Title

Presentation

Salesforce, Inc. beats earnings expectations. Reported EPS is $2.58, expectations were $2.55.

Operator: Ladies and gentlemen, this is the operator. Today’s conference is scheduled to begin momentarily. Until that time, your lines again will be placed on a music hold. Thank you for your patience. Welcome to Salesforce First Quarter Fiscal 2026 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 would like to ask a question, please press star one. Also, this call is being recorded. And 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.

Mike Spencer: Thank you. Good afternoon. Thanks for joining us today on our fiscal 2026 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, Chair and CEO, and Robin Washington, Chief Operating and Finance Officer. In addition, we also have Srini Talabergata, President, Chief Engineering and Customer Success Officer, and Miguel Milano, President and Chief Revenue Officer, joining us for the Q&A portion of the call. 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 or outcomes could differ materially from these forward-looking statements.

A description of these risks, uncertainties, assumptions, and other factors that could affect our financial results and outcomes 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. As a reminder, our commentary today will include non-GAAP measures. Reconciliations between our GAAP and non-GAAP results and guidance can be found in our earnings materials and press release. And with that, let me hand the call to Marc.

Marc Benioff: Alright. Hey. Thanks so much, Mike. Really appreciate everything you’re doing and before I get into all these exciting highlights from the quarter, there’s so much to talk about. I just want to say a few words about Informatica. And I’m sure everybody knows I love Informatica. I’ve been working with this company since probably 2006. So we have a bossy, a former CEO last night, sent me a photo of me and him together at their user conference. I’m so excited that we have signed this definitive agreement to acquire them for $8 billion, which upon close is going to unite our number one AI CRM and, of course, their number one AI MDM, and ETL. And bringing these things together, well, I couldn’t be more excited about this acquisition.

I know that many people on the call know Informatica so well like I do. You may not know everything that’s happened with Informatica. I’ve followed it very closely. The way they’ve rewritten their product into the cloud, their incredible engineering leadership, especially some of their incredible new engineering data engineering centers and what they’ve built is just awesome. And I’ll tell you that there’s just few technology companies I’ve just been more impressed with. In fact, we’re a customer, we’re a partner, we’re an investor in Informatica. We really love the company. We love the people. We’ve loved the leadership, and I have to say we probably spent the last twenty years discussing how to bring the companies together. We spent a lot of time not only with their new CEO, but, Mitt, who’s fantastic, but with their engineering teams.

And, Ivan, sent our group over to India to see what they were doing there. And it all led really to this incredible moment. So it’s an awesome acquisition for us. It’s a transformational step. It’s a great price for the company. This transaction and Robin will get into this you know, because we’ve been very focused on staying you know, really in our, you know, acquisition framework. We spend a lot of time thinking out what is it gonna take to buy a company of scale, How much are we really willing to spend? Are we willing to walk away? Like, we did a year ago? When numbers are not right? We just want to be as disciplined as possible. And look, at the end of the day, I know that all of you already know this, but this is a great price for a great company.

It’s got great multiples. It’s accretive. It’s nondilutive. It’s coming together in an incredible way. And this is a moment where Informatica is more important to our customers than ever before because of what’s happened with AI. And I think everyone who is going through an AI transformation, every business including mine, know, we’re gonna talk about some great businesses that are going through transformations, whether it’s Pepsi or Plabela or OpenTable, etcetera. But every AI transformation is a data transformation. And you don’t see it on the consumer side because when you’re using a consumer AI, you have to remember that the dataset has kind of been prefabricated for you. That is the training data, and everything is put together. You know, that’s an amalgamated dataset applied to this enterprise AI really works.

You have to have your enterprise data together to get the result that you want. And when you look at these very high functioning agents, and we’ll talk about, you know, one that we have. We have so so I mean, we’ve done now eight seven or eight thousand agent force deals. I think we’ve got four thousand paid. Agentforce customers is a hundred million dollars, and AgentForce ARR a billion dollars in more than data cloud and agent force ARR. But when you look at these companies that are doing it right, they have got their data together. And that is what is really the key this ability to unify or harmonize or activate all the data across the entire enterprise. And if you can imagine, you that this idea that you wanna deploy all of this incredible, you know, agentic data, well, you’ve gotta get your data right in Informatica combined with Salesforce data cloud, combined with Tableau, combined with other key assets that we’re gonna bring to bear.

This is what is creating this incredible data business. And, I mean, you know, we have big goals for what how the big size and scale that that data business can get to. Robin will go through that in detail. And we will really work hard to advance this mission of Informatica to make sure that our customers’ data is incredible. So, anyway, let me turn it over to Robin to give perspective on Informatica, and then we’ll get into the quarter.

Robin Washington: Thanks, Marc. We’re incredibly excited to welcome Informatica to Salesforce upon closing. Our responsible M&A framework that Marc just spoke to is a key pillar of our capital allocation strategy. And it’s focused on three areas, customer success and strategic fit, acceleration, and value. Our acquisition strategy is methodical, it’s patient, and it’s decisive. Targeting transformative assets like Informatica when the calculus aligns to maximize customer success. You already heard from Marc on why this will be a critical complementary asset for accelerating our growth strategy and data and AI and apps. I’m gonna focus on value, our third billion. Pillar. We expect to achieve accretion on non-GAAP operating margin, non-GAAP EPS, and free cash flow by year two post-close.

We are laser-focused on speed of integration. By leveraging our focus on operational excellence and our M&A integration playbook, our goal is to achieve accretion as quickly as possible. Which is a significant evolution in our M&A strategy and in line with recent acquisitions. And in line with our M&A framework, we prioritize non-dilutive forms of consideration. As a result of our durable free cash flow generation and strong balance sheet, this deal will be financed through a combination of cash and new debt. Resulting in no share dilution. This transaction is not expected to disrupt our capital return strategy, inclusive of our share repurchase program and our dividend. Finally, we expect to close by early fiscal year 2027. We view this acquisition as a key enabler for Salesforce’s next phase of AI-driven growth.

And believe it will amplify our market differentiation deliver sustained benefits for all Salesforce stakeholders. Now back to you, Marc.

Marc Benioff: Alright. Right on. Well, Robin, thank you so much, and you are doing a fantastic job as our new cohost. So so great that you’re here. And I’m looking forward to you all having the chance to interact with Robin on the call. And look at overall, let’s just talk about this. We are just extremely excited to welcome Informatica, and I can’t wait to close the deal. And you know, I think that this is gonna be an absolutely incredible opportunity. So look, quarter. We delivered $9.83 billion in Q1 revenue. That was up 8% year over year. Subscription and support, 9% in constant currency. We saw very strong growth in our small and medium market business. It really surprised us. Both of them achieved really strong double-digit new bookings growth.

We continue to deliver on these margin goals that we have. We delivered 32.3% non-GAAP margin in the quarter. And we delivered $6.5 billion in operating cash flow. We have $60.9 billion in RPO, up 13% year over year. And we had exceptional performance with CRPO growing 11% year over year in constant currency. And we’re raising our fiscal year 2026 guidance by $400 million to $41.3 billion at the high end of the range. I mean, sometimes, you have a quarter when everything is going right for you. That means know, revenue’s going right, bookings is going right, you know, you’re kicking off the quarter. You know, Q1 is always a high-risk quarter, but even currency is moving in the right direction. This was just a great quarter, and that is why we’re able to deliver this incredible raise.

So few enterprise software companies probably have ever delivered these kinds of numbers. It’s kind of a even a a shock to me that we’re delivering this $41.3 billion and in guidance, and we are now just very well positioned to take advantage of this multitrillion-dollar opportunity in AI and enterprise software and digital labor. And now in just two quarters, we are also just since we launched AgentForce, if you think about that, we now have more than four thousand paid deals, as I mentioned, more than eight thousand in total across every industry. We’ve got eight hundred customers already in production with AgentForce. Including amazing companies like ENGIE, and that has been a success. Incredible. Success story. And with incredible velocity and conversations and OpenTable, Thin Air, Grupo Global, Falabella.

We’ve talked about so many of these. We’re gonna talk about so many more. And we have launched hundreds of prebuilt AgentForce templates for different industries, roles, tasks, making it faster and easier for customers to deploy AgentForce. We’re learning a lot about how to make agents successful, productive, how to scale, how to tune our own organization, and really get our customers all ready for this AI transformation in the enterprise led by agents. Now earlier this month, we introduced our flex credits. It’s a new consumption-based pricing model that’s a how we’ve tuned our pricing after a huge amount of customer feedback. And next month, we’re gonna add FedRAMP high authorization for AgentForce of the US public sector. Can also experience this incredible success.

So no one else is delivering what we think digital labor is at this scale. Now, of course, AgentForce does agentic augmentation for employees. AgentForce is also, you know, doing it directly to consumers. I think that we are really delivering at this point probably more agents and more conversations and more capability to more enterprises than any other vendor in the world. I really see us as the number one agent platform already, and it’s only been a few months. In fact, AgentForce reached more than a hundred million in AOV. It’s much faster than any product in our history. And we’re not even fully deployed on all geographies, currencies, or languages. And to that point, I was in Japan last week, and they are you know, they can’t wait to get AgentForce, you know, running in Japanese, which we’re about to deliver to them.

So the success of AgentForce is building on the strong growth we’ve seen in our data cloud. Data readiness, as I mentioned, with Informatica is critical for every company. And in this quarter, our data cloud just our data cloud, surpassed twenty-two trillion records up 175% year over year, nearly 60% of our top 100 deals included investments in both data cloud and AI, and we are still working really to be able to kinda communicate with every single one of our customers on the importance of data cloud, and yet data cloud just remains this incredibly fast-moving product. Fifty percent of Data Cloud’s Q1 new bookings came from existing customers. I think that’s really important because it really speaks to the adoption of the product and the incredible usage by the customers who have it.

And even though AgentForce is only in its second quarter, 30% of its bookings also came from customers increasing their consumption. Another key point of these two products. Now these are early days, but this flywheel, you know, AI agent flywheel, it’s working. Data cloud and AI ARR grew more than 120% year over year. And it’s more than a billion-dollar part of our business. That is amazing. The pace of innovation’s been incredible. I’ve just never seen our company, really any company, move this fast with a new technology. We’ve also witnessed how we’ve pivoted the entire company around our vision for AI. That is the idea that we have, you know, these incredible apps. Every single one of these apps being rebuilt you know, for this incredible AI revolution.

The data cloud itself and not to mention, of course, you know, when you start to look at it, you’ve got the agendaic layer, and don’t forget about our metadata platform. I’m gonna get into that in a second, but I just think, you know, it all played out just last week when he once looked at the New York World Tour.

Robin Washington: I know many of you were there, and you could really feel the energy. Ten thousand customers, everyone looking at technology that just a year ago did not exist. And now they are on the very cusp of the of of of a huge transformation for their enterprises. Now when I talk about agents and data and apps and metadata, that’s what we really call our Adam framework. It’s in our experience to see now these four elements the app, the data, the agents, and the metadata, that make Salesforce unique. If companies need to achieve the real promise of AgenTek AI, And you could really see that also play out when we got to our Tableau conference this quarter. If you were in San Diego, you saw Tableau next. And what you saw was the Datapam.

That’s the the Tableau community kind of fully inspired because not only were they looking at Tableau next, you know, this incredible new product, But what they saw was Tableau, the Tableau they love, and they also saw an AgenTek layer, and they saw deeply integrated into our data cloud. And all running on our metadata platform. That’s our Adam framework. The agents the data, the apps, the metadata, altogether Tableau Next is a great example of where we’re going with all of our technology in our company, and customers are so excited. Slack is really another example. Slack is, of course, where I believe you’re gonna really begin and end every agent force conversation. It’s the conversational interface for managing all of your work across app systems, teams, and Service Cloud, Sales Cloud, Tableau, Next, any Salesforce app, can live inside Slack.

It’s a very fluid and natural user experience. I know a lot of you are on Slack. And with Agentforce in Slack, every employee has a digital teammate that can make notes for your meeting, summarize your Slack channels, And you really see, like, AI taking place on Slack you look at Slack recap or you look at agents just coming right into your channels to talk to you in real time. And you can imagine how all of these new kinds of apps that are appearing in the marketplace where AI and agents are all happening you know, this is this incredible agent user interface. With Slack. So in this new Agentic AI era, every company is gonna say that they have agents. Well, I think every company does say that they have agents. But without these four parts, of what we call ADAM, the the really, the agents, the data, the apps, the metadata framework, you’re just not really able to deliver this complete experience for the enterprise, including delivering digital labor.

That’s why so many customers are achieving success now with AgentForce and so many of our new offerings that are using this incredible combination. Let’s talk about some customers Thin Air is using AgentForce to help manage customer service for twelve million passengers. AgentForce Force is already having thousands of conversations a week with FinAir customers, and the airline is aiming to automate 80% of customer service queries and reduce new rep onboarding time by 25% with agent force. It’s been an incredible success story, and that’s not the only airline. I think you remember we’ve talked about Singapore Air, talking to so many airlines about how they not only can use all our Customer 360 apps, not just the data cloud, not just our meta platform, but build this agendaic capability around the airline, this is gonna be a huge opportunity for that entire industry, which is so customer service obsessed.

Now I have to tell you about this great company, Falabella, And for those of you who have ever been to Falabella, you already know, I guess, the analog would be you know, I’m speaking, you know, from San Francisco. So I’ll just say, it’s kind of the Nordstrom’s of Latin America in some way. This is a Latin American retail conglomerate. It’s a great example. Of why AgentForce is winning. Here’s this company that’s pioneering AgentForce just a couple of months ago. In their Columbia business. And then it’s so successful. They’re actually which we hadn’t really seen before. And they’re using WhatsApp. The customers are coming in. They’re coming in and, hey. What’s my order? What’s going on? And this what’s my order use case is the main thing that’s driving Palabella and boom.

All of a sudden, they go, you know what? This is working so well. We’re going all over Latin America. And what was kind of, I think, a low six figure deal I mean, Miguel is gonna come in here and tell me, turned into, like, a million dollar deal. Overnight. What? Hundred in December. Was three hundred, right, for just Columbia. It become a million now. Now it’s a million. So that’s a great example. And you know, we will look at another one, OpenTable. We’ve been talking about this story for a while, which is Glenn is doing a great job deploying agent force and you know, he started with the restaurants, then he did employees, And now he’s, like, doing the consumers and this is an incredible thing that OpenTable has been so successful. And I’m so proud of Gwen.

And now we see Ramon doing the same thing at PepsiCo where he’s trying to bring together you know, the beverage business and the snack business. He’s kinda building a one PepsiCo vision. With the data cloud. I think he uses eleven eleven clouds. Right, Miguel? Was that right? Olafin. Every single one. And then delivering a whole hygienic layer around Pepco Co is so incredible. And another Latin American Latin American success is Grupo Global. The Brazilian media conglomerate purchased AgentForce in Q4. In less than three months, AgentForce basically boosted global retention rate by 22% driving revenue upgrades, cross selling, converting non subscribers, It’s very cool. And I guess one of the surprise stories is Angie who’s a long time Salesforce customer, known so many of the CEOs, amazing company, doing all kinds of great things in the energy marketplace, you know, driven out of Europe, And now they’re assisting 83% of their users with agent force.

I think it’s you know, the the number of conversations are happening are some of the highest that we’ve seen It’s really cool. So and I’ve got other stories. You know, we you’ve heard me talk already about one eight hundred account and Smartsheet and so many other customers. This is just the beginning. Of what’s going on with a AI, AgentForce, Data Cloud, or metadata framework. We can go into it in Q&A if you want. And now I’ll turn it over to Robin.

Robin Washington: Thank you, Marc. I’ve been in the coastal role for a little over fifty days now. And I’ve spent that time deeply listening to our shareholders, employees, and customers. And what I’ve heard has been instrumental in shaping my top priorities for the year ahead. Which are delivering customer success and accelerating AI adoption to drive growth driving operational excellence to maximize shareholder value, and responsible capital allocation. We’re already making progress against these priorities. First, let me share a few details on how we’re delivering customer success and accelerating AI adoption to drive growth. Our core clouds continue to be a cornerstone of our product portfolio, with sales cloud, service cloud, and platform in nine of our top ten wins.

More than half of our top ten deals included six or more clouds. With sales and service cloud in nearly 80% of those deals. As customers adopt more clouds, they unlock the full power of our deeply unified platform. With data cloud and agent force built into every one of our application. This drives the flywheel of success as well as lower attrition as customers realize the benefits of our platform. It’s early days, but the flywheel is already turning. 30% of Q1 agent force new bookings came through expansion deals from existing agent force customers. And as Marc just shared, our customers continue to invest heavily in data cloud to prepare for their agendaic future. In Q1, we closed more than thirty net new annual bookings over one million dollars that include both data and AI.

Tableau was included in more than 70% of our deals over one million, and MuleSoft in nearly half of those deals. This underscores how important data is to our customers like Fox, Deloitte, and Boeing. Our ecosystem plays a critical role in driving customer success, and growth. Our partners were included in seven of our top ten deals of the quarter, Today, Salesforce is the fastest growing ISV on AWS Marketplace. Which has driven hundreds of transactions for us since launch. Including two of our top five deals this quarter. Finally, our industry specific solutions continue to deliver significant values to customers like the US Air Force and University of Chicago Medicine. Nearly half of our top one hundred deals included an industry cloud. Our life sciences cloud had a strong quarter We’ve seen incredible momentum with more than forty global customers, including Pfizer and Takeda, which was a Q1 win for us.

Takeda will use the life sciences cloud with AgentForce and Data Cloud to unify its data and deploy agents across medical, commercial, and patient care operations. And we are continuing the momentum We unveiled a brand new next gen mobile application for life sciences cloud for field reps just last week. As customers adopt more agents, upgrade to premium additions, and leverage our industry solutions, we see greater expansion and stronger customer retention. With data and I and AI, that value is accelerating. Driving even more impactful customer outcomes. As you all just heard, we are innovating faster than ever. And this is a core part of how we will drive operational excellence excellence to maximize shareholder value. And we’re positioned better to leverage our own innovation to drive efficiency and profitability.

Similar to what our products bring to our customers. Let me give you two great examples. Our sales agent in Slack is trans how our teams sell. Our AEs have already logged over twenty one thousand interactions, simplifying everyday sales activity, saving our teams over forty four thousand hours annually. Further, data cloud is amplifying that impact cutting lead routing from twenty minutes to nineteen seconds in Slack. In customer support, Agentforce has handled seven hundred and fifty thousand cases and is on track to surpass one million help portal requests this quarter. Cutting case volume by seven percent. Year over year. As a result, we have reduced some of our hiring needs enabling us to rebalance and redeploy five hundred customer support employees to higher impact data plus AI roles by year end.

Driving fifty million in savings. Showing what’s working for us helps our customers envision their future. And I’m excited to keep scaling these efforts internally. That is the power of Salesforce on Salesforce. Utilizing our own own unified platform, infused with data plus AI across our enterprise will drive sustained efficiencies and leverage across our p and l. And we are just getting started. Now you’ve all seen the numbers, but let me provide a little more context on the quarter. For the first quarter, revenue was $9.83 billion up 8% year over year in nominal and constant currency. Subscription and support revenues grew 9% in constant currency. As a reminder, this incorporates a one point headwind from the leap year last February. Again, this quarter, pricing and packaging continued to be a key lever for us, most notably in sales and service.

Q1 revenue attrition ended the quarter at slightly above 8%. In line with recent trends. As we continue to focus on customer success, we are incentivizing on a new metric with our field reps. Net new ALV. Which measures new and renewal performance together. This provides a clear view on overall business expansion and enables our teams to focus on overall health of the customer. Our business benefits from a balanced portfolio of products, and customers across geographies, segments, and industries. From a geographic perspective, we saw strong new business growth in the UK, France, Canada, and Asia Pacific, particularly South Asia. While some pockets in EMEA remain constrained. From a segment perspective, as you heard from Marc, we saw strong performance in our small and mid market business this quarter.

And from an industry perspective, in Q1, comms and media and health and life sciences performed well, while retail and consumer goods and public sector were more measured. On operating expenses, we continue to focus our in sales and marketing, and r and d to drive data and AI innovation helping fuel Customer 360 and future top line leverage. Turning to our balance sheet and cash flows. Remaining performance obligation ended Q1 at $60.9 billion up 13% year over year. Current remaining performance obligation or CRPO ended Q1 at $29.6 billion up 12% year on year in nominal and 11% in constant currency. Which is better than expected driven by strong renewal performance. Q1 operating cash flow was a healthy $6.5 billion up 4% year over year. And as we focus on responsible capital allocation, we are continuing to invest where it matters most, to our business and customers while maintaining a clear focus on efficiency and profitable growth to maximize shareholder value.

On capital return, in Q1, we increased our dividend payout by 4% and returned more than $3 billion in the form of share repurchases and dividends. This brings our total cash return since the inception of our capital return program to more than $24 billion. Finally, let’s cover guidance. We are pleased to raise fiscal year 2026 revenue guidance to $41 billion to $41.3 billion an increase of $400 million on the high end driven by foreign exchange tailwinds. This results in growth of approximately 8% to 9% year over year in nominal and 8% in constant currency. On foreign exchange, we now expect a $250 million tailwind, up $400 million since our last print. We are reiterating our subscription and support revenue growth of approximately 9% year over year in constant currency.

Driven by the momentum in data cloud and some contribution from AgentForce this year. This is partially offset by weakness in marketing and commerce and slower growth in our expiration base. Our guidance reflects a consistent demand environment. And assumes those trends continue. Of course, if the environment changes, our results may be impacted. As we continue to drive operational excellence we are pleased to reiterate our non-GAAP operating margins of 34% and GAAP of 21.6% for the year. Building on the continuous improvement from the last few years. Our annual guidance on operating cash flow growth of 10% to 11% and free cash flow growth of 9% to 10% remains unchanged. Turning to Q2 guidance. Revenue is expected to be $10.1 billion to $10.2 billion up 8% to 9% year over year in nominal and 7% to 8% in constant currency.

CRPR growth for Q2 is expected to be 10% year over year in nominal including a $300 million FX tailwind. Resulting in 9% constant currency growth. As a reminder, while we have we have seen more normalized bookings growth recently, CRPO will continue to be materially impacted by the cumulative effect of the measured sales performance that started in Q2 fiscal year 2023 and our slower expiration base. In closing, we’re starting FY 2026 strong. With a trusted deeply unified platform, the most technical leadership team in our history and a solid foundation to accelerate efficiency and growth. We truly have a once in a lifetime opportunity to lead our customers in this digital labor revolution with data cloud, agent force, and our customer 360 apps.

All deeply unified within our metadata platform. And lastly, a huge thank you to our employees, our customers, our partners, and our shareholders for the warm welcome. It’s an exciting time to be in this new role at Salesforce. With that, Mike, let’s open up the call for questions.

Mike Spencer: Great. Thanks, Robin. Christa, we’ll take the first question now, please.

Operator: Your first question comes from Keith Weiss with Morgan Stanley. Please go ahead.

Keith Weiss: Excellent. Thank you guys for taking the question, and congratulations on great start to the fiscal year. Guess this is a question for all of you guys. The excitement around agent force and data cloud is palpable and how you guys speak about it. And we hear a lot about it when we talk to customers and when we talk to channel partners as well. I think that what a lot of investors are wondering is transmission mechanism of when does this become a bigger driver for the overall growth rate that Salesforce Ten percent is good, but we’d like to see acceleration against that. We’d like to see you guys getting back to more of, like, a growth footing Can you talk to us about some of the puts and takes of that? I am I’m sure there’s some timing issues involved. Robin, you talked about a week expiry date. But when can we really see the trajectory of Salesforce start to take up from here?

Marc Benioff: Well, I really excited about that question because, obviously, we wanna have growth. We also wanna have good solid balanced execution as well. And this is, I think, a big commitment of the company that we are gonna, first and foremost, we’re gonna maintain our margin framework. We’re gonna maintain our cash flow framework. You heard about the very disciplined approach to M&A. And so before I go into my pitch on growth, I really wanna make sure that everybody heard what I just said that I’m committed to all of those things but I’m also deeply committed to growth. And growth is really where we’re at right now, and you can see why growth is so important because we are in a moment in time where every company is coming to us saying, how do I go forward and how do I deliver this incredible agendaic revolution?

Now what that means for us is a number of things. That we all have to put into place. One thing is we need to you know, now that we kinda have our I would say, kind of the margin transformation behind us, the cash flow transformation behind us, the buyback transformation behind us, the dividend. Transformation behind us. And also, I would say we have the acquisition transformation behind us because we saw the acquisition yesterday and also the acquisition last year of OWN. But now there’s one more huge transformation that is really underway, and it’s really driven by this Agentic AI moment. And that is the growth transformation. And our approach to that is gonna be really focused, first and foremost, is on distribution. And Miguel Milano is here as the chief revenue officer who works directly for me.

We also have a the table Srini, our chief engineering officer. And Sebastian, our chief legal officer, and, of course, Robin. And all of us together are deeply committed to continuing the incredible success of the company. Now how would we even accelerate growth at this level? Well, the way we would do it is we’ve really identified that there’s a lot of growth happening already in the company. One of the big areas of growth that’s already happening is in small and medium business. Another area that happened the first quarter is in the mid market. And we even saw a lot of signs for incredible growth in a lot of our And like Japan and others. And in our core technologies, like we mentioned, with data cloud and AI. When we start to put all of these pieces together, that’s where we also decided to now hire you know, another one to two thousand more salespeople.

Because there are a lot of parts of our business that need investment to grow. And we are doing that as well. But I wanna get back still gonna maintain that margin framework. So while we’re making these huge investments, while we are scaling distribution again, we’re doing all these things that have been kind of on pause, I would say, for the last I three years for a lot of good reasons. Now we’re really saying, okay. We can actually do some things in these key areas that are growing. We can supercharge them. And, Miguel, do you wanna just speak to some of the growth initiatives that you have underway and some of the things that you’re especially excited about? Not only performance in the quarter, but how you see over the next one to two years from a growth opportunity for the company, and how we’re gonna rapidly move from where we are this year know, at forty one and and into these higher higher revenue levels, hopefully, in the fifties and sixties, but while maintaining the margin and cash flow disciplines that we have now picked up as a core competency.

Absolutely, Marc. Keith, thank you for the question. Good question. Obviously, growth is our obsession. I I shared the very positive sentiment that both Marc and Robin already share in this call. I don’t think we’ve been we’ve ever been in a better position in this business. I can tell you, you know, there’s some qualitative comments that we made about Adam, our framework, our deeply unified platform, that flywheel is incredible. It’s starting to happen. It’s great to be in two markets that are seminal The data activation market and also the agentic market, everything is coming together and it’s reinforcing the power of our applications By the way, we’re bringing this to public sector very soon. But I think I’m also excited about some hard facts in go to market.

That are non disputable. The expanded a a capacity that Marc referred to Today, we have thirteen thousand eight’s By the way, we’ve not only have the record number of a’s in the history of the company, this is fourteen percent growth year on year today. At the end of the quarter, it’s gonna be nineteen percent growth. At the end of the year, it’s gonna be twenty two percent growth. But also, we’ve been extremely diligent over the last two years to put this capacity in the areas of higher productivity and higher growth. We also have very strong pipeline, open pipeline, and also great pipe gen momentum and velocity, all in the double digit growth. Also, as Marc referred earlier in his comment, we have an incredibly well oiled run rate machine.

I mean, run rate is nearly sixty percent of our business. And the small and medium businesses approaching fifty percent, and that is humming. It’s growing in the mid high teens. Of course, we are well known for how we are able to structure and create big deals, and that motion is strengthening. Pricing and packaging is also helping, Marc, a lot. It’s making our customers we’re making it much easier for our customers to simplify the relationship with us and to and to own our fully unified platform. Also increasing ASP per seat. Overall, I couldn’t be more excited. I joined the company, as you know, two thousand and eleven, and the momentum is incredible. AWS Marketplace, just to mention the last thing, is incredible. The partnership with AWS, we transacted two billion dollars of business through them, hundreds of transactions, and it’s tripling year on year right now.

I’ve never felt as strong as as I feel now in the future of the company. Because, you know, I I I really wanna get into this to one more level because, you know, obviously, I’m completely in sympathy with this. But number one is obviously, you came in the company in two thousand eleven. We had asked you and been recruiting you for many years. You’re at Oracle. Know, running a huge part of their business. And then before that, you’re at McKinsey as well. You know, then you unfortunately left Salesforce, so they four years ago or five years ago to become the chief revenue officer of another company. We won’t go into that, but then we patiently recruited you back, and we got you back, what is two years ago now. Yes. And now you’ve been here for two years.

You’re now working directly for me as the CRO. Our fifteen core distribution unit leaders all are reporting directly to you. You know, what was your biggest surprise in Q1? What was it when you look back? You obviously had a great quarter. What was it the Q1 where you went, wow. That was a huge I should be investing more here, here, here, here, here, and here because these are these are growth levers I really didn’t realize we even had. I mean, obviously, it’s a leading question. You know the answer, Marc. I I have to say, I was shocked to see the momentum that we were enjoying in the line of the market, small, medium, and mid market. In fact, we that made us really rethink the exercise of capacity allocation and we realized that we had allocated enough growth in some of the areas, but not across the fifty no use.

So even within Q2, we are reallocating capacity to to the low end of the market. And the other thing that became very important, and this goes back to Keith’s question is, I mean, it’s great to be owning two segments the data cloud and the data activation business and the agentic business that is growing triple digit, But what if we could grow even faster? I think the participation across my organization needs to be improved. I mean, we won I told my whole organization thirteen thousand is you need to sell data cloud deal Q2, you need to sell an agent for a deal in Q2. I think know, if we can grow that instead of triple digit, high triple digit, that would accelerate the growth of the company. You know, when you really look at kind of distribution capacity expansion, you know, year over year, by the time we get to this end of this fiscal year, what’s your dream in terms of what our total capability is the percentage growth that you’ll have seen?

So we are aiming at twenty two percent overall capacity growth. We’re gonna be growing more on the low end of the market. The the small medium business and the mid market. But that’s an incredibly healthy growth. We’re gonna we’d never I mean, in the last two years, we’ve been flat most of the time. And now to be able to come into H2, with a a fourteen percent growth. These market segments, it’s also distribution capacity expansion. And one more question I have for you, What are some of these geographic regions that are just blowing your mind in terms of their, you know, insatiability for our products and capabilities. I mean, as as Robin referred to, we we can we are lucky because we run a highly diversified portfolio businesses across across industries, but also across geographies.

We saw strong momentum in in Canada, the whole South Asia, is on fire. All APAC is is on fire. And even Europe, there are great pockets of growth. France and UK out delivered, in the quarter. And, of course, there are there are other places that where we see, more measured performance. But overall, we see demand across every geo. I get asked many many times. Okay. Do you see a different geo behavior? And the truth is, every geographic, every geography, every account, every segment every industry they need two things. They need to activate their data and they need an identical ledger top of their applications. I think Data Cloud and again, for us, are so powerful that now many companies are wondering why would I deploy any touchpoint, any customer’s touchpoint on an app that is not a Salesforce app?

Doesn’t make sense. Great. Thank you so much. Thanks, Keith.

Mike Spencer: Operator, we’ll take the next question now, please.

Operator: Your next question comes from the line of Brent Thill with Jefferies. Please go ahead.

Brent Thill: Thanks. Robin, just on the growth rate, I’m just curious given some of the macro and tariff uncertainty. Have you seen any uncertainty in your customer behavior Clearly, putting up a good double digit RPO backlog was was good to see. But what what are your thoughts on what you’re seeing in in your pipeline?

Robin Washington: Yeah. Bren, I’ll reiterate what Miguel said. We do have this overall balanced portfolio. You know, so we were able to think about that relative to our guidance and the puts and takes. Knowing what we know today. It’s been helpful to us. We also have the strong momentum as you’ve heard us talk about with data and AI. So, you know, we have a modest contribution from Agentforce, but we see that to be to be a continued needle mover. We’ve been factored in the headwinds, but overall, that plus the change gives us a lot of confidence in where we stand today. You also heard Miguel talk about the AE capacity that will ramp and be available for second half. So we feel really good. We’re excited about our products. We’re excited about our capacity. And as you heard us talk about our options to grow, are in line with what we believe is ability to deliver on our guidance. Thanks, Brent.

Operator: Your next question comes from the line of Raimo Lenschow with Barq Please go ahead.

Raimo Lenschow: Perfect. The main highlight for me, if I look through the numbers, this quarter, was the strength in platform. And, Marc, you talked about Tableau Can you talk a little bit about how that combined portfolio of Tableau MuleSoft, Informatica is kind of going to change the game for you around agent and and the whole company. Thank you.

Marc Benioff: Well, I think you’re really onto something because you know and I’m gonna ask Srini to come in here also. You know, I think that number one, if you were at the Tableau conference, you really saw the incredible now Tableau But one of the things about that’s powerful about the Tableau, not as it have the agentic layer, not only is it integrated now, deeply integrated into our data cloud, but deeply integrated on our metadata platform. And it runs on Hyperforce. And I’ll tell you, that if you’re using Slack now, you’ll see Tableau’s appearing within that. If you’re using our core app applications, Tableau is now appearing within that. And, Tableau is now part and parcel with our core functionality and kind of the core components of every other part of Salesforce.

So I’m super excited about that. We also went through a pretty big transformation on distribution with Tableau where our Tableau sales leaders who were basically what we call prime account executives, that they’re kind of independent on the side, running as their own kind of you know, sales organization. They’re now deeply integrated into our distribution organization where all of our salespeople are now selling Tableau as a core part of our product line and those distribution leaders are now supporting them in what we call a kind of a co prime position. But I’ll tell you that this idea that Tableau and the new Tableau are really all of our products built on this Adam framework is really being led by Srini. As our chief engineering officer, Srini also runs customer support.

He also runs professional services. And Srini also runs South Asia, which includes everywhere from Singapore, including Thailand, Malaysia, and all the South Asian countries, and all of India as well, including in our Indian engineering operations. So, Srini, would you like to come in and kind of fill that in?

Srini Talabergata: Yes. Thank you, Marc. So I think the I would still frame the bigger point as you know, agent force is everybody wants to do agents. This is a new thing. Every customer talks starts and ends with talking about agent force, and that’s a digital labor platform for the enterprise. And it’s built on this deeply unified enterprise scale trusted open and metadata platform. But all agent forces tied to the data strategy. If you really think of data strategy, you know, this is what you data cloud is very important. It unifies and activates data with zero copy. MuleSoft is very important. Know, it connects all your apps and systems to manage those APIs because that’s what the agents need. And then Tableau turns all those insights based on this Adam framework into action, and that’s where the energy is.

And, of course, Informatica will now accelerate will help us accelerate and expand our data strategy. So this this enterprise grade data platform with MuleSoft, Data Cloud, Tableau, and in the future with Informatica gives enterprises a really trusted data platform which is what is required to really make the promise of agents true because that’s what people want a trusted agent which is scaling, which they can trust, which is really delivers the value, And and the work we have been doing for the last three and a half, four years right, from the database layer right, from Hyperforce, then we got all the data layer, rewriting everything in the Adam framework, is what people are now seeing it And and as Marc referred, when we did the Tableau conference, the data science was really thrilled because now they see not just themselves as just visualizing new and providing insights, but also as agent blazes.

They see this future where they can be part of building agents and bring it all together. So that’s where, how this is all coming together. Great. Thanks, Ronald. Crystal, we’ll take the next question, please.

Operator: Your next question comes from the line of Brad Sills with Bank of America. Please go ahead.

Brad Sills: Oh, great. Thank you so much. You We certainly are hearing the same success that that you’re describing in in the agent force cycle amongst channel partners. Marc, I wanted to ask you a question around some of the indicators that you’re paying attention to that give you the comfort that that this cycle is going to be material for the company? Is it simply these data cloud deals that you’re seeing momentum there as customers load the data there? Some of these pilot deals you referred to, what are some of the leading indicators that you’re looking to that suggest that this is a this is a big cycle coming? Thank you.

Marc Benioff: Well, it’s a great question, and I think we have to just kinda get right back to the beginning, which is you can kinda look at these earnings calls and, like, a year ago, we weren’t really to even I don’t think the word agent was even on our earnings call a year ago. Maybe it wasn’t even on our earnings call nine months ago. But it started to appear. And, you know, when we we released the product end of October, it’s November, December, January, February, March, April. Here we are in May. So just think about in a relatively short period of time, I’ve never seen in my career over forty-five years in enterprise software this idea that we now have eight thousand customers, four thousand of whom are paying many of them who have then scaled deployments where this is working in months.

It just makes no sense actually to me. You know, obviously, you know, most of these products and these technologies like data cloud or look at any of our core apps or Hyperforce or all the things that Srini has built, you know, that Miguel has sold, you know, what the company has put together these things take years, not months, not days, night weeks. So we’re moving very, very fast. I think one of the most important things, and I think Miguel can really speak to this and I’ll have him do that at the end of this, is that when we sell an agent force, we’re not just sell dropping some box off and say, okay. We sold an AgentForce. We’re pulling you know, all of our clouds in. And I’m sure that you know, heard, like, for example, in the example I think of Pepsi.

Have eleven of our clouds. So, you know, when we’re pulling in agent force, we’re all the other products are coming along with it. Obviously, AgentForce and Data Cloud are absolutely, deeply unified and connected. But AgentForce and Data Cloud are deeply integrated and connected to every single one of our products. This is a huge transformation that we have created over just in the last two years. So two years ago, when we went through our huge financial transformation, we also decided maybe aggressively, to also go through a huge innovation transformation. And we have rewritten all of our apps, all of our data cloud, and created an agenic layer and Hyperforce and brought it all together as one unified platform. And two years ago, it was just not there.

It’s one of the reasons why we feel very comfortable right now acquiring Informatica because we can see how it can radically extend what we have done, complement it. It’s incredibly additive. This ability to harmonize all of this data. It just gonna make everything better for our customers and give this platform that we have a lot more capability. In part, I I comment on the non standalone nature of Agentforce. As a reference. We took all the deals all the AgentForce deals for the quarter on average, there were four other clouds on those deals. Also, as Robin referred earlier, a third of our top one hundred deals including both Agentforce and Data Cloud, I look at the top six, the top six which in app on average thirty four million dollars of TCV.

On average on each of them. On those six, five of them have data cloud as an as an as an anchor, also Agentforce as an anchor. The one customer that didn’t buy the top six data cloud is because they bought in Q4, multimillion dollar deal in the cloud. They said the data foundation before they went to adding more clouds and agent force, On the top six, Agentforce, on on the top six deals, five bought Agentforce. The the one that didn’t buy is the one that’s showing you know very well. They we are negotiating now the extension to Agentforce. So it’s kind of magic. But going back to Brad’s also question he was referring, okay, what are you really focused on The reality is Brad, we are not not focused that much on how many more agent force deals or data cloud.

That that motion is on fire. We had three times more data cloud deals in in Q1 than we had the year before. We have also I mean, and I mean, infinite numbers more of agent force deals because we didn’t have agent force last year. What we have focused on very much is in is on consumption. This is a new game. By the way, this consumption motion is bringing the company really tied together from finance to product with Steve Fisher, with engineering, and and Dave Meyer with engineering, which really the whole company and go to market is is really aligned together behind consumption I mean, my role has changed totally. When I sell, my job starts and we have huge consumption. We have twenty-two tera trillion records ingested. Eight of them, eight trillion through zero copy, which is the fantastic innovation and and as I Robin referred earlier on AgentForce, already thirty customers came back and refilled the tank.

Very exciting. But now that we are touching on the consumption topic, Srini, you’ve helped me a lot. You’ve come up with this initiative of, you know, forward deployed engineers. Can you elaborate a bit more on that?

Srini Talabergata: Yeah. So I think in my new role as including customer success and professional services, as Marc mentioned, think I’m really obsessed with customer success. Two things. Correct? When a new product comes in, which is transforming so much, the iteration, the feedback loop between product engineering, customer success, go to market has to be very tight. So the way we have done is we have created thanks to our customer zero initiative, on support where Agentforce is handling a lot of things, we use some of we use some of those resources to create this forward deployment in the rating team. And we’re working with lot of customers hand in hand every day They’re making changes every day to really get the consumption group going and really get the product maturity.

And I see three types of customers We have customers who are in the expansion phase. Got the first customer. These are thirty percent additional ACV that Miguel talked about. And what are they asking? They’re saying they got the first customer line, and they are the people who said, hey. I really like your conversation, but now I really want to expand. Need a better pricing strategy. This is what we learned and created this new action based pricing strategy. They also have day two concerns. They’re saying, hey. I now I wanna expand it more. I want observability. Wanted the improvement loops. A lot of our product features we’re adding to that. Then we have customers in just in a pilot. They got a first pilot. They are now figuring out how do I get my improve my data estates.

They’re becoming data is becoming very critical. Actually, that is what also was driving some of our strategy. Almost every customer I talk to there’s Informatica there. This is also tied to that why we are talking about data is very important. They’re asking things like, you know, setup and determination. They want tools we created a testing center. How do you trade? Because these are all not predictive system. These are stochastic systems. It’s not like regular. So, you know, they have the models are changing, so they need trust. And then everybody at this is a broader level, which is enterprise. They want latency. What happens if one of these model providers go down? How do I do local residency? How do I provide auditability? I think we are taking all of these features and we created this forward deployment teams deployed engineers we call.

We are in a tight loop not just with Salesforce, but also with a lot of our partners like Accenture, Deloitte and all. And Neuroflash and customers like that, and really improving it. I think we are in very early stages. We are super excited. We’re obsessed about customer success, and the name of the game is make sure the product really focus on customer success, and iterate the maturity. And I think they’re learning a lot of things, and that’s what they’re doing. Almost, we’re releasing product features almost every day. This is a learning journey? And we are learning at the biggest scale of any vendor right now across every industry, across every geography, across every segment. And despite feedback loop is very important. Thank you, Srini.

Thanks, Brad.

Mike Spencer: Christa, we’ll take the next question, please.

Operator: Your next question comes from Brad Zelnick with Deutsche Bank. Please go ahead.

Brad Zelnick: Hi, Great. Thanks very much, and I echo my congrats. Marc, with AI and AgentForce advancing quicker, than anything we’ve ever seen, I have to imagine the use cases you’re seeing today versus even ninety days ago are blowing you away. What can you tell us about what lies on the leading edge in terms of applications, impact, and ROI of Agentforce, and how data cloud fits into that. Thanks.

Marc Benioff: Well, I really just have to look directly to these you know, these stories, you know, with these customers. And, you know, as I as I travel the world, and I’ll tell you that, you know, again, we’ve talked about this speed of which AgentForce is gone. But it’s not just the US phenomenon. It’s an international phenomenon. And as I mentioned last week, I was in Japan, and one of our customers in Japan Fujitsu really doing some amazing things. But when I heard that the rate and scale and speed that they wanna deploy the product, and their vision in terms of how it can be all encompassing for an energetic layer around the entire company, I really just could not believe it. I really sat with five of the largest Japanese companies, and I think somehow you know, every company’s imagination has been captured that they have this idea that they can build an injector layer around their company.

So, of course, we’ve all been very focused, you know, for many years you know, on the customer opportunity, what we’ve been calling Customer 360. We’ve deployed that so well. In recent years, we’ve also been incredibly excited about you know, what’s happened with Slack and how we’ve gone across the enterprise. And then in and then in addition to that, we built this massive data business. So now that’s really three different businesses that we’re in. You know, we’re in our customer business, We’re in the Slack business, which is the enterprise wide business. And we’re in this incredible data business. Now, of course, we’re also doing that by vertical. Alright. Well, when we look at that then, when we combine that with this Agentic and AI and data capability, that’s where I really think that you know, that it starts to come together and really powerful and very meaningful way.

And that that is you know, what I see over and over and over again. And I think another really good example is kind of we really we kind of already got into it once before, but I’ll just mention it. I was very surprised when I was seeing this demonstration of Smartsheet. And all of a sudden, when we’re using the product and it’s obviously for those of you know, it’s like a cloud version of Excel, very popular. I think it’s got, like, thirteen million. Users. A lot of you use it. A lot of you have the technology, cover the company. But all of a sudden, right inside Smartsheet itself, agent Force is already now in place, and the customer is able to not only get support, but also to add additional users or change, you know, key provisions with their licenses this idea that agents are kinda starting to provision, to become digital labor, That this is exceeding my expectation that it crosses industries, it’s crossing geographies.

And as I said, all of this is really just happening in only six months. By the time we get to Dreamforce, which is still another six months ahead, I expect another huge, massive transformation You know, we’re starting to cut the code right now on what will be one of the main releases of Dreamforce And when we look at what will come as the release after Dreamforce, our our technology, our product doesn’t look at all like what it looked like, you know, just a few months ago. So we’re moving very, very fast, and I think that I really would say this hasn’t really happened too many times in the last thirty, forty years. The rate of innovation far exceeds the rate of customer adoption. The amount of technology within value that we’re able to deliver to a customer is just phenomenal, which is why I have a real fever about expanding our distribution organization, especially in these markets, geographies, and segments that are just growing at incredible rates.

But for a lot of reasons that have to do with our financial transformation, in the last twenty-four to thirty-six months, we have not grown those distribution in the segments that we’re growing. It wasn’t our it wasn’t a mistake that we were making. We’re it was very mindful. We knew that we were slowing down growth but we were accelerating margin and cash flow. Now our challenge is very simple. We’re gonna grow our margin. We’re gonna grow our cash flow. But we are gonna grow our revenue. And the way that we’re gonna do it is exactly what Miguel and Srini and Robin said. We’re gonna invest at scale into the markets that are growing very dramatically. And we know where they are. We’re there. We’re seeing the whether it’s by geography or whether it’s by market segment.

That is whether it’s by key markets that have grown incredibly since the pandemic, like Japan or Latin America or even you know, markets, you know, in the United States. Like the tech industry. Okay? But where we have not invested distribution capability, we will invest. Aggressively. Well, we already have. And then we will also, you know, build and create incredible new products and value for those segments as well. And we will also acquire like we did last year with OWN. That’s been, by the way, an incredible success story. So I think we have a good handle on one, how to deliver the numbers that all of our investors want. And two, deliver this incredible growth by focusing on geography, segments, and product, and technology capabilities where the markets are really expanding.

Thanks, Brad. Krista, we’ll go to next question, please.

Operator: Your next question comes from Kash Rangan with Goldman Sachs. Please go ahead.

Kash Rangan: Hi. Yeah. Thank you very much. Much, Marc and team. Great start to the fiscal year. I’ll keep my question relatively brief since we’re towards the end of the call. Marc, one for you. Obviously, Agentforce is off to a smashing success. You’re at four thousand paid customers. When you look at consumer adoption, of generative AI, you got chat, JPG, five hundred million users. The adoption there seems to be off the charts. So what is holding the enterprise back What are your view as somebody that led the cloud cycle? What are your view are two or three maybe unblocks that you could bring to bear. So you could have a hundred thousand agent force customers versus the four thousand you have today. And one for Robin. Congratulations on taking over the new position.

I just wanna clarify the time duration when you expect Medica to be creative Is that so you close the deal, early calendar twenty six, and it is going to be accretive to calendar twenty seven. If that’s the case, why that long and why not sooner? How could it be sooner? Thank you so much.

Marc Benioff: Okay. Well, Kash, I’m so glad you answered the question or asked the question because I’ll tell you that you know, we’ve talked about this before. We’ve answered this question before, but I wanna come back and hit it one more time. And then really kinda come in and really explain what it is our strategy is and also the huge progress that we’ve made, but you’re and then incredible opportunity ahead for everybody. Number one, when we all are using ChatGPT or Gemini you know, or u dot com or Perplexity or Anthropics or any of these models or an open source model or DeepSeq. Okay? Know, all these models are are mostly the same. They’re within three to six months of innovation of each other. We all know that. And then all these models are trained on mostly the same datasets.

Because there’s only so much data that they can be trained on. Now there’s some synthetic data, but it doesn’t mean very much to a lot of these models. That’s why, by the way, that these models still have not improved a lot of their accuracy in the consumer side. And you can see those numbers Those benchmarks are very clear. So what happens is you have these advances in these algorithms. You know, models are just algorithms. And then you have these amalgamated data sets, which are kinda manufactured off of the Internet data. And then all of a sudden, you get this kind of working model, and it’s kind of like super search. You know, we all have this experience. It’s like prompt engineering, You know, we write the prompt and we get the answer, and we used to search on Google now we’re searching, you know, through one of these models.

So it could be a model that Google has Gemini. Or it could be another model like you mentioned, chat GPT, or it could be another model, Anthropic, etcetera. And or DeepSeq. And you’re you’re searching, you get the results. So why is that not boom, an accelerate automatic accelerator for everything you could do in the enterprise? And, of course, we could all talk to Microsoft about that, who came in and said that it would be two years ago or three years ago now with Copilot and how that was gonna supercharge everything, and it turned out that that was a false prophecy. Because that’s not how the enterprise works. The enterprise has datasets that are highly controlled, highly governed, and highly secured. And these datasets are everything from your cons your customer data set, your financial dataset, to your HR data set, And the reality is that on all enterprise data is available to all users.

Like, for example, you work cash at Goldman Sachs. You can’t see all the Goldman Sachs customer information. There’s regulations around that. You see all the employees’ salary information. You don’t have access to all the Goldman Sachs financial data. So when you’re using these models, they’re not just giving you access to all of this stuff. Are they cash? No. They have to be tightly controlled. But if I’m a Goldman Sachs customer, and I wanna come in and I wanna ask about my account balance or information about you know, my my who I am and what my portfolio looks like or what my opportunities are Or even if I’m a Goldman Sachs employee and I want information on the general information on benefits or how to enable myself or how to sell products more efficiently to customers, All of those things could easily happen right now with the Agentic platform.

However, there’s a lot of things that could not happen as I kinda just amplified. And that is kind of the constraint So what is it gonna take to get this transformation to happen where we have a much bigger, agentic wrapper around Goldman Sachs, your company, or around all companies. Well, look at my company to start. I think we’ve probably done the best of maybe any tech company. We’ve done now this quarter will pass through a million conversations and customer support. It’s a dramatic reduction in the amount of human beings who have had to get involved to answer customers’ issues I don’t think any other tech company at scale has delivered this capability. It is a proof point without any doubt that Salesforce has been able to deliver on his vision of digital labor.

You know, and Agentforce is proof number one, customer zero, Salesforce. So we eat our own dog food, and this is amazing. By the way, compare that to other big tech companies like Microsoft and others who have tried to do that, but they don’t have this kind of same velocity and capability. They haven’t had this kind of ability because they don’t have the this approach. Now part of it is we’re lucky because we are built on our customer’s 360. We’re built on our service cloud. We’re built on our sales cloud. We’re built on our marketing cloud. So when we look at those things, then we can say at a high level, hey. Marketing Cloud, wow. You’re doing a trillion emails. How do you take those are one way conversations. How do you make those two way conversations?

That’s the AgenTek opportunity. And today, for our customers, they all wanna get there. They all have the hunger to do that. They all wanna have this great success. But it takes some time for them to start to build their datasets. And that is why the Informatica acquisition is so important because they all need to not only translate their data to build build their master data management, they need to harmonize their data, They need to do all these things, and we see that. We go into these customers who are like, let’s go. And they’re like, we can do some, we can’t do all. And the reason they can’t do all is because their whole inner harmonized, which is why Informatica is so critical. Now more than ever. And look, Informatica is a small company.

They don’t have the distribution scale that we have. They have, like, a I’m not gonna tell you what the size of their distribution organization because it’s probably covered under my NDA, But it isn’t It’s orders of magnitude less than Salesforce. I’ll tell you that. So that idea that we have the ability to really go out there and start to sell that product to all companies worldwide to really show them that they need this. For this capability. Now this is why I have this fever about growing, like Miguel said, our distribution organization, by more than twenty percent this year. Because you know, we’ve held back for the last thirty-six months You know? On our you know, and we’ve never done that in our history. But we did it because of the financial transformation that we wanted to go through, so we’ve done that.

But it just now is just coinciding perfectly with this technology transformation that we’re going through. Which indeed is a data transformation. And that is what’s going on. So when we ask a question like you said, well, Chi Chi Priti, Gemini, well, you know, anthropic. You know Deepseek. Well, you know Perplexi. Well, you know u dot com. But these are packaged highly controlled consumer experiences. This is not you know, what you have and you understand the enterprise experience very well, Cash, because you are top enterprise analyst, But at Goldman Sachs, that’s not how it’s gonna roll. When we work with Goldman Sachs or we work with another bank, like we’ve already told of you, we’ve already deployed at a lot of banks. That this idea that we can do this, but it does require you know, very, you know, significant and and critical the governance, the security, reliability, availability, capability of an enterprise company like Salesforce.

And the proof point is here. Me. Help dot salesforce dot com. We are gonna do that for all companies, but we’re gonna do it you know, through Slack. We’re gonna do it through Tableau. We’re gonna do it in Help. We’re gonna do it every product we and we’re gonna do it with through an agendaic layer, through a data layer, through an app layer, and through a metadata layer. And we’re gonna bring these four things together and dramatically transform every every company we do business with, whether they’re small, medium, larger, large, just like Miguel went through. Yeah. And, Chastity, your other question, timing of close, of Informatica as well as time to accretion, Subject to regulatory approval, we expect that it’s gonna close beginning of our fiscal year 2027, which is February of next year, so February 2026.

The framework that we’ve talked about when we look at deals, we assume can we get it accretive within two years. Right? So that’s kind of our goal. Our desire is always to underpromise and overdeliver. I think with our playbook, that we have in place, we’re gonna go fast as possible. We’re really focused on accelerating integration. You know, so we’ll we’ll see how that works out. But overall, that framework is the two-year period that I provided to Accretion. Thanks, Cash. Krista, we’ll take our last question now, please.

Operator: Your last question comes from Mark Murphy with JPMorgan. Please go ahead.

Mark Murphy: Thank you, Marc. The CEO of Anthropic Re recently commented that AI could wipe out fifty percent of entry level white collar jobs and and drive unemployment a lot higher, unfortunately. And know, since you’ve been very astute and very ahead of the curve, on commoditization of LLMs, and you’ve been very outspoken on the topic of digital labor. You know, I’m curious just to get your thoughts on that concept. And how do you think Salesforce can help companies navigate whatever you know, change is coming our way, you know, while while maintaining a human touch or or human oversight that might be required.

Marc Benioff: Well, I think it’s a great question, and I think we all believe in the division of digital labor. And I think I’ve laid out the case help dot salesforce dot com and given you the metrics. And so those employees, though, are really getting, you know, I would say, you know, repositioned in our company in other areas, you know, that is we really have the we have so much opportunity I can’t hire as many people as I want right now. So I’m hiring I’m very excited. I’m trying to grow distribution, as I mentioned. I have a I’m deploying I have four deployed engineers I’m trying to hire. I have account executives I’m trying to hire. I am doing I have a lot of opportunity throughout the world and that is, you know, held back by There isn’t a lot of people to hire.

It’s actually surprising. So that is kind of the interesting point. And, you know, we’ve all read this paper, for example, AI twenty twenty-seven. Which is two years away. You know? And when I talk to a lot of my friends, they’re like, oh, well, this is this is my vision exactly of what’s gonna happen. And I’m like, the self-replicating rocketships are not quite here yet. I don’t know if you’ve read this book, Rhea. We are Legion. We are Bob. It’s kind of a phenomenon here in Silicon Valley that all these CEOs are reading this one book saying, yes. This is exactly what’s gonna happen. Kinda what yielded, you know, Sam Altman’s tweet last week. And we’re not exactly at that point where the computer is completely conscious has human consciousness, and to the point where it’s running its own manufacturing facilities, creating its own rocket ships, and launching itself onto into the planet, And to that point, we’re aren’t exactly even to that point yet where all these white collar jobs are just suddenly disappearing because I think that we realized why AI can do some things, While this is very exciting in the enterprise, we all know.

It cannot do everything. And it doesn’t have the accuracy yet. Because it’s built on a word model. And word models are inherently not one hundred percent accurate because of the way that the computer science works. Where it’s as you all know, this word, that word, this word, and then therefore, it’s this other word. And there’s this kind of matrix between this word and all the other words when you look at it, the mathematics don’t work out to be a hundred percent accurate. It’s in the math is the is hallucinate hallucinogens, which is why people say, oh, the the hallucinogenics are a feature because it’s not going away with that model. We are gonna have to have other models we’re gonna have to come in the future world models or multisensory models or other things but AI is a continuum, and we’re not totally there yet.

And in terms of the amount of white collar jobs that are gonna disappear, you’re all experts at this point in the current generation of AI. You’re using it every day. We’re all using it. It doesn’t matter who I speak to. Probably all of your children, all of your family members are using it. And you can see how it’s impacted. Like, people are smarter. They get their medical labs. They ask, well, what do you think about this? But then when you call your doctor, sometimes the doctor goes, well, actually, that’s not completely true. And we’re kind of at this point where it’s very good on some things but not for everything. And because of that, even in the enterprise, while there’s a lot of things that we can do, edit this press release or write me this speech or whatever, But the reality is, you’re probably still gonna wanna get in there and work on it.

And I think we all know that. So, look, we’re at an exciting moment in AI, and maybe we’re moving into this world where there’s gonna be you know, like, these AI profits. And, obviously, I’m a huge fan of Dario. He’s great. You know, amazing person. Incredible company. Wonderful. But some of these comments, I think, are alarmist and get a little aggressive in the current in the current form of AI today. Not that it’s not a great company. And by the way, sales is a huge investor in philanthropic. Love the company. Loved Ario. We have embedded it into Slack. It’s how Slack does its recap and a lot of its little magical things that happen, like talking to you in your channels, But it’s not at that point, you know. And that’s kinda why, you know, I’ve said, like, copilot lot of ways because yeah, you can do some things, but it’s kinda got overhyped.

And we need to show you what you really can do, how you really can transform your enterprise, how the magic is really can happen. And by the way, if you haven’t used Tableau Next, I this is the best example where you’re using Tableau. We all know Tableau. We’ve loved it. We’ve used it for twenty years. But now there’s an agent there with you, and that it’s on a data cloud and it’s integrated with Slack and all these other things, it’s amazing. And that amazing part is what we’re gonna do more of. And you know, but we’re not ready to, like, I think, take the action that Daria suggested. I hope that that answered your question. Thanks, Marc. Thanks for the question. And thank you, everyone, for joining the call today. And we look forward to seeing everyone over the coming weeks.

Operator: Ladies and gentlemen, this does conclude today’s conference call. Thank you for your participation. Participation and you may now disconnect.