Q1 2025 Salesforce Inc Earnings Call

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Operator: Welcome to Salesforce's fiscal 2025 first quarter results conference call. All lines have been placed on mute to prevent any background noise.

Welcome to Salesforce as fiscal 2025 first quarter results conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad, if you would like.

Operator: After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press the star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. 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.

Your question again prestige Star one 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: Thanks, and good afternoon. Thanks for joining us today on our fiscal 2025 first 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 of our GAAP and non-GAAP results and guidance can be found in our earnings materials and press releases.

Michael Spencer: Thanks, and good afternoon, thanks for joining us today on our fiscal 2025 first quarter results Conference call. Our press release SEC filings and a replay of today's call can be found on our website.

Speaker Change: 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 a reminder, our commentary today will include non-GAAP measures reconciliations of our non of 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 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.

Speaker Change: Some of our comments today may contain forward looking statements that are subject to risks uncertainties and assumptions, which could change.

Speaker Change: Should any of these risks materialize or should our assumptions prove to be incorrect actual company results could differ materially from these forward looking statements a description of these risks uncertainties and assumptions and other factors that could affect our financial results is included in our SEC filings, including our most recent report on forms 10-K, 10-Q, and any other SEC filings, except as required by law.

Mark: We do not undertake any responsibility to update these forward looking statements and with that let me hand, the call over to Mark alright. Thanks, So much Mike I'm really excited for the call today, because there's two things that I'm really been looking forward to talking about first is our incredible financial transformation and as you can see from the numbers today and the second is the incredible work that's happening with artificial intelligence.

Marc R. Benioff: All right. Hey, thanks so much, Mike. I'm really excited for the call today because there are two things that I've really been looking forward to talking about. First is our incredible financial transformation, as you can see from the numbers today. And the second is the incredible work that's happening with artificial intelligence. Look, first of all, in Q1, we delivered $9.13 billion in revenue, up 11% year-over-year in both nominal and constant currency. Subscription and support revenue grew at 12% year-over-year and 13% in constant currency.

Michael Spencer: And with that, let me hand the call over to Marc. All right. Hey, thanks.

Mark: Well first of all in Q1, we delivered 913 billion in revenue up 11% year over year in both nominal and constant currency subscription and support revenue grew at 12% year over year and 13% in constant currency and for the 11th year in a row Salesforce is still ranked the number one provider worldwide by market share based on the latest idea.

Marc R. Benioff: And for the 11th year in a row, Salesforce is still ranked the number one provider worldwide by market share, based on the latest IDC software tracker. And that really gets to a core part of our technology transformation that I'm going to get to, which is the transformation to AI. And because we are the number one CRM provider, we're now managing more than 250 petabytes of data for our customers. This is going to be absolutely critical as they move into artificial intelligence. And now, also, let's turn to our financial guidance. For fiscal year 25, we're maintaining our revenue guidance at $37.7 to $38 billion, growth of 8% to 9% year-over-year.

Mark: <unk> software tracker, I mean that really gets to a core part of our technology transformation that I am going to get to which is the transformation that AI and because we are the number one CRM provider. We're now managing more than 250 petabytes of data for our customers. So this is going to be absolutely critical as they move into artificial intelligence.

Mark: And now also let's turn to our financial guidance for fiscal year 'twenty five we're maintaining our revenue guidance of 37, 7% to 38 billion growth of 8% to 9% year over year, and we now expect fiscal year 'twenty five subscription and support revenue growth to be approximately 10% year over year in constant currency as you can see from our results we remain committed.

Marc R. Benioff: And we now expect fiscal year 25 subscription and support revenue growth to be approximately 10% year-over-year in constant currency. As you can see from our results, we remain committed to profitable growth at scale, and I would also say incredible cash flow, and continue to expect fiscal year 25 non-GAAP operating margin of 32.5%, a 200-base point improvement year-over-year. I'm extremely proud of our team's focus and determination to deliver this world-class financial result, including this cash flow and profitability in the quarter. And Brian and Amy will discuss our Q1 performance in much greater detail.

Did the profitable growth at scale and I would also say incredible cash flow and then continue to expect fiscal year 'twenty five non-GAAP operating margin of 32, 5%, a 200 basis point improvement year over year I'm extremely proud of our team's focus and determination to deliver this world class financial results, including <unk>.

Speaker Change: This cash flow and profitability in the quarter and Brian that Amy will discuss Q1 performance in much greater detail as I said I couldnt be more excited about the opportunity ahead for salesforce not only with these incredible financial results, but in the incredible transformation that we're leading with our customers and artificial intelligence every company in the world across every industry is being <unk>.

Marc R. Benioff: As I said, I couldn't be more excited about the opportunity ahead for Salesforce, not only with these incredible financial results but in the incredible transformations that we're leading with our customers in artificial intelligence. Every company in the world, across every industry, will be transformed by AI in the next few years. And when you look at the power of AI, you realize the models and the UI are not the critical success factors.

Speaker Change: Formed by AI in the next few years and when you look at the power of AI, you realize the models and the UI or not the critical success factors, it's not critical.

Marc R. Benioff: It's not critical where the enterprise will transform. There are thousands of these models, some open source and some closed source models, some built with billions, some with just a few dollars. Most of these will not survive.

Speaker Change: The enterprise will transform their thousands of these models. Some open source in some closed source models. Some built with billion. Some with just a few dollars. Most of these will not survive, they're just commodities now and its not worthy intelligence lives and they don't know anything about our company's customer relationships. Each day hundreds of Petabytes of data are created.

Marc R. Benioff: They're just commodities now, and that's not where the intelligence lies. And they don't know anything about a company's customer relationships. Each day, hundreds of petabytes of data are created that AI models can use for training and generating output. But the one thing that every enterprise needs to make AI work is its customer data, as well as the metadata that describes the data, which provides the attributes and context the AI models need to generate accurate, relevant output. And customer data and metadata are the new gold for these enterprises, and Salesforce now manages, as I mentioned, 250 petabytes of this precious material.

Speaker Change: That AI models can used for training and generating output, but the one thing that every enterprise needs to make AI work as their customer data as well as the metadata that describes the data which provides the attributes in context, the AI models need to generate accurate relevant output and customer data and metadata or the new goals for these enterprises and <unk>.

Speaker Change: <unk> Force now manages as I mentioned 250 Petabytes of this precious material.

Speaker Change: We are one of the most and largest repositories of front office enterprise data and metadata on the world and everyday more companies are adopting salesforce as their front office, bringing all their structured and unstructured data into our platform nearly half of our top 50 wins in the quarter included six or more of our clouds that really speaks to the <unk>.

Marc R. Benioff: We have one of the most and largest repositories of front office enterprise data and metadata in the world. And every day, more companies are adopting Salesforce as their front office, bringing all their structured and unstructured data into our platform. Nearly half of our top 50 wins in the quarter included six or more of our clouds. That really speaks to the comprehensive nature of our strategy. It's incredible, and many of these customers have essential business and customer data that exists outside of Salesforce that's trapped in thousands of apps and silos. It's disconnected

Speaker Change: Comprehensive nature of our strategy, it's incredible and many of these customers have a central business and customer data that exists outside of Salesforce. That's trapped in thousands of the apps and silos. It's disconnected. That's why we're seeing this incredible mentor with our data cloud our fastest growing organic and our.

Marc R. Benioff: That's why we're seeing this incredible mentality with our data cloud, our fastest growing organic, and our next billion dollar cloud. It's the first step to becoming an AI enterprise. Data Cloud gives every company a single source of truth.

Marc R. Benioff: And you can securely power AI insights and actions across the entire customer 360. Now, let me tell you why I'm excited about Data Cloud and why it's transforming our customers and how it's preparing them for this next generation of artificial intelligence. Data Cloud was included in 25% of our million dollar plus deals in the quarter; we added more than 1000 Data Cloud customers for the second quarter in a row. 8 trillion records were ingested into Data Cloud in the quarter, up 42% year over year, and we processed two quadrillion records. That's a 217% increase compared to last year.

Speaker Change: Next billion dollars cloud its the first step to becoming an AI enterprise data cloud gives every company single source of truth, and you can securely power AI insights and actions across the entire customer 360, now let me tell you why I'm excited about data cloud and why it's transforming our customers and how it is preparing them for.

Speaker Change: For this next generation of artificial intelligence data cloud was included in 25% of our million dollar plus deals in the quarter. We added more than 1000 data cloud customers for the second quarter in a row eight trillion records were adjusted in the data cloud in the quarter up 42% year over year, and we process to QUADRA.

Marc R. Benioff: Over 1 trillion activations drove customer engagement, which is a 33% increase year over year. This incredible growth of data in our system and the level of transactions that we're able to deliver, not just in the core system, but especially in Data Cloud, is preparing our customers for this next generation of AI. And last month, we created a zero copy partner network with partners, including Amazon, Databricks, Google, IBM, Microsoft, and Snowflake, so customers can access this live data from anywhere in Data Cloud without copying or moving it.

Speaker Change: And records, that's a 217% increase compared to last year over one trillion activations drove customer engagement, which is a 33% increase year over year. This incredible growth of data in our system and the level of transactions that we're able to deliver not just in the core system, but especially in data cloud.

Marc R. Benioff: It's the engine of our future growth, and this is the engine of our future artificial intelligence growth as well. As you know, for years, we've delivered predictive AI across all our clouds with Einstein. Einstein is generating hundreds of billions of predictions per day, trillions per week.

Speaker Change: <unk> is preparing our customers for this next generation of AI and last month, we created a zero coffee partner network with partners, including Amazon data breaks Google IBM, Microsoft and Snowflake. So customers can access this live data from anywhere and data cloud without copying or moving it. It's the engine of our future growth and this is <unk>.

Speaker Change: The engine of our future artificial intelligence growth as well as you know for years, we've delivered predictive AI across all of our clouds with Einstein Einstein is generating hundreds of billions of predictions per day trillions per week now.

Marc R. Benioff: Now we're working with 1000s of customers to power generative AI use cases with our Einstein Copilot, our Prompt Builder, and our Einstein Studio, all of which went live in the first quarter. And we've closed hundreds of Copilot deals since this incredible technology has gone GA. And in just the last few months, we're seeing Einstein Copilot develop higher levels of capability. We are absolutely delighted and could not be more excited about the success that we're seeing with our customers with this great new capability. Saks, a leader in the luxury fashion market part of Hudson Bay, went all in on Salesforce in the quarter.

Speaker Change: Now, we're working with thousands of customers to power generative AI use cases with our Einstein co pilot, our prompt builder, our Einstein studio all of which went live in the first quarter and we've closed hundreds of co pilot deal since this.

Speaker Change: Incredible technology has gone.

Speaker Change: And then just the last few months, we're seeing Einstein copilot develop higher levels of capability.

Speaker Change: We are absolutely delighted and could not be more excited about the success that we're seeing with our customers with this great new capability SaaS a leader in the luxury fashion market part of Hudson Bay went all in on Salesforce in the quarter.

Marc R. Benioff: The CEO, Mark Metric, is using AI to create more personal experiences for every customer touchpoint across their company. And with our Einstein One platform and data cloud, SACs can unify and activate all its customer data to power trusted AI. Another great story is FedEx, a company that we all know, bringing together previously siloed information. It's the leader in getting packages delivered quickly.

Speaker Change: So mark metric is using AI to create more personal experiences for every customer touch point across their company and with our Einstein one platform of data cloud Saks can unify and activate all its customer data to power trusted AI. Another great story is Fedex a company that we all know bringing together pre.

Speaker Change: Obviously siloed information is the leader in getting packages delivered quickly.

Marc R. Benioff: And, of course, how are we going to now deliver a more productive, more efficient, and more profitable FedEx? The Salesforce data and app and AI capabilities generate expense savings. This is the core efficiency while growing and accelerating top line revenue. This is the effectiveness that we're delivering for FedEx. This efficiency includes next best action for sellers, automated lead nurturing, Slack for workflow management, opportunity scoring, a virtual assistant, and AI on unstructured data for delivering content to sales and customer service.

Speaker Change: And of course.

Speaker Change: How are we going to now deliver a more productive more efficient and more profitable Fedex <unk>.

Speaker Change: The salesforce data and App and AI capabilities generate expense savings. This is the core efficiency, while growing and accelerating top line revenue. This is the effectiveness that we're delivering for Fedex. This efficiency includes NES next best action for sellers automated lead nurturing slack for workflow management.

<unk>, scoring a virtual assistant AI on structured data for delivering content to sales and customer service and when we think about effectiveness, we see our journey builder delivering hyper personalization integrating customer experiences across service sales marketing the ability to tailor and deliver customer experiences based on our customer 360.

Marc R. Benioff: And when we think about effectiveness, we see our journey builder delivering hyper personalization, integrating customer experiences across service, sales, and marketing, and the ability to tailor and deliver customer experiences based on a customer 360 view. When we look at this incredible next generation of capability we've delivered at FedEx, gone are the days of static business rules that leave customers dissatisfied, asking, you know, do they not know that I'm a valued customer of FedEx?

Speaker Change: We view when we look at this incredible next generation of capability, we've delivered at Fedex gone now or these days of static business rules that leave customers dissatisfied asking do they not know that I'm a valued customer of Fedex now Fedex has not only the power of the customer 360, but the power of AI to unlock.

Marc R. Benioff: Now FedEx has not only the power of the customer 360 but the power of AI to unlock so much more commercial potential by conducting an orchestra of commercial functions that have never played well together before. You have a significant opportunity now with Salesforce and this incredible platform to convince companies to transform all of their incredible capabilities to deliver another level of profitability.

Speaker Change: So much more commercial potential by conducting an orchestra of commercial functions that never played well it be together before you have a significant opportunity now with Salesforce and this incredible platform that sellers can convince companies to transform all of their incredible capabilities to deliver another level of profitability.

Speaker Change: Stories like that are driving our company forward and it's all driven by the power of artificial intelligence. Another story I'm really excited about in the quarter as air India transform with data and AI. If you don't know about air India, They're an incredible airlines, whose required multiple airlines to create this amazing platform.

Marc R. Benioff: I think stories like that are driving our company forward, and it's all driven by the power of artificial intelligence. Another story I'm really excited about in the quarter is Air India, which is transformed by data and AI. If you don't know about Air India, they're an incredible airline who's acquired multiple airlines to create this amazing platform for India's growth. And with Data Cloud, Air India is unifying Data Cloud across loyalty, reservations, flight systems, and data warehouses. They have a single source of truth to handle more than 550,000 service cases each month.

Speaker Change: For Indias growth and with data cloud Air India's unified data cloud across loyalty reservations flight systems and data warehouses. They are a single source of truth to handle more than 550000 service cases, each month, and now with Einstein, where automatically classify and summarizing cases and sending that to the <unk>.

Marc R. Benioff: And now, with Einstein, we're automatically classifying and summarizing cases and sending that to the right agent with recommended next steps and upgrading and high-value passenger experiences. Even when things happen like a flight delay, our system is able to immediately intervene and provide the right capability to the right customer at the right time. All of that frees up agents to deliver more personal service and create more personal relationships. A more profitable, a more productive, a more efficient Air India, a company that's using AI to completely transform its capability.

Speaker Change: Agent recommended next steps and upgrading and high value passenger experiences even when things happen Michael flight delay our system is able to immediately intervene and provide the right capability to the right customer at the right time all of that frees up agents to deliver more personal service and create more personal relationships.

Speaker Change: More profitable and more productive or more efficient air India, a company, that's using AI to completely transform their capability, where we're looking forward to talk to you more in this call about these incredible transformations the financial transformation that we've gone through with these incredible cash flow and margin numbers and this incredible artificial intelligence.

Marc R. Benioff: Well, we're looking forward to talking more on this call about these incredible transformations, the financial transformation that we've gone through with these incredible cash flow and margin numbers, and this incredible artificial intelligence transformation. Now, over to Brian.

Brian Millham: <unk> transformation and now over to Brian.

Brian Millham: Hey, thanks, Marc, and thanks to all of you for joining us today. I also want to thank the team for their hard work this quarter.

Brian: Okay. Thanks, Mark and thanks to all of you for joining US today I also want to thank the team for their hard work this quarter as Mark said, we're incredibly well positioned for this AI transformation with a number one AI CRM innovating at a pace I have not seen in my entire career I could not be more excited about the opportunity ahead.

Brian Millham: As Marc said, we're incredibly well positioned for this AI transformation. We're the number one AI CRM, innovating at a pace I've not seen in my entire career. I could not be more excited about the opportunity ahead.

Brian: Seeing good demand as AI technology rapidly evolves and customers recognize the value of transforming into AI enterprises Ceos and <unk> are excited about the opportunity with data and AI and how it can impact their front office operations.

Brian Millham: We're seeing good demand as AI technology rapidly evolves and customers recognize the value of transforming into AI enterprises. CEOs and CIOs are excited about the opportunity with data and AI and how it can impact their front office operations. We continue to focus on our growth levers of multi-cloud deals, international expansion, industry solutions, the Salesforce ecosystem, and, of course, data and AI innovations across all of our clouds. Now, let me briefly address the buying environment. We continue to see measured buying behavior similar to what we experienced over the past two years.

Brian: We continue to focus on our growth levers of multi cloud deals international expansion industry solution, the salesforce ecosystem and of course, the data and AI innovations across all of our clouds.

Brian Millham: With the exception of Q4, where we saw stronger bookings, the momentum we saw in Q4 moderated in Q1, and we saw elongated deal cycles, deal compression, and high levels of budget scrutiny. In addition, in Q1, as part of our ongoing transformation, we made some intentional changes in our go-to-market organization to drive long-term productivity and create better customer experiences, which also played a role in the software bookings performance. At the same time, we are seeing strong momentum in various parts of our business, particularly data cloud and industry.

Brian: Now, let me briefly address the buying environment, we continue to see the measured buying behavior similar to what we experienced over the past two years and with the exception of Q4, where we saw stronger bookings the momentum we saw in Q4 moderated in Q1, and we saw elongated deal cycles deal compression and high levels of budget scrutiny.

Brian: In addition in Q1 as part of our ongoing transformation. We made some intentional changes in our go to market organization to drive long term productivity and create better customer experiences, which also played a role in the softer bookings performance.

Brian: At the same time, we are seeing strong momentum momentum in various parts of our business, particularly data cloud and industries.

Brian Millham: And we continue to drive our core growth levers; multi-cloud deals, again, were a highlight for us in the quarter, with six of our top 10 deals including six or more clouds, showing the depth and relevance of our portfolio. Let me give you just one example of a company that is using Salesforce across the entire front office. CrowdStrike, a leading cybersecurity company and a long-time customer of Salesforce, added Data Cloud, Marketing Cloud, Commerce Cloud, Revenue Cloud, and MuleSoft in the quarter.

Brian: And we continue to drive our core growth levers multi cloud deals again were a highlight for us in the quarter was six of our top 10 deals, including six or more clouds, showing the depth and relevance of our portfolio.

Brian Millham: CrowdStrike already relied on Einstein One Sales and Service and Slack, and now they'll use Data Cloud to pull together new and trapped data from data lakes to build a 360-degree view of their customers, helping them align sales and marketing efforts to drive growth. They're also leveraging MuleSoft with incredible results. MuleSoft has helped CrowdStrike accelerate project delivery by 30% and decrease maintenance costs by 20%. Salesforce is now the backbone of CrowdStrike, driving every aspect of its operation and limiting its reliance on complex siloed third-party applications.

Brian: Let me give you just one example of a company that is using salesforce across the entire front office crowd strike, a leading cyber security company and longtime customer Salesforce added data cloud marketing cloud Commerce cloud revenue cloud and new soft in the quarter crowds. Thank already rely on Einstein, one sales and service and slack.

Brian: And now they'll use data cloud to pull together, new and trap data from data lakes to build a 360 <unk> view of their customers, helping them align sales and marketing efforts to drive growth.

Brian: We're also leveraging <unk> softened with incredible results MELA Sciences help crowdsurf strike accelerate project delivery by 30% and decreased maintenance costs by 20%.

Brian: Salesforce is now the backbone of crowd strike.

Brian: Driving every aspect of crowd strikes operation and limiting their reliance on complex Siloed third party applications.

Brian Millham: As Marc said, we're seeing impressive growth in our data cloud business. In the quarter, 25% of our deals over $1 million included data cloud. It's obviously an important growth lever for us as it brings all of our clouds to life and makes them all better.

Speaker Change: As Mark said, we're seeing impressive growth in our data cloud business in the quarter, 25% of our deals over $1 million included data cloud.

It's obviously an important growth lever for us as it brings all of our clouds to life and make.

Speaker Change: All better.

Brian Millham: And we continue to see momentum in Einstein AI with wins at Turtle Bay Resort, Autodesk, and Langley Federal Credit Union as companies transform into AI enterprises. One example is Siemens. Siemens lacked a centralized destination for customers to easily choose the right products and buy on demand.

Speaker Change: And we continue to see momentum in Einstein AI with wins at Turtle Bay Resort, Autodesk and Langley Federal credit Union as companies transform into AI Enterprises. One example is Siemens <unk>.

Brian Millham: To simplify the buying experience for customers, Siemens worked with Salesforce to develop and launch its Accelerator Marketplace, an AI-powered digital marketplace built on Einstein One Commerce, providing AI-generated product pages, smart recommendations, and self-service ordering. And they did it all in just six months. And obviously, AI is not just for our customers. As part of our own transformation, we continue to adopt AI inside Salesforce. Under the leadership of our Chief People Officer, Natalie Scardino, and our Chief Information Officer, Juan Perez, we've integrated Einstein right into Slack, helping our employees schedule, plan, and summarize meetings and answer employee questions. Einstein has already answered nearly 370,000 employee queries in a single quarter. And in our engineering organization, our developers now save more than 20,000 hours of coding each month through the use of our AI tools.

Speaker Change: Siemens lacked a centralized destination for customers to easily choose the right products and by on demand.

Speaker Change: Beside the buying experience for customers Siemens worked with Salesforce to develop and launch it's accelerated marketplace and AI powered digital marketplace built on Einstein, one commerce, providing AI generated product pages smart recommendations and self service ordering and they did it all in just six months.

Speaker Change: And obviously <unk> is not just for our customers as part of our own transformation. We continue to adopt AI inside sales force under the leadership of our Chief people Officer, Natalie Scardino, and our Chief Information Officer, Juan Perez, we've integrated Einstein right into slack, helping our employees schedule plan and summarize meetings and answer employee.

Speaker Change: Questions Einstein has already answered nearly 370000 employee queries in a single quarter.

Speaker Change: In our engineering organization, our developers now saved more than 20000 hours of coding each month through the use of our AI tools.

Brian Millham: These innovations are helping us drive continued efficiencies across the business and accelerate our product roadmap. We have great momentum with Slack, which again was included in nearly half of our top 50 deals in the quarter. We also launched Slack AI in February, an amazing innovation that provides recaps, summaries, and personalized search right within Slack. I've personally been using it every day to get caught up on the conversations happening in every channel.

Speaker Change: These innovations are helping us drive continued efficiencies across the business and accelerate our product roadmaps.

Speaker Change: We have great momentum with slack, which again was included in nearly half of our top 50 deals in the quarter. We also launched slack AI in February an amazing innovation that provides recap summaries and personalized search rate within slack.

Speaker Change: <unk> been using in everyday to get caught up on the conversation is happening in every channel.

Brian Millham: And we've seen great traction with our customers with this product. Our customers have summarized over 28 million Slack messages since its launch in February. Rocket Mortgage added Slack.ai in the quarter to help its employees save time and close loans faster.

Speaker Change: And we've seen great traction with our customers with this product that.

Speaker Change: Our customers are summarized over $28 million slack messages since its launch in February.

Speaker Change: Rocket mortgage added <unk> <unk> in the quarter to help its employees save time and close loans faster. They are also leverage external slack channels to collaborate with partners more effectively and efficiently and.

Brian Millham: They've also leveraged external Slack channels to collaborate with partners more effectively and efficiently, and they've experienced a 60% faster turnaround speed when working with their customers and partners in Slack. On the international front, we had a solid quarter. In LATAM, we had great wins at Celio and Grupo DPSP, and in EMEA, we had great wins at IHD Hotels and Resorts and John Lewis Partnership. And in APAC, Alassian and Bank of Philippine Islands were winners in the quarter.

Speaker Change: And they've experienced a 60% faster turnaround speed from working with their customers and partners in slack.

Speaker Change: On the international front, we had a solid quarter in Latam, we had great wins at Celio and Grupo Dps P. In EMEA, great wins at IHG hotels and resorts in John Lewis partnership and in APAC, Alaska, <unk> and bank of Philippine Islands were wins in the quarter, we saw particular strength in our Japan business with wins.

Brian Millham: We saw particular strength in our Japan business with wins at Saibu Prince Hotels worldwide and Hitachi. Industry was another growth lever for us in the quarter. Half of our top 10 deals included one of our industry clouds. A great example in the quarter was Paychex, a digital HR leader. By leveraging Financial Service Cloud and Data Cloud, Paychex is able to unify their data, delivering better insights and creating a single view of each customer.

Speaker Change: That cyber print.

<unk> worldwide and Hitachi.

Speaker Change: Industries as another growth lever for us in the quarter half of our top 10 deals included one of our industry cloud a great example, in the quarter was paychex digital HR leader by leveraging financial service cloud and data cloud Paychex is able to unify their data delivering better insights and creating a single view of each customer and using Einstein one sales.

Brian Millham: And using Einstein One Sales and Service, Paychex will be able to proactively manage insurance renewals, which means agents can proactively reach out and surface renewal opportunities during any touchpoint with the customer, 30, 60, or 90 days in advance, driving an increased rate of renewal.

Speaker Change: <unk> service Paychex will be able to proactively manage insurance renewals, which means agents can proactively reach out and surface and real opportunities during any touch point with the customer 30, 60 or 90 days in advance driving an increased rate of renewals.

Brian Millham: And in the public sector, the city of Los Angeles chose Salesforce to modernize how the city's 4 million residents request city services using its MyLA311 system. The city will use Government Cloud and other Salesforce solutions to integrate AI systems into MyLA311 and modernize its own constituent-facing services, giving residents more self-service options and improving service reliability and responsiveness. Our partner ecosystem also continues to be a growth lever for us. I'm especially excited about our deep partnership with Amazon as a growth driver as we move forward into Q2 and beyond.

Speaker Change: And in the public sector the city of Los Angeles chose Salesforce to modernize how the cities 4 million residents request city services using its Mike.

Speaker Change: 311 system.

Speaker Change: The city will use government cloud and other Salesforce solutions to integrate AI assistance into my early 311, and modernize its own constituent facing services, giving residents more self service options and improving service reliability and responsiveness.

Speaker Change: Our partner ecosystem always also continues to be a growth lever for us I'm, especially excited about our deep partnership with Amazon as a growth driver for as we move forward into Q2 and beyond with Salesforce products now available on the AWS marketplace joint customers are able to expedite their deployments to faster buying an <unk>.

Brian Millham: With Salesforce products now available on the AWS marketplace, joint customers are able to expedite their deployments through faster buying and billing experiences and flexible budgeting options. In closing, I want to echo Mark in acknowledging the hard work of the team. Our continued success has been made possible by our amazing employees, customers, partners, and trailblazers. And with that, I will now pass it off to Amy.

Speaker Change: <unk> experiences and flexible budgeting options.

Speaker Change: In closing I want to Echo Mark and acknowledging the hard work of the team are our continued success has been made possible by our amazing employees customers partners and trailblazers and with that I will now pass it off to Amy great. Thanks, Brian Q1 represents another quarter of continued discipline and transformation across the business.

Amy E. Weaver: Great. Thanks, Brian. Q1 represents another quarter of continued discipline and transformation across the business. I am very proud of all of our employees for their continued dedication and hard work. Now, let's go straight to the results.

Amy E. Weaver: Im proud of all of our employees for their continued dedication and hard work now let's go straight to the results.

Amy E. Weaver: For the first quarter, revenue was $9.13 billion, up 11% year over year in nominal and constant currency. However, the result was at the lower end of our guided range due to continuing pressures on professional services, some licensed revenue volatility, and the continued measured buying environment. Subscription and support revenue grew 12% year over year in nominal and 13% in constant currency. As mentioned on our last call, this included a tailwind from the timing of license revenue in MuleSoft and Tableau related to Q4 deals and a one point benefit from the leap year. From a geographic perspective,

Amy E. Weaver: For the first quarter revenue was $9, one 3 billion up 11.

Amy E. Weaver: 1% year over year in nominal and constant currency.

Amy E. Weaver: The result was at the lower end of our guided range due to continuing pressures on professional services. Some license revenue volatility and the continued illustrated by buying environment.

Amy E. Weaver: Subscription and support revenue grew 12% year over year in nominal and 13% in constant currency as mentioned on our last call. This included the tailwind kind of timing of license revenue and Youre talking cap low related to Q4, and kiosks and a one point benefit from the leap year.

Amy E. Weaver: From a geographic perspective.

Amy E. Weaver: In Q1, America's revenue grew 11%, EMEA grew 10% or 9% in constant currency, and APEC grew 14% or 21% in constant currency. We saw strong new business growth in Japan, India, and Canada, while the US, parts of LATAM, and EMEA were constrained. From an industry perspective, in Q1, public sector and financial services both performed well, while high tech and retail and consumer goods were more constrained. Our new offerings for small and medium businesses, Starter and ProSuite, which are ready to use simplified solutions with AI built in, are building momentum. In Q1, we added another 2,300 new logos to these products.

Amy E. Weaver: In Q1, Americas revenue grew 11% EMEA grew at 10% or 9% in constant currency and APAC, 14% or 21% in constant currency with strong new business growth in Japan, India, and Canada, while the U S parts of a Tam and we're constrained.

Amy E. Weaver: From an industry perspective in Q1 public sector.

Amy E. Weaver: Services, both performed well, while high tech and retail and consumer goods unlocking strained.

Amy E. Weaver: Our new offerings for small and medium businesses starter and pro sleek, which are ready to use simplified solutions with AI downturn are building momentum in.

Amy E. Weaver: In Q1, we added another 2300, new logos can these products.

Amy E. Weaver: Since Starter's launch last year, we've seen customers upgrade to our recently launched Pro Suite and even to our Enterprise and Unlimited Edition. Q1 revenue attrition ended the quarter at around 8%, in line with recent quarters. I'm also very pleased that our non-GAAP operating margin again finished strong at 32.1%, up 450 basis points year over year. And our profitable growth trajectory continues to drive strong cash flow generation. Q1 operating cash flow was $6.25 billion, up 39% year over year. Q1 free cash flow was $6.1 billion, up 43% year over year. Cash flow did modestly benefit from the timing of cash tax payments.

Amy E. Weaver: <unk> launch last year, we've seen customers upgrades by recently launched products suite and even for enterprise and limited edition.

Amy E. Weaver: Q1 revenue attrition ended the quarter at around 8% in line with recent quarters.

Amy E. Weaver: I'm very pleased that our non-GAAP operating margin again finished strong at 32, 1% up 450 basis points year over year.

Amy E. Weaver: And our profitable growth trajectory continues to drive strong cash flow generation Q1, operating cash flow was $6 two 5 billion.

Amy E. Weaver: 39% year over year.

Amy E. Weaver: Q1 free cash flow was $6 1 billion up 43% year over year cash flow did benefit modestly from the timing of cash tax payments.

Amy E. Weaver: Now, to put this cash flow performance in context, we have more than tripled the cash we generated just four years ago. Turning to remaining performance obligations, or RPO, which represents all future revenue under contract, we ended Q1 at $53.9 billion, up 15% year over year. Current Remaining Performance Obligation, or CRPO, ended at $26.4 billion, up 10% year-over-year in nominal. Now, this includes a $200 million FX headwind, which results in more than 10% year-over-year growth in constant currency.

Amy E. Weaver: To put this cash flow performance in context, we have more than tripled the cash we generated just four years ago.

Amy E. Weaver: Turning to remaining performance obligation RPM, which represents all future revenue under contract. We ended Q1 at $53 9 billion up 15% year over year.

Amy E. Weaver: Current remaining performance obligation or CRP, EM and at $26 4 billion up 10% year over year in nominal yes. This.

Amy E. Weaver: This included the $200 million FX headwind, which resulted in more than 10% year over year growth in constant currency.

Amy E. Weaver: CRPO growth was primarily driven by resilience in our core products. However, as Brian mentioned, we did continue to experience measured buying behavior, which is reflected in the moderated Q1 book. On capital return, we were incredibly proud to pay out our first ever quarterly dividend of $0.40 per share for a total of $388 million. And all together, in key one, we returned more than $2.5 billion in the form of share repurchases and dividends.

Speaker Change: <unk> growth was primarily driven by resilience in our core products. However, as Brian mentioned, we did continue to experience measured borrowing behavior, which is reflected in our moderated Q1 bookings.

Speaker Change: On capital return, we were incredibly proud to pay out our first ever quarterly dividend of <unk> 40 per share for a total of $388 million.

Speaker Change: And altogether, we returned more than $2 5 billion in the form of share repurchases and dividends. This brings our total cash return since the inception of our capital return programs to more than $14 billion.

Amy E. Weaver: This brings our total cash returned since the inception of our capital return programs to more than $14 billion. We remain committed to continuing capital return and anticipate declaring our quarterly dividend next month, subject to board approval. Now let's turn to guidance, starting with full fiscal year 25. A few items to note.

Speaker Change: We remain committed to continued comparable return and anticipate declaring a quarterly dividend next month subject to Brian.

Speaker Change: Now, let's turn to guidance, starting with the full fiscal year 'twenty five.

Speaker Change: A few items to note.

Amy E. Weaver: First, on the buying environment, we're assuming that the conditions we saw in Q1 continue throughout our fiscal year. On FX, our revenue guidance continues to incorporate a $100 million FX headwind year over year, or about a 30 basis points impact. We also continue to expect our professional services business to be a headwind to revenue, with deal compression and customers delaying or slowing projects. However, we also continue to see strong demand for data cloud and multi-cloud adoption. We're seeing benefits from recent pricing and packaging changes, and we're seeing strong industry adoption. These factors are also included in our guide.

Speaker Change: First on the buying environment, we are assuming that the conditions. We saw in Q1 continued throughout our fiscal year.

Speaker Change: On FX, our revenue guidance continues to incorporate a $100 million FX headwind year over year or about 30 basis points impact.

Speaker Change: We also continue to expect our professional services business to be a headwind to revenue with deal compression in customers delaying or canceling projects.

Speaker Change: However, we also see continued to see strong demand for data cloud and multi cloud adoption.

Speaker Change: We're seeing benefits from recent pricing and packaging changes and we think strong industry adoption. These factors are also included in our guide.

Amy E. Weaver: As a result, on revenue, we are maintaining our guidance range of between $37.7 to $38 billion, growth of 8 to 9% year over year. We now expect subscription and support revenue growth to be approximately 10% year-over-year in constant current. And we expect attrition to remain generally consistent at slightly above 8% for the full year.

Speaker Change: As a result on revenue we are maintaining our guidance range.

Speaker Change: Between $37 seven to 38 billion growth of eight 9% year after year.

Speaker Change: We now expect subscription and support methane growth to be approximately 10% year over year in constant currency.

Speaker Change: And we expect attrition to remain generally consistent at slightly above 8% for the full year.

Amy E. Weaver: As a reminder, starting in Cisco 25, we include Slack invoices in the metric, which we expect to create a modest hedge. Now turning to profitability and cash flow. On margins, we continue to expect fiscal year 25 non-GAAP operating margin of 32.5%, representing a 200 basis point improvement year over year, following the significant increase last year. This includes intentional investments and targeted growth opportunities, notably AI, data, and our core business. Stock-based compensation is now expected to be just above 8% as a percent of revenue.

Speaker Change: As a reminder, starting in fiscal 'twenty.

Speaker Change: Slack invoice and the metric, which we expect to create a modest headwind.

Speaker Change: Now turning to profitability and cash flow on margins. We continue to expect fiscal year 'twenty five non-GAAP operating margin of 32, 5%, representing a 200 basis point improvement year over year following the significant increase of chair.

Speaker Change: This incorporates an intentional investment in targeted growth opportunities <unk> data and our core businesses.

Stock based compensation is now expected to be just about 8% as a percent of revenue the modest increase from our prior guidance is primarily a result of lower voluntary employee attrition in Q1 and in recent years.

Amy E. Weaver: The modest increase from our prior guidance is primarily a result of lower voluntary employee attrition in Q1 than in recent years. As a result, for fiscal year 25, GAAP operating margin guidance is expected to be approximately 20%, representing 550 basis points of improvement year over year. We expect fiscal year 25 GAAP diluted EPS of $6.04 to $6.12, and non-GAAP diluted BPS is expected to be $9.86 to $9.94

As a result for fiscal year 'twenty GAAP operating margin guidance is expected to be approximately 20%, representing 550 basis points of improvement year over year.

Speaker Change: We expect fiscal year 'twenty, five GAAP diluted EPS of $6 four to $6 12.

Speaker Change: non-GAAP diluted EPS is expected to be $9.86 to $9 94.

Amy E. Weaver: As a result of our continued margin expansion, we are delivering world-class cash flow, and we continue to expect fiscal year 25 operating cash flow growth to be approximately 21 to 24% inclusive of cash tax payment head. We also continue to expect CapEx for the fiscal year to be slightly below 2% of revenue. This results in free cash flow growth of approximately 23 to 26% for the fiscal year. Now, to guidance for Q2.

Speaker Change: As a result of our continued margin expansion, we are delivering world class cash flow and we continue to expect fiscal year 'twenty five operating cash flow growth to be approximately 21% to 24% inclusive of cash tax payments heartland.

Speaker Change: We also continue to expect Capex for the fiscal year to be slightly below 2% of revenue. This results in free cash flow growth of approximately 23% to 26% for the fiscal year.

Speaker Change: Now to guidance for Q2.

Speaker Change: On revenue, we expect $9 2 billion to $9, two 5 billion up 7% to 8% year over year in nominal and approximately 8% in constant currency.

Speaker Change: <unk> growth for Q2 is expected to be 9% year over year nominal, including a $200 million FX headwind, resulting in 10% constant currency growth. This includes ongoing headwinds from professional services.

Speaker Change: For Q2, we expect GAAP EPS of $1 31 to.

Speaker Change: To $1 33.

Speaker Change: And non-GAAP EPS of $2 34 to $2 36.

Speaker Change: In closing I want to emphasize that I'm incredibly proud of the company's commitment to disciplined strategic investments and continued productivity gains to drive strong margin expansion and cash flow growth at scale.

Speaker Change: And of course, I want to thank our employees and our shareholders for their continued support.

Amy E. Weaver: On revenue, we expect $9.2 billion to $9.25 billion, up 7% to 8% year-over-year in nominal and approximately 8% in constant current. CRPO growth for Q2 is expected to be 9% year-over-year and nominal, including a $200 million FX headwind, resulting in 10% constant currency growth. This includes ongoing headwinds from professional services. For Q2, we expect GAAP EPS of $1.31 to $1.33 and non-GAAP EPS of $2.34 to $2.36. In closing, I want to emphasize that I am incredibly proud of the company's commitment to disciplined strategic investments and continued productivity gains to drive strong margin expansion and cash flow growth at scale. And, of course, I want to thank our employees and our shareholders for their continued support. Now, Mike, let's open up the call for questions.

Nick: Nick Let's open up the call for questions.

Michael Spencer: Thanks, Amy. Thanks, everyone, for joining us. When we go to Q&A, we ask that each participant limit themselves to one question. And with that, Rob will take the first question.

Nick: Thanks, Amy and thanks, everyone for joining when we go to Q&A, we ask that each participant limit themselves to one question and with that Rob will take the first question.

Operator: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. Our first question comes from the line of Keith Weiss from Morgan Stanley. Your line is open.

Speaker Change: Thank you we will now begin the question and answer session. If you would like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the queue.

Speaker Change: Your first question comes from the line of Keith Weiss from Morgan Stanley. Your line is open.

Keith Weiss: Excellent. Thank you guys for taking the time to answer the question. And I appreciate all the detail on sort of the growth drivers and what you guys are excited about in the business. But the quarter did come in below your expectations for CRPO growth. And we all look at that as a forward indicator, but you're not taking down the full-year revenue guide. And so I was hoping you could help us get comfortable with why that's not leaving risk on the table and why you guys feel comfortable that that original fiscal year 25 guide is still appropriate. Why not take it down and make it more conservative and ensure that we can get back to beating and raising quarters on the go forward?

Keith Weiss: Excellent. Thank you guys for taking the question.

Keith Weiss: And I appreciate all the detail on sort of the growth drivers and what you guys are excited about in the business.

Keith Weiss: The quarter did come in below your expectations for <unk> growth and we all look at that as a <unk>.

Speaker Change: Forward indicator, but youre not taking down the full year revenue guidance. So I was hoping you could help us get comfortable on why that's not leading risk on the table are and why you guys feel comfortable that that original fiscal year. 'twenty guide is still appropriate why not take it down and make it more conservative and ensure that we can't get back to.

Speaker Change: Beat and raise quarters on a go forward basis.

Amy E. Weaver: Great, Keith. Thanks for the question. I'll take that one.

Speaker Change: Great Keith Thanks for the question I'll take that one let me start by saying that there are many factors we have to consider with our guidance and all in based on what we're seeing at this time, we continue to believe that we will be within the range we guided.

Brian: Now any guide that is a balancing act and as Brian called out we are continuing to see this measure the buying behavior is.

Brian: It's been very consistent for the last two full years at this point with the possible exception of Q4, we did see stronger bookings and you can see the impact of that environment on our Q1 numbers. There is no question about that.

Speaker Change: <unk> also continues to see more and more pressure as customers really just looking for shorter duration projects.

Speaker Change: However, this is really balanced by the demand that we're seeing in our products and that remains strong.

Speaker Change: We continue to see good demand on multi cloud adoption, we're seeing benefits from pricing and packaging changes that we have rolled out over the past year were seeing very healthy adoption around our industry projects.

Speaker Change: I also should point out that our attrition remained attrition rates remained very healthy customers are continuing to rely on salesforce to run their businesses and they'll continue to do that.

Amy E. Weaver: Let me start by saying that there are many factors we have to consider with our guidance. And all in, based on what we're seeing at this time, we continue to believe that we will be within the range we set. Now, any guide that is a balancing act.

Speaker Change: So when I step back and really take a holistic view at the full year, we do feel confident that we will be within our guided range.

Amy E. Weaver: And as Brian pointed out, we are continuing to see this measured buying behavior. It's really been very consistent for the last two full years at this point, with the possible exception of Q4, where we did see stronger bookings. And you can see the impact of that environment on our Q1 numbers. There's no question about that.

Speaker Change: I'd like to add I really.

Amy E. Weaver: ProServe also continues to see more and more pressure as customers are really just looking for shorter-duration projects. However, this is really balanced by the demand that we are seeing for our products, and that remains strong. Yet we continue to see good demand for multi-cloud adoption. We're seeing benefits from pricing and packaging changes that we have rolled out over the past year. We're seeing very healthy adoption around our industries projects. I also should point out that our attrition remains, and our attrition rates remain very healthy.

Amy E. Weaver: You know, customers are continuing to rely on Salesforce to run their businesses, and they'll continue to do that. So when I step back and really take a holistic view of the full year, we do feel confident that we will be in our guided brain.

Amy E. Weaver: Continue to focus on exactly like Amy says this incredible transformation that we've seen with the financials and obviously, we're delivering some quarter. Some numbers this quarter that were beyond our imagination, just a few quarters ago.

Marc R. Benioff: I'd like to add, I really think we continue to focus on, exactly like Amy says, this incredible transformation that we've seen with the financials. And obviously, you know, we're delivering some numbers this quarter that were beyond our imagination just a few quarters ago.

Marc R. Benioff: But another point of optimism is not just what Amy said, but also, you know, we see this incredible transformation happening with our customers. And we all know the AI transformation is many transformations. It's a transformation of how we're interacting with software. It's also a transformation of these algorithms, or we call these models, that the AI is built on.

Speaker Change: Another point of optimism is not just with Amy said, but also we.

Speaker Change: We see this incredible transformation happening with our customers.

And we all know the AI transformation as many transformations, it's a transformation of how we're interacting with software. It's also a transformation of these algorithms or we call. These models at the AI is built on and it's a transformation of the data.

Marc R. Benioff: And it's a transformation of the data that's used by, whether it's consumers or enterprises, to deliver this incredible next level of intelligence. But for enterprises, we know that this customer data and this metadata is really the new gold for these enterprises. And it's a huge driver of growth for our business. We all saw the McKinsey report.

Speaker Change: Used by whether it's consumers or enterprises to deliver this incredible next level of intelligence, but for.

Prizes, we know that this customer data and this metadata is really the new gold for these enterprises and it's a huge driver of growth for our business. We all saw the report from Mckinsey, 75% of the value of Gen. AI use cases is in the front office and everybody knows Salesforce is the leader in front office software, that's our fundamental premise for our <unk>.

Marc R. Benioff: 75% of the value of Gen AI use cases is in the front office, and everybody knows Salesforce is the leader in front office software. That's our fundamental premise for our growth going forward, that we're already managing 250 petabytes of data and metadata that's going to be used to generate this incredible level of intelligence and artificial capability to deliver for our customers a level of productivity and profitability they've just never been able to see before.

Speaker Change: Growth going forward that we're already managing 250 petabytes of data and metadata, that's going to be used to generate this incredible level of intelligence and artificial and capability.

Speaker Change: To deliver for our customers the level of productivity and profitability. They have just never been able to see before.

Marc R. Benioff: And at the heart of that is going to be our data cloud. And we've seen this data cloud, well, we've seen this deliver for our customers an incredible level of capability in just the short period that we've made it available. It's already included in 25% of our million-dollar-plus deals, as I mentioned, and more than 1,000 data cloud customers in the second quarter again. That's our second quarter row.

Speaker Change: And at the heart of that is going to be our data cloud and we've seen this data cloud well we've seen this deliver for our customers and incredible level of capability and just the short period that we've made it available. It's already included in 25% of our million dollar plus deals as I mentioned and more than 1000 data cloud customers in the second quarter again.

That's our second quarter Roe.

Marc R. Benioff: When we look at a quarter where we see huge growth of a new product, it really sets us up for continued delivery of growth of that incredible technology. But what's the cool thing about the data cloud is that it's connected to every single one of our clouds. So it's making our sales cloud better, our service cloud better, our marketing cloud, our commerce cloud. Every aspect of Salesforce is better now with this incredible new technology. Another key part of it is, as I mentioned, 8 trillion records were ingested into the data cloud in the first quarter. That was up 42% year-over-year, and 2 quadrillion records were processed.

Speaker Change: When we look at a quarter, where we see huge growth of a new product it really sets us up.

Speaker Change: For continued delivery of growth of that incredible technology, but whats the cool thing about data cloud is it's connected to every single one of our clouds. So it's making our sales cloud better our service cloud better our marketing cloud our commerce cloud every asked with the sales force is better now with this incredible new technology. Another key part of it is.

Speaker Change: I mentioned eight trillion records were ingested into data cloud in the first quarter that was up 42% year over year and two Quadrillion records were processed that's up 217% year over year and over a trillion activations could driving customer engagement up 33% year over year.

Marc R. Benioff: That's up 217% year-over-year, and over a trillion activations are driving customer engagement, up 33% year-over-year. All of that means that we're preparing our customers for a level of data capability that's going to give them this next capability of artificial intelligence. And last month, we created the Zero Copy Partner Network with Amazon, Databricks, Google, IBM, Microsoft, and Snowflake that federates our data cloud with all these amazing data sources. Look, we really are focused on two things in our company.

Speaker Change: All of that means that we're preparing our customers for a level of data capability, that's going to give them. This next capable capability of artificial intelligence and last month, we created the zero copy partner network with Amazon data bricks, Google IBM, Microsoft and Snowflake that fed rates, our data cloud with all of these amazing data sources.

Speaker Change: Look we really are focused on two things in our company. One is this incredible financial transformation that we've all gone through with you in the last year. The second one is this incredible transformation to artificial intelligence, which is going to be based on data I don't think any company has more well positioned for the future of artificial intelligence and all.

Marc R. Benioff: One is this incredible financial transformation that we've all gone through with you in the last year. The second one is this incredible transformation to artificial intelligence, which is going to be based on data. I don't think any company is more well positioned for the future of artificial intelligence and also delivering the kind of metrics that our stakeholders are going to want than Salesforce.

Speaker Change: So delivering the kind of metrics that our stakeholders are going to want and salesforce.

Operator: Thank you. Rob, we'll take the next question, please. Your next question comes from Brad Sills from Bank of America. Your line is open. Oh, great. Thank you so much. I appreciate the commentary on the impact of the tough macro. We're certainly seeing that across the group.

Speaker Change: Thanks, Steve Rob will take the next question. Please.

Operator: Your next question comes from a line of Brad Sills from Bank of America. Your line is open.

Speaker Change: Your next question comes from the line of Brad Sills from Bank of America. Your line is open.

Bradley Hartwell Sills: Oh, great. Thank you so much I appreciate the commentary on the impact from the tough macro we're certainly seeing that across the group are Brian you mentioned also perhaps some impact here from go to market changes, which is which is I guess shouldn't be a big surprise given all that's going on at Salesforce right now I Wonder if you could just articulate a little bit on that what are those changes is this the kind of.

Bradley Hartwell Sills: And we're it's just some short term impacts that could benefit.

The sales productivity over the longer term. Thank you.

Brian Millham: Yeah, Brad, hey, thanks for the question. And you're exactly right. These are changes that we typically make in the first quarter; it's the most obvious time to make those changes when you start out a new year. But these changes are actually intended to be productivity drivers for the future. You're absolutely right. We want to get aligned behind our go-to-market strategy around buyers to make sure that we're aligned to support our customer scale, that we can really support our multi-cloud strategy going forward to ensure our customers know exactly what we can do to support them across our entire product portfolio.

Bradley Hartwell Sills: Yes, Brad Hey, Thanks for the question and you're exactly right.

Brad: These are changes that we typically make in the first quarter. It's the most obvious time to make those changes when you start out a new year.

Brad: These changes are actually intended to be productivity drivers for the future absolutely right.

Brad: We want to get aligned behind our go to market strategy around buyer to make sure that we're aligned to support our customer scale that we can really support our multi cloud strategy going forward to ensure our customers know exactly what we can do to support them across our entire product portfolio and some of the changes that we made were exactly for that reason how do we ensure that we are.

Brian Millham: And some of the changes that we made were exactly for that reason. How do we ensure that we are aligned with that strategy to ensure we can go faster in Q2, Q3, and Q4? So you're absolutely right. The changes, while impactful in Q1, are short-term, and we expect to see productivity gains from them going forward.

Brad: Line behind that.

Brad: That strategy to ensure we can go faster.

Brad: In Q2, Q3 and Q4 so you.

Speaker Change: Youre absolutely right the changes while impactful in Q1, our short term and we expect to see productivity gains from them going forward.

Operator: Thanks, Brad. Rob, we'll take the next question, please. Your next question comes from the line of Brent Thill from Jefferies. Your line is open. Thanks, just from the geographic perspective.

Speaker Change: Thanks, Brett Rob will take the next question. Please.

Operator: Your next question comes from the line of Brent Thill from Jefferies. Your line is open.

Speaker Change: Your next question comes from the line of Brent Thill from Jefferies. Your line is open.

Brent John Thill: Thanks, just from a geographic perspective, Europe looked like it was a little weaker I am curious if thats, where you saw the pronounced weakness in EMEA or was this pretty consistent across most of the geographic regions. Thank you.

Brian Millham: question. Yes, EMEA was weaker in the quarter. You know, frankly, feeling some of the measured buying environment, most pronouncedly in the Americas, but there were other pockets around the world that were very strong. Canada was a strong region for us in the quarter. I mentioned our Japan business really accelerated in the quarter, really outstanding performance from our Japan business. So the big businesses are going to feel the impact, obviously, of the measured buying environment in the Americas, more exposure to technology, which I think we all know has been a tough industry over the last several quarters, SMB, and other areas of transactional business. These are the areas we're going to feel some of those headwinds in the business. So, spot on EMEA and Amer are sort of feeling the impacts of the measured environments.

Speaker Change: Question, Yes, EMEA was weaker in the quarter.

Speaker Change: Frankly, feeling some of the measured buying environment.

Speaker Change: Pronounce Lee actually felt it also in the in the Americas, but there are other pockets around the world that we're very strong Canada was a strong region for us in the quarter I mentioned, our Japan business really accelerated in the quarter really outstanding performance from our Japan business. So.

Speaker Change: The big businesses are going to feel the impact obviously of the measured buying environment.

Speaker Change: In the Americas more exposure to technology, which I think we all know has been a tough industry over the last several quarters.

Speaker Change: SMB in other areas of transactional business. These are the areas, we're going to feel some of those headwinds in the business so spot on EMEA and <unk> sort of feeling the impacts of the measured environment.

Operator: Thanks, Brent. Rob, we'll take the next question, please.

Speaker Change: Thanks, Brent Rob we'll take next question please.

Operator: Your next question comes from the line of Kirk Materne from Evercore ISI. Your line is open. Yeah, thanks very much. Maybe for Mark or Brian, but I was just kind of curious, you know, when we think about this measured buying environment, is there any sort of crowding effect around AI that's impacting software in your view? Meaning, you know, when you think about all these companies starting to gear up for this next platform shift, it's just the uncertainty of what they're going to spend on over the next six to 12 months, you know, I know it's sort of an ongoing question, but I wondered if you all could weigh in.

Speaker Change: Your next question comes from the line of Kirk <unk> from Evercore ISI. Your line is open.

Speaker Change: Yes, thanks, very much maybe for mark or Brian, but I was just kind of curious when we think about this measured buying environment is there any sort of crowding effect around AI, that's impacting software in your view, meaning when you think about all of these companies starting to gear up for the snacks platform shift.

Speaker Change: Just the uncertainty of what theyre going to spend on over the next six to 12 months holding them back perhaps on what their normal sort of pace of spending might be with you all our other enterprise software companies I know, it's sort of an ongoing question wondering if you all could weigh on thanks.

Kirk Materne: Well, let me give you my swing at exactly where we are, and then I'm going to turn it over to Brian to fill in the details.

Speaker Change: Well, let me give you my swing at exactly where we are and then I am going to turn it over to Brian to fill in the detail.

Speaker Change: I think when you look back over the last four years Salesforce entered the pandemic in 2020 as four years ago almost exactly.

Speaker Change: <unk>.

Brian: About half the size that we're at now we've doubled our company at scale to 'twenty Bill from $20 billion of approximately $40 billion. That's how I look at it in my mind, you can fill in the exact numbers and over that period of time, we saw an incredible surge in the demand and buying environment and in the sales environment, especially during the.

Marc R. Benioff: You know, I think when you look back over the last four years, you know, Salesforce entered the pandemic in 2020, that's four years ago, almost exactly, you know, about half the size that we're at now. We've doubled our company at scale, you know, to 20 billion, from 20 billion to approximately 40 billion. That's how I look at it in my mind. You can fill in the exact numbers.

Brian: Endemic.

Marc R. Benioff: And over that period of time, we saw an incredible surge in the demand and the buying environment and in the sales environment, especially during the pandemic. As we entered the post-pandemic reality, we saw companies who had acquired so much software in that time look to actually rationalize it, ingest it, integrate it, install it, update it. I mean, it's just a massive amount of software that was put in.

Brian: As we entered the post pandemic reality, we saw companies who had acquired so much software in that time look to actually rationalize it just it integrate it and install it update it I mean, it's just a massive amount of software that was put in and so for every enterprise software company kind of has adjusted.

Marc R. Benioff: And so for every enterprise software company kind of has adjusted into this post-pandemic environment. So when you look at all of these companies, especially as you saw them report in the last 30 days, they're all basically saying that same thing in different ways. When you take AI, that has to be your growth driver for future capabilities for these companies. AI, when we look at these companies and the stories that we told, you know, on the call, whether it's FedEx or Air India or CrowdStrike or Paychex or any of the huge deals that we did in the quarter, you know, what we're seeing is not only the installation and integration and implementation, of the platforms that we've sold in last four years, but the layering in of this new capability, which is delivering for these companies, you know, a kind of a capability that we weren't able to forecast four years, And when we saw, like I told you the story of FedEx, like when we talked to their top executives about what they've delivered, or you take a incredible company like State Farm is kind of automated 60 million policyholders, you know, and thousands of agents, they're just able to deliver, you know, at a level of capability. And I said it before, but profitability, employee augmentation, better customer relationships, much higher margins. These are financial metrics that we're able to deliver into these implementations. That's on top of where we were four years ago.

Brian: Going into this post pandemic environment. So when you look at all of these companies, especially as you saw them report in the last 30 days, they're all basically saying that same thing in different ways.

Brian: When you take AI that has to be a growth driver for future capabilities for these companies.

Brian: When we look at these companies and the stories that we told.

Brian: On the call, whether it's Fedex or air India crowd strike or paychecks or any of the huge deals that we did in the quarter.

Brian: What we're seeing is not only the installation and integration and implementation.

Brian: The platforms that we sold in last four years, but the layering in of this new capability, which is delivering for these companies.

Brian: Kind of a capability that we werent able to forecast four years ago.

Brian: And when we saw like I told you the story of Fedex like when we talk to their top executives about what they've delivered or you take incredible company like state farm is kind of automated 60 million policyholders.

Brian: <unk> of agents.

Brian: They're just able to deliver at a level of capability in <unk>.

Brian: Said, it before but profitability employee augmentation better customer relationships much higher margins. These are financial metrics that we're able to deliver into these implementations. That's on top of where we were four years ago. So I think that.

Marc R. Benioff: So I think that, as I was trying to make here earlier, and I'll keep making, which is the most important thing Salesforce is doing, is not just continuing to automate every customer touchpoint. This is obviously critical and why we've been able to consume this 250 petabytes of information. But the second key point is that we've rebuilt the way that we are delivering a foundation of data for our customers. Why is that so important?

Brian: And the point I was trying to make here earlier and I'll keep baking, which is the most important thing Salesforce is doing is not just continuing to automate every customer touch point. This is obviously critical and why we have been able to consume this 250 petabytes of information but.

Brian: The second key point is we have rebuilt the way that we are delivering a foundation of data for our customers why is that so important because as we have now re architected all of our apps and all of our capabilities to fuel and fund this data cloud it means that for our customers going forward Theyre going.

Marc R. Benioff: Because as we have now re-architected all of our apps and all of our capabilities to fuel and fund this data cloud, it means that for our customers going forward, they're going to be able to take this data cloud and leverage that into their future capability and growth, and especially profitability and productivity. And that is where our whole company, and I think our whole industry, is eventually going to go. It's as we've said even in our core marketing; it's gold for our customers and their ability to deliver the next capability in their own enterprises.

Brian: Able to take this data cloud and leverage that into their future capability and growth and especially profitability and productivity and that is where our whole company and I think our whole industry is eventually going to go not every company is as well positioned as you know for this artificial intelligence capability of sales forces because.

Brian: They just don't have the data they may say they have this capability of that capability. This user interface that model that whatever all of these things are quite fungible and are expiring quickly as the technology rapidly moves forward, but the piece that will not expire as the data. The data is the permanent key aspect that says we have.

Brian: Set and are even in our core marketing. It is the goal for our customers and their ability to deliver our next capability in their own enterprises, and Brian and I will turn it over to you yes. Thanks Mark.

Speaker Change: All of those things absolutely true Mark said earlier, 75% of.

Jen: Jen AI will benefits will come from the front office and we're really feeling that right now.

Speaker Change: Our demand we're seeing from our customers in the pipeline that we're creating out their.

Speaker Change: Solid performance on pipe Gen.

Speaker Change: I do think customers are.

Speaker Change: Getting their data estate and order is a precursor to leveraging AI capabilities and we're seeing that with the growth of data cloud right now.

Speaker Change: Customers really wanting to bring together many data sources and leveraging AI in the in the flow of work and our capabilities. So.

Marc R. Benioff: And Brian, I'll turn it over to you. So I think it's actually a step process for many of our customers. Let's get our data in order, and then let's layer in the AI to really drive the productivity gains that we expect. And so that's really what we're seeing in the market right now.

Speaker Change: I think it's actually a step process for many of our customers, let's get our data in order and then lets layer in the AI to really drive the productivity gains that we expect and so that's really what we're seeing in the market right now Kurt.

Rob: Thanks, Kurt Rob Let's go to the next question. Please.

Brian Millham: Kirk, Rob, let's go to the next question. Our next question comes from Karl Keirstead from UBS. Your line is open. Okay. Great. Maybe I'll switch subjects. So, Mark and Amy, there was some concern in your show.

Operator: Your next question comes from the line of Karl Keirstead from UBS. Your line is open.

Speaker Change: Your next question comes from the line of Karl Keirstead from UBS. Your line is open.

Karl Emil Keirstead: Okay, Great, maybe I'll, maybe I'll switch subjects, Marc and Amy there was some concern in your shareholder base in March and April around <unk>.

Karl Emil Keirstead: Media reports related to M&A I know you can't comment on those reports not expecting that but I'm wondering if you could comment on your M&A framework, whether theres been any change to it at all I think might be helpful. Thank you.

Operator: Yeah, no, I'd love to talk about that. And I think it's extremely important. I mean, Salesforce has a long history of innovation, organic innovation, like we've seen today with data cloud, everyone, I'm sure, is extremely impressed with the growth of that product, but also inorganic innovation. And a lot of our customer touch points, whether it's our commerce platform, or marketing platform, or integration platform, are inorganic innovations. You know, products that we acquired many of them at the multi hundred million dollar revenue level that Some of the largest, most important software companies in the market today are actually companies that we acquired at much smaller levels. And all of you know Salesforce's story and how we put all of that together.

Speaker Change: Yes, no I'd love to talk about that and I think it's extremely important I mean, salesforce has a long history of innovation organic innovation like we've seen today with data cloud everyone. I'm sure is extremely impressed with the growth of that product, but also inorganic innovation in a lot of our customer touch points, whether it's our commerce platform or a marketing plan.

Speaker Change: Four are in their integration platform, our inorganic innovation products that we acquired many of them at the multi hundred million dollar revenue level that are at the multibillion dollar revenue level. Some of the largest most important software companies in the market today are actually companies that we acquired at much smaller levels and all of you know salesforce his store.

Marc R. Benioff: And of course, I've mentioned, we're re-architecting almost every single one of those products and quite successfully redeploying them to our customers in a single integrated data fabric to provide the power of future artificial intelligence. Now, when we look at all of that combined, we always are looking at what the next level of innovation is. And so we're going to be looking at products organically. But yes, we will continue to look at products inorganically.

Speaker Change: And how we put all of that together and of course I've mentioned, we're re architect in almost every single one of those products and quite successfully in deploying redeploying them to our customers into a single integrated data fabric. So provide the power of future artificial intelligence now when we look at all of that combined.

Marc R. Benioff: But as we've committed to you, if we're looking at a large-scale acquisition, we're going to make sure that it is not dilutive to our customers, that it is creative, you know, that it is, you know, has the right metrics. And we're also going to be quick to walk away from things that we are not totally confident in, or that we don't have the trust with whatever company that we're looking So we have operated inside that framework; we continue to acquire companies; we just acquired an amazing new company called Spiff, which is part of our Salesforce automation platform. It's an amazing capability.

Speaker Change: And we always are looking at what is the next level of innovation and so we're going to be looking at products organically, but yes. We will continue to look at products Inorganically, but as we've committed to you. If we're looking at a large scale acquisition, we're going to make sure that it is not dilutive to our customers that its accretive.

Speaker Change: That it is it has the right metrics and we're also going to be quick to walk away from things that we are not totally confident in or that we don't have the trust with whatever company that we're looking at.

Marc R. Benioff: I mean, Salesforce, as you know, is the number one SFA platform in the world. That SFA platform got a lot better this quarter with the capabilities now that it's deeply integrated into the data cloud, which gives SFA customers the next step of growth with our SFA platform. But also, it has an incredible new level of artificial intelligence and generative AI capabilities now built into the sales cloud. And in addition, it also has compensation capabilities through Spiff, and that's through inorganic.

Speaker Change: We have operated inside that framework, we continue to acquire companies. We've just acquired amazing New company called <unk>, which is part of our sales force automation platform. It's an amazing capability I mean salesforce as you know is the number one SFA platform in the world that SFA platform got a lot better this quarter with the.

Speaker Change: Capabilities now that it's deeply integrated into data cloud, which gives SFA customers. The next step of growth with our SFA platform, but also it has an incredible new level of artificial intelligence and generative AI capabilities now built into it.

Marc R. Benioff: And that was acquired through our new M&A framework, for example. And as we go forward, we're going to continue to look at those opportunities. And look, we're not going to shy away from M&A for any one particular reason if it's within our framework. But if it's outside of our framework, we're going to be extremely cautious.

Speaker Change: Built into the sales cloud and in addition, it also has compensation capabilities through Smith and Thats through inorganic and that was acquired through our new M&A framework for example.

Amy E. Weaver: And let me have Amy reiterate what the attributes of that framework are and how we look at M&A, because I don't think any company has been more successful with M&A than Salesforce has been. You see this amazing cash flow number and margin number that we've rarely seen before in the software industry. Maybe only a couple companies have ever delivered cash flow at this level, and I think it's higher than most of the great consumer companies like Coke and Starbucks and all of that.

Speaker Change: And as we go forward, we're going to continue to look at those opportunities and look we're not going to shy away from M&A for any one particular reason if it's within our framework, but if it's outside of our framework, we're going to be extremely cautious and let me have Amy reiterate what the attributes of that framework are and how we look at M&A, because I don't think any.

Speaker Change: Company has been more successful with M&A, then salesforce has been I mean, that's how we built our customer 360 and have this incredible incredible platform that we're able to automate these amazing companies with what we've gone through but as we go forward, we know that we need to slightly adjust that so that we can continue to deliver to you. These amazing.

Speaker Change: Financial metrics that you see like you see this amazing cash flow number and margin number that we've seen rarely before in the software industry, maybe only a couple of companies have ever delivered cash flow at this level and I think it's higher than most of the great consumer companies like Coke and Starbucks and all of that like it.

Speaker Change: These numbers are pretty epic in that area, but we know to deliver continued to deliver cash flow and margin numbers. At this level. We're also going to have to continue to keep our eye on the M&A framework. So Amy lets talk about that great. Thanks, Mark Let me back up a little bit to talk about our capital allocation strategy overall, and it's really very simple and we're going to <unk>.

Amy E. Weaver: These numbers are pretty epic in that area, but we know to deliver and continue to deliver cash flow and margin numbers at this level, we're also going to have to continue to keep our eye on the M&A framework.

Amy E. Weaver: So Amy, let's talk about that. Great. Thanks.

Amy E. Weaver: Great. Thanks, Marc. Let me back up a little bit to talk about our capital allocation strategy overall. And it's really very simple.

Amy E. Weaver: <unk> to expand our free cash flow margin as we scale, we are going to invest in innovation as Mark said that is organic and it can be inorganic.

Amy E. Weaver: We are going to continue to expand our free cash flow margin as we scale. We are going to invest in innovation. As Marc said, that is organic, and it can be inorganic if it matches our principles and our goals.

Speaker Change: And if it matches, our principal with alcohol and we're going to return cash to shareholders and we're doing that now vote through our share repurchase program and our dividend program now.

Amy E. Weaver: And we're going to return cash to shareholders. And we're doing that now both through our share repurchase program and our dividends program. Now on the inorganic perspective, as you brought up, we're always going to be opportunistic. You know, M&A has been an incredible part of our past, and I'm sure, at the right time, it will be part of our future. But it's got to fit into the framework that we have been outlining for the last few days; we're going to have to have a clear timeline for value accretion, we're going to need to prioritize our use of the balance sheet, and it's going to be a best-in-class asset.

Speaker Change: On the inorganic perspectives as you brought up we're always going to be opportunistic in M&A. It's been incredible part of our past I'm sure at the right time, we will be part of our future.

Speaker Change: It's got to fit into the frameworks that we have been outlining for the last few.

Speaker Change: We're going to have to have a clear timelines value accretion when you need to prioritize our use of the balance sheet and it's going to be a best in class assets and when all that comes together, that's what we'll be focused on.

Amy E. Weaver: And when all that comes together, that's what we'll be focused on. In the meantime, you know, I really want to talk about our goal. We are trying to optimize shareholder value. At the end of the day, that's the single most important element.

Speaker Change: In the meantime, everyone I talked about our goal we are trying to optimize shareholder value at the end of the day. It is the single most important element and we're doing that by focusing on delivering very strong free cash flow per share. We're doing this by our focus on profitable growth and site very carefully managing our dilution and when you bring that together.

Amy E. Weaver: And we're doing that by focusing on delivering very strong free cash flow per share. We're doing this through our focus on profitable growth and by very carefully managing our dilution. And when you put that together, I am very confident in our long-term free cash flow per share opportunity. And I'm very confident about our capital allocation strategy.

Speaker Change: Very confident in our long term free cash flow per share opportunity.

Speaker Change: I'm very confident about our capital allocation strategy overall.

Operator: Great, thanks, Karl. We'll take the next question, please. Your next question comes from a line from Raimo Lenschow from Barclays.

Speaker Change: Great. Thanks, Karl we'll take the next question please.

Speaker Change: Your next question comes from the line of Raimo <unk> from Barclays. Your line is open.

Speaker Change: Hey, Thank you.

Speaker Change: Okay.

Speaker Change: Obviously.

Speaker Change: This quarter was impacted on the booking side.

Speaker Change: Maybe question for Brian.

Speaker Change: Let me hear if you think about the two factors you pointed out one is the economy you want us to just under.

Speaker Change: On the sales changes at the beginning of the year.

Speaker Change: On the economy side like we've been talking about a tough selling environment for a while now and it hasn't gotten worse from what you've seen or is it.

Speaker Change: Are the issues this quarter more coming from from the <unk> III. Thank you.

Speaker Change: Great well thanks for the question appreciate it.

Raimo Lenschow: Thanks for the question. I appreciate it.

Brian Millham: It was hard to parse apart what the two impacts were in our first quarter, no doubt about that. We did have some changes that I outlined in the quarter as we set ourselves up for productivity and FY25. The economic question, I think, is one that we feel like is similar to what we felt in the first half of last year.

Speaker Change: Hard to parse apart what what the two impacts were in our first quarter no doubt about it we did have some changes I outlined in the quarter as we set ourselves up for for productivity in FY 'twenty five.

Speaker Change: The economy.

Speaker Change: Question I think is one that we feel like it's similar to what we felt in the first half of last year.

Brian Millham: The same measured buying environments that we experienced in the first half are sort of what felt like the same in Q1. We came off a Q4 that was a very solid, very, very strong performance. In retrospect, in hindsight, we may have been in a similar environment but executed very well as a sales team in that fourth quarter. It's so hard to really parse apart these things.

Speaker Change: The same measure buying environment that we experienced in the first half of sort of what felt like the same in Q1.

Speaker Change: We came off a Q4 that was very solid.

Speaker Change: Very strong performance in retrospect hindsight.

Speaker Change: We may have been in a similar environment, but executed very well as the sales team in that fourth quarter.

Speaker Change: So hard to really parse apart these things, but when you look at some of the transactions that we saw in Q1, we saw compression on many deals that we ultimately ended up getting done but they got smaller when we ultimately close them. We saw a couple of deals pushed out of the quarter as people delayed decisions that were that we thought would actually happen.

Brian Millham: But when you look at some of the transactions that we saw in Q1, we saw compression on many deals that we ultimately ended up getting done, but they got smaller when we ultimately closed them. We saw a couple of deals push out of the quarter as people delayed decisions that we thought would actually happen in our first quarter. And there's no decision issue that is coming up more frequently than we anticipated.

Speaker Change: And our first quarter.

Speaker Change: And yes. There is no decision issue is coming up more frequently than we anticipated so hard to really parse those two things apart, but when you combine them both in a particular quarter. It can have an impact of.

Brian Millham: So hard to really parse those two things apart. But when you combine them both in a particular quarter, it can have an impact on lower bookings, and that's what we felt in our first quarter. Yeah, I think I'd also like to add, and I'll just give you a little color on the narrative inside our company. When we look at operating in this environment, which we've been going through for a couple of years, and we look at, hey, how do we continue to deliver these strong ACV numbers, but also how do we continue to deliver the overall strong financial metrics at the same time? It's important that we deliver this high level of customer success to prepare for our future growth. It's really along three lines.

Speaker Change: Lower bookings and that's what we felt in our first quarter.

Speaker Change: I think I'd also like to add and I'll just give you a little color on the narrative inside our company. When we look at operating inside this environment, which we've been now going through for a couple of years and we look at Hey.

How do we continue to deliver these strong ACB numbers, but also how do we continue to deliver the overall strong financial metrics at the same time, it's important that we're delivering this high level of customer success to prepare for our future growth.

Marc R. Benioff: And those three lines, first of all, are that we're just having to start every quarter with much higher pipelines. We look at these pipeline multiples as much higher than we've traditionally had to start with. And this is really critical in managing our distribution organization and overall success in the quarter. And traditionally, we might have to start our pipelines at 2X. Now our message to our distribution leaders is, hey, if you're going to start out your pipeline in the quarter, you better start out at 3X.

Speaker Change: It's really along three lines and those three lines first of all is we're just having to start every quarter with much higher pipelines. We look at these pipeline multiples as much higher than we've traditionally had to start with and this is really critical in managing our distribution organization and overall success in the quarter and were.

Speaker Change: Donnelley, we might have to start our pipelines at <unk> now our message to our distribution leaders is hey, if you're going to start out your pipeline in the quarter you better start out at <unk> and this is also our message to our peers as well the evaluate the pipeline much more aggressively than ever before that means a much deeper.

Marc R. Benioff: And this is also our message to our peers as well, to evaluate the pipeline much more aggressively than ever before. That means a much deeper inspection of the pipeline, but holding it at a much higher level. That is evidence of this environment.

buying: Inspection of the pipeline, but holding it at a much higher level that is evidence of this environment and if you would ask any leader in this company how much how many times they've heard from me or from buying that they better start at a three X pipeline because that is the world that we're in today the second attribute that's.

Marc R. Benioff: And if you asked any leader in this company how many times they've heard from me or from Brian that they better start at a 3X pipeline, because that is the world that we are in today. The second attribute that's incredibly important for all of our leaders in our company or throughout our industry is that you might need a much higher level of enablement. What that means is that so many people have come into our industry in the last five or even 10 years; a lot of them just need the level of training capability, especially as we move into this new area of artificial intelligence, generative AI, data, the kind of capabilities that we're talking about.

buying: <unk> important for all of our leaders and.

buying: And our company are throughout our industry is you might need a much higher level of enablement. What that means is so many people have come into our industry in the last five or even 10 years. There are a lot of them just need the level of training capability, especially as we move into this new area of artificial intelligence.

buying: Artificial intelligence generative AI data.

buying: Kind of capabilities that we're talking about when we explain to people how models work, how uis workout data frameworks work and how it works in regards to our software and our platforms and our architectures that is requiring a level of training that is incredibly important and when we're talking about companies at scale like Salesforce who have.

Marc R. Benioff: When we explain to people how models work, how UIs work, how data frameworks work, and how it really works in regards to our software and our platforms and our architectures, that requires a level of training that is incredibly important. And when we're talking about companies at scale, like Salesforce, who have very significant numbers of salespeople. I'm not going to go into all the details of how it's organized and how many we have.

Marc R. Benioff: But just know that that requires a very high level of enablement. And that's the second key attribute to managing in this framework in this environment. And the third is a level of stability. Now, when you enter the first quarter of any fiscal year, there is always going to be a desire by every sales organization to slightly shift, slightly adjust their strategy, and their organization to reflect the demands of the fiscal year. You start the fiscal year, writing your business plan, and thinking about how you're going to implement it.

buying: It's very significant numbers of salespeople and aren't going to go into all the details of how it's organized and how many we have but just know that that requires a very high level of enablement and that's the second key attribute managing in this framework in this environment and the third is a level of stability now when you enter the first quarter.

buying: <unk> of any fiscal year, there always is going to be a desire of every sales organization.

buying: Slightly shifts slightly adjust their strategy in their organization to reflect the demands of the fiscal year you start the fiscal year brining your business plan thinking about how youre going to execute and then you have to look at how much disruption are you able to tolerate in the quarter because if you over shift if you.

Marc R. Benioff: And then you have to look at how much disruption you are able to tolerate in the quarter. Because if you overshift, if you do too much, you will end up with more volatility in the ACB than you like.

buying: Do too much you will end up with more volatility in the quarter and the ACB than you like now it May result in a better fourth quarter are good examples last year, where we saw late in the first quarter, we might not have achieved exactly everything we wanted because we had too much disruption, but by the fourth quarter. We over delivered so there is a.

Marc R. Benioff: Now, it may result in a better fourth quarter. A good example is last year, you know, where we saw that in the first quarter, we might not have achieved exactly everything we wanted because we had too much disruption. But by the fourth quarter, we over delivered.

Marc R. Benioff: So there is a level of balance that has to be achieved in regards to stability and disruption, and those four attributes have 3x pipelines having much higher levels of enablement, and having much higher levels of stability. That is the key to managing in this environment in this or this part of the industry right now. And when I talk to my peers and other major enterprise software companies, that is what I'm really emphasizing to them.

buying: Level of balance that has to be achieved in regards to stability and disruption and those four attribute as having three X pipelines have been much higher levels of enablement.

buying: And having much level higher levels of stability that is the key to managing in this environment in this or this part of the part of the industry right now and when do I talk to my peers.

buying: The other major enterprise software companies that is what I am really emphasizing to them and for all of them of course, it's good if they are using our products because our products are really the key to making all of that happened because we were able to deliver for these companies all of those things that they need to have that level of success as well.

Marc R. Benioff: And for all of them, of course, it's good if they're using our products, because our products are really the key to making all of that happen, because we're able to deliver for these companies all of those things that they need to have that level of success as well.

Ralph: Thanks, Ralph Rob will go to the next question. Please.

Operator: Thanks, Rao. Rob, we'll go to the next question, please.

Operator: Your next question comes from the line of Kasthuri Rangan from Goldman Sachs. Your line is open. Thank you very much.

Speaker Change: Your next question comes from the line of Kash Rangan from Goldman Sachs. Your line is open.

Kasthuri Gopalan Rangan: Thank you very much, Marc and team. I'm actually looking at the Salesforce Tower from my office here, and I'm thinking about the past. And Marc, you've been through all these cycles before. Maybe it's just cyclical, maybe high interest rates causing economic uncertainty. Maybe it's as simple as that.

Kasthuri Gopalan Rangan: Thank you very much Mark and team are actually looking at the Salesforce tower from my office here.

Kasthuri Gopalan Rangan: I'm thinking about the past Mark you've been through all these cycles before maybe it's just cyclical maybe high interest rates, causing economic uncertainty.

Kasthuri Gopalan Rangan: Maybe it's as simple as that or maybe it's structural.

Kasthuri Gopalan Rangan: If it's.

Kasthuri Gopalan Rangan: If it's <unk>.

Marc R. Benioff: Or maybe it's structural, and if it's structural, maybe there's an architectural change going on. And, Marc, you drove the last big architectural change from distributed computing to Internet computing. And how confident are you that this generative AI, which is causing an upheaval in that whole tech stack, is not something to take lightly? And what are the things that the company is preparing for, if it's not just cyclical, if maybe there's a structural change that's going on, what are the things that you are doing to the company to bulletproof it, because typically, people, incumbents miss big transitions You and I have seen that. We've all seen that. And what are the things that you're doing to ensure that you're bulletproof in that regard, that you're absolutely ready architecturally for the next cycle?

Speaker Change: We have a structural and maybe there is an architectural change going on in the market drove the last big architectural change from distributed computing due to Internet computing at how confident you are that this generative AI, which is causing an upheaval in the total tech stack.

Speaker Change: It's not something to take lightly and what are the things that the company is preparing if its not just cyclical if maybe there's a structural change that's going on what are the things that you are doing to the company to bulletproof because typically people incumbents Miss Big transitions right, you and I have seen that we have seen that.

Speaker Change: One of the things Youre doing to ensure that bullet proof in that regard that youre, absolutely ready architecture for the next cycle.

Marc R. Benioff: Well, I'd just like to make a couple of comments. You know, I think that number one, it's been pretty magical to use Open AI over the last year, especially in the last release, you know, where I'm really talking to it. And when I think about the incredible engineering effort that Open AI has done, it's pretty awesome. They built a great UI, you know; I love talking to the software. They have really strong algorithms, or what we call models, especially their new one, which is their 4.0. And then, you know, they stole data from lots of companies, like Time, Dow Jones, New York Times, Reddit, now they're all making good, you know, doing agreements with all of us saying we're sorry, and paying for it. And they took that data, they normalized it. They delivered a comprehensive data set that they then trained their model on. And all of us understand that that's what they did, right?

Speaker Change: Well.

Speaker Change: I will just say Oh, I'd like to make a couple of comments on that.

Speaker Change: I think that number one.

Speaker Change: It's been pretty magical to use open AI over the last year, especially in the last release.

Speaker Change: Talking to it and when I think about the incredible engineering effort that open AI has done it's pretty awesome.

Speaker Change: Built a great UI I love talking to the software.

Speaker Change: They have really strong algorithms or what we call models, especially their new one which is therefore zero model.

Speaker Change: And then they stall.

Speaker Change: Data from lots of companies like time, Dow Jones, New York Times read it now they're all making good.

Speaker Change: <unk> agreements with all of US, saying, we're sorry and paying for it and they took that data they normalized it.

Speaker Change: They delivered a comprehensive data set that then they train their model on and all of us understand that thats, what they did right. They have great UI. They have this amazing model and then they have the data and then we've seen a lot of fast followers with the models it.

Marc R. Benioff: They have a great UI, they have this amazing model, and then they have the data. And then we've seen a lot of fast followers with the models. You know, it could be open source models like Llama3. It could be some proprietary models like Gemini from Google and others. Now there are thousands and thousands of these models. And if you look at Hugging Face, you know, everybody's a fast follower.

Speaker Change: It could be open source models like Lama three it could be some proprietary models like Gemini from Google and others now there's thousands and thousands of these models and if you look on hugging face everybody as a fast follower in six months later, everybody is where everybody else was six months ago and the data well a lot of these companies are all thank you may.

Speaker Change: Rip off all this data too and they're all having to pay that price. Okay. That's the consumer world.

Marc R. Benioff: And six months later, everybody is where everybody else was six months ago, and the data, well, a lot of these companies are all thinking they can rip off all this data too. And they're all having to pay that price. Okay, that's the consumer world. The enterprise world's a little different, right? We have great user interfaces, great apps, all kinds of great technology that our users are using, millions and millions of users. Then we have, you know, the same models in many cases, or maybe we've written some of our own models with our engineers. But then the third piece is the data.

Speaker Change: Enterprise World is a little different right, we have great user interfaces, great apps, all kinds of great technology that our users are using the millions and millions of users than we have.

Speaker Change: The same models in many cases or maybe we've written some of our own models with our engineers, but then the third piece is the data and that data is a little bit different because in the enterprise. How do you put together these large fully normalized datasets to deliver this incredible case.

Marc R. Benioff: And that data is a little bit different because in the enterprise, how do you put together this large, fully normalized data to deliver this incredible capability? And that is where the magic is going to be.

Ability.

Marc R. Benioff: Because all companies, including ours, others who want to deploy generative AI internally, it's not just going to be Time magazine that's going to give you the intelligence; it's going to be your customer data and your transaction history and how your company operates in your workflow and your metadata. And that idea that we can deliver another level of productivity for companies using that architecture is absolutely in front of us.

Speaker Change: And that is where the magic is going to be because for.

Speaker Change: All companies, including ours, others, who wanted to deploy generative AI internally, it's not just going to be time magazine, that's going to give you. The intelligence, it's going to be your customer data in your transaction history and how your how your company operates in your workflow and your metadata and that idea that we can deliver another level of productivity for <unk>.

Speaker Change: He is using that architecture is.

Speaker Change: It is absolutely in front of in front of us but that.

Speaker Change: That idea.

Marc R. Benioff: But that idea, that we have to do it, you know, with the right architecture that's in front of us, and I think that while we can say it's a different kind of architecture, it's still the same idea that we need a great UI. We need models, but we're going to need, very highly normalized and federated data. And that data needs to be stored somewhere, and it needs to come from somewhere.

Speaker Change: We have to do it.

Speaker Change: With the right architecture that also is in front of us and.

Speaker Change: I think that while we can say, it's a different kind of architecture. It's still the same idea that we need a great UI.

Speaker Change: Need models, but we're going to need.

Marc R. Benioff: And it's going to, that is going to be something that's going to continue in perpetuity over time, as these models and UIs are quite fungible. And, you know, we'll be using different models and different UIs over the years, but we'll be using the same deep data sources. And I think that is why, when I look at what Salesforce is doing, this is going to be critical for our customers. Now, you may see great new UIs, like Agents, and you may see great new UIs, like you see what we've deployed with Slack. You know, Brian was talking about how he's, you know, changed how he uses Slack with our new Slack AI or what we've done with SFA this quarter, service this quarter, with the incredible new generative capability.

Speaker Change: Very highly normalized and federated data and that data needs to be stored somewhere and it needs to come from somewhere and it's going to that is going to be something that's going to continue in perpetuity overtime. As these models and <unk> are quite fungible, and we will be using different models and different uis over.

Brian: The years, but we'll be using the same deep data sources and I think that is why when I look at what sales force is doing this is going to be critical for our customers. Now you may see great New uis like agents and you may see great New Uis like you see what we've deployed with slack Brian was talking about how it has changed how we use it.

Brian: <unk> with our new slack AI.

Brian: What we've done with SFA this quarter service this quarter with the incredible new generative capabilities.

Marc R. Benioff: But this idea that data, you know, is going to be more important for companies than ever, and when I look at the success we've had with so many of these companies, I mentioned State Farm briefly, you know, we've become their fundamental data architect. That is not where we were with that company even four years ago. Now they look at us as the fundamental framework for their future.

Brian: But this idea that the data.

Brian: <unk> is going to be more important for companies than ever having deeply normalized federated data sources and when I look at the success. We've had with so many of these companies I mentioned state farm briefly.

Brian: We become their fundamental data architecture that is not where we were with that company. Even four years ago now they look at us as the fundamental framework for their future and as they wanted to deploy agents or as they wanted to deploy new user interfaces or achieve more productivity the data that they have in salesforce and their ability.

Marc R. Benioff: And as they want to deploy agents, or as they want to deploy new user interfaces or achieve more productivity, the data that they have in Salesforce and the ability to manage and share it keep that data reliable, available, and scalable. The way that we do updates so we don't bring down our system, you know, do an upgrade or update like a lot of vendors still do, you know, those kinds of capabilities will be more important than ever.

Brian: To manage and share keep that data reliable available and scalable.

Brian: Way that we do updates that we don't bring down our system do an upgrade or update like a lot of vendors still do.

Brian: Those kind of capabilities that will be more important than ever.

Marc R. Benioff: And I think that that is going to be a huge driver for our growth going forward and provide the foundation for this future and what the future of the enterprise is going to look like. And I think it's a little bit different than the consumer model.

Brian: And I think that that is going to.

Brian: To be a huge driver.

Brian: For our growth going forward and provide the foundation for this future.

Brian: And what the future of the enterprise is going to look like and I think it's a little bit different than in the consumer model.

Operator: Thanks, Kesh. Rob, we'll take our last question now, please.

Speaker Change: Thanks, Kash, Rob we'll take our last question now please.

Operator: Your final question comes from the line of Mark Murphy from J.P. Morgan. Your line is open.

Speaker Change: Your final question comes from the line of Mark Murphy from Jpmorgan. Your line is open.

Mark Ronald Murphy: Thank you very much Mark you mentioned that there is a transformation of how we interact with our software that's happening and I am curious if you sense any temporary pause as customers may be trying to digest, the new innovations the new pricing mechanisms.

Mark Ronald Murphy: software that's what's happening. And I'm curious if you sense any temporary pause as customers may be trying to digest the new innovations, the new pricing mechanisms, which include consumption pricing, and that perhaps there's going to be a pause that refreshes down the road as they'll ultimately gain comfort and start to move forward with the Einstein co-pilots and all the other innovations that require a little bit of a different architecture, a different thought process.

Speaker Change: It's consumption pricing and that perhaps is going to be a pause that refreshes.

Down the road as they will ultimately gain comfort and start to move forward with the Einstein co pilots and all the other innovations that require.

Speaker Change: A little bit of a different architecture, but different thought process.

Marc R. Benioff: Well, I think it's a very key question, which is, you know, Salesforce is managing many different kinds of pricing models, obviously, like our data cloud is a consumption product. We've seen, you know, Clear path now to over a billion in revenue with that product that uses consumption pricing. You know, we look at our core SFA product, which is a product doing, I don't know, approximately $8 billion a year, or a service cloud doing approximately $8 billion a year. These are per user prices.

Speaker Change: Well I think it's a very key question, which is <unk>.

Speaker Change: Salesforce is managing many different kinds of pricing models, obviously like our data cloud is a consumption product.

We've seen you know.

Speaker Change: A clear path now to over $1 billion in revenue with that product that uses consumption pricing. When you look at our core SFA product, which is a product doing it I don't know what approximately $8 billion a year or service cloud doing approximately $8 billion. A year. These are per user prices, but when you buy salesforce now and you're buying our products you might be buying them.

Marc R. Benioff: But when you buy Salesforce now and you buy our products, you might be buying a new product that we have called UE Plus. And that's a product that we just introduced a few months ago. Now, why is that exciting? Because UE Plus is a hybrid pricing model that includes per user pricing and consumption pricing.

Speaker Change: New product that we have called <unk>, plus and Thats a product that we just introduced a few months ago. Now why is that exciting because you replaces a hybrid pricing model that includes per user pricing and consumption pricing. It delivers for our customers the ability to deploy all of the architectures that I articulated on the call today, but to do it incredibly competitive.

Marc R. Benioff: It delivers for our customers the ability to deploy all the architectures that I articulated on the call today, but to do it at an incredibly competitive price point. And when we look at the very large customers that are deploying Salesforce standardizing, you know, on our platform to deliver this kind of capability for the future, as we retrain our salespeople to be able to have the narrative that I have on the call today.

Speaker Change: Price point and when we look at the very large customers that are deploying salesforce standardizing on our.

Speaker Change: For them to deliver this kind of capability for the future as we retrain, our salespeople to be able to have the the narrative that I have on the call today.

Marc R. Benioff: You know, this idea that we can deliver, basically, not only the number one AICRM, not only deliver, you know, we see this incredible growth in our pipelines, as I mentioned, not only the kind of next generation, price points, and products like with UE Plus, but we have to deliver it with a level of customer success for our partners and implementations at scale. And also, you know, what the culture that, you know, Salesforce is known for. Those are really the five elements that we are really taking into consideration as we're moving forward.

Speaker Change: This idea that we can deliver basically not only the number one AI CRM not only deliver you know we see these incredible growth in our pipelines as I mentioned not only the kind of the next generation price points and products like with UE, plus but we have to deliver it with a level of customer success for our partners and the.

Speaker Change: <unk> at scale and also with the culture that Salesforce is known for those are really the five elements that we're really taking into consideration as we're moving forward. We think that we have the right mix.

Marc R. Benioff: We think that we have the right mix and, you know, we're spending a lot of time talking to our customers very, very closely. Look at this. Don't think that there aren't a lot of people walking into these companies saying, hey, you can do this, you can do that, you can do these other things. We've seen a lot of that in the last, you know, six to 12 months. And then it turns out that you can't, you know, hey, I can make this happen. I can make that happen. I can pull a rabbit out of the hat and the enterprise for you by doing this, that, and the other thing. And then it doesn't actually happen.

Speaker Change: And we're spending a lot of time.

Speaker Change: <unk> to our customers very very closely look at don't think that there arent a lot of.

Speaker Change: People walking into these companies, saying Hey, you can do this you can do that you can do these other things we've seen a lot of that in the last six months to 12 months and then it turns out that you can't.

Speaker Change: Hey, I can make this happen I can make that happen I can pull a rabbit out of a hat in the enterprise for you by doing this that and the other thing and then it doesn't actually happen and then at what it turns out is you got to do a lot of the hard work to make this AI happen and that starts with building highly normalized large scale Federated high.

Marc R. Benioff: And then what it turns out is you got to do a lot of the hard work to make this AI happen. And that starts with building highly normalized, large scale, federated, you know, highly available data sources. And then building on top of that, the kind of capabilities to deliver it to our customers. I think a common story is, hey, oh yeah, I am a provider of a data lake or a data capability.

Speaker Change: Really available data sources, and then building on top of that the kind of capabilities to deliver it to our customers I think a common story is hey, Oh, yes, I am a provider of.

Marc R. Benioff: And just by going to that, I'm going to be able to provide all your AI. But then it turns out that no one in the enterprise actually uses that product. There is no UI that's commonly accessed.

Speaker Change: A data lake or a data capability and you're just by going to that I am going be able to provide all your AI, but then it turns out that no one in the enterprise actually uses that product. There is no UI that's commonly.

Speaker Change: Access that's why I'm, so excited that Salesforce sales cloud and service cloud and tableau and slack and all of our amazing products that.

Marc R. Benioff: That's why I'm so excited that Salesforce, and Sales Cloud, and Service Cloud, and Tableau, and Slack, and all of our amazing products that have, you know, huge numbers of users that use these products every single day in a trusted, scalable way, and then connecting that to this new capability. That's where the magic is going to happen. By the time we get to Dreamforce, and for those of you who maybe were at our Connections Conference or our last world tour in New York or even Trailhead DX, you know, we haven't heard gasps in the audience when we've demoed the products in a long time, you know, I think maybe ever.

Speaker Change: Huge numbers of users.

Speaker Change: <unk> used these products every single day, and a trusted scalable way and then connecting that in to this new capability, that's where the magic is going to happen by the time, we get to Dream Force.

Speaker Change: And for those of you who maybe were at other connections conference or at our last World Tour in New York or even trailhead Dx.

Speaker Change: We haven't heard gaps in the audience when we demo the product and the law.

Speaker Change: I think maybe ever like some of the new technology is incredible we're able to deliver for our customers.

Marc R. Benioff: Like, some of the new technology is incredible that we're able to deliver for our customers, and I think that it's going to be extremely exciting going forward. And it will be delivered with a variety of new business models and pricing models. But at the end of the day, we're going to have to be, you know, a trusted partner to these customers delivering this AI at scale.

Speaker Change: And I think that it's going to be extremely exciting going forward and it will be delivered with a variety of new business models and pricing models, but at the end of the day, we're going to have to be.

Speaker Change: Trusted partner to these customers delivering this AI at scale.

Operator: Great. We want to thank everyone for joining the call today, and we'll look forward to seeing everyone over the coming weeks.

Speaker Change: Great we want to thank everyone for joining the call today, and we look forward to seeing everyone over the coming weeks.

Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.

Speaker Change: This concludes today's conference call. Thank you for your participation you may now disconnect.

Speaker Change: Thank you.

Speaker Change: Yeah.

Speaker Change: Thank you.

Okay.