform now customer service.
Michael Spencer: AI to give their agents real time insights next best actions.
Michael Spencer: Aldo generated case summaries, but I have to say to you there was a little bit embarrassing salesforce is not number one on their list and I say to them how can that be we're the number one service cloud we're number one in the market MQ. We're number one in this number one.
Michael Spencer: No we're going to evaluate this we're going to look at all the different solutions, we're going to look at all the new AI models. We think we're just going to help this model up to this and we're going to do that and it sounds like a big Rube Goldberg invention, what what's going to happen there and so we had to go in and we just wanted to partner with MSA Alright show US what you want to do we're going to work with you we're going to be trusted.
Michael Spencer: Partners, let's go but like a lot of our customers moving to AI ADP realized it didn't have a comprehensive deeply integrated platform of data and metadata.
Michael Spencer: That could bring together all of this into a single source of truth and then you get the incredible customer service then you get the results that you are looking for and it's deeply integrated with their sales systems with marketing and customer applications and ADP discovered only salesforce can do this we were able to show ADP, how we could unlock.
Michael Spencer: Wrap data with data cloud zero coffee drive intelligence productivity efficiency for their sales team with Einstein to levels Unimagined, just a year ago.
Marc R. Benioff: Only Salesforce has this vision of this kind of platform and only has, we've been working on this for 25 years, and we are not done. We are just starting. Because let me tell you now a story of how we're delivering high-quality trusted AI to, We all know the HR and payroll leader, ADP, and their incredible new CEO, Maria Black. Amazing.
Michael Spencer: We're now incredibly excited to work with all of our customers to take their AI to the next level with Einstein copilot, which is going live tomorrow.
Michael Spencer: <unk> co pilot.
Michael Spencer: If you haven't seen it and if you haven't please come to trailhead Dx next week. This is the first conversational AI assistant for the enterprise that's truly trusted it's amazing.
Marc R. Benioff: ADP has been a great Sales Cloud customer for two decades. They've used Einstein for years. They're one of the first customers we ever had. We're so grateful to ADP. Amazing.
Michael Spencer: It can answer questions and concerns as it can create new content dynamically automate tasks by half of the user from a single consistent user experience embedded directly within our platform, but let me tell you. The one thing that can do this more important than all of that.
Marc R. Benioff: And worked with so many of their great CEOs over the decades. And the company wanted to transform customer service with AI to give their agents real-time insights, next best action, and auto-generated case summaries. But what I have to say to you, it was a little bit embarrassing. Salesforce was not number one on their list. And I said to them, "How can that be?"
Michael Spencer: It is able to read across all of the data and metadata in our platform to get that insight instantly and youre going to see that so the sales rep might ask the Einstein co pilot what lead I should focus on or what is the most important thing I need to do with this opportunity and it may say, you need or you need to resolve this customer's customer.
Michael Spencer: <unk> because there's escalation that's been around for a week or you better go and answer that lead that came in on the marketing cloud before if you want to move this opportunity for it because it's reading across the entire dataset.
Marc R. Benioff: We're the number one service cloud. We're number one in the MQ. We're number one in this. No, we're going to go evaluate this. We're going to look at all the different solutions. We're going to look at all the new AI models. We think we're just going to hook this model up to this, and we're going to do that. And it sounded like a big Rube Goldberg invention was going to happen here.
Michael Spencer: That is something that individual users cannot do that the co pilot can do with access to customer data and the metadata and salesforce, including all this real time data and website engagement and the ability to read through the dataset. That's why Einstein co pilot has all the context to understand the question and surface believe that has the highest value and likelihood to convert.
Marc R. Benioff: And so we had to go in, and we just wanted to partner with them and say, all right, show us what you want to do. We're going to work with you. We're going to be trusted partners. Let's go.
Marc R. Benioff: But like a lot of our customers moving to AI, ADP realized it didn't have a comprehensive, deeply integrated platform of data and metadata that could bring all of this together into a single source of truth, and then you get incredible customer service. Then you get the results that you're looking for, and it's deeply integrated with their sales systems, with marketing, and custom applications, and ADP Discovered, the only Salesforce. We were able to show ADP how we could unlock trapped data with Data Cloud, zero copy, and drive intelligence, productivity, and efficiency for their sales team with Einstein to levels unimagined just a year ago. We're now incredibly excited to work with all of our customers to take their AI to the next level with Einstein Copilot, which is going live tomorrow. Einstein Co-Pilot, which if you haven't seen it, and if you haven't, please come to Trailhead DX next week. This is the first conversational AI assistant for the enterprise that's truly trusted. It's amazing.
Michael Spencer: And it can also instantly generate the action plan with the best steps to close the deal such as suggesting optimal meeting times.
Michael Spencer: On the lead contacts known preferences, even drafting email if you haven't seen the video that I put on my Twitter feed last night, there's a five minute video that goes through all of these incredible things that it's able to do there has never been an enterprise AI capability quite like it. It's amazing all of US can understand metastasis, copilot, performing and I bet a lot of <unk>.
Michael Spencer: Even on this call that a lot of other companies might say they can do this but I assure you without the deep integration of the day and the meta data across the entire platform with their co pilots deep integration of that data they cannot do it.
Michael Spencer: They cannot do it I assure you they cannot because they don't have the data and the metadata, which is so critical to making an AI assistant so successful.
Michael Spencer: I encourage you to try the demos yourself to put our copilot up against any other copilot because I will tell you that I've seen enterprise co pilots from these other companies and actions made a spin and spin and spin and some have a different copilot for every app some with different capabilities restrictions grounding. This WYSIWYG builders on whatever is very cute.
Marc R. Benioff: It can answer questions, it can summarize, it can create new content, and dynamically automate tasks on behalf of the user from the single consistent user experience embedded directly within our platform. But let me tell you one thing that it can do that's more important than all of that. It is able to read across all the data and metadata in our platform to get that insight instantly. And you're going to see that. So the sales rep might ask the Einstein co-pilot, what lead I should focus on? Or what is the most important thing I need to do with this opportunity?
Michael Spencer: You know very nice exciting is really cool for the first minute and then you realized wait a minute what data is available to this co pilot.
Michael Spencer: Only a conversational UI, okay can start to understand all these things if it has the X axis.
Michael Spencer: Only after a conversational UI for canned queries or don't understand the customers to customize the co pilot those as none of these things are going to work.
Michael Spencer: I've use those co pilots from our competitors.
Michael Spencer: We have not seen them work yet, okay thinking icon spinning it goes on and on and on and on Einstein co pilot Youre going to see you're going to have your hands on it now it's been released into the wild to our customers to all of you. This is fundamentally different kind of AI just like Einstein was a different AI, which became the democratization of AI, which is why I'm.
Marc R. Benioff: And it may say, you need to resolve this customer's customer case because this escalation has been around for a week. Or you better go and answer that lead that came in on the marketing cloud if you want to move this opportunity forward because it's reading across the entire data set. That is something that individual users cannot do that the co-pilot can do with access to customer data and the metadata and Salesforce, including all this real-time data and website engagement and the ability to read through the data set. That's why Einstein Co-Pilot has all the context to understand the question and surface the lead that has the highest value and likelihood to convert.
Michael Spencer: Stein Desert trillion transactions, a week Einstein's the only co pilot with the ability to truly understand what's going on with your customer relationships. It's one conversational AI assistant deeply connected to trusted customer data and metadata.
Michael Spencer: It's one integrated system for all of our customers across any role or industry and it's why we call. It Einstein once it's one platform one integrated system that is what you need to get AI to work next week at our trail of Dx Conference in San Francisco I Hope you all come in it's going to be amazing on March 6th and seventh Youre going to see how we're bringing even more AI innovation to our customers.
Marc R. Benioff: And it can also instantly generate an action plan with the best steps to close the deal, such as suggesting optimal meeting times, on-the-lead contacts, known preferences, and even drafting an email. If you haven't seen the video that I put on my Twitter feed last night, there's a five-minute video that goes through all of these incredible things that it's able to do. There's never been an enterprise AI capability quite like
Michael Spencer: Being prepared to be amazed by Einstein co pilot builder prompt builder model builder and so much more that we're doing to help our customers make every employ more productive and Toronto transform every customer experience and I hope youre going to join us in person or you can join us online at Salesforce plus.
Marc R. Benioff: All of us can understand the tasks that the co-pilot's performing. And I bet a lot of people, even on this call, that a lot of other companies might say they can do this, but I assure you, without the deep integration of the data and the metadata across the entire platform, with the co-pilot's deep integration of that data, they cannot. They cannot do it. I assure you they can.
Michael Spencer: And with closing I just want to thank all of you once again for everything he's done for us for the last year or so grateful to each and every one of you and to our entire management team or a hunter and all of our customers.
Michael Spencer: As well, we're so grateful as we look forward now to our 20 <unk> anniversary in March as I've never been more excited you can here why.
Marc R. Benioff: Because they don't have the data and the metadata, which is so critical to making an AI assistant so successful. And I encourage you to try the demos yourself to put our co-pilot up against any other co-pilot. Because I've seen enterprise co-pilots from these other companies in action, and they just spin and spin and spin. And some have a different co-pilot for every app, some with different capabilities, restrictions, grounding this, WYSIWYG builders on whatever.
Michael Spencer: Not just the fundamental transformation of the company, but also the fundamental transformation of the product line and the product vision.
Michael Spencer: As we move into this incredible new intelligent world that we're all seeing with AI.
Michael Spencer: Thank you and now I'll turn it over to Brian who was employee number 13, our chief operating officer, who has done a phenomenal job this year without him and without Amy without our whole management team, who would not be possible I just want to thank again, everyone, who has been a huge part of everything and.
Marc R. Benioff: It's very cute, very nice, exciting. [inaudible] Only a conversational UI can start to understand all these things if it has this access. Only after a conversational UI for canned queries or doesn't understand the customers to customize the copilot will none of these things work. I've used those co-pilots from the competitors. I have not seen them work.
Michael Spencer: I'll turn it over to you Brian here again.
Brian Millham: Thank you Mark I really appreciate it I couldn't be more proud to be part of Salesforce. The past 25 years, especially this past year as we took on a pivotal business transformation, while delivering incredible innovation for our customers and returns for our shareholders. Our continued focus on operational excellence high performance and new growth initiatives helped deliver strong results in the fiscal year and remains our.
Marc R. Benioff: Okay, the thinking icon, the spinning, it goes on and on and on. Einstein copilot, you're going to see you're going to have your hands on it now. It's been released into the wild to our customers, to all of you. This is a fundamentally different kind of AI, just like Einstein was a different AI, which became the democratization of AI, which is why Einstein does a trillion transactions a week. It's the only copilot with the ability to truly understand what's going on with your customer relationships. It's one conversational AI assistant deeply connected to trusted customer data and metadata. It's one integrated system for all of our customers across any role or industry, and that's why we call it Einstein One. It's one platform, one integrated system. That is what you need to get AI to work. Next week at our Trailhead DX conference in San Francisco, I hope you're all coming. It's going to be amazing.
Michael Spencer: Our focus going forward.
Michael Spencer: In FY 'twenty four we laid the foundation for success and strategic restructuring streamlining our go to market approach deeper inspection and continued operational excellence as part of our transformation. We also refined and scaled our big deal motion and introduced new product bundles to give our customers comprehensive solutions on a unified trusted platform.
Michael Spencer: And we're unlocking customer spend with new channels like AWS marketplace, and driving C level relevance through a strategic collaboration with Mckinsey.
Michael Spencer: The adjustments we made are paying off.
Michael Spencer: Mark mentioned, our deals greater than $10 million in FY 'twenty four grew substantially 78% year over year, and we closed 86000 multi cloud deals.
Marc R. Benioff: On March 6 and 7, you're going to see how we're bringing even more AI innovation to our community. So be prepared to be amazed by Einstein Copilot Builder, Prompt Builder, Model Builder, and so much more that we're doing to help our customers make every employee more productive and transform every customer experience. And I hope you're going to join us in person, or you can join us online at Salesforce Plus. And, in closing, I just want to thank all of you once again for everything that you've done for us over the last year.
Michael Spencer: Our pricing and packaging strategy is driving higher sales and delivering more value for companies of all sizes and industries.
Michael Spencer: Launching in April we've added 3000, new logos through self service with Salesforce starter solution for small businesses that include sales service and marketing with AI and data cloud built in.
Michael Spencer: We're excited by the momentum we're seeing in U E plus bundle, which is now called Einstein. One addition, it's providing substantial returns for our customers and for Salesforce and.
Marc R. Benioff: We're so grateful to each and every one of you and to our entire management team, all our AHANA members, and all of our customers. As well, we're so grateful as we look forward now to our 25th anniversary on March 8th. I've never been more excited.
Michael Spencer: In fact, we continue to see significant average sales price uplift from existing customers, who upgrade to Einstein. One addition.
Michael Spencer: It is also attracting new customers to Salesforce, 15% of the company that purchased our Einstein. One addition in FY 'twenty four were net new logos.
Marc R. Benioff: Not just the fundamental transformation of the company but also the fundamental transformation of the product line and the product vision. As we move into this incredible new intelligent world that we're all seeing with AI, so thank you. And now I'm turning it over to Brian, who was employee number 13, our Chief Operating Officer. He's done a phenomenal job this year. Without him and without Amy, without our whole management team, it would not be possible.
Michael Spencer: As you heard from Mark with our <unk> platform, including data cloud and Einstein co pilot rapidly infusing conversational AI across our entire product portfolio.
Michael Spencer: <unk> is a huge differentiator for us in the industry transforming excuse me and as the industry transforms and as AI Revolution.
Michael Spencer: Fastest and safest way to unlock an organization's data to create better customer experiences augment employees with AI and drive productivity and improve margins and profitability.
Brian Millham: I just want to thank everyone again who's been a huge part of everything. And I'll turn it over to you, Brian. Here we go. Well, thank you, Mark. I really appreciate it.
Michael Spencer: AI strategy starts with data as Mark said, Dana cloud has strong momentum.
Brian Millham: I couldn't be more proud to be part of Salesforce for the past 25 years, especially this past year as we took on a pivotal business transformation while delivering incredible innovation for our customers and returns for our shareholders. Our continued focus on operational excellence, high performance, and new growth initiatives helped deliver strong results in the fiscal year and remains our focus going forward. At FY24, we laid the foundation for success through strategic restructuring, streamlining our go-to-market approach, deeper inspection, and continued operational. As part of our transformation, we also refined and scaled our big deal motion and introduced new product bundles to give our customers comprehensive solutions on a unified trusted platform. And we're unlocking customer spend with new channels like AWS Marketplace and driving C-level relevance through strategic collaboration with. The adjustments we made are paying off
Michael Spencer: Datacom is approaching $400 million in IRR are growing at nearly 90% year over year and in Q4, 25% of our deals greater than $1 million included data cloud.
Michael Spencer: Customers like Xerox in London stock exchange and Daikon Turner data cloud in Q4 to build their trusted data foundations and unlock their trapped data within salesforce.
Michael Spencer: And we're excited about our future. We just were named as Mark mentioned the leader in the inaugural February 2000.
Michael Spencer: 24, Gartner magic quadrant for customer data platforms.
Michael Spencer: I met with dozens of Ceos and business leaders over the past few months and they are all focused on fueling growth and strengthening customer relationships within their current budgets and workforce and they see AI as the tool to augment their people and drive more productivity companies like ADP and Intel Mclaren and soon us are investing in <unk> to become AI first.
Brian Millham: As Marc mentioned, our deals greater than $10 million in FY24 grew substantially. 78% year over year, and we close 86,000 multi-cloud. Our pricing and packaging strategy is driving higher sales and delivering more value for companies of all sizes, and since launching in April, we've added 3,000 new logos through self-service with Salesforce Starter, a solution for small businesses that includes sales, service, and marketing with AI and the data cloud built in. We're excited by the momentum we're seeing in the UE plus bundle, which is now called Einstein one edition, providing substantial returns for our customers and for sales.
Michael Spencer: Organizations.
Michael Spencer: In FY 'twenty four we closed 309 signed deals as more customers are leveraging our generative and predictive AI capabilities.
Michael Spencer: China on electric they wanted to standardize and simplify customer care across their 3000 support agents.
Michael Spencer: <unk> 15 different languages around the world.
Michael Spencer: Instead of talking to customers service agents, we're spending way too much time searching for answers across different systems and summarizing cases.
Michael Spencer: Dealing with 7 million cases per year leads the time consuming interactions for their support agents now Einstein will automatically create E mail replies that agents can use to respond and summarize their cases.
Brian Millham: In fact, we continue to see significant average sales price uplifts from existing customers who upgrade to Einstein 100. It's also attracting new customers to Salesforce. 15% of the companies that purchased our Einstein One Edition and FY24 were net new logos.
Michael Spencer: With the power of mine San Juan Schneider Electric support teams are already seeing a 15% increase in case efficiencies and it's not just their service agents. Their sales teams are also seeing incredible benefits from our AI capabilities.
Michael Spencer: We're just at the beginning of the new innovation cycle that will spark a massive software buying cycle over the coming years and Salesforce is leading the way.
Brian Millham: As you heard from Mark, with our Einstein One platform, including Data Cloud and Einstein Copilot, we're rapidly infusing conversational AI across our entire product portfolio. ISOM1 is a huge differentiator for us in the industry transforming, excuse me, as the industry transforms in this AI revolution. It's the fastest and safest way to unlock an organization's data to create better customer experiences, augment employees with AI, and drive productivity and improve margins and profitability.
Michael Spencer: We continue to see strong demand for our data products as customers lay the foundation for AI, specifically middle soft is helping companies such as rising all in TK elevator in North America bring together their data from any source a critical step to prepare for AI <unk> was in eight of our top 10 deals in the quarter and executed a record 319 billion.
Michael Spencer: <unk> workflows automated workflows every months up 100% year over year.
Brian Millham: As Marc said, Data Cloud has strong momentum. Data Cloud is approaching 400 million in ARR, growing at nearly 90% year over year, and in Q4, 25% of our deals greater than a million dollars included Data Cloud. Customers like Xerox and London Stock Exchange and Daikin turn to Data Cloud and Q4 to build their trusted data foundations and unlock their trapped data within Salesforce.
Michael Spencer: Tableau was in 20 of our 20 top 25 deals in the quarter and is fully integrated to data cloud wins in the quarter included customers like IHG Heathrow Airport and Brazilian Fintech stone.
Michael Spencer: Tableau pulse a phenomenal new product that has just been released generally available last week actually is how already has 2000 customers powered by data cloud and Einstein.
Michael Spencer: Tableau pulse automatically delivers personalized AI powered insights and both in natural language and visual format.
Michael Spencer: We're also excited about the innovation coming from slack, which was included in nearly half of our top 50 deals in the quarter. We just launched slack AI with features like AI search channel recaps and fed thread summaries to meet enormous demand for embedded AI and the flow of work from customers like Australia post and open AI.
Brian Millham: And we're excited about our future. We just were named, as Mark mentioned, the leader in the inaugural February 2024 Gartner Magic Quadrant for Customer Data Platform. I met with dozens of CEOs and business leaders over the past few months, and they're all focused on fueling growth and strengthening customer relationships within their current budgets and workforce, and they see AI as the tool to augment their people and drive more productivity. Companies like ADP and Intel, McLaren, and Sonos are investing in Einstein-1 to become AI-first organizations. In FY24, we closed 1,300 Einstein deals as more customers are leveraging our generative and predictive AI capabilities. For example, take Schneider Electric.
Michael Spencer: It's amazing to see what slack is accomplished in a decade and frankly, it's just the beginning we have a great vision for the future of slack as a conversational interface for any application.
Michael Spencer: Our specialized industry products continue to fuel our growth chosen in the quarter by customers like Japan post insurance and TPG Telecom and USDA collectively our industry businesses finished the year at $4 8 billion.
Brian Millham: They wanted to standardize and simplify customer care across their 3,000 support agencies, which speak 15 different languages around the world. Instead of talking to customers, service agents were spending way too much time searching for answers across different systems and summarizing cases. Dealing with 7 million cases per year leads to time-consuming interactions for their support agency. Now Einstein will automatically create email replies that agents can use to respond to and summarize their messages. The power of Einstein 1 Schneider Electric support teams are already seeing a 15% increase. And it's not just their service agents; their sales teams are also seeing incredible benefits from our AI capability. We're just at the beginning of a new innovation cycle that will spark a massive software buying cycle over the coming years, and Salesforce is leading the way.
Michael Spencer: Up more than 20% year over year.
Michael Spencer: We saw strong growth internationally with wins at Volvo and Genpact Hitachi and <unk>.
Michael Spencer: India continues to be a bright spot for us growing new business at 35% year over year, and we continue to invest in the region to meet the needs of customers, including passage Finance I.
Michael Spencer: I had the great opportunity to meet with their CEO Rajeev Jain in January and a top priority for him was using Einstein to deliver predictive and generative AI across our entire lending business, which they run on Salesforce in Q4, <unk> became the second largest data cloud customer globally building their AI foundation on the Einstein one platform.
Michael Spencer: I want to close by acknowledging that our success is only possible because our phenomenal employees incredible partners trailblazers shareholders, an amazing customers, who have trusted us for 25 years as we proved in FY 'twenty for when we focus on something as a company, we deliver results and FY 'twenty five that focuses on profitable growth.
Brian Millham: We continue to see strong demand for our data products as customers lay the foundation for AI. Specifically, MuleSoft is helping companies such as Rossignol and TK Elevator North America bring together their data from any source, a critical step to prepare for AI. MuleSoft was in eight of our top 10 deals in the quarter and executed a record 319 billion workflows automated workflows every month, up 100% year over year. Tableau was in 20 of our top 25 deals in the quarter and is fully integrated with Data Cloud. Wins in the quarter included customers like IHG, Heathrow Airport, and Brazilian fintech Stone.
Michael Spencer: And with that I'll turn it over to you Amy.
Amy E. Weaver: Thanks, Brian let.
Amy E. Weaver: Let me join Mark and Brian.
Amy E. Weaver: A year it has been for sale.
Amy E. Weaver: Sure.
Amy E. Weaver: At this time last year, we laid out our accelerated transformation plan and I am incredibly proud of the significant progress we made this year against that plan.
Amy E. Weaver: Throughout fiscal 2024, we delivered an increasing profitability revenue productivity and operational excellence.
Michael Spencer: Q4 represented another quarter of strong execution and continued discipline across the business.
Brian Millham: Tableau Pulse, a phenomenal new product that's just been released, generally available last week, actually, already has 2000 customers. Powered by Data Cloud and Einstein, Tableau Pulse automatically delivers personalized AI-powered insights in both a natural language and visual format. We're also excited about the innovation coming from Slack, which was included in nearly half of our top 50 deals in the quarter. We just launched Slack AI with features like AI Search, Channel Recaps, and Thread Summaries to meet the enormous demand for embedded AI and the flow of work from customers like Australian Post and OpenAI.
Michael Spencer: Now, let's turn to the results.
Michael Spencer: For the fourth quarter revenue was $9 3 billion up 11% year over year and 10% in constant currency.
Michael Spencer: <unk> is primarily driven by Brazilian sales and service performance as well as strength in Europe.
Michael Spencer: Cath lab.
Michael Spencer: And for the full year revenue was $34 9 billion up 11% year over year and does nominal and constant currency.
Michael Spencer: From a geographic perspective in Q4, the Americas revenue grew 9% EMEA grew 14% or 11% in constant currency and APAC grew 14.
Michael Spencer: 19.
Michael Spencer: We saw strong new business growth in Latam, India and Canada.
Brian Millham: It's amazing to see what Slack has accomplished in a decade, and frankly, it's just the beginning. We have a great vision for the future of Slack as a conversational interface for any application.
Michael Spencer: It's a EMEA remained constrained.
Michael Spencer: From an industry interest net cash in Q4 public healthcare and travel transportation and hospitality notes performed well.
Brian Millham: Our specialized industry products continue to fuel our growth, chosen in the quarter by customers like Japan Post Insurance, TPG Telecom, and USDA. Collectively, our industry businesses finished the year at 4.8 billion ARR, up more than 20% year over year. We saw strong growth internationally with wins at Volvo and Genpak, Hitachi, and Bochicario. India continues to be a bright spot for us, growing new business at 35% year over year, and we continue to invest in the region to meet the needs of customers, including Bajaj Finance.
Michael Spencer: Retail and consumer goods and high Tech, we generally more necessary.
Michael Spencer: Our multi cloud momentum can continue in Q4 eight of our top 10 deals included six or more planned and.
Michael Spencer: And more than half of our top 100 win picture My cloud.
Michael Spencer: Antipoverty Herring AI territory, and we are seeing strong momentum maintaining client.
Michael Spencer: In Q4 more than half of our top 25 plans, including data cloud.
Michael Spencer: Q4 revenue attrition ended the quarter at slightly above 8% generally in line with recent quarters.
Brian Millham: I had the great opportunity to meet with their CEO, Rajiv Jain, in January, and a top priority for him was using Einstein to deliver predictive and generative AI across their entire lending business, which they run on Salesforce. In Q4, Bajaj became the second largest data cloud customer globally, building their AI foundation on the Einstein One platform. I want to close by acknowledging that our success is only possible because of our phenomenal employees, incredible partners, trailblazers, shareholders, and amazing customers who have trusted us for 25 years. As we proved in FY24, when we focus on something as a company, we deliver results, and in FY25, that focus is on profitable growth. And with that, I'll turn it over to you.
Michael Spencer: In Q4, our non-GAAP operating margin was 31, 4%.
Michael Spencer: 220 basis points year over year.
Michael Spencer: And for the full year in line with our guidance.
Michael Spencer: non-GAAP operating margin of 35 eight.
Michael Spencer: 800 basis points year over year.
Michael Spencer: And GAAP operating margin ended the year at 14, 4% up one.
Michael Spencer: <unk> 110 basis points here.
Michael Spencer: Q4, operating cash flow was $3 4 million or 22% year over year Q4 free cash flow was $3 3 million up 27% year after year.
Michael Spencer: And for the full year operating cash flow with a record $10 2 billion up 44% year over year.
Michael Spencer: Free cash flow was $9 5 million.
Amy E. Weaver: Thanks, Brian. Let me join Mark and Brian in saying what a year it is. At this time last year, we laid out our accelerated growth plan, and I am incredibly proud of the significant progress we made this year. Throughout Fiscal 2024, we delivered on increasing profitability, revenue, and productivity. Q4 represents another quarter of strong and continued growth. Now let's turn to, For the fourth quarter, revenue was $9.3 billion, up 11% year-over-year, and $10.3 billion in revenue. The growth is primarily driven by resilient sales and, as well as strength. And for the full year, revenue was $34.9. From a geographic perspective, in Q4, America's revenue grew 9%, and the Andrew 14% or 11. APAC Group 14.
Michael Spencer: 50% year after year.
Michael Spencer: Now turning to remaining performance obligation RPM, which represents our future revenue under contract ended Q4 at an incredible $56 million.
Michael Spencer: 17% year after year.
Michael Spencer: Current remaining performance obligation or CRP M ended at $27 6 million up 12% year over year and 13% in constant currency.
Michael Spencer: Particularly driven by strong execution on early renewals.
Michael Spencer: We also benefited from new business performance and timing of license revenue from New York.
Michael Spencer: <unk>.
Michael Spencer: As expected this was partially offset by a one point headwind from professional services, which we at nelligan corner.
Speaker Change: Now, let's turn to guidance starting with for fiscal year 'twenty five on revenue, we expect 37 <unk> 38.
Amy E. Weaver: We saw strong new business growth in Latham, India, and Canada, while parts of EMEA remain from an industry. Vitality, both performed well in retail and consumer goods. We're generally more.
Speaker Change: Relative to 89% year after year.
Speaker Change: A few items to note on our revenue guide.
Speaker Change: Our expectations, incorporating a 100 million dollar FX headwind year over year or 30 basis points.
Amy E. Weaver: Unknown Speaker In Q4, eight of our top 10 deals included six or more, and more than half of our top 100 winners. As you've already heard, AI is starting, and we are seeing strong moments. In Q4, more than half, The Bulletproof Executive 2013 All rights reserved. Q4 revenue attrition ended the quarter at slightly above. In Q4, our non-GAAP operating margin was 31%, 220 basis points year over, and for the full year in line with our guide.
Speaker Change: We also expect our professional services business to remain under pressure in FY 'twenty, five and expect it will be a headwind to revenue.
Michael Spencer: Within our revenue guidance subscription and support revenue growth is expected to be slightly above 10% year over year in constant currency.
Michael Spencer: As a reminder, our topline expectations include the impact from the natural buying environment that began back in fiscal year 'twenty train.
Michael Spencer: This takes time to flow through our subscription revenue stream do you get the lag effect of bookings to revenue recognition.
Amy E. Weaver: We delivered a non-GAAP operating margin of 30, end of the year, for operating cash flow of $3.4 billion, 22% year over, and for the full year operating cash flow with a record 10.2 full year free cash flow of nine. Now turning to remaining performance, RPO, which represents all future revenue, and a Q4 and an incredible current remaining, ended at 27.
Michael Spencer: That said, we continue to execute well and the natural buying environment over the past few quarters I'm happy to AWP seen improved bookings ramp and as you heard from Marc we are incredibly well positioned to build on our success and bring our customers.
Michael Spencer: AI era.
Michael Spencer: Turning to attrition starting in fiscal 'twenty, five we are including smack in Italy in the metric.
Amy E. Weaver: Particularly driven by strong, We also benefited from new timing of License Revenue. As expected, this is partially offset by which we. Now let's turn to, starting with the full fiscal year. On revenue, we expect $37.7 to $38 billion, growth of $8 to $9. There are a few items to note. Our expectations incorporate a $100 million, Europe, or a 30 day We also expect our professional services business, and expect it will be within our Revenue Guidance, Subscription and Support Revenue. Unknown Speaker...expected to be slightly above... Well, as a reminder, our top line experts... includes the impact from the measured buying and selling that began back in fiscal year. This takes time to flow through our subscription revenue stream due to the lag.
Michael Spencer: Despite expecting a modest headwind, we expect attrition to remain consistent.
Michael Spencer: Slightly above 8%.
Michael Spencer: Margins, we continued to drive operational excellence productivity and efficiency.
Michael Spencer: And for fiscal year 'twenty five we expect non-GAAP operating margin of 32, 5%, representing a 200 basis point improvement year over year, while making key investments in growth opportunities negatively AI data and our core business.
Michael Spencer: Stock based compensation is expected to be below 8% is it presented for <unk> and we continue to take a disciplined approach to our equity based program.
Michael Spencer: As a result for the fiscal year 'twenty side I am pleased that our GAAP operating margin guidance for the first time is expected to surpass 20% at 24%, representing a 600 basis point improvement year over year.
Amy E. Weaver: That said, we continue to execute well in the measured bias. Over the past two quarters, I'm happy to say that, And as you heard from Mark, we're incredibly well-positioned to build on. Now turning to attrition, starting in Fiscal 25, we are including Slack Invoice. Despite expecting a modest headwind, we expect attrition to remain. On margins, we continue to drive operational excellence and productivity, and for fiscal year 25, we expect a non-GAAP operating margin of 32%, representing a 200 day while still making key investments in growth. Notably, AI data. Stock-based compensation is expected to be below $800,000.
Michael Spencer: We expect fiscal year, 'twenty, five GAAP diluted EPS of $6 and Kevin Kim <unk> <unk>.
Michael Spencer: non-GAAP diluted EPS is expected to be $9 68 and $9.
Michael Spencer: Yeah.
Michael Spencer: As a result of our focus on profitable growth and continued transformation, we're seeing a market improvement in our cash flow.
Michael Spencer: We expect fiscal year 'twenty, five operating cash flow kind of approximately 21% to 24%, which includes a 10 point year over year headwinds from cash taxes.
Michael Spencer: Capex for the fiscal year is expected to be slightly below 2% of revenue.
Amy E. Weaver: As a percentage of revenue, as we continue to take a, As a result, for the fiscal year 25, I am pleased that our gap for the first time is expected to represent a 600 basis. We expect fiscal year 25 GAAP's diluted EPS of $6.75, non-capitalism. $69.68. As a result of our focus on profitable growth and continued, Unknown Speaker We are seeing a mark. We expect fiscal year 25 operating cash flow to conclude a 10 point year over, and CapEx for the fiscal year is expected to be slightly below. This results in free cash flow growth for approximately. Now to Guidance. On revenue, we expect $9.12 billion, one 11. 11% year over year and nominal and 12, This includes a tailwind.
Michael Spencer: This results in free cash flow granted approximately 23% to 26%.
Speaker Change: Now to guidance for Q1.
Speaker Change: On revenue, we expect 912 billion to $9, one 7 billion up 11% year over year and 12% in constant currency. These include detailed range when the timing of license revenue. When you are talking half now.
Speaker Change: Additionally, Q1 <unk> to one <unk>.
Speaker Change: From an extra day of revenue recognition given the leap year, which has no impact on our full year revenue with the RPM.
Speaker Change: <unk> growth for Q1 is expected, 11% year over year and 12% in constant currency.
Speaker Change: For Q1, we expect GAAP EPS of $1 42 to $1 44, and non-GAAP EPS of $2 37 to $2.
Speaker Change: 39.
Speaker Change: Now to capital return.
Speaker Change: We are deeply committed to driving free cash flow and returns my shareholders, while investing in new organic growth initiatives.
Amy E. Weaver: License Revenue. Additionally, Q1 has a one-point benefit. The Bulletproof Executive 2013. Unknown Speaker, CRPO growth for Q1 is expected to be 11% year over year in nominal. If you won, we would accept GAP EPS of $1.42, and Nongap EPS of $2.35.
Speaker Change: In Q4, we returned $1 7 billion and finally share repurchases, bringing the total return during FY, $2047 7 million or more than 80% free.
Speaker Change: Free cash flow.
Speaker Change: More than fully offset dilution from our stock based compensation.
Speaker Change: Since the inception of our repurchase program. We have now returned $11 7 billion to shareholders with an average purchase price of $182 per share.
Amy E. Weaver: Now to Capital. We are deeply committed to driving free. In Q4, we returned $1.7 billion, which more than fully funded.
Speaker Change: And I'm incredibly excited to announce our first Android again again, we are enhancing our capital return strategy reflective of the confidence we have in the future of our business.
Amy E. Weaver: Since the inception of our, We have now returned $11.7 billion. And I'm incredibly excited to announce that we are enhancing our, (inaudible) we have in the future, and our ability to. Our board has approved the initiation of a quarterly dividend starting. More details of this dividend are available at www.salesforce.com.
Speaker Change: And our ability to drive long term cash flow.
Speaker Change: Our board has approved the initiation of a quarterly dividend starting in 'twenty.
Speaker Change: More details of discount against unassailable in our press release.
Amy E. Weaver: Additionally, the board has approved a $10 billion increase to our share, bringing the total authorization to 30. Based on our progress to date, the remaining balance in the, In closing, I want to echo Mark and Brian, this has been an extraordinary journey. I'm very proud of the progress we have made. We are executing with discipline while also, I want to personally thank our employees who have worked so hard this Ann Pankhurst-Sheriff. Now, Mike, I think we better. Thanks, Amy. Brianna, we're ready to take questions. At this time, I would like to remind everyone that in order to ask a question, please press star one. Your first question comes from the line of Brent Thill with Jeffries. Please go ahead.
Speaker Change: Additionally, the board has approved the $10 billion increase towards share repurchase plan, bringing our total authorization to $30 billion.
Speaker Change: Our progress to date remaining Donlin kidney program is approximately $18 million.
Speaker Change: In closing I want to Echo Mark and Brian. This is Dan an extraordinary year in theory trying to progress we have made throughout the company. We are executing with discipline, while also investing for our future.
Speaker Change: I want to personally thank our employees, who have worked so hard this past year and thank our shareholders for their continued support over this past transformational year.
Speaker Change: No Mike I think if I had to call for questions.
Speaker Change: Thanks, Amy Brandt, and we're ready to take questions.
Speaker Change: At this time I would like to remind everyone in order to ask a question. Please press star one.
Speaker Change: Your first question comes from the line of Brent Thill with Jefferies. Please go ahead.
Speaker Change: Yeah.
Marc R. Benioff: Marc, last quarter, you said that you were starting to see some green shoots, and we're not ready to say you completely turned the corner. But I'm just curious if you could give everyone an update in terms of just what you're seeing from customer behavior and, ultimately, how you think that plays out through the year. Thank you.
Brent John Thill: Mark last quarter, you had said that you are starting to see some green shoots and we're not ready to say you're completely turned the corner, but I'm just curious if you could give.
Brent John Thill: Everyone an update in terms of just what youre seeing from customer behavior.
Speaker Change: Ultimately how do you think that plays out through the year. Thank you.
Marc R. Benioff: That's a great question. And I think, you know, Amy, we'll go back and say, you know, it was really this kind of moment in the middle of fiscal year 23, whatever it was, 23, where we started to see this kind of weird behavior. And then I would say, starting last quarter, like you said, we saw these green shoots, and now I would really say it was kind of a 180, that it's really that, you know, AI, every customer realizes Number one. They've got to start a major investment cycle if they're going to remain competitive. Every customer is trying to achieve more productivity. I think we all know what that means.
Speaker Change: That's a great question and I think Amy we'll go back and say you know it was really this kind of moment in the middle of fiscal year or whatever it was 23, where we started to see this kind of weird behavior, and then I would say starting.
Speaker Change: Last quarter like you said, we saw these green shoots and now I would really say it was kind of a 180.
Brent John Thill: It's really that.
Brent John Thill: AI every customer realizes.
Brent John Thill: Number one.
Brent John Thill: They've got to start a major investment cycle to remain competitive every customer is trying to achieve more productivity I think we all know what that means.
Marc R. Benioff: We certainly do. We've had to achieve more productivity ourselves over the last year, and that is really about, in many cases, enhancing your employees. A lot of you have heard my Gucci story. There are so many stories.
Brent John Thill: We certainly do we've had to achieve more productivity ourselves over the last year and that is really about in many cases augmenting your employers a lot of you have heard my duty story. There are so many stories, there's going to be so many more stories, where these tools all of a sudden really start to deliver much more productivity better customer.
Marc R. Benioff: There are going to be so many more stories where these tools, all of a sudden, really start to deliver much more productivity, better customer relationships, and higher margins. CEOs understand that. I think that is driving the 180. Obviously, we're also in the third phase of the pandemic. The first phase, we all went through together, it was horrible. It was my first pandemic; I had never been through anything like it.
Brent John Thill: <unk> chips and higher margins Ceos get that.
Brent John Thill: Think that is driving the 180, obviously, we're also in the third phase of the pandemic. The first phase. We all went through together was horrible. It was my first pandemic I had never been through anything like it then all of a sudden we are in the post pandemic.
Marc R. Benioff: Then all of a sudden, we're in the post-pandemic phase, where we were in this crazy interest rate and inflation. But now we're in the third phase, post-post-pandemic. And in post-post-pandemic, things are just better, not just because we're going through this technology surge, but because all this other stuff is behind us, and we're in a new normal, and people know, We need to invest in technology to grow, and that I think is really driving the 180 for our customers and for ourselves. I think for a lot of you, we can all see it in the equity markets; that is not the equity market that we had in 2021. So, we are in a new place, and we are ready to deliver. You're going to have to be the judge yourself.
Brent John Thill: There we were in this crazy interest rate and inflation now were in the third phase post post pandemic and then post post pandemic things or just better not just because we're going through this technology search, but because all this other stuff is behind us and we're in a new normal and people know hey, we need to invest to grow.
Brent John Thill: We need to invest in technology to grow and that I think is really driving the 180 for our customers for ourselves I think for a lot of you. We can all see in the equity markets that is not the equity markets that we had in 2021.
Brent John Thill: So we are in a new place and we are ready to.
Brent John Thill: Deliver youre going to have you can be the judge yourself when we get to <unk>. So I hope that you're all going to most of you have my text and email.
Marc R. Benioff: When we get to TrailerDX, I hope that you're all going to, most of you have my text and email. Text and email me, and tell me what you think, because if you see anyone else being able to deliver on the promise of enterprise AI at the level of quality, scale, and capability of Salesforce, I'll be very surprised. And this is driving, through different geographies or different product portfolios. Green Shoots, Brian, I want you to come in here and talk about these Green Shoots, but really the 180 that we're seeing. Yeah, I really appreciate it.
Brent John Thill: And email me and tell me, what you think because if you see anyone else being able to deliver on the promise of enterprise AI at the level of quality and scale and capability Salesforce I'll be very surprised and this is driving.
Brent John Thill: Through different geographies or different product portfolios Green shoots Brian I want you to come in here and talk about these green shoots, but really the 180 that we're seeing it really appreciate it and we are seeing tremendous demand for data cloud and for AI I do I do think Brent that we are still operating in a measured environment and we are still having two inch.
Brian Millham: And we are seeing tremendous demand for data clouds and for AI. But I do think, Brent, that we are still operating in a measured environment, and we are still having to ensure that we're doing the deep inspection and managing the business very tightly in the way that we have over the past six, seven quarters in this environment. The Green Shoots around data cloud, around MuleSoft, the regional performance that we've seen has been really outstanding in Canada and LATAM, in Spain. I mentioned the India performance on the call.
Brian: Sure that we're doing the deep inspection and managing the business very tightly and the way that we have over the past six seven quarters in this environment. The green shoots around data cloud around middle soft regional performance that we've seen.
Brian: Outstanding in Canada, and Latam in Spain, I mentioned, the India performance on the call.
Brian Millham: Our focus on industries is really paying big dividends. So we are seeing parts of our business really accelerate, but there certainly are still some measured environments out there that we have to continue to take into account in the way that we manage. Amy, I think you should come in here and also talk about how, Transcribed by https://otter.ai [inaudible] fiscal year 23, where we suddenly saw the buying environment, the elongated sales cycles. And over the last few years, what I've really seen is not so much a shift in buying behavior, but a shift in our ability to make decisions, and I think we've seen that over the last couple of quarter I do think that there is a lot of excitement about AI and data. Thanks, Brent.
Brian: Our our focus on industries is really paying big dividends. So we are seeing parts of our business really accelerate but there certainly are.
Brian: Some still some measured environments out there that we have to continue to take into account the way that we manage this business. Amy I think you should come in here and also talk about how you're seeing the transformation of the business and that the green shoots that you see happening at what kind of a $180 talking about sure Thats incredible couple of years, Yeah, Mark as you mentioned going back Kimberly became July end.
Amy: Fiscal year, 'twenty, three where we suddenly saw this measured buying environment. The elongated sales cycles. The additional approvals the compressed deals and over the last few years, but ive really seen is not so much a shift in the buying behavior is shifting our ability to execute.
Amy: And I think we've seen that over the last couple of quarters in particular that we're executing much better than that.
Amy: I do think that there is a lot of excitement to come on AI and data and we'll see how that plays out this year.
Amy: Thanks, Brent Brendan will take the next question.
Amy: Your next question comes from Keith Weiss with Morgan Stanley. Please go ahead.
Amy E. Weaver: Brandon, we'll take the next question. Your next question comes from Keith Weiss with Morgan Stanley. Please go ahead.
Keith Weiss: Excellent. Thank you guys for taking my question and congratulations on another.
Keith Weiss: Another really nice quarter.
Keith Weiss: A question on sort of.
Keith Weiss: Buying cycles and sort of the timing for this AI good news to kind of come into the numbers and maybe it's a question for Brian how.
Brian Millham: Thank you guys for taking the question and congratulations on another really nice quarter. A question just on sort of buying cycles and sort of the timing for this AI goodness to kind of come into the numbers. And maybe it's a question for Brian.
Keith Weiss: How should we think about how customers are ingesting thats right.
Keith Weiss: Or are they purchasing Einstein platform.
Keith Weiss: Does it start with data cloud and then they move into more of the application functionality.
Brian: And then importantly, how should investors think about when this could potentially impact numbers. When this will become material enough to see an inflection in kind of revenue growth and then maybe one for Amy.
Brian Millham: How should we think about how customers are ingesting this, right? Like, how are they purchasing the Einstein platform? Does it start with the data cloud, and then they move into more of the application functionality? [inaudible] First of all, Keith, thank you. I really appreciate the question. You kind of nailed it.
Keith Weiss: Another 200 basis points of operating margin expansion in the guide Super impressive can you give us some indications of where that's coming from whether it be additional areas of leverage that you're seeing in the business.
Keith Weiss: Okay.
Amy: First of all Keith Thank you I really appreciate the question.
Amy: You kind of nailed it in your question, we're seeing our customers with tremendous desire to take advantage of AI capabilities to drive efficiencies in their business to drive higher margins and productivity.
Brian Millham: And in your question, we're seeing our customers with a tremendous desire to take advantage of AI capabilities to drive efficiencies in their business to drive higher margins and productivity. But it all starts with data. And so you saw some of the numbers that we put out in my comments, data cloud approaching $400 billion and growing 90% year over year, this should be an indicator of the demand that we're seeing for people to get ready for the AI transformation they want to put their their company through. And so we're really excited about the opportunity ahead. But every customer I talked to said, I've got bad data, I don't have a great data strategy, and my architecture is off.
Amy: But it all starts with data and so you saw some of the numbers that we put out in my in my comments Dana cloud approaching $400 billion in growing 90% year over year. This should be an indicator of the demand that we're seeing for people to get ready for the AI transformation. They want to put their there their company through and so we're really excited.
Amy: The opportunity ahead, but every customer I talk to says I've got trapped data I don't have a great data strategy my architectures off and that's why we're seeing such great performance on our data cloud products.
Brian Millham: And that's why we're seeing such great performance on our data cloud product. On the AI front, I think we're going to start to see that show up later this fiscal year. We don't have a lot of it factored into our guide right now, to be candid, just because there's so much work that needs to happen.
Amy: On the AI front, I think we're going to start to see that show up.
Keith Weiss: Further out in this fiscal year, we don't have a lot of it factored into our guide right now to be candid just because there's so much work that needs to happen now the demand is heavy and as we just launched this co pilot product this year.
Brian Millham: Now, the demand is heavy. And as we just launched this co-pilot product yesterday, this was announced yesterday, and we will launch it tomorrow, as you'll see next week at TDX, enormous demand for it. And we think we have a massive opportunity to go faster here, and so there's a big upside, but not a lot factored in here. And I'm gonna flip it over to Amy to talk a little bit about some of that. Sure. So just following up, Brian, on the comments in terms of the new products, you know, on Data Cloud. We're already seeing the data cloud. We're already seeing the data cloud, we're already seeing the data cloud. On some of the gen AI is still early, and given that the adoption curve and really our size and scale as a $38 billion company, we're not factoring in a material contribution from these new products into Yes, I would be really happy to see another 200.
Keith Weiss: Yesterday's announced and launched it tomorrow Youll see next week at Tds enormous demand for it and we think we have a massive opportunity to go faster here and so a big upside, but not a lot factored in here and I'm going to flip it over to Amy to talk a little bit about some of that.
Amy: Sure and just following up Brian on the comments in terms of the new products and the data that we're already seeing this great traction, which is certainly factored in is going to be gen AI.
Amy: Too early given the adoption curve and really our size and scale.
Amy: $8 million company, we're not we're not factoring any material contribution from these new products into our FY 'twenty.
Amy: Revenue guidance at this time.
Speaker Change: Turning now to gross margin, yes, really happy to see a net of 200 basis points. This year I think in that night.
Amy: We are just seeing amazing left range from many of the hard decisions, we made last year and continuing to flow through.
Amy E. Weaver: This year we are just seeing amazing leverage from many of the hard decisions we made last year; they're continuing to flow through and really benefit the [inaudible]. We are starting to grow in some areas at this point, but it's really investing in our most important. AI at data, and we're doing that in cost-effective ways, really trying to target areas they have high, high talent pools and, We're also looking at things like top line, you know, how are we doing with our product? What are we doing in terms of going-to-market? Ryan has been great this past year and will make you, I think you'll see.
Amy: That is in the business.
Amy: A few things I would call out.
Amy: Displaying around head count over the past year.
Amy: Turning to growing in the areas at this point, that's really investing into our most productive areas.
Amy: AI data and we're doing that in concert tickets land really trying to leverage areas. They have high high talent pools and my time.
Amy: We're also looking at things like top line you know how are we dealing with our product and pricing.
Amy: Are we doing in terms of go to market efficiency and finance them, great. This past year, and making changes and driving productivity I think you'll see additional changes coming additional benefits.
Amy E. Weaver: Thanks, Keith. Brianna, we'll take our next question, please. Your next question comes from Cash Rangan with Goldman Sachs. Please go ahead. Hi, thank you very much.
Amy: Benefits coming from all of those areas.
Speaker Change: Thanks, Keith Brandon we will take our next question. Please.
Amy: Your next question comes from Kash Rangan with Goldman Sachs. Please go ahead.
Kasthuri Gopalan Rangan: Hi, Thank you very much mark as you've talked to you talked a lot of Ceos right across all the breadth of industries one of the thing about.
Marc R. Benioff: Marc, as you talk, you talk to a lot of CEOs, right, across all the breadth of industries. What are they saying about their businesses and their propensity to spend real dollars on the data cloud with Salesforce? And if that comes true, could the company re-accelerate its top line? One for you, Amy.
Kasthuri Gopalan Rangan: Their business and their propensity to spend real dollars in beta cloud with Salesforce.
Kasthuri Gopalan Rangan: That comes through could the company could Reaccelerate top line one for you Amy.
Amy E. Weaver: You seem to sound confident that leading indicators are rebounding. What are those leading indicators? We can't quantify them, at least qualitatively.
Kasthuri Gopalan Rangan: Seemed to sound confident that leading indicators have rebounded what all those leading indicators, we can't quantify at least qualitatively can you talk about the leading indicators and how much of a lag is there between those indicators and how they show up in revenue. Thank you so much and congrats.
Marc R. Benioff: Can you talk about the leading indicators? And how much of a lag is there between those indicators and how they show up in revenue? Thank you so much.
Marc R. Benioff: Well, Kash, this is, you know, basically, what every software company wants: you want a new killer app. Sometimes you can get it through organic innovation; sometimes you get it through inorganic innovation. We got lucky.
Speaker Change: Well Kash. This is you know basically.
Kasthuri Gopalan Rangan: You know what every software company wants you want a new killer App.
Kasthuri Gopalan Rangan: Sometimes you can get it through organic innovation, sometimes you get it through inorganic innovation, we got Lucky we've done it with organic innovation with data cloud I think data cloud.
Marc R. Benioff: We've done it with organic innovation with Data Cloud. I think Data Cloud is everything that we want at this moment for a few different reasons. First of all, yes, it's an incredible new cloud.
Kasthuri Gopalan Rangan: Is everything that we want at this moment for a few different reasons first of all yes. It is an incredible new cloud and we've seen what that can do for Salesforce. When we add sales cloud the service cloud the marketing cloud platform.
Marc R. Benioff: And we've seen what that kind of can do for Salesforce when we add the sales cloud to the service cloud to the marketing cloud to the platform. And of course, we also had these other clouds that we picked up, you know, inorganically, Commerce, Tableau, Slack, etc. But this incredible new organic cloud. The difference with this cloud, and the difference between what's ever happened with Salesforce before, is that this cloud makes every other cloud better.
Kasthuri Gopalan Rangan: And of course, we also have these other clouds that we picked up Inorganically commerce, tableau slack et cetera, but this incredible new organic cloud <unk>.
Kasthuri Gopalan Rangan: Different with this cloud.
Kasthuri Gopalan Rangan: And the difference between what's ever happened with Salesforce before.
Kasthuri Gopalan Rangan: This cloud makes every other cloud better.
Marc R. Benioff: So, the hot, new, exciting version of Sales Cloud, the hottest new feature in Sales Cloud, what's gonna transform the tens of thousands of Sales Cloud customers that we have out there that we've been working on building for the last two and a half decades is Data Cloud. And Service Cloud, the new version of Service Cloud, is Service Cloud plus Data Cloud. And Marketing Cloud, read the Gartner MQ. We vanquished all of the other competitors completely with this product because it's so deeply integrated with what we're doing already with everything else in marketing. And the platform is extended with Data Cloud. And if you have any of the other data infrastructure in your company, any of the, you know, the big queries and the red chests and the snowflakes and the red, I went through all this. It's made better with Data Cloud because it unleashes that trapped data for your user. This is a compelling reason to use Data Cloud all by itself, but that would be if we were not in the greatest transformation of our industry with artificial intelligence, which we so badly need.
Kasthuri Gopalan Rangan: So.
Kasthuri Gopalan Rangan: Hot New exciting version of sales cloud the hottest new feature in sales cloud, what's going to transform the tens of thousands of sales cloud customers that we have out there that we wouldn't working on building for the last two and a half decades is data cloud.
Kasthuri Gopalan Rangan: And service cloud the new version of service Cloud is the service cloud plus data cloud and marketing cloud read the Gartner MQ, we vanquished all of the other competitors.
Kasthuri Gopalan Rangan: Lately with this product because it's so deeply integrate with what we're doing already and everything else and marketing and the platform.
Kasthuri Gopalan Rangan: As extended with data cloud and if you have this other data infrastructure in your company.
Kasthuri Gopalan Rangan: The big queries in the redshift and snowflake.
Kasthuri Gopalan Rangan: Through all this.
Kasthuri Gopalan Rangan: It's made better with data cloud because it unleashes that trap data to your users.
Kasthuri Gopalan Rangan: This is a compelling reason to use data cloud all by itself, but that.
Kasthuri Gopalan Rangan: That would be if we were not in the greatest.
Kasthuri Gopalan Rangan: Transformation of our industry with artificial intelligence, where we so badly need.
Marc R. Benioff: This, Data. Yes, we would always love to have another data lake. We would have loved to have a data lake integrated with Sales Cloud many years ago. Okay, we have that. But why is it more important right now?
Kasthuri Gopalan Rangan: This.
Kasthuri Gopalan Rangan: Data not weird.
Kasthuri Gopalan Rangan: Yes, we always love to have another a data lake that we would have loved to have a data lake integrated with sales cloud many years ago. Okay. We have that but why is it more important right now yes, we have the data Lake we have the repository, we have the warehouse, but now it has deeply also integrated into the AI.
Marc R. Benioff: Yes, we have the data lake, we have the repository, we have the warehouse, but now it is also deeply integrated into AI. That is why every customer must buy this product if they are going to achieve the nirvana that we can see for businesses. The trinity that we talked about, productivity, customer relationships, and margins, when you get data and AI working together. We can do it. This is our message to our salespeople, to our partners, to all of you. This is an incredible moment. That is why we have to execute like hell this year.
Kasthuri Gopalan Rangan: That is why every customer must buy this product if theyre going to achieve that.
Kasthuri Gopalan Rangan: The Nirvana that we can see for businesses.
Kasthuri Gopalan Rangan: The currently that we talked about productivity customer relationships margins.
Kasthuri Gopalan Rangan: When you get data and AI working together.
Speaker Change: We can do it this is our message to our salespeople to our partners to all of you.
Speaker Change: This is an incredible moment that is why we have to execute like Hell. This year fiscal year 'twenty five needs to be one thing the year of data cloud.
Marc R. Benioff: Fiscal year 25 needs to be one thing, the year of data class. Okay, great thing. And Cass, thanks for the question about leading indicators. I think you probably first heard the excitement about, I can go through it again. I'll go one more time.
Speaker Change: Okay great.
Speaker Change: Thanks for the question about leading indicators and I think first you obviously heard the excitement about Dana cloud.
Speaker Change: And if you can get I can go through it again.
Speaker Change: Got it.
Speaker Change: One more time.
Amy E. Weaver: Let's just start with that when I'm looking at a leading indicator. So, specifically, there are a number of things that we look at that tend to be leading indicators that things may not be as good. Now that would be something like create and close, S&B, self-direct. I've talked a lot about those. But I do feel very good about some things I'm saying. It is the execution.
Speaker Change: Let's just start with that and I'm looking at leading indicators.
Speaker Change: Specifically.
Speaker Change: There are a number of things that we look at that tend to be leading indicators that things may not be as good now that would be something in the creative cloud F&B South <unk> talked a lot about in the past few years.
Speaker Change: But I do feel very good and things in hand right now.
Speaker Change: It is the execution from our team and we've really seen in the past few quarters.
Amy E. Weaver: And we've really seen this over the last couple of years, And that's really led to, we think AE productivity. Brian talked a lot about that last quarter. It was fantastic.
Speaker Change: Really like to improve bookings growth.
Speaker Change: We think any productivity that is that Brian talked a lot about that last quarter. It was fantastic. When you look at our pipeline for indications going forward.
Amy E. Weaver: We look at our pipeline. Yeah, that said, as we talked about, our top line expectations do include the lagging impact from the measured buying environment that began. It's just going to take time for that to work through our system. But I am saying some nice things. Thanks, Cash.
Speaker Change: Yes, hi.
Speaker Change: It has to take the topline expectations do you include the lagging impact from the natural buying environment that began in couple of years ago. It's just going to take time for that to work through our system than I am.
Speaker Change: <unk> seen some nice indicators.
Brian Millham: Brianna, we'll take the next question. Your next question comes from Karl Keirstead with UBS. Please go ahead.
Speaker Change: Give me a lifestyle.
Speaker Change: Thanks, Kash Brandon we'll take next question.
Speaker Change: Your next question comes from Karl Keirstead with UBS. Please go ahead, okay, great maybe a two parter for Brian two elements of the business that I think you have responsibility for one is around pricing and bundling and you mentioned Einstein one just curious.
Brian Millham: Okay, great. Maybe a two-parter for Brian, two elements of the business that I think you have responsibility for. One is around pricing and bundling, and you mentioned Einstein One. Just curious, when will that be a needle mover for revenues? How much of that uplift are you baking into the guide this year? And then also on the pro services side, typically not a focus area for anybody on this call, but down 9% from the quarter was obviously an inflection point. What's happening with that? Is that tight discretionary spend, or is Salesforce consciously pushing more work to your SI partners? Thanks on both.
Karl Emil Keirstead: When will that be a needle mover for.
Karl Emil Keirstead: For revenues how much of that uplift are you baking into the guide this year and then also on the pro services side typically not a focus area for anybody on this call, but down 9% in the quarter was obviously, an inflection down what's happening with that is that tight discretionary spend or is that salesforce consciously push.
Karl Emil Keirstead: More work to your Si partners. Thanks on both.
Brian Millham: Okay, so before you hit that, I want you to hit the service. But before you do that, when you think AI, and you think, obviously, we all know what ACV is, I think it's basically a term that we created. Now it's industry-wide AOV. CSM, Brian, you created ACV. This year, we obviously have huge goals.
Speaker Change: Okay. So before you hit that I want you to hit the service, but before he does.
Speaker Change: When you think AI and you think obviously, we all know what ACB is I think it's basically a term that we created now it's industry wide.
Speaker Change: CSM, Brian you've created that ACB.
Speaker Change: This year, we obviously have huge goals internally okay.
Marc R. Benioff: Okay. A material part of this ACB needs to be the data cloud. This is important.
Speaker Change: A material part of this ACB needs to be data cloud. This is important this is and this is the AI number this is everything.
Marc R. Benioff: This is the AI number. This is every, The AI, Einstein One, the artificial intelligence, and data cloud, we have to bring this all together. That's why we call it Einstein One. Look at the Einstein One SKU, look at what we call UE plus. That is where you're going to see the material ACV traction.
Speaker Change: AI Einstein won the artificial intelligence data cloud we have to bring this all together that's why we call. It Einstein one look at the Einstein one SKU you look at what we call UE plus that is where youre going to see the material ACB traction that is our focus intention of course, we don't know whats been really happen.
Marc R. Benioff: That is our focus intention. Of course, we don't know what's gonna really happen. You know, but when we got all of our, you know, we did a huge kickoff last week in Vegas, we brought 5000 of our top executives, most 80% for sales. We had 70,000 online. We had one message to them: Data Cloud. Number one data cloud, number one AI. Become a great storyteller about these stories.
Speaker Change: But when we got all of our you know we did a huge kick off last week in Vegas, we brought 5000 of our top executives most 80% for sales.
Speaker Change: We had 70000 online we had one message to them.
Speaker Change: Data cloud.
Speaker Change: Number one data cloud number one NII.
Speaker Change: Become a great storyteller about these stories.
Marc R. Benioff: Number two. Number three. Cell, UE Plus, and Cell Einstein One.
Michael Spencer: Number two number three sell UE Pos sell Einstein one.
Marc R. Benioff: Number four, deliver customer success. Number five, our incredible new Ohana 2.0 culture. These are the five things we're doing this year. So it's deeply integrated with that, and this absolutely must be part of everything we're doing. But when you think AI, think Data Cloud, Brian. Thanks, Mark.
Michael Spencer: Number four deliver the customer success number five our incredible new a Honda two O culture. These are the five things we're doing this year. So it's deeply integrated with that and that this absolutely must be part of everything we're doing but when you think AI big data cloud Brian.
Speaker Change: Thanks, Mark Karl back to your question on pricing and bundling we're excited about the.
Brian Millham: Karl, back to your question on pricing and bundling. We're excited about the progress we've made here. UE plus is a good example of what we're seeing. Good acceleration.
Speaker Change: The progress we've made here UE plus is a good example of what we're seeing.
Speaker Change: Good acceleration.
Brian Millham: It's not the only thing we're doing in pricing and packaging. Obviously, we did a price increase last year, and we are seeing some benefits from that. Certainly, we're simplifying the way that we're putting quotes in the market, fewer SKUs, making it easier for our sellers to get out there. But in terms of materiality, in the short term, you're not going to really see it show up. We did in the second half of last year.
Speaker Change: We're not the only thing we're doing pricing packaging, obviously, we did a price increase last year and seeing some some benefits to that certainly we're simplifying the way that we are putting quotes in the market fewer skus, making easier for our sellers to get out there.
Michael Spencer: Terms of materiality in the short term youre not going to really see it show up we did in the second half of last year and so while we've seen great progress and there is a lot of promise for it in terms of.
Brian Millham: And so while we've seen great progress, and there's a lot of promise for it in terms of this year's revenue guide, not a huge factor in our growth numbers this year, you will see it start to show up in years two and three, as we roll through the renewals, the uplift, etc. And some of the incremental pricing changes that we're going to do. On ProServe, a good question.
Michael Spencer: This year's revenue guide not a huge factor in our in our growth numbers this year.
Michael Spencer: You will see it start to show up in year, two and three.
Michael Spencer: As we roll through the renewals, the uplift et cetera, and some of the incremental pricing changes that we're going to do.
Michael Spencer: On pro serve a good question I think the big issue and it's really been felt across the entire professional services industry.
Brian Millham: I think the big issue, and it's really been felt across the entire professional services industry, a bit of headwinds on customers' willingness to do massive transformation. We really felt that during the pandemic, customers were coming to us and saying, I want to make a multi-year commitment to your services and spend a significant amount of money on very large transactions and services. Now our customers are saying, "hey, let me take a smaller bite at the apple. Let me start smaller, get to time to value faster."
Michael Spencer: A bit of headwinds on our customers' willingness to do massive transformation, we really felt that during the pandemic that customers were coming to us and saying I want to make a multiyear commitment to your services and spend significant amount of money is very large transactions and services now our customers are saying.
Michael Spencer: Hey, let me take a biter smaller bite at the Apple Let me start smaller get to two time to value faster, let me get the benefits of the technology sooner and so while the demand remained high. It's just smaller transactions that are getting done vis vis last year and the year before that so the.
Brian Millham: Let me get the benefits of the technology sooner. And so while the demand remains high, it's just smaller transactions that are getting done vis-a-vis last year and the year before that. So the tough comparisons on large deals, smaller transactions. For us, in a lot of ways, very good.
Michael Spencer: Tough compares on large deals smaller transactions for us and a lot of ways very good let's get our customers proving out the technology, let's go faster, but having an impact on our professional services business right now.
Brian Millham: Let's get our customers proving out the technology. Let's go faster, but with an impact on our professional services. Great. Thanks, Karl.
Amy E. Weaver: Brianna, let's go to the next question. Your next question comes from Mark Murphy with J.P. Morgan. Please go ahead. Thank you very much for Amy and Brian. The gross margin and sales efficiency metrics are quite strong this quarter. And so I'm curious, just from the standpoint of eating your own dog food or drinking your own champagne, have you been able to realize any benefit from deploying either service GBT or sales GBT internally to save time for your own customer support agents or your own sales teams?
Speaker Change: Great. Thanks, Carl Brandon, Let's go to the next question.
Michael Spencer: Your next question comes from Mark Murphy with Jpmorgan. Please go ahead.
Mark Ronald Murphy: You very much for Amy and Brian to the gross margin and sales efficiency metrics are.
Mark Ronald Murphy: Quite strong this quarter and so I'm curious just from a standpoint of eating your own dog food or drinking your own Champagne have you been able to realize any benefit from deploying either service GBT or sales GBT internally.
Mark Ronald Murphy: To save time for your own customers.
Mark Ronald Murphy: Customer support agents or your own sales team. So I'm just wondering if you or are they suddenly becoming more productive or able to do more with less already.
Brian Millham: I'm just wondering if you're, are they suddenly becoming more productive, or able to do more with less already? Yeah, Marc, thank you. We are a big believer in Salesforce. We are deploying our own AI technology internally. Our sales teams are using it. Absolutely. We are seeing benefits right now.
Speaker Change: Yes, Mark Thank you.
Mark Murphy: We are a big believer on Salesforce Salesforce, we are deploying our own AI technology internally. Our sales teams are are using it absolutely. We are seeing benefits right now, but the biggest benefit we've seen actually has been in our support operation with case summaries, our ability to get to tap into knowledge base is faster to get knowledge surfaced within the flow of work.
Brian Millham: But the biggest benefit we've seen actually has been in our support operation with case summaries, our ability to get to tap into knowledge bases faster to surface knowledge within the flow of work. And so it absolutely is part of our margin expansion strategy going forward, which is how do we leverage our own AI to drive more efficient seasons in our business to augment the work that's being done in sales and in service and in marketing and even into our commerce efforts as well. So we're excited about the future there as well as leveraging our own technology to drive those. I don't know if you have anything else to add to that. No, I think that was great, Brian.
Mark Murphy: <unk>.
Michael Spencer: It absolutely is part of our margin expansion strategy going forward, which is how do we leverage our own AI to drive more efficiencies in our business to augment the work that's being done in sales and in service and in marketing and even into our commerce.
Michael Spencer: Efforts as well so we're excited about the future there as well as leveraging our own technology to drive those efficiencies.
Speaker Change: If you have anything else out there I think that was great. Brian we have to be customer number one and use that and I'm excited that we are lots of opportunities for us.
Amy E. Weaver: We have to be customer number one and use it, and I'm excited that we are. Thanks, Mark. Brandon will take the next question. Your next question comes from Kirk Materne with Evercore ISI. Please go ahead. Yeah, thanks very much.
Brian: Thanks, Mark Brennan will take next question.
Mark Ronald Murphy: Your next question comes from Kirk <unk> with Evercore ISI. Please go ahead.
Kirk: Yes, thanks very much.
Marc R. Benioff: A lot of congratulations on a great fiscal year. I don't know if Brian or Mark wants to take this one, but we realize AI is applicable to every industry. But I was just kind of curious, are there any industries that you believe are farther along in terms of taking advantage of AI where, you know, there could be a domino effect due to the competitive advantage, you know, one customer could get over another if they don't start down this path? A very good question and an unknown. I mean, this is the future. Look at this. Does anybody really know what is going to happen?
Kirk: That's on a great fiscal year, I don't know, Brian or Mark wants to take this one but we realize it's applicable to every industry, but I was just kind of curious are there any industries that you believe are farther along in terms of taking advantage of AI, where youre. There frankly, it could be a domino effect due to the competitive advantage here one customer could get over.
Kirk: Another if they don't start down this path.
Speaker Change: A very good question and an unknown I mean this is the future look this.
Speaker Change: Does anybody really know what's going to happen I mean, we saw minority report where games. It was written by our Futurist Peter Schwartz at Salesforce, many decades ago, we have seen the movies.
Marc R. Benioff: I mean, we saw Minority Report and WarGames, it was written by our futurist, Peter Schwartz at Salesforce, many decades ago. We've seen the movies, you know, Terminator. Is this our future? Do we really know what's going to happen? You know, look, at the end of the day. We all know that everything is underway with AI. The future is unfolding before our eyes. And we all remember the Minority Report scene when Tom Cruise walks into the Gap store and the whole store turns into a highly personalized experience, and the digital sales agents and the human sales agents all start talking, oh, you got those jeans last time, you need to buy the new jeans this time. Listen, if I go into the Gap store right now, and I love the Gap, amazing new CEO, San Francisco company, fantastic, incredible work, you But the store has not yet transformed into the Tom Cruise seen, we know that.
Speaker Change: Her Terminator is this our future do we really know what's going to happen you know look at the end of the day.
Speaker Change: We all know that everything is underway with AI the futures unfolding between our eyes and we all remember the minority report seeing win.
Speaker Change: Tom cruise walks into the gap store in the hall store turns into a highly personalized experience and the digital sales agents in the human sales agents all started talking Oh, you've got those Gms last time, you need to buy the new GM at this time.
Speaker Change: Listen before I go into the gap store right now and I love the GAAP Amazing New CEO, San Francisco Company Fantastic incredible work work with him at Mattel, but the store has not yet transformed into the Tom cruise.
Speaker Change: <unk> seen we know that okay, but great products, great brand Great company, great linear great founders.
Marc R. Benioff: Okay, but great products, great brands, great companies, great lineage, great foundation. Okay. We are on the verge of something huge happening for all of our customers. We have to be driving that. We think we have the solution. This is going to happen. We also need to be guiding it with the right values. We all know that.
Speaker Change: Okay.
Speaker Change: We are on the verge of something huge happening for all of our customers we have to be driving that.
Speaker Change: We think we have the solution.
Speaker Change: This is going to happen.
Speaker Change: We also need to be guiding it with the right values. We all know that we have to have the right core values I went to this AI safety summit.
Marc R. Benioff: We have to have the right core values. I went to this AI safety summit, you know, not enough focus on values, the values, not just the woke values that we're seeing in these filters, which are horrible, but the values of trust, you know, and that story I told you on the script, when I saw that last week, I'm like, I'm putting this in the script, that this company, which is a great company and a customer of ours, but did not use our technology, went out there and use some kind of rogue AI that they picked off the internet, you know, some engineer just hobbled it, hooked it up, and then it started just spewing these hallucinations and falsehoods around their loyalty program, and the courts are holding them liable, good.
Speaker Change: Not enough focus on values the values not just the walk values that we're seeing in these filters, which are horrible, but the values of trust.
Speaker Change: And that story I told you.
Speaker Change: On the script when I saw that last week I'm like I'm, putting this in the script.
Speaker Change: At this company, which is a great company and a customer of ours, but did not use our technology went out there and use some kind of rogue AI that they picked off the internet you know some engineer just hobbled it hooked it up and then it started just spewing these hallucinations and falsehood around their loyalty program.
Speaker Change: And the courts are holding them viable good let every CEO wake up and realize we are on the verge of one of the greatest transformations in the history of technology, but trust must be our highest value and that is why at Salesforce. We are going to lead this not just with great technology like you see but also.
Marc R. Benioff: Let every CEO wake up and realize we are on the verge of one of the greatest transformations in the history of technology, but trust must be our highest value. And that is why at Salesforce, we are going to lead this, not just with great technology like you see, but also, and I just put up on my Twitter feed, I hope you see my results for the quarter at the top of my Twitter feed, but please watch the five minute video that's on my Twitter feed so you can understand what we are delivering with AI, a trust-based AI for enterprises built on our data and metadata. This is what's truly important. Great Thanks, Brianna.
Speaker Change: And I just put on my Twitter feed I hope you see at the top of my Twitter feed the results for the quarter, but please watch the five minute video that's on the Twitter feed. So you can understand coming into trail with Dx, what we're delivering with AI a trust based AI for enterprise is built on our data metadata. This is what's truly important.
Speaker Change: Great. Thanks, Brandon we will take our last question now.
Operator: We'll take our last question now. Your final question comes from Brad Zelnick with Deutsche Bank. Please go ahead.
Speaker Change: Your final question comes from Brad Zelnick with Deutsche Bank. Please go ahead.
Operator: Great. Thank you so much for taking the time to answer the question. Listen, great to see the data cloud traction, the recognition in Gartner's Magic Quadrant. And Marc, I appreciate you taking us into why the architecture is different from general purpose data platforms that, you know, and that it brings together the data and the metadata. But my question is a two-parter. First, it's clear that the data cloud is optimized for customer data and customer-related apps. Can you take it beyond that? And then, B, how much of the customer base today is really viable to take iSign one on and UE plus at a 50% higher list price point? And how far penetrated are we into that? Thank you. Well, I'm going to do the first part, and then I'm going to turn it over to Mike Spencer to do the second, because he not only runs AIR, but he also runs FP&A, and he's been doing that analysis, so I know he was going to come in on this. Look, number one.
Brad Alan Zelnick: Great. Thank you so much for taking the question.
Brad Alan Zelnick: Listen great to see the data cloud traction the recognition and Gartner Magic quadrant and Mark I. Appreciate you are taking us into why the architecture is different from general purpose data platform.
Brad Alan Zelnick: It brings together the data and metadata, but my question is a two parter.
Speaker Change: It is clear data cloud is optimized for customer data and customer related apps can you take it beyond that and then b how much of the customer base today is really viable to peak signed one on <unk> and <unk>, plus 50% higher list price points and how far penetrated are we into that thank you.
Speaker Change: Well I'm going to do the first part and then I'm going to turn it over to Mike Spencer to do the second because he is not only is runs IR, but he also runs at <unk> and he has been doing that analysis. So I know he was going to come in on this.
Michael Spencer: Look number one.
Marc R. Benioff: This is a huge upsell opportunity. You probably know, I think not even 50% of our sales cloud users use service cloud. Mea culpa, that is on us. Okay. I wish I could say that all of our sales users are service users, or service users are sales users, but even ADP, which I talked about in the script, who we've worked with for more than two decades. And I remember the first time I made a sales call there to extract Siebel from their infrastructure.
Michael Spencer: This is a huge upsell opportunity for us.
Michael Spencer: Probably no I think not even 50% of our sales cloud users service club not even 50% of our service cloud users you sell cloud may of copper that is on us okay.
Michael Spencer: I wish I could say that all of our sales users or service users our service users or sales, but even ADP that I talked about in the script.
Speaker Change: We've worked with for more than two decades, and I remember the first time I made a sales call there to extract siebel from their infrastructure.
Marc R. Benioff: We're not yet using this. So we have a lot of work to do to sell our existing clouds to our customers and also to upsell our existing customers and cross-sell them on Data Cloud, with Einstein One, with the full platform. We're rewriting our whole platform to be deeply integrated. We will no longer have all these separate acquired platforms.
Speaker Change: Was not yet using us for service.
Speaker Change: So we have a lot of work to do to sell our existing clouds into our customers and also to upsell, our existing customers and cross sell them with data cloud with Einstein one with the full platform. We're rewriting our whole platform to be deeply integrated we will no longer have all these separate.
Speaker Change: <unk> was acquired platforms. When we're done we have one integrated platform Einstein one.
Marc R. Benioff: When we're done, we have one integrated platform, Einstein One. One unified data and metadata platform. This is something I have.
Speaker Change: One unified data and metadata platform. This is something I have.
Marc R. Benioff: Deeply focused on in the last year to make sure it's clear to all of our engineers and is also funded that this must be funded, which it is. And then, we will deliver this capability, and then we will light up and give you these great success stories. Look, some companies operate at the highest level of user experience and productivity. That's not where we are. Okay. Some companies, okay, they operate maybe at the model level. That's also not where we are.
Speaker Change: Deeply focused on in the last year to make sure it's clear to all of our engineers and our also finance that this must be funded which it is and then.
Speaker Change: We will deliver this capability and then we will light up and give you. This great success stories look some companies operate at the highest level the user and the productivity level, that's not where we are okay.
Speaker Change: Some companies Okay. They operate maybe at the model level. That's also now where we are we are a data company. We operate at the data level, yes, we're about customer success made possible by this.
Marc R. Benioff: We are a data company. We operate at the data level. Yes, we're about customer success made possible by data. This isn't an AI revolution. It's a data revolution. There's no question.
Speaker Change: This is AI Revolution is a data revolution.
Speaker Change: There is no question you cannot have the AI without the data that's why those AI company stole all that consumer data. So they could have some assembly.
Marc R. Benioff: You cannot have AI without data. That's why those AI companies stole all that consumer data so they could have some, you know, semblance of these parties, for the enterprise. It's not going to fly.
Speaker Change: Assembler, So those party tricks for the enterprise, it's not going to fly you've got to have these comprehensive datasets that are informed by the metadata and Mike's now going to answer the second part and we'll wrap it up Mike go ahead Bryan.
Marc R. Benioff: You've got to have these comprehensive data sets that are informed by the metadata. And Mike's now going to answer the second part, and we'll wrap it up. Mike, go ahead.
Michael Spencer: Yeah, Brad, thanks for the question. I think the way to think about the price uplift, moving to the Einstein One Edition, which used to be a limited edition plus, it's really about the value that we're providing to our customers. Because at the end of the day, our ability to get higher prices is about the value that we're going to provide. And so as customers start to ramp up their abilities with AI, ramp up their learnings, and understand what it means for them economically, our ability to get higher prices will be dictated by that. Early signs of that are pretty strong.
Michael Spencer: Brad Thanks for the question I think the way to think about the price uplift moving to Einstein. One addition used to be elimination plus.
Michael Spencer: It's really about the value that we're providing to our customers because at the end of the day, our ability to get increased price. It's about the value that we're going to provide and so as customers start to ramp up their abilities on AI ramp up their learnings and understand what it means for them economically our ability to get price will be dictated by that early signs are that are pretty strong we feel good about the <unk>.
Michael Spencer: We feel good about the progress we've seen. It's only been in the market for four plus months now, in FY 24. But we're encouraged by what we're seeing. But at the end of the day, we're trying to make it as simple as we can for our customers to buy it, but it's gonna be predicated on value.
Michael Spencer: Yes, we've seen is when we've been in market for four plus months now in FY 'twenty four.
Michael Spencer: But we're encouraged by what we're seeing by the end of the day.
Speaker Change: Trying to make it as simple as we can for customers to buy it but it can be predicated on the value I agree and just one last comment Bryan Bryan.
Brian Millham: I agree. And just one last comment, Brad, it's Brian. We want to be able to deliver data cloud and AI at all levels in all segments. And you see that in our offering around Salesforce Starter, where we're building in AI and data cloud capabilities as part of that. So every segment of our customer base should be able to enjoy the power of AI and data cloud.
Speaker Change: We want to be able to deliver data cloud and AI at all levels in all segments and you see that in our offering around salesforce starter, where we're building an AI and data cloud capabilities as part of that so every segment of our customer base should be able to enjoy the power of AI and data cloud.
Brian Millham: So thanks for the question, Brad. And we thank everyone for joining the call today. We look forward to seeing everyone over the coming weeks. Thanks all. This will conclude today's conference call. Thank you for joining us. You may now disconnect.
Speaker Change: So thanks for the question, Brian and we thank everyone for joining the call today, we look forward to seeing everyone over the coming weeks.
Brian: Thanks Al.
Speaker Change: This will conclude today's conference call. Thank you for joining US you may now disconnect.
Speaker Change: Yeah.
Speaker Change:
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Yeah.