Operator:

Welcome to Salesforce's Fiscal 2024 Fourth Quarter and Full Year Results Conference Call. Please note, today's call is being recorded. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] 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.

Marc Benioff:

All right. Hey. Thanks so much, Mike. And hey, thanks everyone for being on the call. Look, as you can see from these numbers, we've had just an incredible quarter, well, actually we've just had an incredible year here at Salesforce with strong performance across all of our key metrics, revenue, margin, EPS, cash flow and of course our CRPO. Look, it's been an extraordinary year of transformation for Salesforce, you'll know that you've all been there with us. You've been the support that we have needed during this year. Thank you to all of our shareholders, and thank you to all of our stakeholders. It’s been a year of incredible transformation for our industry with the emergence of this next generation of artificial intelligence as well. It's been really two unbelievable things happening at once. The total transformation of Salesforce and the total transformation of our industry. All right. Let's start with the transformation of Salesforce, okay? Look it was over a year ago, we said, Salesforce had to transform and you, many of you came to me, came to our whole team and you said, look, we're going to transform the whole company. We did it together. We could not have done it without you. We said we will restructure our business for the short and long term, we did that. We said we would place a laser focus on increasing productivity and operational excellence from across the board, we've done that. We said we were going to double down on innovation to make our core products even better, we've done that. And when you see what's coming in Trailhead DX next week, you're not going to believe it. Not just our next generation artificial intelligence, not just -- that was not just our prompt builder, not just our copilot, but this data cloud which I'm going to get to in a second are fastest, most exciting new product ever, fastest growing, most customer traction that I have ever seen. That has been incredible. So let's talk about all of this and let's talk also about how we have also strengthened our relationships with our investors. Thank you, Mike, for everything you've done. And Amy, together with the management team, with our Board, we've really focused on you, the investor community. We've accomplished all of that together. We've completely transformed this company together and we're very grateful to each and every one of you. And that transformation, well, it has driven incredible results. You're seeing productivity is up, profitability is up, margins up, revenues up and you're going to see it again in our results for our quarter. You're going to be looking at these full year numbers with phenomenal cash flow, with incredible margin growth, well, margin growth that I've never seen in any software company over the last 12 months -- 18 months. It's completely unprecedented. And you can see the incredible speed and success of the transformation that we've undertaken. Now we believe that Salesforce not only needs to be a great software company for our customers, our employees, our communities, but also a great company for our shareholders as well. We've certainly seen that with the exceptional performance of our equity over the last few months. Now I'm thrilled that we're opening the door to another incredible part of our ongoing transformation today with the introduction of our first ever dividend. And that's amazing to say that word for the first time in 25 years in Salesforce history, our first ever dividend, which you're going to hear more about from Amy in a moment. And if this year has shown anything, if it's shown anything at all, it really shows that we've committed to serving all of our stakeholders. We closed out fiscal year '24 with $9.29 billion in revenue for the fourth quarter. That's up 11% year-over-year, 10% in constant currency. Pretty awesome at our size and scale, incredible. Eight of our top 10 deals in the quarter included six or more of our clouds, really showing the depth and breadth of our product line and our portfolio. And all of our top 10 wins included sales, service and platform, and we're really focused on delivering that full cocktail of all of our clouds to all of our customers. And our deals greater than $10 million, well, they grew nearly 80% year-over-year in fiscal year '24. That was also amazing. Our customers just get so much more value and they can do so much more when they take the full advantage of our Einstein 1 platform. And I want to explain that to you because we have such a rich set of applications that when we're working with all of these employees through the whole company, and also the customers as well, we're filling our platform with the data and the metadata that our customers need to be successful. And there is no other time in the history of our industry that that rich data and metadata together in one place is so important, because that is what you're going to need to drive this artificial intelligence. And you're going to see that next week at Trailhead DX as we show you our copilot for our first time and prompt builder for the first time, and data cloud for the first time, and how it works together so that you can get the insights that you need. Now, this is all possible because we're delivering this Einstein 1 platform. But before I get to that, I just want to make this one last point. For the full year, we delivered $34.9 billion in revenue, up 11% year-over-year, one of the best performances of any enterprise software companies ever. With our continued disciplined approach to margin expansion, non-GAAP operating margin for fiscal '24 was also 30.5%, up 800 basis points year-over-year. We closed fiscal year '24 with operating cash flow reaching $10.2 billion, operating cash flow up 44% year-over-year. Major goal for the company this year, well risked, well done, highest cash flow in our company's history. CRPO, our current remaining performance obligation was $27.6 billion, up 12% and 13% in constant currency year-over-year, fantastic display on CRPO. And total remaining performance obligation ended the fourth quarter at $56.9 billion, an increase of 17% year-over-year. Now let me just say this again, $57 billion in RPO amazing. For fiscal year '25, we expect free cash flow to grow between 23% to 26% for fiscal year '25, that is for fiscal year '25 we expect free cash flow to grow between 23% to 26%. And we're guiding revenue to $38 billion at the high end of our range 9% year-over-year, expecting to deliver fiscal year '25 in subscription and support revenue growth of above 10% year-over-year. In constant currency, we're going to get to that detail in a second. We're committed to delivering non-GAAP operating margin of 32.5%. All told, an unbelievable year, a transformation. From the financial metrics, we're going to get to the technology now. And before I move on, let me just say I've never seen anything like it over the last 25 years as CEO of Salesforce. The pace of change, the focus on productivity, profitability, the speed of innovation, the quality of the management team, people coming back to help us get it done, our boomerangs, our Ohana, thank you to everyone who's made this possible. Just look at where we are now. Salesforce is the world's number one AI CRM. Number one in sales, number one in service, number one in marketing, number one in data cloud. Incredible. And since the start of the pandemic in 2020, we've doubled the size of the company. That's amazing. We doubled the size of the company in scale since the pandemic started, which was about four years ago. That's incredible at our scale. We're the largest enterprise applications company in the world. We passed SAP. That was amazing. That was a huge accomplishment this year. But now we're the third largest enterprise software company in the world and the second largest in Japan. And to all of my Japan, Ohana, [indiscernible] for what you have done with the Japanese market is incredible. We're not stopping. Our management team and our extraordinary employees are focused every day to make our business as strong as it can be. Personally, I've never been more excited about the future of Salesforce. You're about to hear why. It's not just the incredible financial results, not just the unrivaled success of our customers, but it is the incredible door that has opened through artificial intelligence once again and the evolution of our entire technology platform. It's what our engineering and product teams have done in the last 12 months is nothing short of amazing. I am so grateful to their leadership and to David and Srini and to all of your employees. Thank you for what you have done for Salesforce. Your leadership, your vision, your insights, your creativity in rebuilding the platform so quickly, and data cloud for artificial intelligence, for Steve, what you have done for Jujhar, for my whole team, it's incredible. As I said, it's not only a remarkable year of transformation for Salesforce, it's been an amazing year of transformation for entire industry. As I talk to CEOs around the world, they tell me they want three things. You may have heard me say this already, but I'll say it again. One, they want more productivity and they're going to get that productivity through the fundamental augmentation of their employees through artificial intelligence. It's happening and it's empirical. Number two is they want higher value customer relationships, which is also going to happen through this AI and they want higher margins, which we are seeing empirically as well when they use this artificial intelligence and these next generation products. As we look at productivity, as we look at higher value customer relationships, as we look at higher margins, how do our customers get these things? How are they achieving these goals? It is AI. It is why every CEO and company knows they need to make major investments in AI right now. And I believe this is the single most important moment in the history of the technology industry. It's giving companies an unprecedented level of intelligence that will allow them to connect with their customers in a whole new way. And with our Einstein 1 platform, we're helping out our customers transform for the AI future. Now, many of our customers have been inspired by OpenAI's GPT-4 I have, and cohere I have, and anthropic I have, and inflection I have. And also all the amazing models on hugging face and other AI models. All these things, amazing. And everyone has been wowed by what these AIs can do incredible things and a lot of party tricks, a lot of magical things. And then we also realize there's some other things too. Let's talk about the truth. The truth is that these AI models are all trained on amalgamated public data. You all understand that. You've all seen the New York Times lawsuit of OpenAI or others who are really going to tasks saying, this is all this amalgamated stolen public data, but all these publication (ph) used without permission and unlicensed, but amalgamated into these single consolidated data stores. Now, some of my people even say this is just stolen data, but all this public data has been amalgamated into what they call training sets. And these training sets then get turned into what we call inference, which is how the AI then is able to start to deliver its insights, but there's other things that it's providing besides insights. These AI models, well, they could be considered very confident liars, producing misinformation, hallucinations. Hallucinations are not a feature, okay? And I'm going to get to that point in a second, and I think you all understand it that already because at this point, we all have a high level of experience with AI, don't we? Everyone has had that experience. And there's a danger though, for companies, for enterprises, for our customers, that these are not trusted solutions. And let me point out why that is, especially for companies who are in regulated markets, why this is a big, big deal. These models don't know anything about the company's customer relationships, and in some cases are just making it up. Enterprises need to have the same capabilities that are captivating consumers those amazing things, but they need to have it with trust and they need to have it with security, and it's not easy. Look, we all read the story. Now, it just happened last week. An airline chat-bot. An airline chat Bot prompts by a passenger to book a flight with a 90 day refund window. It turns out the chat bot running on one of these big models, we won't have to use any brand names here. We all know who it was hallucinated the option, it did not exist. We all know what that's like. We've all had the experience. So here's the chat-bot, it hallucinates the option, it's working with the customers, it didn't exist. It did not exist. The airline said, oh, listen, that was just the chat-bot, it gets that way sometime. We're so sorry. You know what? That's just a separate technical entity, a separate legal entity, and the airline, we're not going to be hold liability for that. Well, guess what? That defense did not work in a court of law. The court of law said that that AI chatbot, that made up that incredible new policy for that company, well, that company was going to be held responsible, liable for that policy, that they were going to be held liable for the work of that chatbot, just as they would for a human employee. They were being held liable for a digital employee. The reality for every enterprise is that to deliver trusted AI experiences, you need these three essential components now. You need that compelling user interface. There's no question a natural and effortless experience. And at Salesforce, we have some of the most intuitive user interfaces that deliver insights and intelligence across sales and service and marketing and commerce and industries, many of you are on Slack right now, many of you are on Tableau, many of you are on Mulesoft or one of our other products. Okay. And what else do you need? Number two, you need a world-class AI model. And now we know there's many, many models available. Just go to Hugging Face, which is a company that we're investor in, or look at all the other models. And by the way, not only are there thousands of models right now, but there are tens of thousands, hundreds of thousands of models coming. And all the models that are available today will be obsolete 12 months from now. So we have to have an open, extensible and trusted framework inside Salesforce to be receptacles for these models. That's why Einstein 1 is so important. Then you have to be able to use these AI models, the ones that Salesforce is developing or these public models on Hugging Face or other things or even bring your own model. Customers are even making their own models. Fantastic. Of course, we have great partnerships with OpenAI, with Anthropic, with Cohere, with many other AI models. This is the second key component. One is the UI, the second is the model. All right. Now for those of you who put like for example, Copilot on our phone, any one of the Copilots on the App Store, we have a compelling UI and we know underneath there, there is a compelling model. But third, we also know there's a huge data set there. But here we go. Now we're in the enterprise. In the enterprise, you need deep integration of data and metadata for the AI to understand and deliver the critical insights and intelligence that customers need across their business, across sales, service, marketing, commerce, whatever it is, that deep integration of the data and metadata, that's not so easy. That's not just some amalgamated stolen public data set in the enterprise, that deep integration of data and metadata, oh, that's what Salesforce does. We are a deep integration of data and metadata. That is why it's very, very exciting. Yeah, I like to say, and I love NVIDIA, by the way. And what Jensen has done is amazing. And they are delivering very much in the era of the gold rush, the Levis jeans to the gold miners. But we all know where the gold is, the data. The gold is the data. And that's why we're so excited about Salesforce because we are one of the very largest repositories of enterprise data and metadata in the world for our customers. And customers are just starting to realize this right now and they try to stitch together a variety of AI tools and Copilots, and this and that, and whatever. I've had so many funny conversations with so many customers who come to me that they're experts in AI and they're this, and then I just say to them, but how are you going to deliver this experience? And then finally realize, oh, I need the deep integration with the data and the metadata. The reason why the metadata is so important is because it describes the data. That's why so many companies are turning to Salesforce for their AI transformation. Only Salesforce offers these critical layers of AI for our customers. The UI, the model and the deep integration of the data and the metadata and make the AI smart and intelligent and insightful and without the hallucinations and without all these -- all the other problems. For more than two decades, we've been trusted with our customers' data and metadata and we have a lot of it and a lot of you are our customers, so you'll understand what I'm saying. But many of our customers also have islands and thousands of systems of trap data. Now what I'm going to say is very simple. Trap data is all over the enterprise. Now what trap data can be is you might be using a great company like Snowflake, and I love Snowflake or Databricks or Microsoft or you might be using Amazon system or even something like Google. What these things -- BigQuery, all these various databases. But put your hand up if you're using Snowflake every day. Put your hand up if you're using one of these other systems. Put your hand up if you're using Salesforce sales cloud, service cloud, Tableau, Slack. We need to be able to, through our zero copy, automatically integrate into our Data Cloud, all of those systems and then seamlessly provide that data back into these amazing tools. And that is what we are doing because so many of our customers have islands of trapped data in all of these systems. But this AI is not going to work because it needs to have this seamless amalgamated data experience of data and metadata. And that's why our Data Cloud is like a rocket ship. The entire AI revolution is built on this foundation of data and it's why we're so excited about this incredible Data cloud. It's now deeply integrated into all of our apps, into our entire platform. It's self-service for all of our customers to turn on. It is our fastest-growing product ever. It's our total focus for fiscal year '25 with Salesforce Data Cloud. Salesforce can unlock this trap data and bring together all of their business and customer data into one place for AI all while keeping their data safe and secure and it's all running inside our Einstein Trust Layer and we've deployed it to all of our customers. We unleashed now the Copilot as well to all of our customers deeply built on our pilot, on our data and metadata. And while other copilots just sit and spin because they can't figure out what the data means and if you haven't seen the demonstrations, you just see these Copilots spin. But when they use Salesforce, it all of a sudden becomes intelligent. And that is the core of the Einstein 1 platform. It's all of our apps, all of our AI capabilities, all of the customer data in one deeply integrated trusted metadata platform. And that's why we're seeing incredible demand for Data Cloud. Data Cloud brings it all together and we are so blessed to have Data Cloud in our company. And it's also why in Q4 25% of our deals already over $1 million have included Data Cloud. And we've recently added over 1,000 new customers to Data Cloud. We've never seen traction like this of a new product because you can just easily turn on the Data Cloud and it adds huge value to Sales Cloud, it adds huge value to Service Cloud, to Marketing Cloud, to the CDP. You've all seen the Gartner Magic quadrant that got published last week about the Data Cloud. Or if you haven't go to my Twitter feed and you'll see how amazing that MQ is. And it's the fastest-growing organic product in the history of Salesforce. This last quarter, more than 7 trillion records, 7 trillion records were ingested into Data Cloud, unbelievable. 7 trillion records ingested in Data Cloud with over 1 trillion activations driving customer engagement, lighting up all of those sales service marketing cloud users, all the platform, Tableau, it's all integrated into Data Cloud. And because Data Cloud and all of Einstein 1 is built on our metadata framework, as I just described, every customer app can securely access and understand the data and use any model, use any UI workflow, integrate with the platform. That means less complexity, more flexibility, faster innovation. But also we want to say goodbye to these hallucinations. We want to say goodbye to all of these crazy experiences that you're having with these bots that don't know what they're doing because they have no data or metadata, okay? Or the data that they have metadata is like productivity data, or like the highest level data that's not deeply integrated data. So only Salesforce can do this. Only Salesforce has this vision of this kind of platform and only has -- we've been working on this for 25 years and we are not done. We are just starting because let me tell you now a story of how we're delivering a high-quality trusted AI for our customers. We all know the HR and payroll leader ADP and their incredible new CEO, Maria Black, amazing. ADP has been a great Sales Cloud customer for two decades. They've used Einstein for years. They were one of the first customers we ever have. We're so grateful to ADP, amazing. And work with so many of their great CEOs over the decades. And the company wanted to transform now customer service with AI to give their agents real time insights next best actions, auto generated case summaries, well, I have to say to you, it was a little bit embarrassing, Salesforce was not number one on their list. And I said to them, how can that be? We're the number one Service Cloud. We're number one in the MQ, we're number one in this. We're number one merchant. No, we're going to go evaluate this. We're going to look at all the different solutions. We're going to look at all the new AI models. We think we're just going to hook this model up to this and we're going to do that. And it sounded like a big Rube Goldberg invention. What was going to happen there? And so we had to go in and we just wanted to partner with them and say, all right, show us what you want to do. We're going to work with you. We're going to be trusted partners, let's go. But like a lot of our customers moving to AI, ADP realized it didn't have a comprehensive deeply integrated platform of data and metadata that could bring together all of this into a single source of truth. And then you get the incredible customer service, then you get the results that you're looking for. And it's deeply integrated with their sales systems, with marketing and custom applications. And ADP discovered only Salesforce can do this. We were able to show ADP how we could unlock trap data with Data Cloud, zero copy, drive intelligence, productivity, efficiency for their sales team with Einstein to levels unimagined just a year ago. We're now incredibly excited to work with all of our customers to take their AI to the next level with Einstein Copilot, which is going live tomorrow. Einstein Copilot, which if you haven't seen it, and if you haven't, please come to Trailhead DX next week. This is the first conversational AI assistant for the enterprise that's truly trusted. It's amazing. It can answer questions. It can summarize. It can create new content, dynamically automate tasks behalf of the user from this single consistent user experience embedded directly within our platform. But let me tell you the one thing that it can do that's more important than all of that. It is able to read across all the data and metadata in our platform to get that insight instantly. And you're going to see that. So the sales rep might ask the Einstein Copilot what lead I should focus on or what is the most important thing I need to do with this opportunity? And it may say, you need to resolve this customer's -- customer case because this escalation has been around for a week. Or you better go and answer that lead that came in on the marketing cloud before if you want to move this opportunity forward. Because it's reading across the entire data set, that is something that individual users cannot do but the copilot can do with access to customer data and the metadata in Salesforce, including all this real time data and website engagement and the ability to read through the data set. That's why Einstein Copilot has all the context to understand the question and surface believe that has the highest value and likelihood to convert. And it can also instantly generate the action plan with the best steps to close the deal, such as suggesting optimal meeting times on the lead contacts, known preferences, even drafting the email. If you haven't seen the video that I put on my Twitter feed last night, there's a five minute video that goes through all of these incredible things that it's able to do. There's never been an enterprise AI capability quite like it. It's amazing. All of us can understand the tasks that the Copilot is performing. And I bet a lot of people, even on this call, that a lot of other companies might say they can do this. But I assure you, without the deep integration of the data and the metadata across the entire platform, with the Copilot's deep integration of that data, they cannot do it. They cannot do it. I assure you they cannot because they don't have the data and the metadata, which is so critical to making an AI assistant so successful. And I encourage you to try the demos yourself to put our Copilot up against any other copilot. Because I'll tell you that I've seen enterprise Copilots from these other companies in actions and they just spin and spin and spin. And some have a different copilot for every app, some with different capabilities, restrictions grounding this Wizzywig builders on whatever. It's very cute. Very nice. Exciting. It's really cool for the first minute and then you realize, wait a minute, what data is available in this Copilot? Only a conversational UI can start to understand all these things if it has this access. Only after a conversational UI for canned queries or don't understand the customers to customize the Copilot, those are -- none of these things are going to work. I've used those Copilots from the competitors. I have not seen them work yet. Okay, the thinking icon, the spinning, it goes on and on and on and on. Einstein Copilot, you're going to see. You're going to have your hands on it. Now it's been released into the wild to our customers, to all of you, this is fundamentally different kind of AI. Just like Einstein was a different AI, which became the democratization of AI, which is why Einstein does a trillion transactions a week. Einstein's the only Copilot with the ability to truly understand what's going on with your customer relationships. It's one conversational AI assistant deeply connected to trusted customer data and metadata. It's one integrated system for all of our customers across any role or industry. And it's why we call it Einstein 1. It's one platform, one integrated system. That is what you need to get AI to work. Next week, at our Trailhead DX conference in San Francisco, I hope you're all coming, it's going to be amazing. On March 6 and 7, you're going to see how we're bringing even more AI innovation to our customers. So be prepared to be amazed by Einstein Copilot builder, prompt builder, model builder, and so much more that we're doing to help our customers, make every employee more productive and transform every customer experience. And I hope you're going to join us in person or you can join us online at Salesforce Plus. And with closing, I just want to thank all of you once again for everything that you've done for us for the last year. We're so grateful to each and every one of you and to our entire management team, all our Ohana and all of our customers as well. We're so grateful as we look forward now to our 25th anniversary in March 8, I've never been more excited. You can hear why? Not just the fundamental transformation of the company, but also the fundamental transformation of the product line and the product vision as we move into this incredible new, intelligent world that we're all seeing with AI. So thank you. I'm now turning over to Brian, who was employee number 13, our Chief Operating Officer. He's done a phenomenal job this year. Without him and without Amy, without our whole management team, it would not be possible. I just want to thank again everyone who's been a huge part of everything. And I'll turn it over to you. Brian, here we go.

Amy Weaver:

Great. Thanks, Brian. Let me join Marc and Brian on saying what a year it has been for Salesforce. At this time last year we laid out our accelerated transformation plan and I am incredibly proud of the significant progress we made this year against that plan. Throughout fiscal 2024 we delivered, we've on increasing profitability, revenue, productivity and operational excellence. Q4 represents another quarter of strong execution and continued discipline across the business. Now let's turn to the results. For the fourth quarter, revenue was 9.3 billion, up 11% year-over-year and 10% in constant currency. The growth was primarily driven by resilient sales and service performance as well as strength in Yolsoft and Tableau. And for the full year revenue was 34.9 billion, up 11% year-over-year in both nominal and constant currency. From a geographic perspective, in Q4, the Americas revenue grew 9%, EMEA grew 14% or 11% in constant currency, and APAC grew 14% or 19% in constant currency. We saw strong new business growth in LatAm, India and Canada, while parts of EMEA remained constrained. From an industry perspective, in Q4, public sector and travel transportation and hospitality both performed well, while retail and consumer goods and high tech were generally more measured. Our multicloud momentum also continued. In Q4, eight of our top 10 deals included six or more clouds, and more than half of our top 100 wins included six or more clouds. As you've already heard, AI starts with data and we are seeing strong momentum in Data Cloud. In Q4, more than half of our top 25 wins included Data Cloud. Q4 revenue attrition ended the quarter at slightly above 8%, generally in line with recent quarters. In Q4, our non-GAAP operating margin was 31.4%, up 220 basis points year-over-year. And for the full year, in line with our guidance, we delivered non-GAAP operating margin of 30.5%, up 800 basis points year-over-year and GAAP operating margin ended the year at 14.4%, up 1110 basis points year-over-year. Q4 operating cash flow was $3.4 billion, up 22% year-over-year. Q4 free cash flow was $3.3 billion, up 27% year-over-year. And for the full year, operating cash flow was a record $10.2 billion, up 44% year-over-year. Full year free cash flow was $9.5 billion, up 50% year-over-year. Now turning to remaining performance obligation, RPO, which represents all future revenue under contract, ended Q4 at an incredible $56 billion, up 17% year-over-year. Current remaining performance obligation, or CRPO, ended at $27.6 billion, up 12% year-over-year and 13% in constant currency, particularly driven by strong execution on early renewals. We also benefited from new business performance and timing of license revenue from Mulesoft and Tableau. As expected, this was partially offset by a 1 point headwind from professional services, which we had noted last quarter. Now let's turn to guidance. Starting with full fiscal year '25. On revenue, we expect $37.7 billion to $38 billion, growth of 8% to 9% year-over-year. A few items to note on our revenue guide. Our expectations incorporate a $100 million FX headwind year-over-year or a 30 basis points impact. We also expect our professional services business to remain under pressure in FY25 and expect it will be a headwind to revenue. Within our revenue guidance, subscription and support revenue growth is expected to be slightly above 10% year-over-year in constant currency. Now, as a reminder, our top line expectations include the impact from the measured buying environment that began back in fiscal year '23. This takes time to flow through our subscription revenue stream due to the like effect of bookings to revenue recognition. That said, we continue to execute well in the measured buying environment. Over the past two quarters, I'm happy to say that we've seen improved bookings growth. And as you heard from Marc, we're incredibly well-positioned to build on our success and bring our customers into this new AI era. Now, turning to attrition. Starting in fiscal '25, we are including Slack invoice in the metric. Despite expecting a modest headwind, we expect attrition to remain consistent at slightly above 8%. On margins, we continue to drive operational excellence, productivity and efficiency. And for fiscal year '25, we expect a non-GAAP operating margin of 32.5% representing a 200 basis point improvement year-over-year, while still making key investments in growth opportunities, notably AI, data and our core businesses. Stock-based compensation is expected to be below 8% as a percent of revenue as we continue to take a disciplined approach to our equity-based programs. As a result, for the fiscal year '25, I am pleased that our GAAP operating margin guidance for the first time is expected to surpass 20% at 20.4%, representing a 600 basis point improvement year-over-year. We expect fiscal year '25 GAAP diluted EPS $6.07 to $6.15. Non-GAAP diluted EPS is expected to be $9.68 to $9.76. As a result of our focus on profitable growth and continued transformation, we are seeing a market improvement in our cash flow outcomes. We expect fiscal year '25 operating cash flow growth of approximately 21% to 24%, which includes a 10 point year-over-year headwind from cash taxes. CapEx for the fiscal year is expected 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 Q1. On revenue, we expect $9.12 billion to $9.17 billion, up 11% year-over-year in nominal and 12% in constant currency. This includes a tailwind from the timing of license revenue in Mulesoft and Tableau. Additionally, Q1 has a one point benefit from an extra day of revenue recognition given the leap year, which has no impact on our full year revenue or CRPO. CRPO growth for Q1 is expected to be 11% year-over-year in nominal and 12% in constant currency. For Q1, we expect GAAP EPS of $1.42 to $1.44 and non-GAAP EPS of $2.37 to $2.39. Now to capital return. We are deeply committed to driving free cash flow and return to our shareholders while investing in new organic growth initiatives. In Q4, we returned $1.7 billion in the form of share repurchases, bringing the total returns in FY24 to $7.7 billion, or more than 80% of fiscal year free cash flow, which more than fully offset dilution from our stock-based compensation. Since the inception of our repurchase program, we have now returned $11.7 billion to shareholders with an average purchase price of $182 per share. And I'm incredibly excited to announce our first ever dividend. We are enhancing our capital return strategy reflective of the confidence we have in the future of our business and our ability to drive long term cash flow. Our Board has approved the initiation of a quarterly dividend starting at $0.40, more details of this dividend are available in our press release. Additionally, the Board has approved a $10 billion increase to our share repurchase plan, bringing the total authorization to $30 billion. Based on our progress to date, the remaining balance in the program is approximately $18 billion. In closing, I want to echo Marc and Brian, and this has been an extraordinary year. I'm very proud of the progress we have made throughout the company. We are executing with discipline while also investing for our future. I want to personally thank our employees who have worked so hard this past year and thank our shareholders for their continued support over this past transformational year. Now, Mike, I think we better open up the call for questions.

Operator:

[Operator Instructions] Your first question comes from the line of Brent Thill with Jefferies. Please go ahead.

Marc Benioff:

It's a great question. And I think Amy will go back and say it was really this kind of moment in the middle of fiscal year, whatever, it was '23, where we started to see this kind of weird behavior. And then I would say starting last quarter, like you said, we saw these green shoots, and now I would really say it was kind of a 180, that -- it's really that AI, every customer realizes, number one, they've got to start a major investment cycle if they're going to remain competitive. Every customer is trying to achieve more productivity. I think we all know what that means. We certainly do. We've had to achieve more productivity ourselves over the last year, and they -- that is really about, in many cases, augmenting your employees. A lot of you've heard my Gucci story, there's so many stories, there's going to be so many more stories where these tools all of a sudden will really start to deliver much more productivity, better customer relationships and higher margins. CEOs get that. I think that is driving the 180. Obviously, we're also in the third phase of the pandemic. The first phase, we all went through together, it was horrible. It was my first pandemic. I had never been through anything like it. And then all of a sudden we were in the post-pandemic where we were in this crazy interest rate and inflation burn. Now we're in the third phase post, post-pandemic. And in post, post-pandemic, things are just better. Not just because we're going through this technology surge, but because all this other stuff is behind us and we're in a new normal and people know, hey, we need to invest to grow. We need to invest in technology to grow. And that, I think, is really driving the 180 for our customers, for ourselves. I think for a lot of you, we can all see it in the equity markets that it's not the equity markets that we had in 2021. So we are in a new place and we are ready to deliver. You're going to have -- you could be the judge yourself. When we get to Trailhead DX, I hope that you're all going to -- most of you have my text and email, text and email me and tell me what you think. Because if you see anyone else being able to deliver on the promise of enterprise AI at the level of quality and scale and capability of Salesforce, I'll be very surprised. And this is driving through different geographies, through different product portfolios. Green shoots. Brian, I want you to come in here and talk about these green sheets. But really, the 180 that we're seeing.

Marc Benioff:

Amy, I think you should come in here and also talk about how you've seen the transformation of the business and the green shoots that you see happening or kind of the 180s that I’m talking about.

Michael Spencer:

Thanks, Brent. Brandon, we'll take the next question now.

Keith Weiss:

Excellent. Thank you guys for taking the question. And congratulations on another really nice quarter. A question just on sort of buying cycles and sort of the timing for this AI goodness to kind of come into the numbers. And maybe it's a question for Brian. How should we think about how customers are ingesting this? Right, how are they purchasing the Einstein platform? Does it start with Data Cloud and then they move into more of the application functionality? And then importantly, how should investors think about when this could potentially impact numbers? And then when this will become material enough to see the inflection in kind of revenue growth? And then maybe one for Amy, another 200 basis points of operating margin expansion in the guide. Super impressive. Can you give us some indications of where that's coming from, where there are the additional areas of leverage that you're seeing in the business?

Amy Weaver:

Sure. So just following up, Brian, on the comments, in terms of the new products, in Data Cloud, we're already seeing this great traction, which is certainly factored in. Some of the GenAI, it's still early, and given that the adoption curve at really our size and scale as a $38 billion company, we're not factoring in material contribution from these new products into our FY25 revenue guidance at this time. Turning on OP margin. Yes. Really happy to see another 200 basis points this year as a commitment. This year, we are just seeing amazing leverage from many of the hard decisions we made last year. They're continuing to flow through and really benefiting the business. A few things I would call out a lot of discipline around headcount over the past year. We are starting to grow in some areas at this point, but it's really investing into our most productive areas, AI, data. And we're doing that in cost effective ways, really trying to leverage areas that have high, high talent pools and low costs. We're also looking at things like top line, how are we doing with our product and pricing? What are we doing in terms of go to market efficiencies? Brian has been great this past year in making changes and driving productivity. I think you'll see additional changes coming, additional benefits coming from all of those areas.

Operator:

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

Marc Benioff:

Well, Kash, this is basically what every software company wants. You want a new killer app. Sometimes you can get it through organic innovation. Sometimes you get it through inorganic innovation. We got lucky. We've done it with organic innovation, with Data Cloud. I think Data Cloud is everything that we want at this moment for a few different reasons. First of all, yes, it's an incredible new cloud and we've seen what that kind of can do for Salesforce when we had Sales Cloud to Service Cloud to Marketing Cloud to platform. And of course, we also had these other clouds that we picked up inorganically, commerce, Tableau, Slack, etc. But this incredible new organic cloud, the difference with this cloud and the difference between what's ever happened with Salesforce before, this cloud makes every other cloud better. So the hot new, exciting version of Sales Cloud, the hottest new feature in Sales Cloud, what's going to transform the tens of thousands of Sales Cloud customers that we have out there that we've been working on building for the last two and a half decades is Data Cloud. And Service Cloud -- the new version of Service Cloud is the Service Cloud plus Data Cloud. And Marketing Cloud read the gartner MQ. We vanquished all of the other competitors completely with this product because it's so deeply integrated with what we're doing already and everything else in marketing. And the platform is extended with Data Cloud. And if you have this other data infrastructure in your company, any of the big queries and the redshifts and the snowflakes, I went through all this. It's made better with Data Cloud because it unleashes that trap data to your users. This is a compelling reason to use Data Cloud all by itself. But that would be if we were not in the greatest transformation of our industry with artificial intelligence, where we so badly need this data. We -- yes, we always love to have another data lake. We would have loved to have a data lake integrated with sales cloud many years ago. Okay, we have that. But why is it more important right now? Yes, we have the data lake, we have the repository, we have the warehouse, but now it has deeply also integrated into the AI. That is why every customer must buy this product if they are going to achieve the nirvana that we can see for businesses, the trinity that we talked about, productivity, customer relationships, margins when you get data and AI working together. We can do it. This is our message to our salespeople, to our partners, to all of you. This is an incredible moment. That is why we have to execute like hell this year. Fiscal year '25 needs to be one thing, the year of Data Cloud.

Marc Benioff:

I can go through it again. I'll do it one more time.

Michael Spencer:

Thanks, Kash. Brandon, we'll take the next question.

Karl Keirstead:

Okay. Great. Maybe a two-parter for Brian. Two elements of the business that I think you have responsibility for. One is around pricing and bundling, and you mentioned Einstein 1. Just curious, when will that be a needle mover for revenues? How much of that uplift are you baking into the guide this year? And then also on the pro services side, typically not a focus area for anybody on this call, but down 9% in the quarter was obviously an inflection down. What's happening with that? Is that tight discretionary spend or is that Salesforce consciously pushing more work to your SI partners? Thanks on both.

Brian Millham:

Thanks, Marc. Karl, back to your question, on pricing and bundling, we're excited about the progress we've made here. UE plus is a good example of what we're seeing, good acceleration. It's not the only thing we're doing in pricing and packaging. Obviously we did a price increase last year and seeing some benefits to that. Certainly, we're simplifying the way that we are putting quotes in the market, fewer SKUs, making it easier for our sellers to get out there. In terms of materiality in the short term, you're not going to really see it show up. We did it in the second half of last year. And so while we've seen great progress and there's a lot of promise for it in terms of this year's revenue guide, not a huge factor in our growth numbers this year, you will see it start to show up in year two and three as we roll through the renewals, the uplift, etc., and some of the incremental pricing changes that we're going to do. On ProServe, a good question. I think the big issue, and it's really been felt across the entire professional services industry, a bit of headwinds on customers willingness to do massive transformation. We really felt that during the pandemic that customers were coming to us and saying, I want to make a multiyear commitment to your services and spend significant amount of money, these very large transactions and services. Now our customers are saying, hey, let me take a smaller bite at the apple. Let me start smaller, get to time to value faster, let me get the benefits of the technology sooner. And so while the demand remains high, it's just smaller transactions that are getting done vis-a-vis last year and the year before that. So the tough compares on large deals, smaller transactions. For us, in a lot of ways, very good. Let's get our customers proving out the technology, let's go faster, but having an impact on our professional services business right now.

Operator:

Your next question comes from Mark Murphy with JPMorgan. Please go ahead.

Brian Millham:

Yeah, Mark. Thank you. We are a big believer on sales on Salesforce. We are deploying our own AI technology internally. Our sales teams are using it. Absolutely, we are seeing benefits right now. But the biggest benefit we've seen actually has been in our support operation with case summaries. Our ability to get -- to tap into knowledge bases faster to get knowledge surfaced within the flow of work. And so it absolutely is part of our margin expansion strategy going forward, which is how do we leverage our own AI to drive more efficiencies in our business to augment the work that's being done in sales and in service and in marketing and even into our commerce efforts as well. So we're excited about the future there as well is leveraging our own technology to drive those efficiencies. Amy, I don't know if you have anything else to add to that.

Michael Spencer:

Thanks, Mark. Brandon, we'll take the next question.

Kirk Materne:

Yeah. Thanks very much. I'll echo the congrats on a great fiscal year. I don't know if Brian or Marc wants to take this one, but we realize AI is applicable to every industry. But I was just kind of curious, are there any industries that you believe are farther along in terms of taking advantage of AI where there frankly could be a domino effect due to the competitive advantage one customer could get over another if they don't start down this path?

Michael Spencer:

Great. Thanks. Brandon, we'll take our last question now.

Brad Zelnick:

Great. Thank you so much for taking the question. Listen, great to see the data cloud traction, the recognition of Gartner's magic quadrant. And Marc, I appreciate you taking us into why the architecture is different from general purpose data platforms and that it brings together the data and the metadata. But my question is a two-parter. A, it's clear Data Cloud is optimized for customer data and customer related apps. Can you take it beyond that? And then, B, how much of the customer base today is really viable to take Einstein 1 on and UE plus at a 50% higher list price point? And how far penetrated are we into that? Thank you.

Michael Spencer:

Yeah. Brad. Thanks for the question. I think the way to think about the price uplift, moving to Einstein 1 edition used to be a limited edition plus. It's really about the value that we're providing to our customers. Because at the end of the day, our ability to get increased price is about the value that we're going to provide. And so as customers start to ramp up their abilities on AI, ramp up their learnings, and understand what it means for them economically, our ability to get price will be dictated by that. Early signs of that are pretty strong. We feel good about the progress we've seen. It's only been in market for four plus months now in FY24, but we're encouraged by what we're seeing. But at the end of the day, it's -- we're trying to make it as simple as we can for our customers to buy it. But it's going to be predicated on the value.

Michael Spencer:

So thanks for the question, Brad. And we thank everyone for joining the call today. We look forward to seeing everyone over the coming weeks.

Operator:

This will conclude today's conference call. Thank you for joining us. You may now disconnect.

Operator:

Welcome to Salesforce's Fiscal 2024 Third Quarter Results Conference Call. After managements prepared remarks, we will open the floor to questions. [Operator Instructions] I would now like to hand the conference over to your speaker, Mike Spencer, Executive Vice President of Investor Relations. Sir, you may begin.

Marc Benioff:

All right. Hey, Mike. Thanks so much, and thanks for all your hard work this year. It's been an incredible year. And also, I just really appreciate everyone being here on the call today. And hope you all had a great Thanksgiving, and I hope you're all preparing a fantastic holiday for yourself coming up. I know it's been an incredible year for so many of the folks on this call, and I'd just encourage all of my folks to try to take a couple of days off and do a little digital detox. And I hope you get a chance to do that as well as we come into the season. We're obviously super excited about these results. We've delivered in this unbelievable quarter and in this unbelievable year. And this double-digit revenue growth, delivering non-GAAP margin exceeding 30%, this is really exciting for us. And when we look at these numbers, when we think about having an $8.7 billion quarter, 31.2% margin in the quarter, and then talking about this year at 34.8% fiscal year '24, amazing with 30.5% margin growth, whether it's 800%, 900%, 1,000% increase from year-over-year, these numbers all exceed what we thought we were able to do. And I'll tell you, okay, we really did this in partnership with all of you. I'm just going to come back to that a couple of times to give you the gratitude and thanks that you deserve for everything you've been doing to help us have an unbelievably great year. But I'll tell you, it's more than just a great year. It's also a huge year of transformation. I think everyone on the call knows that. It's exactly a year ago, as you remember, or maybe I'd like to forget, exactly how crazy that year got, and it was a really unusual year. But we knew we had to change. We knew there had to be transformation. We knew there were things that had to get done. And we look that we were going to have to restructure our business for the short and long term. We talked about that in each of the last several calls. We knew we had to focus on increasing profitability, productivity, operational excellence across the board. We knew that. We knew that we had to really double down on our core, deliver some strong relationships with you, our investors. And then I'll just keep coming back to that, that you've been just such great partners in making all of this happen. And I'll tell you that we have to stay focused on continuing to be this number one AI CRM, which we've been doing. You're going to hear about that today and really finding these incredible growth factors for the company. You know what, people have been asking me why am I so excited about this quarter? And Brian is going to hit on this as well, and Amy is going to hit on this as well. The three things that keep coming back to me are, number one, that we have 80% growth in deals more than $1 million. That is far exceeding our expectations, that we were able to pull together all of these different clouds into this kind of what we call a cocktail. The customers were wanting to buy Tableau, Slack, MuleSoft, the Data Cloud, Sales Cloud, the Service Cloud, all that we're able to build these big transactions. And there's no question that, that kind of fell off last year, now to see that come back. That is just really exciting. Brian's going to talk about that. Number two, we have a great new product. And everyone knows here at Dreamforce, Data Cloud. You can see in the quarter 1,000 new Data Cloud customers. That is number two thing. I am really excited about that. I literally just got off the plane from Tokyo. You probably all saw me yesterday at Salesforce World Tour. Tokyo was incredible. Everyone is very excited about Salesforce in Japan, now the second largest software company in Japan. Incredible what has happened over there in the market. I met with hundreds of customers while I was there. I spoke to some of the CEOs of the largest companies in Japan. It was an incredible week. It was the Momiji season, which is the fall season with incredible fall leaves, beautiful over there. And I'll tell you, everyone wants to talk about Data Cloud. And that is really exciting to have an incredible driver for future growth. And the third thing is, these Einstein GPT Copilots that we've delivered. These Einstein GPT Copilots, this is a product we didn't really even have an imagination around a year ago. Of course, we had Einstein. Of course, we could see the incredible growth of Einstein. I mean now, Einstein with predictive and generative combined, is doing 1 trillion transactions a week, that's amazing. But more amazing is that 17% of the Fortune 100 are now Einstein GPT Copilot customers. And this is a product that is just coming to market. Everyone is so excited about buying this product. So when you see these larger deals, when you see Data Cloud, when you see these Einstein GPT Copilots going into place, that is why we are excited about our growth and why we're excited about this quarter. And then you look at the financial metrics. The $1.5 billion in cash flow, up about 1,000%. That is another reason why we're excited about the quarter. So let me get into the script a little bit, and let me talk to kind of give you the structured messages and then turn this over to Brian. So number one, we are the number one AI CRM. If that isn't clear already, we're leading the industry through the unprecedented AI innovation cycle. It's unlike anything I've seen and most of the people that I talk to all over the world feel the same way. We're the only platform that are bringing CRM and data and AI and trust together for our customers in a way that enables them across every industry to be more successful, faster, be more productive, more efficient. We're the number one by market share for the tenth year in a row based on latest IDC software tracker. We're the number one enterprise apps company now. That's amazing. And Data Cloud, this hyperscale, this real-time customer data platform that is performing incredibly well for us, it's the foundation of every AI transaction, but it's the foundation of every large deal that we did this quarter. That is what is so exciting. And in just our third quarter, Data Cloud has ingested an astonishing 6.4 trillion records, 6.4 trillion records. That's 140% year-over-year increase. It triggered 1.4 trillion activations, a 220% increase year-over-year. This is a monster product. I could not be more excited. And it's the perfect time, we didn't really understand that it was going to line up so well with this generative AI revolution. It's a product we've been working on for a couple of years. Just the timing of it has been incredible because listen, if you don't have your data together, in a company, you're not going to deliver AI. It's not like companies are going to run their AI off of Reddit or off of some kind of big public data set. They have to have their data set together to make AI work for them, and that is why the Data Cloud is so powerful for them. Now as I've said before, this AI revolution is going to be a trust revolution. It's not just about CRM, data or AI. It's also about trust. And I think the trust layer and the way that we've architected our platform so that our customers are not basically taking -- getting taken advantage of these next-generation large language models, these foundation models, they are so hungry for all of this data, and they want our customers' data so that they can grow. We're not going to let them have it. We're going to separate ourselves from those models through a trust layer so customers can be protected. This is going to be so important for the future of how Salesforce architects itself with artificial intelligence. Now revenue in the quarter was $8.7 billion. Not too many software executives get to say it so I think I'll say it twice, actually. Revenue for the quarter was $8.7 billion, up 11% year-over-year, incredible. Third largest enterprise software company now by revenue, also incredible. And companies standardizing on Salesforce as their core technology platform, doing these multi-cloud deals with us. Getting that growth, as I said, that incredible stat that Brian is going to come back to, the 80% growth in deals of more than $1 million, so exciting. Nine of the top 10 deals included six or more clouds. Think about that. Nine out of our top 10 deals included six or more clouds. So that we have amazing clouds, Sales Cloud, Service Cloud, Marketing Cloud, Platform, our Commerce Cloud, Slack, Tableau, MuleSoft, but think about it, how they're bringing all of those things together, Data Cloud, they're bringing it all together into a cocktail. That's amazing. And by the way, those cocktails are going to be a Christmas cocktail soon. And in Q3, we once again showed our commitment to increasing our margins. Non-GAAP operating margin for the quarter was 31.2%, up 850 basis points year-over-year, following an increase of 1,000 basis points in the previous two quarters. It kind of is a sentence that you don't really expect ever read as a CEO, so that was kind of amazing. Operating cash flow for the third quarter was $1.5 billion, up 389% year-over-year. Free cash flow was $1.4 billion, up 1,088% year-over-year. Percentages and absolute numbers are just mind blowing. And our remaining performance obligation ended the third quarter at $48.3 billion, which is an increase of, yes, 21% year-over-year. Pretty good. Okay. Now let's move on to guidance. Based on our performance, we're raising our fiscal year '24 revenue guidance in constant currency to 34.8% at the high end of the range, 11% projected growth year-over-year. Last quarter was raised our fiscal year '24 non-GAAP operating margin of 30% and now we're accelerating again. And we think that we're going to move this thing to 30.5% for the year. And Amy, I think you better beat that, okay? So I mean, the acceleration on the margin this year has been pretty incredible as we all know. So if you go back and look at the last five quarters, you wouldn't believe it. I don't believe it. We delivered an improvement of 850 basis points year-over-year this quarter. I couldn't be more proud of our entire team, how well they are doing. We just got our employee surveys back. The team, the morale is super high, so cohesive, brought back so many boomerangs, really reinforced our culture during this year as well. That's been one of the major things that we have been doing. We've really been focused on building this number one AI CRM, rebuilding our product strategy. Really focused on, number two, is getting these sales executives be able to tell these stories of AI success. And it's incredible to be able to exactly explain to a customer what they can do to be successful. Through the third thing we're really focused on is this idea of delivering new products and new technologies, and this UE+ product that we've now introduced in the market to see so many customers adopt that in the quarter, to see so much of it in our pipeline, UE+ and the incredible work of David Schmaier and his team has been just amazing there. And also our professional services team, delivering these great implementations and making sure our customers are successful. And the fifth thing I would say we're focused on is this Ohana 2.0 culture, which is really takes shape in the middle of this year and really now evidence in this -- you probably saw we just became a Great Place to Work again. We're on the top 10. We're now number seven. And it's amazing to see that recognition for this company is so well deserved. So where are we? Well, you're seeing this high level of interest in Data Cloud and Einstein. It's incredible what's happened. I've been on the road pretty much nonstop especially over the last month. I've been in -- throughout Europe. I've been now in Asia. I've been throughout the United States. And I just continue to see these same trends, which is customers are investing for the future and they're investing and inspired by AI to give them more productivity. Look, they realize unemployment is just so low. Where are they going to hire more people? It's so hard for them to hire, they're going to have to get more productivity from their employees. They're going to do that through this great new technology, and we're going to help them make that happen. Data Cloud was part of six of our top 10 deals in the quarter. We had more than 1,000 net new customers for Data Cloud. I've talked a little bit about the number of deals, the number of wins over $1 million in Data Cloud doubled, and the average ARR per win more than tripled compared to last quarter, pretty awesome. And we've now traded a self-service switch so that every EE and UE customer can just flip it on. And engineering has just done a great job getting every customer become a Data Cloud customer. Closed a lot of amazing deals in the quarter. Really excited about AWS. I know everyone has been talking about that, especially down at the conference this week at ReInvent and we couldn't be more thrilled for our partnership with Andy Jassy, really excited. Really excited about our relationship with American Cancer Society. They've been a customer for a long time. Doing incredible work now seeing them use the Data Cloud, even becoming even more productive, more efficient. Group Global, 30 million users now using Data Cloud, SiriusXM. Joe Inzerillo, great executive. We worked so closely with him at Disney. And one of the reasons that Disney has become wall-to-wall Salesforce. And nowadays at SiriusXM, he's deployed a great, incredible deployment of Data Cloud, but our -- actually our whole product line or so. Excited to work with Joe. And this is really, I think, going to continue on as we start to talk more about customers who are using Data Cloud. I was just in Houston and had a great dinner down there with all of our customers. We had some phenomenal local country music performance at the dinner as well. The Ortega family did a great job cooking for us. Their restaurants are probably our favorite when we get on the road. But I'll tell you, Waste Management and Jim Fish, who I saw when I was in Houston, great executive, love working with Jim. Here is a great company, North America's leading environmental sustaining solutions provider. Now most of the folks on the call are probably customers. And wow, they just have done an incredible implementation and now doing a great job implementing all the AI solutions as well. Well, there's a lot more to talk about there. We've got so much going on and March 8 is going to be a big day for Salesforce. We're going to turn 25 years old. It's hard to believe. At the same time, we've completely rebuilt the company and so well positioned for the AI revolution. And we're lucky to have a great management team, and we've got them sitting here at the table. Of course, we've got Mike Spencer here who is doing a great job running FP&A and IR. We have Sabastian, our new Chief Legal Officer; Amy, our new CFO. But Brian, why don't you take it from here and tell us what happened during the quarter?

Amy Weaver:

Great. Thanks, Brian. Q3 represents another strong quarter of strong execution and discipline. As you heard from both Marc and Brian, we've transformed the company over the past 12 months to drive consistent, profitable growth. And we are pioneering the next wave of innovation with data, AI, CRM and trust. Now let's get right to the results. For the third quarter, revenue was $8.7 billion, up 11% year-over-year and 10% in constant currency. This represents a $40 million beat in constant currency. The growth was primarily driven by continued MuleSoft momentum and resilient sales and service performance. From a geographic perspective, the Americas revenue grew 9%, EMEA grew 14% or 10% in constant currency, and APAC grew 18% or 21% in constant currency. We saw strong new business growth in India, Brazil and Japan, while parts of EMEA were more constrained. From an industry perspective, public sector performed very well while high tech and general continues to be more measured. And as Brian mentioned, our multi-cloud momentum continues. In Q3, nine of our top 10 deals included six or more clouds. Q3 revenue attrition remained strong and ended the quarter again at approximately 8%. In Q3, our non-GAAP operating margin was 31.2%, up 850 basis points year-over-year. Our strong margin outperformance was driven by our continued disciplined investment strategy. Q3 operating cash flow was $1.5 billion, up 389% year-over-year. Q3 free cash flow was $1.4 billion, up 1,088% year-over-year. This upside in cash flow was driven primarily by strong collections as well as lower cash outflow that results to higher margins just discussed. Now turning to remaining performance obligations, RPO, which represents all future revenue under contract, ended Q3 at $48.3 billion, up 21% year-over-year. Current remaining performance obligation, or CRPO, ended at $23.9 billion, up 14% year-over-year and 13% in constant currency. This was ahead of expectations, primarily driven by strong early renewal performance as well as a large customer win in the quarter. This was partially offset by a 1 point headwind from professional services that we had cautioned about last quarter. Finally, we continue to deliver on our capital return commitment. In Q3, we returned another $1.9 billion in the form of share repurchases. And to date, we have exceeded our initial authorization of $10 billion in just over five quarters. Before moving to guidance, I want to reiterate that we continue to assume a consistent measured customer buying environment. Let's start with full year fiscal year '24. On revenue, we are narrowing our guidance range to $34.75 billion to $34.8 billion, representing 11% growth year-over-year in nominal. We are now expecting a $50 million FX headwind, which implies a modest raise in constant currency. On margins, we have made incredible progress on profitability and productivity this year. For fiscal year '24, we are very pleased to raise non-GAAP operating margin guidance again to 30.5%, representing an 800 basis point improvement year-over-year. We also remain focused on stock-based compensation, which is now expected to be approximately 8% as a percent of revenue. As a result of these updates, we now expect fiscal year '24 GAAP diluted EPS of $3.99 to $4, including estimated charges for the restructuring of $0.91. Non-GAAP diluted EPS is now expected to be $8.18 to $8.19. We are raising our fiscal year '24 operating cash flow growth guidance to approximately 30% to 33%, and this continues to include a 14- to 16-point headwind from restructuring. The upside in our cash flow guidance is driven by strong collections to date and our continued expense discipline. CapEx for the fiscal year is expected to be slightly below 2.5% of revenue. This results in free cash flow growth of approximately 33% to 36% for the fiscal year. And as we focus on shareholder return and disciplined capital allocation, we continue to expect to fully offset our stock-based compensation dilution through our share repurchases in fiscal year '24. In fact, as a result of our ongoing share repurchases, for the first time in company history, we expect the full year's ending share count to decrease year-over-year. Now to guidance for Q4. On revenue, we expect $9.18 billion to $9.23 billion, growth of 10% in both nominal and constant currency. CRPO growth for Q4 is expected to be 10% year-over-year in nominal and 11% in constant currency. Similar to this past quarter, we expect professional services headwinds of 1 point to CRPO growth. For Q4, we expect GAAP EPS of $1.26 to $1.27 and non-GAAP EPS of $2.25 to $2.26. As we look forward to our largest quarter of the year, we remain focused on strong execution and our disciplined investment strategy. In closing, I want to echo both Marc and Brian. This was a great quarter, but even more than that, this has been an extraordinary year of transformation. I want to thank our shareholders for their continued support, and I particularly want to thank our employees for their incredible work throughout the past year. Now Mike, let's open up the call for questions.

Operator:

Our first question comes from the line of Kirk Materne with Evercore ISI. Please go ahead.

Marc Benioff:

I'm going to have Brian really give you the detail, but what I'll tell you is, you're seeing something that we have been seeing and calling out for the last few quarters, but we probably have not been able to illuminate it to the level that you see now in the numbers, which is that every customer and every customer transformation and every customer AI transformation is going to begin and end with data. And for us to achieve that goal, those customers are going to have to get to another level of excellence with their data. And at the heart and soul of that for many of these customers is becoming MuleSoft. So in addition to Einstein, in addition to Data Cloud, in addition to our Copilot technology that we called out, it's been a lot about MuleSoft this year. And we think that, that trend is going to continue and it's very exciting, and that we're very well positioned with this completely unique product that is helping our customers bring all their data together for their AI transformations. Brian?

Michael Spencer:

Thanks, Kirk. Operator, we will take next question, please.

Raimo Lenschow:

Sorry. Never learn that. Congrats from me as well. The -- Brian, you talked about the sales productivity, and that was a big theme this year and the 30% increase is very impressive. Where are we on that journey in terms of like, first of all, how did you achieve that? Because that's a very big number in the software industry, but like where are we on that journey in terms of going forward? Thank you.

Michael Spencer:

Thanks, Raimo. Operator, we will take next question, please.

Keith Weiss:

Excellent. Thank you, guys for taking the question and a very nice quarter. I wanted to ask about the 17% of the Fortune 500 that are the Einstein GPT Copilot customers. Really impressive figure. Really early in a technology cycle, because a lot of what we're hearing is a lot of exploration out there, a lot of people trying to figure out what to do with these tools, not a lot of buying. So can you give us a little bit of color on kind of what's driving that adoption and what's enabled you guys to get such good adoption so quickly? And maybe if I could sneak one in for Amy as well. Great margin expansion this year, but there's a lot of stuff you guys need to be investing against with this technology cycle. Should we expect to see further margin expansion as we head into FY '25? Thank you, guys.

Marc Benioff:

Yes.

Brian Millham:

Yeah. I'll just add a little bit there, too, Amy. I think we have really a team focused on the margin expansion. We want to continue to simplify our go-to-market strategies, how we optimize our pricing and packaging going forward as well. We talked about some of the things that we're doing there. New channels to market. We're really excited about the AWS Marketplace as a new channel to market for us. Amy mentioned location strategies, how do we continue to look at our real estate portfolio as an opportunity, how do we leverage our own technology, sales force on Salesforce and using our own products to drive more efficiency and automation in our business. So lots of opportunity to continue to do this. I’m excited about the culture and structural change in the way that we’re thinking about margin expansion of the company, and I think you’ll continue to see that. So thank you, Keith. And then on the Fortune 500 that are using it, you’re right, it is early days. And as we said in the script, a lot of our customers are starting to trial and use this technology to see the benefits around productivity and cost takeout, leveraging the technology. But as we’ve also said, the data is an important aspect of this. And how do they clean up and harmonize their data first before they start to roll out these AI technologies broadly? How do you trust the output that you’re getting from your AI investments? And so what we found in conversations with our customers is an energy around and excitement around AI, but in a need to clean up the data first before they can really take advantage of this. And we’ll continue to see the expansion. The 17% is great. We want to continue to go faster there, and we’re going to work with our customers to go drive those outcomes.

Operator:

Your next question comes from the line of Mark Murphy with JPMorgan. Please go ahead.

Marc Benioff:

I think your number one thing that you're going to see is customers trying to achieve more productivity. This AI revolution is a productivity revolution, and it means that every customer is just a lot more augmented. When I was in Tokyo, obviously, the yen is very depressed. And of course, we see that in our financial results as well. They'd be so much higher if the yen was higher. But I had an opportunity to walk into a couple of our customers' retail stores, and one of them that I was extremely impressed with was Louis Vuitton. And when I walked into Louis Vuitton, they know exactly who I am. They have -- even in Tokyo, and I test this wherever I go in the world, lots of different customers, I had an incredible experience. They use this amazing app that they've built with our platform called ICON. They've done an incredible job. They have my full customer data and buying history. The sales executives are guided on how to work with me and what kind of products I'm interested in and what I want to buy. And it's a productivity revolution for them. They are able to get a lot more success with our technology. And I walked into another store which is not one of our customers, and I have to follow up still with the CEO because, wow, the customer experience was just Oracle. It was the exact opposite. They didn't know anything about me. They couldn't work with me at all. It took probably the salesperson 3 or 4 or 5 times as long to complete the transaction because they did not have the automation. The product revolution had not come to this company. So when I look at the companies that have had that great success, obviously, the entire Louis Vuitton group, obviously, the entire Kering Group, when I look at so many of the organizations that I had the opportunity to kind of touch, it's amazing. I guess I was also very inspired in Japan talking to Goto-san as the CEO of Seibu. He has an incredible hotel chain called Prince Hotels. And they're building a whole next-generation loyalty system based on Salesforce. They've had great success in using our product for marketing their hotels and having much higher levels of customer touch, both in B2B and B2C. But now they can take it to another level with the Data Cloud and provide a high-level loyalty management point system, something that's so important for their future growth. I had another opportunity to talk to Amazon is the Head of Technology at Toyota. His point was very simple, that we've fully automated all of the Toyota dealers in Japan. It's been an incredible success story. We have done that with Toyota Media Services as our partner, a company that we have an incredible relationship with. But now with Toyota, we have the ability to take our vision to a whole another level, making this connected car experience really go one step higher, connecting all the Toyota cars directly to our Data Cloud and the Data Cloud then having the ability to proactively deliver the customer information and interactivity as it hits different thresholds. These are the opportunities that I see going forward. It's about productivity. It's about automation. It's about doing it on a global basis for these companies. And ultimately, for them, it's about taking advantage of incredible new artificial intelligence technology that before was not possible.

A – Brian Millham:

No, that’s great, Amy. Exactly what I was going to say, a lot of demand at the top of the funnel for us for new technologies like Data Cloud and like AI, but also seeing some headwinds, no doubt, from our more transactional business, as you stated. So Mark, thank you for the question.

Operator:

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

Marc Benioff:

There's a lot of debate on the management team and putting together this call on how we're going to answer that question. We don't want to, in any way, give you indications that we see this environment going behind us. That said, we see a lot of green shoots. There's just a lot of opportunities. Customers are excited about -- and I think Japan, I would say, is very much a metaphor for me. When I was there about a year ago, for them, it was still the pandemic. Everyone, when I had lunch with my employees, they had to wear masks a year ago. So this was the first time when I felt like, kind of back to normal and the pandemic hangover is kind of ingested by the customers. I think that we're cautious about saying, oh, it's all green shoots, everything is going, we're back to normal. But at the same level, we are honest with you that we have a lot of green shoots and in products, in geographies. And you can see in this growth rate in large deals. So we're excited. I don't think we're willing to say to you on the call, hey, we've turned the corner. We want to but we're not sure because for a lot of customers, they still are measured in their buying environments. You know that. You talk to these customers. You talk to the channel partners. They're somewhat measured in their buying environments. But I would say people are a lot less measured than they were is one way to put it. There's definitely a reduction in the measured environment. And on a global basis, and like I said, in some of these customers in the last 30 days, I was in -- I can give you my direct experience. I was in San Francisco, Los Angeles, Las Vegas, Stuttgart, Germany, I was in Nice, Monaco. I visited with our customers throughout that area. And also, I went up to Amsterdam, to France. I had a large customer dinner in the U.K. in London. I went to the U.K. Safety Summit. I then came back and went to Japan. I think I see something very consistently, which is customers are extremely excited about AI everywhere we go. It could be government, it could be commercial organizations. It could be technologists. Everyone is excited about AI. At the same time, there is a lot of confusion about what AI can and cannot do. And I think that's a huge opportunity for us to tell stories to our customers of what the success opportunities are in the enterprise with AI and also what the reality is for a lot of these customers. When I mentioned I was in Vegas. When I showed up in Vegas at the Wynn Hotel, the customers are -- they have our product in their hands, welcoming me. The whole team comes out because they're so excited because they used Salesforce, it's very flattering. When I got to Disneyland in Anaheim, which is something I have done 4 times this year, and obviously, they've become also one of our very largest customers in the world. Every Disney guy and they use Disney guys, which is a product. I highly recommend it to all the Disneylands, Disney Tokyo on Monday and in Disney Anaheim. Been talking to the Disney guys and they use Salesforce and Slack to make those tours happen. They use Salesforce call center now for Disney+. On the Disney store is Commerce Cloud. It's an incredible success story, but it's a huge opportunity for them to take another level of Disney where I certainly can see how all that information can get translated into AI. And that when I walk in the park, I'm expecting the Mandalorian to come up to me and say, "Hey, what did you think of the episode last night? It hasn't happened yet. I think we're all kind of on the cusp of delivering that full customer 360 for Disney." I think Bob Iger has been doing an incredible job in his vision for the future of the company with AI Assist extraordinary. And I can kind of go customer by customer, story by story. And this excitement, this energy, these ideas of innovation of AI were not in place a year ago. Because don't forget, a year ago, I don't think any of us have used ChatGPT or Bard or Anthropic or Cohere or Adapt or any of the new AI companies. None of us had really had our hands on or envisioned what it really meant to us or that we would have Copilots, and that those Copilots would give us the ability to do all kinds of next-generation capabilities. But a year later, it's a technology revolution. And we just want to make sure it's a trust revolution. We want to make sure it's about an AI and CRM and data revolution. I think we hit it right with the Data Cloud. We have -- we still have a lot of work, as everyone does in our industry, on AI and making it safe for our customers. This is going to be incredibly important. I think for a lot of customers, they realize that they'd like to just let this AI unleashed autonomously but it still hallucinates a huge amount and it also is quite toxic. So we're not quite ready for that revolution. But every day, it's getting a little better. And when I -- going through the streets of Tokyo, it's not quite the minority report, which is a movie that was partly written by our futurist, Peter Schwartz, but it's getting closer to that idea. And when I walked into some of these stores, there's definitely a lot more automation based on my customer record but not quite the level of automation that Tom Cruise felt when he walked into that Gap store, if you remember that scene, which was so amazing, which is very much front of mind for a lot of our customers because they want to have that capability and they want us to deliver that for them.

Operator:

Your next question comes from the line of Karl Keirstead with UBS. Please go ahead.

Brian Millham:

Hey, Karl. Thanks for the question. Appreciate it. Price increases landed as well as the price increase can, I guess, with our customers out there. I think when we're delivering value to our customers and they're seeing benefits from our technology, we feel good about our ability to go execute against this. It's still early, honestly. We just introduced this a few months ago. And so we have seen certainly some benefits from it. But we'll see these benefits roll in over the next, really, three years as these contracts come up for renewal. And so yes, there's been receptivity to it but the big impact will be seen over the next three years. We're not going to see it in the near term, honestly, in our numbers. Amy, any comments?

Michael Spencer:

Thanks, Karl. Operator, we will take next question, please.

Brad Sills:

Wonderful. Thank so much. Great to see all the success here with Data Cloud. I'm not surprised we're hearing that in the channel. My question is really around the organization, the team that's responsible for executing on this and how they plug into the different product groups. Data scientists in this day and age are a rare commodity and you clearly are attracting that. So would love to get a sense for that organization, how it's evolved and how well integrated they are across the different product groups. Thank you.

Michael Spencer :

Great. Thanks, Brad. With that, we'll conclude the call. We appreciate everyone joining the call and wish everyone a happy holiday season. Thank you.

Amy Weaver:

Bye, everyone. Thank you.

Operator:

Welcome to Salesforce Fiscal 2024 Second Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I would like to hand over the conference to your speaker, Mike Spencer, Executive Vice President of Investor Relations. Sir, you may begin.

Marc Benioff:

All right. Thanks so much, Mike, and really appreciate everyone being here today. We're obviously very excited about these results and getting out there with all of you, and thanks for being on this call. So, listen, as we've shared with you over the last couple of earnings calls, Salesforce has really accelerated our transformation to profitable growth. I think that's super clear from the numbers and I couldn't be more excited, especially on this huge top line beat and what our margin is looking like today. As you all know, over last year, we've been executing against these four key areas of our transformation. First, our restructuring for the short and long-term. We've been talking about that since the fourth quarter call and we're going to update you on that today. Second, we're reigniting our performance culture by focusing on productivity, operational excellence and profitability and Brian is going to talk about that today. And third, we're prioritizing the core innovations to drive customer success, and I can't wait to share with you at Dreamforce, how we're taking our core platform to a whole new level, showing you some incredible new enhancements to our data cloud as well as new versions of Einstein and also fundamental extensions to our core platform, really showing how our core platform has been rebuilt so that we can take so many of these amazing acquisitions that we've made over the last decade and run them right inside the core. Our fourth priority is building even stronger relationships with our investors. That's all of you. You know how important that is to us. We probably spent more time in the last six or nine months with our investors, and we have maybe in the entire history of the company. And we've received just great feedback from all of you and we're really making great progress there and I want to especially thank Mike for everything that he's doing with all of you. And we're adding a fifth priority. And last quarter, we told you we're now driving our AI transformation. We're pioneering AI for both our customers and ourselves leading the industry through this incredible new innovation cycle and I couldn't be happier with Srini and David and the entire product and technology team for the incredible velocity of AI products that were released to customers this quarter and the huge impact that they're making in the market and showing how Salesforce is transforming from being not only the number one CRM, but to the number one AI CRM, and I just express my sincere gratitude to our entire T&P team. I couldn't be happy with the performance of our team delivered in the second quarter, and the numbers basically speak for themselves. Our AI data, CRM plus Trust platform, well, it's propelled us to become the third largest enterprise software company by revenue in the world. And I think in Japan, we just became the second largest company. So congratulations to everyone at Salesforce and especially to our Japanese team. And with our industry-leading cloud and sales service marketing commerce, our industry clouds powered by Data Cloud, Einstein Flow, Tableau, Slack, MuleSoft. Really, all of these are integrated into one trusted metadata-driven platform. We're providing more capabilities to more customers than any other CRM vendor, and I can't wait to show all that, as I said, at Dreamforce. That's why Salesforce is the number one CRM by market share based on the largest latest IDC Software Tracker. And now we are working hard to be the number one, as I said, AI CRM. Our transformation drove our second quarter results, especially when it comes to our highest priority, as you can see, profitability. And look, we couldn't be happier to see these numbers. It's incredible to see the margin acceleration in such a short period of time. We've exceeded our own expectations. I hope you've exceeded yours. In our second quarter, our non-GAAP operating margin rose to 31.6%. That's up over 1,000 basis points year-over-year. And this is the second quarter in a row, our operating margin is up 1,000 or more points year-over-year. And as you're about to hear from Amy, we've maintained our disciplined approach to cost management while also investing in growth initiatives across our entire platform of offering and we're positioning Salesforce for the future and will continue to drive our margins and also while we're continuing to drive customer growth. Revenue in the second quarter was $8.6 billion. It adds up a 11% year-over-year and the same in constant currency. And during the quarter, we had great wins with JPMorgan, Bayer, FedEx, Maersk, as well as the Department of Veterans Affairs. And so many more you're going to hear about from Brian. Operating cash flow for Q2 was $808 million, pretty incredible. That's up 142% year-over-year, really, very strong. And our remaining performance obligation ended the second quarter at $46.6 billion, that's an increase of 12% year-over-year, really amazing. Current remaining performance obligation or what we call CRPO, ended at $24.1 billion. That's up 12% year-over-year and 11% and in constant currency. Now through the second quarter, we have returned and this is amazing, $8 billion in share repurchases since we started the buyback program a year ago. So we've bought $8 billion of stock over the last 12 months that is really awesome. Amy is going to talk more about that. And I think I know you realize we have a lot more to do there. Based on our performance and what we saw in the back half of the year, we're raising our fiscal '24 revenue guidance to $34.7 billion to $34.8 billion or about 11% projected growth year-over-year. Last quarter, we raised our fiscal year '24 non-GAAP operating margin guidance to 28% and we said that we expected to eclipse 30% in the first quarter of fiscal '25. Well, as you've all seen these numbers and now I'm happy to officially share, we are accelerating that target again, raising our fiscal year '24 non-GAAP operating margin, 30%, an improvement of 750 basis points year-over-year. It's kind of amazing, but, yes, we are saying that we're going to deliver 30% margin for this year. And that's an incredible goal. So while we thought we were going to do it next year, we're really going to do it this year. And it's an amazing achievement of our whole team. It certainly has been a lot of work. It's been difficult. In a lot of cases, it has been a struggle. But our teams are incredible. And what they have done has been nothing more miraculous and down to see, not only to the delivery of the 31% plus growth for this quarter, but 30% for the year. It's just awesome. It's just incredible. And I'm really excited to welcome back to Salesforce so many boomerang employees. Boomerang employees are employees who are employees, but for one reason or another, left the company, got recruited away or went off to start their own companies or ever. Well, a lot of these results have to do with not only our incredible employees that we've had in place. But a lot of folks have really felt the desire to come back and help us. And I just want to say thank you to all of them. It's been incredible to welcome them back. And the line is long out the door of people who have left Salesforce and want to come back to Salesforce and we're welcoming all of them with open arms, especially across our sales, engineering, technology organization, proven winners, incredible leaders who got taken out of Salesforce because they were doing incredible things. To watch them come back because they want to help us and achieve this next level of growth and capability and revenue and margin and in technology and leadership. Well, I just want to especially start to thank some of those, including Miguel Milano who's our new Chief Revenue Officer. He's just returned to us from Celonis and of course Ariel Kelman, our Chief Marketing Officer, who was most recently at Oracle and Kendall Collins, our Chief Business Officer, and he's been my -- now my Chief of Staff and was, of course, had so many executive positions at Salesforce. But this is a long list and I can't even continue it of how many people are coming back. And what I love about this is that they're hitting the ground running and they make an immediate impact. They know the culture, they understand the products, they're able to execute incredible agility. And so I've got the siren sound out there for all of them to come back and to join us. Now earlier this month, we welcomed Sabastian Niles to Salesforce, he's our Chief Legal Officer. He's sitting here at the table right now, making funny faces with me, and I wouldn't be happier. And I couldn't be happier to have Sabastian. As part of my executive leadership team, we met Sabastian this year. We did a lot of work with Wachtell, as lot of you know, we will go through the details. It's not necessarily to go through that right now. The past is the past. But I'll tell you one of the greatest things that happened during this amazing period of Salesforce was meeting Sabastian and now to have him on the leadership team. I couldn't be more excited and I'm thrilled to have him with us. So welcome Sabastian.

Marc Benioff:

Okay. Thank you. Those are his opening comments. AI, Data, CRM, Trust, let me tell you, we are at the dawn of an AI revolution. And as I've said, it's a new innovation cycle that is sparking amounts of tech buying cycle over the coming years. It's also a new tech investment cycle. We've been involved in the earliest rounds many of the top AI start-ups. Many of you have seen that, we are in there very early. But I'll tell you, this company has pioneered AI, and not just in predictive, a lot of you have followed up the development and growth of Einstein. But also, you've seen that we've published some of the first papers on prompt engineering and the beginnings of generative AI, and we took our deep learning routes, and we really demonstrated the potential for regenerative AI and now to see so many of these companies become so successful. I just saw OpenAI delivering $1 billion revenue run rate. It's just awesome to see this growth and especially proud that they're right here in our hometown of San Francisco, which is becoming the number one AI city in the world. Very excited for our city. Now through our $500 million generative AI Fund, we're seeing the development of ethical AI with amazing companies like Anthropic, Cohere, Hugging Face and some others, and I just heard one of them just subleased our entire Slack building, but I'm not allowed to say who it is, but I couldn't be more excited about that because we're really seeing downtown San Francisco become AI Central. So every CEO I've met with this year across every industry believes that AI is essential to improving both their top and bottom line, but especially their productivity AI is just augmenting what we can do every single day, just thinking about myself. I have spent so much time on Bard over the last week, it's incredible. I was just buying some flashlights and I couldn't figure out what flashlight I wanted to buy, and I was on Amazon trying to figure out what's the flashlight. And so I took a picture of the Amazon picture of what was happening on the app, and I gave it to Bard because Bard has this multimodal capability to ingest the photo. And then ingested the photo, and it told me not to buy the flashlight, that it was poor quality and then recommended one that was better for me, and it was incredible to see that I was once again working with a next generation of artificial intelligence. And that is inspiring me and I think many of our customers and ultimately, all of them believe they can grow their businesses by becoming more connected to their customers than ever before through AI and at the same time, reduce cost, increase productivity, drive efficiency and exceed customer expectations through AI. And I'll tell you, every single management team that we have here at Salesforce every week, we're using our Einstein AI to do exactly the same thing. We go back, we're trying to augment ourselves using Einstein. So what we'll say is, and we've been doing this now and super impressive, we'll say, okay, Brian, what do you think our number is and we'll say, okay, that's very nice, Brian. But Einstein, what do you really think the number is? And then Einstein will say, I think Brian is sandbagging and then the meeting continues. The reality is every company will undergo an AI transformation with the customer at the center, because every AI transformation begins and ends with the customer, and that's why Salesforce is really well positioned with the future. And with this incredible technology, Einstein that we've invested so much and grown and integrated into our core technology base. We're democratizing generative AI, making it very easy for our customers to implement every job, every business in every industry. And I will just say that in the last few months, we've injected a new layer of generative AI assistance across all of the Customer 360. And you can see it with our salespeople who are now using our Sales Cloud GPT, which has been incredible, what we've released this quarter to all of our customers and here inside Salesforce. And then when we see that, they all say to themselves, you know what, in this new world, everyone can now be in Einstein. But democratizing generative AI at scale for the biggest brands in the world requires more than -- that's just these large language models and deep learning algorithms, and we all know that because a lot of our customers kind of think and they have tried and they go and they pull something off a Hugging Face, it is an amazing company. We just invested in their new round and grab a model and put some data in it and nothing happens. And then they don't understand and they call us and say, hey, what's happening here? I thought that this AI was so amazing and it's like, well, it takes a lot to actually get this intelligence to occur. And that's what I think that's the value that Salesforce is bringing is that we're really able to help our customers achieve this kind of technological superiority right out of the box just using our products in a low code, no code way. It's really just democratization of generative AI at scale. And that is really what we're trying to achieve that at the heart of every one of these AI transformations becomes our intelligent, integrated and incredible Salesforce platform, and we're going to show all of that at Dreamforce. Our platform starts and ends now with our Data Cloud, and I just would like to call out the incredible Data Cloud team for what they've delivered. A lot of you have seen the release of the Data Cloud, this incredible Genie technology that we started really showing off last Dreamforce, but what you can see with Data Cloud is that customers must get their data together if they want to achieve success with AI. This is the critical first step for every single customer. And we're going to see that this AI revolution is really a data revolution. And you're going to see at Dreamforce that we're going to get this data cloud turned on as fast as we can and as easiest as we can for every single one of our customers. This Data Cloud is incredible, what it's doing for our customers. It not only has AI built in, but it's real time, it's automated, it's integrated with the core platform. It's not some separate Data Cloud. It's an integrated part of our platform in our metadata, in our core code, like our Sales Cloud, like our Service Cloud and, as you're about to assume seeing our new Marketing Cloud and Commerce Cloud and of course, our core application development capabilities all inside our Data Cloud. No CRM platform on the planet is better positioned than Salesforce to use this amazing Salesforce and business data to fuel AI-powered applications because of this architecture. It's very easy for our customers to set up and just go. And our data cloud is so deeply integrated as part of this core metadata architecture. It's allowing our customers to quickly action all of their data from any source without the costly integration project necessary with stand-alone data warehouses and data lakes, they've been forced to buy and create more islands of information and all of these independent systems and independent teams versus having one integrated data architecture. We're moving our customers from having islands of data to having a single source of truth for all of their data. This is our greatest dream. With Data Cloud and powerful technologies like Einstein Flow, Lightning, Tableau, MuleSoft, Slack. Our customers, they can easily supercharge every application and customer experience with AI, automation and analytics at scale. Data Cloud continues to be our fastest-growing organic product. You're going to see the new version. At Dreamforce, it's fully integrated with our Sales Cloud and Service Cloud and of course, already our Marketing Cloud and other key things in this kind of new second version of Data Cloud that's coming will be fully released to the customers. And as I said, our goal is for every customer just to be able to easily turn it on. Just in the second quarter, Data Cloud ingested, and this is amazing. Over six trillion records, it ingested six trillion records and triggered more than one trillion activations to drive customer engagement. And we've always put trust at the center of everything that's going on in our platform and that has never been important. More important, I would say, especially now, with not only with data cloud, but in this AI revolution because this AI revolution is a trust revolution. Everything Einstein does has also delivered with trust and especially ethics at the center and I especially want to call out the incredible work of our office of ethical and humane use, pioneering the use of ethics and technology. If you didn't read their incredible article in HBR this quarter. It was awesome. And they are doing incredible work really saying that it's not just about AI, it's not just about data, but it's also about trust and ethics. And that's why we developed this Einstein trust layer. This is completely unique in the industry. It enables our customers to maintain their data privacy, security, residency and compliance goals. And I can tell you, we're already at this early stage seen momentum with these amazing Einstein innovations. Companies like Heathrow Airport and PenFed Credit Union really adopted Einstein and took their Salesforce implementations to another level in the quarter. Heathrow is a great example of transformative power of AI, Data, CRM and Trust and the power of a single source of truth. They have 70 million passengers who pass through their terminal annually, I'm sure many of you have been one of those passengers I have as well, Heathrow is operating in a tremendous scale, managing the entire airport experience with the Service Cloud, Marketing Cloud, Commerce Cloud, but now Heathrow, they've added Data Cloud also giving them a single source of truth for every customer interaction and setting them up to pioneer the AI revolution. And with Einstein, Heathrow's service agents now have this AI-assisted generator applies to service inquiries, case deflection, writing case summaries, all the relevant data and business context coming from Data Cloud, we're doing so much incredible and exciting innovative work in service with Data Cloud and with our Service Cloud and AI is going to show us a whole new vision for the future of service and what our Service Cloud can do for customers not only with delivering high-quality customer service, but delivering incredible new levels of productivity. This is saving their agents huge amounts of time and effort. This is the power of Salesforce. I've never been more excited about the future of our industry, the power and future of our company, the potential to help all of our customers and also especially our team, the quality of our team, especially fueled by all these amazing new boomerangs and you're going to see it all at Dreamforce. Dreamforce is right around the corner, September 12 through 14 right here in San Francisco. I'm looking forward to welcoming each and every one of you to Dreamforce. I'm right now at the top of Salesforce Tower in San Francisco. We're going to bring you up here. We'll bring you through Moscone. We'll show you our incredible downtown. And I'll tell you this isn't just the largest enterprise tech conference this year. It's going to be the world's largest AI conference and the largest gathering of AI experts. We'll have many of the world's top AI thinkers, including Sam Altman and his amazing OpenAI company, incredible what he's doing. Anthropic CEO, Dario Amodei, who's one of his alumni who left OpenAI to start Anthropic, amazing company. Stanford's Fei-Fei Li, amazing researcher and visionary leader of AI and presenting some of the -- into some of the 1,500 Dreamforce Conference sessions, it's really awesome what we're going to see here with AI and Dreamforce. And we're going to take everyone's skills to a whole another level. And we'll also share our vision for the future of CRM, the next generation of Data Cloud and Einstein. And we're also going to have the Foo Fighters, they are going to play our Dreamforce Benefit Concert. Dave Matthews is going to play my dinner the night before. Hopefully, we're going to see him at the conference, some incredible ways. And we can't wait to get you all here and to show you what's happening at Salesforce, what's happening in AI, what's happening in San Francisco. And it's going to be an amazing event, and we're just a few days away. And now let me turn it over to Brian.

Marc Benioff:

It wasn't me. It was Einstein. So just you know it is what it is, Brian.

Marc Benioff:

That's the AI revolution coming at you, baby. So get ready.

Amy Weaver:

Thank you, Brian. Our Q2 results show that we continue to make great progress in our four, now five, key areas of transformation, delivering another quarter of top and bottom line expansion. As you can see in our results, we're delivering against our transformation, driving profitable growth and shareholder value, and we are well positioned for the future with the number one AI CRM. Our execution against our profitable growth framework drove our Q2 results. So let's start with the top line commentary. For the second quarter, revenue was $8.6 billion, up 11% year-over-year and the same in constant currency. The growth was primarily driven by continued MuleSoft momentum, solid sales and service performance and a modest FX tailwind. This was partially offset by some continued weakness in professional services. The durability of our business model and our continued multi-cloud expansion strategy reflects the mission-critical nature of our unified platform. This is evidenced by the more than 450 customers who invest more than $10 million annually and average seven clouds. And in the last five years, the number of $10 million plus customers has tripled and their average number of clouds has nearly doubled. From a geographic perspective, the Americas revenue grew 10%. EMEA grew 13% or 11% in constant currency, and APAC grew 20% or 24% in constant currency. We saw strong new business growth internationally, highlighted by Canada, France and India. While the United States continues to be constrained. From an industry perspective, manufacturing, automotive and energy saw greater resilience, while high tech and retail and consumer goods were more measured. Q2 revenue attrition ended the quarter at approximately 8%. In Q2, our non-GAAP operating margin rose to 31.6%, up 1,000 basis points or more for the second quarter in a row. The margin improvement was driven by savings from our restructuring actions, strength in revenue and investment timing. I am very proud of our progress. Our disciplined approach to cost management has allowed us to exceed our 30% non-GAAP margin target three quarters early. Q2 operating cash flow was $808 million, up 142% year-over-year. Q2 free cash flow was $628 million, up 379% year-over-year. The upside in cash flow was driven by stronger collections than expected and lower cash outflows tied to the Q2 margin benefits we just discussed. Now turning to remaining performance obligation, RPO, which represents all future revenue under contract ended Q2 at $46.6 billion, up 12% year-over-year. Current remaining performance obligation, or CRPO, ended at $24.1 billion, up 12% year-over-year and 11% in constant currency. This was ahead of expectations, notably due to the momentum in MuleSoft. As we called out last quarter, CRPO growth did include a one point headwind from professional services. And finally, we continue to deliver on our capital return commitment. In Q2, we returned $1.9 billion in the form of share repurchases, bringing the total return to more than $8 billion, representing more than 48 million shares since the program was initiated just last August. Before turning to guidance, I wanted to briefly touch on the current macro environment. As you heard from Brian, the measured macro environment continues to impact customer decision-making. And we are still seeing elongated sales cycles, additional deal approval layers and deal compression in our subscription and support and professional services businesses. These factors are incorporated in our guidance. Let's start with fiscal year '24. On revenue, we are raising our guidance to 34.7% to 34.8%, representing 11% growth year-over-year in both nominal and constant currency. The increase is driven by strength in our subscription and support revenue, particularly in MuleSoft. We are accelerating our transformation to profitable growth. For fiscal year '24, we are pleased to raise non-GAAP operating margin guidance to 30%, representing a 750 basis point improvement year-over-year. As Marc highlighted, we're in a new AI era, a new innovation cycle that we will continue to invest into as we have over the last decade. As a result, we expect nonlinear quarterly margins in the back half of this year, driven by investment timing, specifically in AI-focused R&D. We also remain focused on stock-based compensation and expected to improve this year to slightly above 8% as a percent of revenue. As a result of these updates, we now expect fiscal year '24 GAAP diluted EPS of $3.50 to $3.52, including estimated charges for the restructuring of $1.11. Non-GAAP diluted EPS is now expected to be $8.04 to $8.06. We are raising our fiscal year '24 operating cash flow growth guidance to approximately 22% to 23%. This continues to include a 14 to 16 point headwind from restructuring. As a reminder, we expect to see an increase in our cash taxes in fiscal year '24 as we draw down our remaining net operating losses. We expect an even greater cash tax headwind next fiscal year as we draw down our remaining tax credit carryforward. CapEx for the fiscal year is expected to be slightly below 2.5% of revenue. This results in free cash flow growth of approximately 24% to 25% for the fiscal year. Now to guidance for Q3. On revenue, we expect $8.7 billion to $8.72 billion growth of approximately 11% or 10% in constant currency. CRPO growth for Q3 is expected to be slightly above 11% year-over-year in nominal and slightly above 10% in constant currency. We continue to expect professional services headwinds of approximately one point to CRPO growth. As a reminder, Q3 is the first full quarter we lapped the measured buying environment that we first began to see in July of last year. While we expect bookings growth to begin to normalize, CRPO will continue to be materially impacted by the cumulative effect of the previous five quarters of measured sales performance. For Q3, we expect GAAP EPS of $1.02 to $1.03. And non-GAAP EPS of $2.05 to $2.06. And as we focus on shareholder return and disciplined capital allocation, we continue to expect to fully offset our stock-based compensation dilution through our share repurchases in fiscal year '24. In closing, I want to thank our shareholders for their continued support. As we laid out for you two quarters ago, we have radically accelerated our transformation to profitable growth. We've maintained our disciplined approach to cost management while continuing to make strategic investments, notably in our new data and AI capabilities. And finally, I hope you're able to attend Dreamforce whether in person or virtually, to hear the latest on the incredible AI innovation our team is delivering. As Marc said, it's going to be the AI event of the year. Now, Mike, let's open up the call for questions.

Operator:

Thank you. [Operator Instructions] Your first question comes from the line of Kash Rangan with Goldman Sachs. Your line is open.

Marc Benioff:

Kash, thanks so much, and we're looking forward to seeing you at Dreamforce. We're really excited, and I think you're going to be super excited when you see these new AI products. And when we talk about growth, I think it's going to start with AI. I think that AI is about to really ignite a buying revolution. I think we've already started to see that with our customers and even some of these new companies like OpenAI. And we certainly see that in our customers' base as well. I think you also know we've definitely seen in the last several quarters a measured buying environment, that's also been true, not just at Salesforce, but I think for the vast majority of our peers that you follow. And I think that you've also called that out a number of times. And I certainly expect that to abate, especially as customers begin to adopt these new AI technologies and understand they need to invest and grow to be able to achieve this kind of next level of productivity. Now all that said, we've also seen this amazing growth in a number of our core technologies and our products, and I would especially like to call out the incredible success of MuleSoft over the last several quarters because that is a product that is far exceeded our expectations, especially and including several of our geographies as well. So this is not something that is quite permeated everywhere, but there are some isolated areas. And I really think that Dreamforce is going to become a catalyst for our customers to see this opportunity to grow with us to see these new products, these new technologies. Data Cloud is just one example of many new areas that Salesforce investments can happen with customers. And I'm sure that as they start to reignite their IT buying budgets in this kind of post-pandemic hangover that's kind of occurred. I think as we kind of get to this next level, we're going to see it driven by artificial intelligence. Brian, what's your perspective?

Marc Benioff:

And I think I would be remiss if I didn't call on an Ariel Kelman who's sitting here at the table with us to talk about Dreamforce and also talk about a number of the incredible new technologies that are turning to -- Ariel, can you give us a little bit of an insight to what we're going to see in some of these catalysts remains the next level of growth for Salesforce that are going to occur.

Marc Benioff:

Ariel, you've been back now for what has been, a couple of months now, one month? How long has it been?

Marc Benioff:

Three months. So tell us what's been your biggest surprise being back at Salesforce?

Marc Benioff:

Well, we were sorry to lose you to Amazon and then to Oracle, but we're happy to have you back here. So welcome back.

Marc Benioff:

Okay, Michael.

Operator:

Your next question comes from the line of Keith Weiss with Morgan Stanley. Your line is open.

Marc Benioff:

Well, I really would like to just directly address that, which is what you're really speaking to is this incredible opportunity ahead, and generative AI is really that opportunity, but also many other opportunities, including data. I really think that there are some unbelievable opportunities ahead. It's going to be incredible to see what we're going to be able to do. And I think that the question is, exactly as you said it, how much are we going to really unleash -- the fundamental growth of the company against commitments that we have made to our investors to continue to deliver profitable growth. I think that at the very fundamental level, starting with our Investor Day last Dreamforce, we told you that we are committed to profitable growth. And now you can see that we were serious. It wasn't a joke. We did a number of things. We curtailed things. We made changes structurally to the company, short-term and long-term issues. And we're still doing things, by the way, to do that. At the same time, we see this incredible opportunity that's out in the industry, new companies that are emerging as well as, of course, all kinds of unusual public company dislocation. So we're watching all of those things. But number one is going to be our commitment to you. Nothing is more important than the trust that we have with our investors. Number two is, we are very thirsty to make sure that Salesforce is the number one AI CRM, and we have done a lot organically to do that in the last six months. Of course, there's things out there that we could do to help us with inorganic as well. We're looking at those things. We're looking at everything, but nothing is going to ever trump the trust that we have with all of you.

Mike Spencer:

Thanks, Keith. Emma, we'll take the next question, please.

Kirk Materne:

Yeah, thanks very much. I guess, Amy, I've had a lot of questions just on the impact of the pricing actions that you all announced earlier this -- over the summer. How that -- if that had any impact on the quarter? And then how are you thinking about that in terms of the guidance for the back half of this year? Thanks.

Brian Millham:

Exactly. We're going to see the impact of our price increase really hit the customer base over the next one to two to three years. So no big material change in this fiscal year. Appreciate the question, Kirk.

Operator:

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

Marc Benioff:

Well, I think it's such a great question. It's something the management team is talking about every single day because we are continuing to grow and invest in our headcount, especially in AI. Also, I think I mentioned we are doing so much incredible innovation work on our core, and we've commanded our engineering teams to accelerate their work in moving all of our acquisitions into our core, especially our marketing products and commerce products and Data Cloud, all of which we plan to show you at Dreamforce and to accelerate that work, and that's extremely important to us. And also Brian has a number of products and geographies that are growing and we've also committed him to invest in his growth. So we are continuing to grow our headcount, but we are also facing normalized attrition, of course, with headcount, that's also part of it. And so as those -- both of those things get rebalanced, you'll continue to see our head count adjust and move forward. I don't know if we can call this as a bottom exactly yet or if it's -- but we're not planning any other major restructuring efforts in the company today, like what we saw earlier this year, we hope that, that is one and done and behind us.

Operator:

Your next question comes from the line of Brad Sills with Bank of America Securities. Your line is open.

Marc Benioff:

Well, thank you so much for that. And let me just say, we're at the beginning of quite a ballgame here and we're really looking at the evolution of artificial intelligence in a broad way, and you're really going to see it take place over four major zones. And the first major zone is what's played out in the last decade, which has been predictive. That's been amazing. That's why Salesforce will deliver about a trillion transactions on Einstein this week. It's incredible. These are mostly predictive transactions, but we're moving rapidly into the second zone that we all know is generative AI and these GPT products, which we've now released to our customers. We're very excited about the speed of our engineering organization and technology organization, our product organization and their ability to deliver customer value with generative AI. We have tremendous AI expertise led by an incredible AI research team. And this idea that we're kind of now in a generative zone means that's zone number two. But as you're going to see at Dreamforce, zone number three is opening up with autonomous and with agent-based systems as well. This will be another level of growth and another level of innovation that we haven't really seen unfold yet from a lot of companies, and that's an area that we are excited to do a lot of innovation and growth and to help our customers in all those areas. And then we're eventually going to move into AGI and that will be the fourth area. And I think as we move through these four zones, CRM will become more important to our customers than ever before. Because you're going to be able to get more automation, more intelligence, more productivity, more capabilities, more augmentation of your employees, as I mentioned. And you're right, we're going to see a wide variety of capability is exactly like you said, whether it's the call summaries and account overviews and deal insights and inside summaries and in-product assistance or mobile work briefings. I mean, when I look at things like service, when we see the amount of case deflection we can do and productivity enhancements with our service teams not just in replies and answers, but also in summaries and summarization. We've seen how that works with generative and how important that is in knowledge generation and auto-responding conversations and then we're going to have the ability for our customers to -- with our product. We have an open system. We're not we're not dictating that they have to use any one of these AI systems. We have an ecosystem. Of course, we have our own models and our own technology that we have given to our customers, but we're also investing in all of these companies, and we plan to be able to offer them as opportunities for those customers as well, and they'll be able to deliver all kinds of things. And you'll see that whether it's going to end up being contract digitization and cost generation or survey generators or all kinds of campaign assistance. And the most recently in our world tour in London, we showed how our Data Cloud did automatic marketing segmentation that was incredible. And you're going to see a lot more that's going to happen in all of these things. A lot of it, you can see happening in Slack. Slack has become incredible for these AI companies, every AI company that we've met with is a Slack company. All of them make their agents available for Slack first. We saw that, for example, with Anthropic, where Cloud really appeared first and Cloud 2, first in Slack. And Anthropic, as a company uses Slack internally and they have a -- they take their technology and develop news digest every day and newsletters and they do incredible things with Slack -- Slack is just a treasure trove of information for artificial intelligence, and you'll see us deliver all kinds of new capabilities in Slack along these lines. And we're working, as I've mentioned, get Slack to wake up and become more aware and also for Slack to be able to do all of the things that I just mentioned. One of the most exciting things I think you're going to see at Dreamforce is Slack very much as a vision for the front end of all of our core products. We're going to show you an incredible new capability that we call Slack Sales Elevate, which is promoting our core Sales Cloud system running right inside Slack. That's going to be amazing, and we're going to also see how we're going to release and deliver all of our core services in sales force through Slack. This is very important for our company to deliver Slack very much as a tremendous easy-to-use interface on the core Salesforce, but also all these AI systems. So all of that is that next generation of artificial intelligence capability, and I'm really excited to show all of that to you at Dreamforce as well as Data Cloud as well.

Operator:

Your next question comes from the line of Brad Sills -- Brad Zelnick with Deutsche Bank. Your line is open.

Marc Benioff:

Well, especially as we said on the call as well, which is that we've said this is about AI, this is about data, this is about CRM and this is about trust. Those 4 things have to come together as one thing. And that's what we call Salesforce. That's a modern version of Salesforce. It's AI plus Data plus CRM plus Trust. And I think that is really a moment that we have to like really get clear and show that to customers. We've tried to really book the last six months. Obviously, we're going through a huge transformation with all of you. But you can see we've also gone through an incredible technology transformation around artificial intelligence to the point where we got these products out was awesome and let our customers really get into it and see what they can and cannot do and what they're excited about and how they want to move these products forward and what we think is going to be the future of AI. And it's these 4 things together that are going to fundamentally help us. And I think Data Cloud, you're 100% right, is going to be the heart of it. Well, certainly, it's a huge revenue opportunity for us because as you heard from Brian, customers who have Sales Cloud and they've got Service Cloud and they've got Marketing Cloud, and they're using our platform. Maybe they have Commerce Cloud as well, and now they're adding Data Cloud. And as these clouds get stacked with these customers', attrition falls, customers become more successful, they develop a single source of truth. And our job is to get all of these things running on our core and getting all of these things ignited with artificial intelligence. So I was very excited to recruit back as my Chief of Staff and as my Chief Business Officer, Kendall Collins. So Kemble, can you just give us a little insight on the vision of Dreamforce and what we're going to see for Data Cloud and some of these amazing clouds and why everyone should get excited about what's about to happen over the next couple of weeks when everyone gets here into San Francisco on September 12?

Marc Benioff:

Well, I'm really excited as well. And I'll tell you, you're sitting next to Sabastian Niles, our new Chief Legal Officer, just joined us from Wachtell. Sabastian, we're happy to have you here live for the first earnings call and welcome to Salesforce. And I know this is going to be your first Dreamforce and give us a vision of what you're excited about for the future.

Marc Benioff:

Well I couldn't be more excited to have you on our new management team and kind of the evolution of our team here at Salesforce. And thank you for all the help that you've given us also in the last six months, especially with all of our investors. Michael?

Operator:

Your question comes from Brent Thill with Jefferies. Your line is open.

Marc Benioff:

Well, I'll tell you that's certainly on my mind every single day. And you're right, I'm a growth CEO. So that's what I like to do. I like to grow. I mean that's been about growing margins for the last six months, so that's a reframe for me. But we've grown this business to these incredible revenue numbers this year, third largest software company in the world. And as we kind of head into these incredible next levels of capability, I'm very excited about the future. And there's lots and lots of ways to move the top line forward. But I'll tell you, now I am quite addicted to the bottom line as well. And also, as I said earlier, there's nothing more important than the trust that I have with all of our stakeholders, including our investors. So I want to make sure that we fulfill our commitments and promises to all of you, just as we have in the last three earnings calls, we've delivered exactly as we've told you we are going to do, and we're going to continue to do that. At the same time, you know that I am thinking about how are we going to move this ball forward and down the field with these incredible opportunities in front of us. So it's very much has to be a balanced equation to make this right, to make it right for us and to make it right for you, and I'd love to have that conversation in more depth in the next couple of weeks. As we all come to Dreamforce, I hope you'll seek me out and find me and let's have that conversation one-on-one, just as we have been having in the last six months. I want to do what I've been doing for the last couple of quarters, which is to express my sincere gratitude to all of you and our investors have been a critical part you've had key insights, many of which we did not have ourselves on things that we could do to make us an even stronger company. And we've done that, I'm sure you can see that in the numbers. There's never been a software company quite like this at this level even now as we start to cross into these incredible numbers in the mid-$30 billion numbers, the strength of the company has never been higher, and now we have this incredible opportunity with AI ahead.

Operator:

This concludes today's conference call. You may now disconnect.

Operator:

Welcome to Salesforce Fiscal 2024 First Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. [Operator Instructions] I would like to hand over the conference to your speaker, Mike Spencer, Executive Vice President of Investor Relations. Sir, you may begin.

Marc Benioff:

Thanks, Mike, and thank you all for being on the call. On our last call in March, we told you about how Salesforce had radically accelerated our transformation to profitable growth. We share with you how we hit the hyperspace button across the key areas of our transformation, restructuring for the short and long-term, reigniting our performance culture by focusing on productivity, operational excellence, and profitability, prioritizing our core innovations that drive customer success, building even stronger relationships with you, our investors. Our Q1 results show that we continue to make great progress. As I said in March, we're just getting started with this incredible transformation. We continue to scrutinize every dollar investment, every resource, and every spend and we're transforming every corner of our company. Our progress over the last 5 months, while it's very impressive and I cannot be more grateful to our entire team for their leadership. In fact, you may hear me say that several times on this call. Our transformation drove our Q1 financial results. As I said, on our last call, well improving profitability is our highest priority. As a result, we significantly exceeded our margin target for the quarter, delivering a non-GAAP operating margin of 27.6%, up 1,000 basis points year-over-year, incredible. And there's no greater point of evidence to our transformation than this amazing result following the tremendous operating margin Q4. In Q1, we delivered 8.2 billion in revenue, up 11% year-over-year and 13% in constant currency. We had some amazing wins in the quarter with Northwell Health, Paramount, Siemens, Spotify, NASA, and the U.S. Department of Agriculture, among others. We delivered 4.5 billion in operating cash flow up 22% year-over-year. Our remaining performance obligation ended the quarter at 46.7 billion, an increase of 11% year-over-year. And through Q1, we've now returned more than $6 billion in share repurchases. As a result for the third quarter in a row, we ended the quarter with fewer shares year-over-year another amazing point of evidence on this incredible transformation. Now, turning to our financial guidance, while the economy is not in our control, our margins are, which is why we're raising our margin target for the full fiscal year. For FY 2024, we're raising our non-GAAP operating margin to 28%, an improvement of 550 basis points year-over-year and we remain confident that we'll hit 30% non-GAAP operating margins in the first quarter of fiscal year 2025. We could not be more excited about our progress. We're maintaining our fiscal year 2024 revenue guidance of approximately 34.5 billion to 34.7 billion over 10% projected growth year-over-year. I couldn't be more proud of how our team has come together, stepped up, and delivered these results. I've also been asked numerous times this quarter by our investors and our customers, how we're able to make so much progress so fast and deliver these incredible numbers? It's very simple. It's our Ohana culture. It's our superpower. And again, I'd like to thank our amazing team for this incredible accomplishment. Last quarter, I told you of how our AI team is getting ready to launch Einstein GPT, the world's first genitive AI for CRM. At TrailheadDX in March in front of thousands of trailblazers here in San Francisco, that's exactly what we did. At its foundation, Einstein GPT is open and extensible. Customers can connect to multiple large language models, including from partners like OpenAI and Tropic and others. This is a whole new way to work for our customers, users, and trailblazers. Users on Salesforce are seeing new AI generative features across all of their most common workflows. And while many of these will be created by Salesforce developers, far more will be created by our incredible trailblazer ecosystem. For low code of trailblazers, Einstein GPT will provide a toolset to design generative AI apps built on [reusable props] [ph]. For pro code trailblazers, Einstein GPT will offer an extensible ecosystem of LLM providers with configurable grounding. And Einstein GPT is the combination of tremendous research and engineering by our world-class AI team, and I'd like to congratulate them on this amazing result. And one more amazing result, this week, Einstein, Salesforce Einstein that we've been talking about for so many years on these calls, will generate an incredible 1 trillion predictions for our customers, an incredible milestone on our AI journey. We saw more of the incredible work of our AI team at our New York City world tour this month when we demonstrated Slack GPT. Slack is a secure treasure trove of company data that generative AI can use to give every company and every employee their own powerful AI assistant helping every employee be more productive and transforming the future work. Slack GPT can leverage the power of generative AI to deliver instant conversation summaries, research tools, and writing assistance directly in Slack, and you may never need to leave Slack to get a question answered. Slack is the perfect conversational interface for working with LLMs, which is why so many AI companies are Slack first and why OpenAI, ChatGPT, and Anthropic Squad can now use Slack as a native interface. Slack is also delivering integrated sales and service experiences powered by native GPT to be the best interface for all of our Salesforce customers and there's a lot more magic to come with Slack and generative AI. In this month, we also announced Tableau GPT. At our Tableau conference, we had over 8,000 in-person attendees. Tableau GPT simplifies data analysis for all of our users enabling anyone to inquire about their data using Einstein GPT and obtain AI driven insights at scale. The intelligence and automation that Tableau GPT provides is tremendously important in this area of hyperscale data that we're all entering. The coming wave of generative AI will be more revolutionary than any technology innovation that's come before in our lifetime or maybe any lifetime. Like Netscape Navigator, which opened the door, to a greater Internet, a new door has opened with generative AI and it is reshaping our world in ways that we've never imagined. Every CEO realizes they're going to have to invest in AI aggressively to remain competitive and Salesforce is going to be their trusted partner to get them to do just that. Every CEO I've spoken with sees AI as a revolution beginning and ending with the customer, and every CIO I've spoken with wants more productivity, more automation, and more intelligence through using AI. A great example [of deploying] [ph] this technology is Gucci. We're working with them to augment their client advisors by building AI chat technology that creates a Guccified [indiscernible] service, well, incredible new voice, amplifying brands, storytelling and incremental sales as well. It's an incredibly exciting vision for generative AI to transform which was customer service into now customer service, marketing, and sales, all through augmenting Gucci employee capabilities using this amazing generative AI, but we can only do all of this with trust. Our customers need to understand where their data is going and they must be able to maintain data integrity and access and privacy controls. Large customers must maintain data compliance as a critical part of their governance, while using generative AI and LLMs. This is not true in the consumer environment, but it is true for our customers, our enterprise customers who demand the highest levels of this capability. Where customers who for years have used relational databases as the secure mechanism of their trusted data, they already have that high level of security to the row and sell level. We all understand that. And that is why we have built our GPT trust layer into Einstein GPT. The GPT trust layer gives connected LLM secure real time access to data without the need to move all of your data into the LLM itself. It's an incredible breakthrough for our customers and working with LLMs in a secure and trusted way. While they're using the LLMs, the data itself is not moving and being stored in the LLM. That is what our customers want. They can be sure that the customer data is where they know it is, where they can be assured that it is for their compliance and for their governance. And I cannot be more excited about our AI CRM and delivering on this future of trusted AI through our new Salesforce GPT trust layer. Finally, I can't talk about AI without talking about the success of our data cloud. Data Cloud is the heart of customer 360 and now our fastest growing cloud ever. Data Cloud created a real-time Intelligent Data Lake that brings together and harmonizes all of our customers' data in one place. In Q1, we closed one of our largest healthcare industry deals ever with Northwell Health, New York's largest private employer. They have 21 hospitals, 900 patient – 900 outpatient facility or ambulatory facilities, and their own medical school all in New York. By integrating DataCloud with Health Cloud, Tableau, MuleSoft, while our entire customer 360, Northwell is improving patient care by bringing together its vast data resources to create a single source of truth and using AI to govern data, use, and maintain regulatory compliance. This is the future of our customers and our industry. It's AI, plus data, plus CRM. And of course, this AI revolution is just getting started, which is why we've invested 250 million in our new AI venture fund to fuel startups developing our trusted generative AI vision. We'll be talking more about this at our AI Day event on June 12th in New York City, and I hope that you'll join me there. To wrap up, we’re transforming every corner of our company. We're laser focused on our short-term and long term restructuring, improving productivity and performance, prioritizing our core innovations and delivering for our shareholders. As a result, productivity is up, profitability is up, revenue is up, cash flow is up, and we dramatically increased our margin guidance. And just like the cloud, mobile and social well, AI, this revolution is a new innovation cycle. It's going to be a new spending cycle as well, which is going spark a massive new tech buying cycle. And we've led the industry through each of these cycles and I couldn't be more excited for our future as we continue on a path to our long-term goal to make Salesforce the largest most profitable enterprise software company in the world, and the number 1, safest and most trusted AI CRM. With that, Brian, I'll turn it over to you.

Amy Weaver:

Thank you, Brian. As Marc said, a key part of our transformation to profitable growth is short and long-term restructuring of the company. We have now largely completed the restructuring announced in January, and we're completing our comprehensive operating and go to market review. As we shift to the implementation phase, we're executing against three key pillars, optimization of resources and organization structure, product investment prioritization, and operational rigor. We continue to view sales and marketing and G&A as the primary drivers of leverage. While R&D remains an important investment area. Our profitable growth framework, disciplined capital allocation strategy, and opportunity to drive shareholder value are represented in our actions and in our results. Now, turning to our results for Q1's fiscal year 2024, beginning with top line commentary. For the first quarter, revenue was 8.2 billion, up 11% year-over-year or 13% in constant currency with the beat primarily driven by strong momentum in MuleSoft, and more resilient core performance. Geographically, we saw strong new business growth in parts of EMEA and LatAm, specifically Switzerland, Italy, and Brazil, while we experienced continued pressure in the United States. In Q1, the Americas revenue grew 10%, EMEA grew 12% or 17% in constant currency. And APAC grew 16% or 24% in constant currency. From an industry perspective, manufacturing, automotive, and energy all performed well, while high-tech and financial services remained under pressure. Q1 revenue attrition ended the quarter at approximately 8%. As expected, we saw a modest increase in Q1. Partially attributed to the inclusion of Tableau in the metric. We also noted some incremental weakness in our marketing and commerce attrition. As Marc said, non-GAAP operating margin finished strong in Q1 at 27.6%, driven by our disciplined investment strategy and accelerating our restructuring efforts. Q1 operating cash flow is 4.5 billion, up 22% year-over-year. This includes a 910 basis points headwind from restructuring. Q1 free cash flow was 4.2 billion, up 21% year-over-year. Turning to remaining performance obligation or RPO, which represents all future revenue under contract. This ended Q1 at 46.7 billion, up 11% year-over-year. Current remaining performance obligation or CRPO, ended at 24.1 billion, up 12% year-over-year in both nominal and constant currency, ahead of expectations driven by strong core performance, partially offset by continue, create, and close softness. And finally, we continued to deliver on our capital return commitment. In Q1, we returned 2.1 billion in the form of share repurchases bringing the total returned to more than 6 billion since the program was initiated last August, representing more than 38 million shares. Before moving to guidance, I wanted to briefly touch on the current macro environment that Brian discussed. The more measured buying behavior persisted in Q1. And as Brian noted, in Q1, we started to see weakness in our professional services business. We expect these factors to persist, which is incorporated in our guidance. Let's start with fiscal year 2024. On revenue, we are holding our guidance of 34.5 billion to 34.7 billion, representing over 10% growth year-over-year in both nominal and constant currency. The strength in our Q1 performance is offset by the pressure in our professional services business previously discussed. For fiscal year 2024, we are raising non-GAAP operating margin guidance to 28%, representing a 550 basis points improvement year-over-year. This guidance increase is driven by the acceleration of our restructuring efforts and also includes reinvestment in targeted areas, namely in R&D. I'm proud of our progress and remain confident in our trajectory as we progress towards our 30% non-GAAP operating margin target in Q1 2025. We also remain focused on stock based compensation and continue to expect it to improve this year to below 9% as a percent of revenue. Before moving to EPS, on restructuring, we now expect the charges in FY 2024 to come in towards the higher end of the range previously provided in our last earnings release. As a result of these updates, we now expect fiscal year 2024 GAAP EPS of $2.67 to $2.69, including estimated charges for the restructuring of a $1.11. Non-GAAP EPS is now expected to be $7.41 to $7.43. And we are raising our fiscal year 2024 operating cash flow growth to be approximately 16% to 17%, which now includes a 14 point to 16 point headwind from restructuring. As a reminder, we will see an increase in our cash taxes in fiscal 2024 as we draw down our remaining net operating losses. CapEx for the fiscal year is expected to be slightly below 2.5% of revenue. This results in free cash flow growth of approximately 17% to 18% for the fiscal year. Now to guidance for Q2. On revenue, we expect $8.51 billion to $8.53 billion, growth of approximately 10% in both nominal and constant currency. CRPO growth for Q2 is expected to be approximately 10% year-over-year in nominal and constant currency. Our guidance incorporates the momentum of our execution in Q1, offset by the persistent measured buying behavior and a decline in professional services fixed fees contribution. The professional services impact represents approximately a 1 point headwind to growth. For Q2, we expect GAAP EPS of $0.79 to $0.80 and non-GAAP EPS of $1.89 to $1.90. And as we focus on shareholder return and disciplined capital allocation, we continue to expect to fully offset our stock based compensation dilution through our share repurchases in fiscal year 2024. In closing, we continue to transform every corner of the company. We are hyper focused on delivering the next wave of innovation led by Data Cloud and Einstein GPT. And Salesforce is well-positioned to remain the market leader in this new AI first world. We are committed to delivering long-term shareholder value, and I personally want to thank our shareholders for their continued support. Now, Mike, let's open up the call for questions.

Operator:

Thank you. [Operator Instructions] Your first question today comes from the line of Kirk Materne with Evercore. Your line is open.

Marc Benioff:

Well, I think this is the absolute question of the day, which is we are about to enter an unbelievable super cycle for tech and everyone can see that. This is an incredible opportunity for not only Salesforce, but our entire industry. I mean, perhaps only a year ago or less than a year ago, no one on this call even knew what GPT was. Today, ChatGPT is the fastest growing consumer product of all time, and has transformed many, many lives. It's definitely not just the technology of this lifetime, but maybe any lifetime. It's an incredible technology. And every company is going to have to transform because every company is going to have to become more productive or automated more intelligent through this technology to be competitive with other companies. And just yesterday, I'm in a room here at the top of Salesforce Tower on the 60th floor, and we have the CEO of a very large bank here. And like every other sales call I've made in the last quarter, there's only one thing that customers want to talk about, and that's artificial intelligence and specifically, generative AI. Of course, we have been a leader in this area with Einstein, more than 1 trillion transactions delivered this week, but these are primarily predictive transactions built on machine intelligence, machine learning, and deep learning. But in 2018, deep learning evolved and became much more sophisticated and became generative as these neural networks expanded their capabilities and also the hardware went to another level as well. So, now we have this incredible new capability. It's a new platform for growth, and I couldn't be more excited. But yesterday, there were many questions from my friend who I'm not going to give you his name because he's one of the – the CEO of one of the largest and most important banks in the world. And I'll just say that, of course, his primary focus is on productivity. He knows that he wants to make his bankers a lot more successful. He wants every banker to be able to rewrite a mortgage, but not every banker can, because writing the mortgage takes a lot of technical expertise. But as we showed him in the meeting through a combination of Tableau, which we demonstrated and Slack, which we demonstrated, and Salesforce's Financial Services Cloud, which he has tens of thousands of users on, that banker understood that this would be incredible. But I also emphasize to him that LLMs, or large language models, they have a voracious appetite for data. They want every piece of data that they can consume, but through his regulatory standards, he cannot deliver all that data into the LLM because it becomes amalgamated. Today, he runs on Salesforce, and his data is secure down to the row and cell level. He knows that readers don't block [riders] [ph] that there's all types of security provisions and regarding who can see what data about what account or what customer. And when you put it into an LLM, those permissions are not understood. So, that is a very powerful moment to realize that the way that LLMs operate is in a way state where they're kind of consuming all this data and then giving us that information back out, well, that Salesforce's opportunity. That's why we built this GPT trust layer. And through the GPT trust layer and rebuilding all of our apps, including Slack and Tableau, but as we demonstrated him yesterday, a new Sales Cloud, a new Service Cloud, a new marketing cloud, and what we'll show on June 12 in New York City, a complete reconceptualization of our product line. What that means for this customer and for every customer is that they have an opportunity to transform their business. And for Salesforce, that also means an opportunity to transform ourselves and for our industry, a new super cycle where every company will have to transform to be AI first.

Elizabeth Porter:

Great. This is Elizabeth Porter on for Keith Weiss. Thanks for the question. I wanted to ask on the potential disruption from rebooting the sales enablement process. Are we past the point of seeing disruption or could that be a future risk? And if so, how is it included in guidance. The CRPO guidance for 10% looks like a bit of a slowdown despite the easier comp. And Amy, you called out pro services a one-point headwind. But just any other factors we should keep in mind that may create a challenge over the next couple of months? Thank you.

Brian Millham:

Yes, Marc, thank you. I appreciate it. And Elizabeth, thank you for the question. I think you're referencing some comments we made on previous calls about enablement being an important strategy for us as we saw during the pandemic, not as many of our AEs and SEs and leaders were as enabled as we would like. We've made those changes, and we've really invested in the time to make sure our AEs understand our product portfolio, the entire customer 360, and we're on sort of the next generation of enablement. As Marc just talked about, this new AI wave is going to create a huge opportunity for us. And we need to make sure that we're investing in the enablement to bring our teams along. It's been a very short window around this innovation, and we've got some work to do on this, but we're very, very excited with our path forward, our position in the market. All that we're doing with our customers, the demand we're feeling from our customers. Marc mentioned it, and I had the same experience, every CEO in the world is talking to us about generative AI right now, and we are investing heavily to make sure our account executives, our sales teams, in fact, the entire company is able to articulate our value proposition to our customers. So, Amy, I don't know if you have any further comments there?

Mike Spencer:

Thanks Elizabeth. Emma, let’s move to the next question please.

Brad Sills:

Oh, wonderful. Thanks. I wanted to ask a question to Brian, I think, here on the efforts here to improve productivity. You mentioned removing some layers here. My question is, we think of all these actions that you're taking as drivers of margin expansion, but are you starting to see some early traction here on the sales productivity front, such that perhaps that's driving some upside here across the business, perhaps larger deals now that you're seeing coming out of the field and pipeline and some of the deal closure? Thank you so much.

Mike Spencer:

Thanks, Brad. Emma, next question please.

Brent Thill:

Amy, regarding Americas, that was a pretty large decel, one of your slowest growth quarters, I think, ever in Americas. The rest of the world did decel, but maybe not quite as the magnitude of the Americas. Can you just speak to what happened there in that region?

Brian Millham:

Sure. Yes. I think when we think about our business from an industry perspective, we have a very nice footprint of our great technology companies and financial services company, both of which were a bit slower than we would have liked in the Americas in Q1. And so, as we think about the all-in size of our Americas business, those industries felt a little bit more of the economic headwinds in the quarter in Q1. And so, I think a bit of a slowdown from that perspective is a result you're seeing in the Americas business.

Operator:

Your next question comes from the line of Mark Murphy with JPMorgan. Your line is open.

Marc Benioff:

Well, I think that this is a great question. And I tried to address it on the last call. I just really think you have to look at 2020, 2021 was just this massive super cycle called the pandemic. I don't know if you remember, but we had a pandemic a couple of years ago. And during that, we saw tech buying like we never saw. It was incredible and everybody surged on tech buying. So, you're really looking at comparisons against that huge mega cycle. And that is what I think is extremely important to understand, the relative comparisons. And that is where my head is at, which is I am constantly comparing against what happened in 2021, but also looking at 2020 and 2019. That's a little bit different than 2008 and that's a little bit different than 2001. We didn't exactly have these huge mega cycles that kind of we were exiting. And I – that's also what gives me tremendous confidence going forward and what we're really seeing is that customers are absorbing the huge amounts of technology that they bought. And that is about to come, I believe, to a close. I can't give you the exact date, and it's going to be accelerated by this AI super cycle.

Mike Spencer:

Thanks, Mark. Emma, next question please.

Brent Bracelin:

Good afternoon. I wanted to circle back to the generative AI discussion, if we could. I totally understand how large enterprises are turning to Microsoft, given the productivity tools and suite that they have, but as you start to engage with customers, what's resonating relative to the Salesforce Gen AI journey? Is it the data layer and Customer 360 messages resonating? Is it the app layer around sales automation functionality that you're going to offer? Just double quick on what customers are coming to Salesforce and engaging the you around some of the new things that we'll hear about it sounds like in June.

Srini Tallapragada:

Yes, Marc. So, I think I met about 70 customers in the last quarter. And like Marc was saying, the only conversation everybody is interested is on – and while everybody understands the used cases, they're really worried about trust. And what they are looking for us is guidance on how to solve that. For example, so we are doing a lot of things as the basic security level, like we are really doing tenant level isolation coupled with zero retention architecture, the LLM level. So the LLM doesn't remember any of the data. Along with that, they – for them to use these used cases, they want to have – they have a lot of these compliances like GDPR, ISO, SOC, [Quadrant] [ph], they want to ensure that those compliances are still valid, and we're going to solve it for that. In addition, the big worry everybody has is, people have heard about hallucinations, toxicity, bias, this is what we call [model trust] [ph]. We have a lot of innovation around how to ground the data on 360 data, which is a huge advantage we have. And we are able to do a lot of things at that level. And then the thing which I think Marc hinted at, which is LLMs are not like a database. These intra-enterprise trust, even once you have an LLM, you can't open the data to everybody in the company. So, you need ability to do this – who can access this data, how is it doing both before the query and after the query, we have to build that. And then we have to be not only open, but also optimized. We are running an open – the way we'll run is, we'll run like a model [indiscernible] because one of the things everybody has to watch out is it's great, but what about the cost to serve, not all models are equal. So, we are going to run this and pick very – we are going to pick a very cost-optimized curve, so the value is very high. And our Salesforce AI research has a lot of sales for state-of-the-art models and industry cases, which we are optimizing to run at very low cost and high value. Add to that, we've got the Trailblazers platform, which allows low code, high code, and many other things, and we're going to optimize sort of jobs to be done for each industry and jobs. That's really what they're looking for because they have been using our AI platform. Like Marc mentioned, we already do 1 trillion transactions per day. And by the way, the data cloud, just in a month, we are importing more than 7 trillion records into the data layer, so which is a very powerful asset we have. So, coupled with all of this is what they are looking for guidance and how we think we can deliver significant value to our customers.

Srini Tallapragada:

Yes. I think you hinted something very important. I think, as you know, Marc, we have – our I research team is one of the best-in-class model – state-of-the-art models from different areas. The way we are thinking of it is like anything else, where the world is going to go, which we strongly believe is going to be multiple models. And depending on the used case, you will pick the right models, which will provide you the value at the lowest cost. Where we have to run with highly regulated industries, where the data cannot leave the trust boundary or where we have significant advantage, where we can train on industry-specific data or Salesforce-specific – 360-specific data, like, for example, our FX model are helping our customers implement or our flow, we will use our internal model. Where we need more generated image models or something where it needs public image databases, we may use a coherent or an OpenAI. It depends on the use case and which is why, at a given request, a secure trusted gateway will decide smartly which is the best used case, which is the model, and we always keep running the [indiscernible], which is what I mean. So today, one particular model may be good. Tomorrow, something else will come, and we'll behind the team flip it, but our customers don't need to know that. We will handle all of it. We'll handle the model trust. We'll handle all the compliances and all behind the scenes. And this is always what we promise to our customers, we'll always future-proof. That's the Salesforce promise to our customers so that they can focus on the business used cases.

Srini Tallapragada:

I think the key is innovations we are doing, which people will see starting next month is around what we call [from generation] [ph] and grounding. These are techniques, which we'll have to do, but it will work only because we have – all of this as based on underlying data. We have the Data Cloud, where we have all the 360 data, which is there. So, we're able to ground these models and do it. So, there are a lot of other techniques, which are very technical, which we put it on our block. But that's the innovation that we're doing. And you have to remember that Salesforce also is a metadata model. So, we have a semantic understanding of what our customers are trying to do. We're going to leverage the Metadata platform and do this grounding automatically for our customers, of course, while keeping the trust. That's the base line.

Mike Spencer:

Emma, next question please.

Raimo Lenschow:

Hi, thank you. Question for Amy or Brian maybe more. The improvement in profitability or the raised guidance for profitability and cash is that all timing? Can you talk a little bit about that? Is it just timing or are there other factors we should consider in here? Thank you.

Brian Millham:

Yes, thanks for the question. When we think about longer-term structures, we obviously took the action in Q1. But longer term, we're looking at things like how do we leverage comp plan redesign to drive better efficiencies in our organization going forward. How do we continue to look at self-serve at the low end of the market to drive better efficiencies in our organization. So, resellers as a potential investment that we'll make in emerging markets is long-term leverage on the efficiency gains. So lots of things that we're doing that will be in sort of the Phase 2 oriented around process improvement and systems improvement. And again, as I mentioned, top plan design that will drive better efficiencies in the organization.

Operator:

Your next question will come – is from Karl Keirstead with UBS. Your line is open.

Amy Weaver:

Great. Thanks, Karl. So first on the timing. As I mentioned, we've been doing this end-to-end comprehensive operating and go-to-market review. The entire company has been involved in that. There's really no stone unturned. We're getting close to the end of that process, and then we will be moving into the implementation. You'll be hearing more about that in future quarters. Turning to reinvestment. We are keeping a very close eye on reinvestment, very excited particularly about artificial intelligence. So, much of what Srini has been talking to you about, I don't view this as a greater investment from what we were looking at earlier. We're really going along with our current plans. We are looking at operating expenses management, and we're looking at it seriously every day, but that's not something that has changed.

Operator:

Our last question comes from the line of Kash Rangan with Goldman Sachs. Your line is open.

Marc Benioff:

Well, thanks, Kash, for giving me the opportunity to talk about our AI vision, and I'm also going to ask Srini again to fill in some of the details. But I think it started to occur to me – I think folks know, I have – my neighbor is Sam Altman is the CEO of OpenAI, and I went over to his house for dinner, and it was a great conversation as it always is with him. And he had – he said, Oh, just hold on one second, Marc, I want to get my laptop. And he brought his laptop out and give me some demonstrations of advanced technologies that are not appropriate for the call. But I did notice that there was only one application that he was using on his laptop and that was Slack. And the powerful part about that was I realized that everything from day 1 at OpenAI have been in Slack. And as we kind of brainstormed and talked about – of course, he was paying a Slack user fee and on and on, and he's a great Slack customer. We've done a video about them, it's on YouTube. But I realize that taking an LLM and embedding it inside Slack, well, maybe Slack will wake up. I mean there is so much data in Slack, I wonder if it could tell him what are the opportunities in OpenAI? What are the conflicts, what are the conversations? What should be his prioritization? What is the big product that got repressed that he never knew about? And I realized in my own version of Slack at Salesforce, I have over 95 million Slack messages, and these are all open messages. I'm not talking about closed messaging or direct messaging or secure messaging between employees. I'm talking about the open framework that's going on inside Salesforce and with so many of our customers. And then I realized, wow, I think Slack could wake up, and it could become a tremendous asset with an LLM consuming all that data and driving it. And then, of course, the idea is that is a new version of Slack. Not only do you have the free version of Slack, not only do you have the per user version of Slack, but then you have the additional LLM version of Slack. And for each one of our products in every single one of our categories, there's that opportunity to upsell and cross-sell into the next version of generative AI, not just with Slack, but you can also imagine, for example, even with Salesforce, the ability as we're going to see in June, that many of our trailblazers are amazing low-code, no-code trailblazers, but soon they'll have the ability to tap in to our LLMs like ProGen and Cogen that have the ability to code for them automatically. They aren't coders. They didn't graduate computer science degrees. And if they need to write a sophisticated Apex code or other code, it can be a challenge for them, but because you know what is there only 8 million or 10 million coders in the whole world – but now with LLMs, everybody can start to code. That's an amazing productivity and augmentation of everybody's skill set. And that's a great way to look at what could happen, for example, with our core products, but even with Tableau, which has tremendous programmatic engine as well or even MuleSoft, which is a highly programmatic product that then coupled with an LLM can have the ability to go forward. But of course, those LLMs are highly trained models for those specific types of code, and then that is something that we would add on either through partnership or through our own LLM, as Srini described, it's another layer of value that we can provide to our customers. In all cases, customers are going to be more productive. They're going to be more automated, and they're going to be more intelligent. And as we look at some of the examples that we've given like at the New York World Tour, you saw our Marketing Cloud do something very cool that it couldn't do even just 6 months ago. It segmented the database on its own. It wrote an e-mail on its own. Of course, it required editing, and it also built a landing page on its own. That was amazing. Or as we saw at the Tableau conference, we saw Tableau being able to create its own visits or visualizations that was incredible. And what we saw at our Trailhead DX, we saw Einstein GPT which started to do these amazing next-generation things. And I think in each of these areas, we can offer more value, but we must do it in the auspices of trust, data integrity and governance. And that is what we have been working on now for a considerable amount of time. Of course, we've led – we have always wanted to be the Number 1 AI CRM. And we are, if you look at Einstein's transaction level, I think that that's enough evidence right there. But I think this idea of generative AI, this starts to reconceptualize every product and we will start to build and develop not only extensions to all of our current products, but entirely new products as well. And we have a lot of exciting ideas of things that we can do to help our customers connect with their customers in a new way using generative AI. Srini, do you want to come in and talk about that?

Marc Benioff:

Well, that's a very key point. Isn’t it? That you're seeing a 30% productivity increase in your own engineers using our own LLM.

Marc Benioff:

And address this one issue that a lot of customers come in like they did yesterday, and they tell us they think they're just going to take all of their data, all their customer data, all of their information and put it into an LLM and create a corporate knowledge base, and it's going to be one amalgamated database. Why is that a false prophecy?

Marc Benioff:

Well, we're really excited to show all of this technology at our AI Day on June 12 in New York City. And then also when we get to [Dreamforce GPT] [ph], we're going to have an incredible demonstration of this technology.

Operator:

This concludes today's conference call. You may now disconnect.

Operator:

Welcome to Salesforce Fiscal 2023 Fourth Quarter and Full Year Results Conference Call. [Operator Instructions]. I would like to hand over the conference to your speaker, Mike Spencer, Executive Vice President of Investor Relations. Sir, you may begin.

Marc Benioff:

Thanks, Mike, and hey, thanks to all of you for joining the call. As you can see from our results, we had another strong quarter. Improving profitability is our highest priority, and that really showed up this quarter. Our goal is to make Salesforce the largest and most profitable software company in the world, and that is what we are doing. Six months ago, in September at our Dreamforce Investor Day, we shared with you our comprehensive transformation plan, the new day for profitable growth. But things have changed. As we entered our fourth quarter, we recognized that we needed to radically accelerate the transformation plan timeframe. We needed to press the hyperspace button and bring the 2-year goals forward quickly and exceed them. Now we immediately put into place an accelerated transformation plan in 4 areas

Amy Weaver:

Thank you, Brian. It is great to be here today to talk about our financial results and the transformation underway. As we laid out at Investor Day in September, it is a new day for Salesforce. As Marc called out, we are focusing on 4 key areas

Operator:

[Operator Instructions]. Your first question comes from the line of Keith Weiss with Morgan Stanley.

Brian Millham:

Well, Keith, first of all, thanks for the question. Really appreciate it. And I agree we had very strong performance in our Q4. Very happy with the quick pivot we made enabling our salespeople to talk differently about the values our customers get. Time to value is very critical to our customers, automation, digital transformation, efficiencies and cost reductions in their organizations. And we did a beautiful job in the fourth quarter to drive that message to our customers to see better-than-expected performance. On your question about next year and some of the changes we're seeing in our organization, we feel very good about the work that we're doing. As we mentioned in the commentary, the organic innovation that's coming out of our product organization is phenomenal. We have an incredible portfolio to go sell them the Customer 360, new product that we can go sell in Data Cloud. And as you know, the CRM market continues to grow very fast in double digit, and we think we should be taking market share in that market environment. I also would like to say, I think we have an opportunity to drive higher productivity amongst our salespeople. I think we have an opportunity to bundle products together and to show up differently in front of our customers, to consolidate organizations that have been stand-alone sales organizations in the past. Bundling products together, driving higher ASP per salesperson is really what we want to go do next year. And we don't think that the impact of some of the changes that we're making, the architecture of the organization is going to have an impact on our growth next year. Amy, over to you. .

Operator:

Your next question comes from the line of Kirk Materne with Evercore.

Marc Benioff:

Thanks so much for that question. I really appreciate it. I really appreciate everyone's support during the quarter. I don't think we could have had this quarter without everyone who's on the call. We really are very grateful to the support we had, especially from the analysts and the shareholders, because, really, through their guidance and enlightenment, we were able to execute a different plan. I think when we look back, and I think we have to look backwards to go look forward. Obviously, the 2021 calendar year is like something that none of us have ever experienced in the technology business. It was incredible. You can see that throughout the whole industry. Then as we entered 2022, it was not 2021, and I think we all understand that. Currencies, measured buying environment, macro conditions, inflation, the stock market. So when we planned 2022 out of 2021, I'm talking calendar years now, that's where I think we had a little incongruence, and then we had to adjust and shift and pivot, and that's really what happened right around Dreamforce. We really started to see it. We had that great Investor Day with you all. We put out there our profitability framework. We put together our fiscal year 2016 targets. And 90 days ago when everything happened, you know what happened. We don't have to go through it again. It doesn't matter. It's behind us. But you all said, hey, you guys can hit the hyperspace button, just like I said, and we did. We hit the hyperspace button, and we said, we can hit these targets now. We don't have to wait 2 years, and that's where I'm putting my time, my energy, my effort. I'm very proud of the team for delivering this Q4 operating margin of 29.2% because that really has become like our North Star. As Amy just said, as we look to next year, even in Q1 and so forth, we're saying that this 30% plus world, this is we should be living in that. We have onboarded the entire management team worldwide to that fact. It's a core part of our V2MOM. It's one of the name of our methods that we are guiding 30% plus. And that's our direction. And at the same time, we had a great quarter. Just like you just heard, Q4 revenue at $8.38 billion, exceed our expectations for many reasons, some currency, but really a lot was execution and execution in the corner from 2 great product lines with our Tableau and MuleSoft team, extremely impressive execution. And I'll also just call out what an unbelievable performance for the year at $31.4 billion, this is just a huge incredible software company that has got great margins and great cash flow and a great position in the market. So that's where my head is at. There's basically 2 motions here. One is, just like we just heard, Brian has to continue to deliver the ACVs. That's why we're keeping a lot of stability in our sales organization right now, maintaining the productivity, deliver the year in ACV. This is really critical for us. That's motion number one. Motion number two is also, at the same time, profitability. Profitability is our -- truly our #1 strategy, and that's my #1 strategy. That's what I've been focused on with the management team. That is the #1 thing we talked about at the start of every meeting we have in this company. And that is why we were able to deliver that in 90 days. You all know that we've never had an efficiency focus in the company before because we've had 24 incredible years of where we've had to just grow, grow, grow. There have been moments where we've had to pull back. '01, '02, bad recession, we had to pull back. '08, '09, we had to pull back and reassess. We're kind of looking at this moment as, hey, we can reassess. This is a incredible moment. We can deliver great results. You saw we're delivering more than 10% growth -- revenue growth, but we want to deliver this more than 27% margin growth for the year and -- not growth, but margin target. And we're going -- obviously, the growth rate is actually much higher. I mean I think that, that is amazing that we've delivered more than 4 points last year, not basis points, 4 points, and 4.5 points this year, and that's my main focus. I've gotten a lot of great coaching. I'll just -- huge call out to my mentor, Larry Ellison, who has spent a lot of time with me, giving me the Oracle playbook. And I'm very grateful to him. He was the first person who texted me after the earnings came out today. And as -- I'll tell you, it's good to have friends in the world when things happen, and he's been a great friend, and we're executing that playbook to increase our margins. They obviously have best-of-class margins. So it's great to have someone on your side like that and great to have all of you on our side as well because without all you, we would not be able to deliver this quarter. So thank you so much for everything. .

Bradley Sills:

Congratulations on a nice finish to the year and margin and outlook. I wanted to ask how important the concept of CDP and vertical solutions are. As you pivot towards this ongoing sales productivity and asking reps to sell more of the solution of all the great components in the Salesforce stack, how important are those solutions and really pulling in more of those components over time?

Brian Millham:

And Brad, just another comment quickly on the industry play. A big part of our success in the quarter and a big bet for us in the coming years as we invest heavily in our industry cloud. I think you heard in the commentary, 8 of 13 of our industry clouds grew above 50% in ARR in the quarter. Really a great payoff in the investment we've made in the technology there and really having our sales team show up and speaking the customer -- the language of our customers to drive the growth of this business, couple that with the strategies around driving international growth, international expansion of all of our products, along with multi-cloud selling, a great opportunity for us going forward. So the industry is a big part of our strategy.

Raimo Lenschow:

Congrats on the tough decisions this quarter and the great quarter. So I think you all be praised for that and the hard work you've done. A question for me, more for Brian. Obviously, there were comments out from you guys around sales, sales productivity as we kind of went through the January. If you think about the actions you're taking now, where do you see that sales productivity that you're seeing at the moment? And where do you think [indiscernible] Salesforce and the setup that you have here?

Operator:

Your next question comes from the line of Kash Rangan with Goldman Sachs. .

Marc Benioff:

To understand what we're going through, I really did go back and looked at all the numbers in '01, '02 and '08, '09. And what you said, Kash, is quite enlightened in that. Of course, we saw in '08, '09 ACV fall off dramatically. And of course, we hit the break on spending, and we accelerated margin, I think, 6 points during that time. I don't know the exact numbers, but it was a moment where you see sales and marketing companies, marketing spend -- when these things happen, CEOs, they stop hiring salespeople. They stop spending on marketing, right? Everybody knows the methodology of what, how CEOs behave in a recession. As soon as the stock market implodes CEOs, they hit the brakes. So I think that, that's what we saw in '08, '09. I think we really started to see that in the middle of '22, maybe August, September, October, November. Certainly, as we've exited Dreamforce, we were like, I think that we can execute our playbook. We have a recession playbook. We know how to transform the company. Well, you just saw it in the last 90 days where the things we're doing are launching on our -- really launched a profitable growth strategy. This is a key part of what we're doing, really making sure that every executive in this company knows that profitability is our highest priority and making sure that we keep in the very forefront of our mind that Salesforce is not just one of the largest and fastest growing. You can see that I think that we gained -- we probably added or created more ACV than all the other SaaS companies combine. Like our ACV numbers are massive, but also the most profitable software company in the world, the most -- the highest cash flow. That's what's on our mind. And to do that, we are really focusing on making sure we have the expertise in the company. And I'll tell you, Dreamforce, you are all sitting in the audience. You know Mason Morfit was there, sitting next to his founder, Jeff Ubben. And we had been working with Mason, and he started bringing us these incredible ideas on distribution, on pricing, on efficiency. It was these incredible strategic decks. I have never seen the level of quality of work from anyone outside the company before. I was just so inspired with what Mason came up with that, and I'm like, you know what, we should put him on the board and he has added just incredible value. I mean probably a lot from the Microsoft experience, obviously, being on the Microsoft Board was awesome for him. And the expertise that we're getting as a Board member is incredible. I think he starts today, but he has really been working with us now and has been really cool. And a huge call out to Jeff, too, because Jeff has been a friend for many years and great thoughts. I'll tell you -- and all of these guys, I'll tell you -- there's a lot of them. We all know that. I've learned from everybody. I really appreciate all of their feedback. It's been fantastic. And we're also adding 2 more great Board members today, I mentioned already. But you might now know, Sachin, the CFO of Mastercard, incredible financial expertise. And also Arnold Donald, who I've known for so many years, is probably one of the greatest Fortune 100 CEOs of our time, incredible executive. Looking forward to everyone getting to know him. And again, a huge thank you to Sandy and Alan, all of you -- I know many of you work for Sandy in your careers. And it's hard to see Sandy leave the Board because we love him, but it's been 20 years so it's probably the right moment. We're having dinner next week, and it's going to be a lot of gratitude there. And I think that those points, combined with -- by the way, we're going to repurchase so much stock, $20 billion, I think it's real right time. We've already did $4 billion and that's obviously critical for us, and we even created this new Business Transformation Committee. So the Board can really keep their eye on these KPIs that we're talking about. But yes, performance, productivity, the fundamental profitability of the company, the prioritization of our products, leading with growth like with our new Data Cloud, with our verticals that was very enlightened that question and our services organization as well. We have a lot of growth things. So when you look at -- the buying environment gets back online in some huge way, and it doesn't become measured, I think we are very well positioned for the future, and we have these great customer relationships. And I don't think there's any other evidence of that than the -- that we just hit a record low on customer attrition.

Brent Thill:

Amy, given Marc's #1 profit -- goal of profitability, can you outline where this big jump is coming from? Can you give us just a sense of the big areas that you feel that you can really cut? And I guess, back to Marc, it seems like you can keep growing at a pretty good rate even with higher margins. So this doesn't really feel like it's really sacrificing growth when you're guiding to still a double-digit number.

Operator:

Your next question comes from the line of Karl Keirstead with UBS.

Amy Weaver:

Great. Thanks for the question, Karl. There is certainly an increasing focus on GAAP margins, and in particular, on adding back stock-based compensation into our non-GAAP operating margin. I spent quite a bit of time in Europe meeting with investors in January. And in Europe, that is the first thing that everyone does. So very much top of mind. Our stock-based compensation for last year was just over 10%. We plan to drive that below 9% this year. And we're getting -- there are 2 of key levers there. One is that we're actually burning through a lot of the stuff that came with some of the M&A we've done in recent years. So that is rolling through our system in the way that's going to help drive the numbers down. The others are changes at our Compensation Committee has been making very thoughtfully to how we grant equity and the form of equity that we grant. So we'll have more coming up on that as we get into proxy season, but I see this going well over the next few years. .

Sarah Hindlian-Bowler:

Congratulations to the entire team on an Oscar-worthy quarter. Karl really did a great job of asking the stock-based compensation question I was going to ask. So I'd like to pivot a little bit back towards maybe getting your understanding of the macro environment that helped you build your outward guidance. Brian, maybe this is a question for you in terms of getting a sense for where you saw points of stickiness or points of disruption or otherwise within your various vertical categories.

Michael Spencer:

Okay. Thanks, Sarah, and thanks, everyone, for joining us today. We appreciate everyone taking the time and look forward to seeing everyone over the coming several weeks. Thanks.

Marc Benioff:

Aloha.

Operator:

Good afternoon, ladies and gentlemen, and welcome to Salesforce's Fiscal 2023 Third Quarter Results Conference Call. At this time, all participants are in a listen-only mode, and please be advised that this call is being recorded. After the speaker's prepared remarks, there will be a question-and-answer session. [Operator Instructions] And now at this time, I'll turn the call over to your speaker, Mr. Mike Spencer, Executive Vice President, Investor Relations. Please go ahead.

Marc Benioff:

Okay. Well, thank you so much, Mike, and thank you, everyone, for being on the call. I just want to come back to how great it was to see so many of you at Dreamforce in September. It was really a wonderful experience for me personally. It was our most successful, but I really think it was our most important Dreamforce ever, because we were able to come together for what we called our great reunion. And being with you all of you, especially at our IR day, that was a joy for me. Now let's get on to the quarter results. We delivered solid revenue growth and profitability in an increasingly challenging environment. You've seen how we're driving customer success, the strength of our organic innovation and this incredible Trailblazer community and how it manifested at the Dreamforce. And everywhere we turn, we saw customers learning how to connect with their customers in entirely new ways and the depth of our Customer 360 platform. We're also thrilled to introduce Genie, which is our Customer Data Cloud, and it's one of the most transformational technologies we have ever delivered. And when you hear some of the metrics already coming out of customer adoption with Genie, I think that you'll be incredibly impressed, and I can't wait for Bret to talk about that. The best part of Dreamforce was being together. That was what it was all about for me, and I'm sure it was for you as well, and the 40,000 folks that all came to San Francisco to have this incredible experience and all the additional folks that joined us online. Now let's get to our results. Revenue in the quarter, well, it was $7.84 billion. That's up 14% year-over-year. I think that's a record for us. And also, it was 19% in constant currency. And we're going to talk about that foreign exchange situation in just a second. We closed some amazing deals in the quarter with great companies like Bank of America, RBC Wealth Management and Dell and other great stories, and I'm also going to get that into a moment as well. And even with purchase decisions receiving greater scrutiny, we continue to gain market share and close marquee transactions. IDC recently ranked Salesforce as the number one in CRM. And now we've done that for nine years in a row. And I'm proud that we've delivered revenue growth in this environment, but especially proud of the team for our continued focus on delivering record operating margins. And here, you can see now, up 22.7% non-GAAP operating margin we delivered for the quarter. And I think when I look back at various financial crisis, as we think back even, I think, to 2008, 2009, I think it was like somewhere down to 10%. So we've come a long way in a short period of time. So this quarter has been further proof of our commitment to profitable growth, continuing our operating margin growth, continued focus on our revenue growth, continued focus on our market share growth. And a great evidence of that is our remaining performance obligation. Our RPO is now an incredible $40 billion. Now, as I've said in the last few quarters, the dollar had a strong quarter, maybe even a stronger quarter than we had. I think that when we first said that, in the second quarter, folks didn't really understand what we were talking about, or maybe it wasn't the first quarter we said that. I remember, it was a trip to Japan when I called Amy, and I was asking her what the expectations were for revenue. But when I told her what my guidance was for what and how I was looking at revenue, including foreign exchange, I don't think either one of us could believe what was really happening, and now we've really seen that start to play out. We continue to see the impact of foreign currency fluctuations. And of course, that is our biggest surprise of the year. In the quarter, we saw $300 million year-over-year headwinds to revenue, and we've expected a total of $900 million for the full year. Now that is something we just could not have expected a year ago, and that is when we initiated our revenue guidance. At Dreamforce and in my travels around the world, our customers have been asking how to best navigate this economic situation with the high level of market volatility and uncertainty. A lot of CEOs have never been through these types of crisis before. They haven't seen these kind of variations in the market or in foreign exchange or even in market demand. Well, we've got a lot to say about that, because this is not our first financial crisis. And I'm seeing a lot of buying behavior that really reflects a lot of what we've seen during other crisis, whether it's 2008, 2009 or even 2001. And obviously, the current economic situation is nowhere near as severe as what happened beginning in 2008, but there are some patterns that we've seen repeat themselves. And in early 2008, we saw customers who are reluctant to expand distribution capacity, they weren't adding service people, they froze their hiring, they initiated headcount reductions. We saw those occur in that year. We saw that in [2011] (ph) as well. I think that, maybe when things start to get a little tough or when the stock market shifts that's when CEOs say, hold on, should we be expanding distribution capacity right now? Should we be expanding service capacity? What do we stop -- let's stop our advertising, let's stop our marketing spend, things that they can immediately take actions on. Well, you couple that with foreign exchange headwinds have become an issue and everyone was shifting their focus to finding efficiencies, reducing their costs, increasing productivity, and again, we're feeling all of this once again. And that led us to the shift of the company. It took us a lot to how we operate and where we are investing our dollars. We've actually developed our own playbook. We really wrote it all down. We talked about what was happening we knew would happen again. And we had to dust off some of those plans and numbers from 12, 13 years ago from 22 years ago. And we've turned that playbook in gaining market share and focusing on operational discipline and operational excellence, especially in the face of economic headwinds. And as the economy has started to recover, whether it's in 2010, or even in 2002, we were able to radically accelerate our growth. I have to tell you, when we went back as a team and we looked at the numbers, even I was really shocked to see kind of how things change some of the decisions that we made, but then how we all of a sudden were able to navigate so well, and use that as an opportunity to adjust the company in all -- in a number of really critical and strategic areas. Now I've always believed since that point, especially, that an economic crisis creates these opportunities, and we're squarely in that moment, and we've acted. Starting in July of this year, the buying environment became more measured and foreign exchange headwinds were becoming increasingly complex. We told you then we didn't believe this challenging macro environment was going to be a short-term problem. And you know we're not economists. You know that we don't know exactly what is happening or when the recovery will happen, et cetera, but we do see a lot, and I think we understand a lot about what's going on, because we have such strong global data. And we're not assuming that this economy gets any better anytime soon. We're just reporting what we see with our customers, the kind of changes they make, when they start to feel these headwinds. We're following our playbook to make sure we’re well positioned to gain market share, to increase our profitability, to focus on our operating margin, to focus on the growth of our revenue and be able to continue to invest, especially when the economy recovers. Now for this fiscal year, we're maintaining our revenue guidance of $30.9 billion to $31 billion, up 17% year-over-year or 20% in constant currency. And you saw that, that also included that incremental foreign exchange headwind, and it's even an expected incremental $100 million of foreign exchange headwind just since last quarter. We're raising our fiscal year 2023 non-GAAP operating margin guidance from 20.4% to 20.7%, an expansion of 200 basis points year-over-year, and I expect a lot more, especially with this increased focus we have on expanding our operating margin. Salesforce is mission-critical to nearly every Fortune 1000 company, because every company is becoming a customer company. And everyone knows that this is the time during a crisis like this that you need to focus on your customers. If you need to do one thing, if there's one critical thing that every company has to do to get through this, is to make sure they maintain their relationships with their customers. It's a critical part of navigating through this time, and you're not going to be successful if you don’t stay connected with your customers. We're signing transformational deals with major brands, as every industry continues to digitally transform and that continues to be perhaps the most important initiative of every company, regardless of the economic situation. When you look at this by industry, it's slightly different for each industry. In telecom, we're working with almost every major players. They transform how they connect with their customers. All telcos must deliver faster, better service to customers, keeping their costs down, focusing on their NPS score, becoming more competitive. We all know that. It's a highly competitive industry. We all understand the dynamics well. It's one of the reasons why we've done so well in all these global telecom companies. But I really want to talk to you about a great example, and this deal that we signed with T-Mobile in the quarter. Now we've done a lot of work with Mike and with T-Mobile over the years, and that's been very exciting to see how they built their company and especially how they've executed the merger and now they have a treeing amazing transformational opportunity on how they work with businesses, and we're working with them to develop a vision for the next-generation user experience for T-Mobile for Business and our professional services team is leading that charge. Financial Services, well, that's another industry that's been going through one of the most incredible digital transformations, but it's an incredible moment for them actually. It's why we're working with all the major financial service companies to drive stronger client relationships and to unite their teams to be more effective, especially in this environment. It's a golden time for financial services in many ways. A great example is Bank of America, who I think has been a customer for more than 20 years, and we've been with them through many different financial crisis. But in a short amount of time, they've increased productivity and reduce their technical debt. They're saving time and money, they're connecting with their customers in new base. It's a tremendous relationship with BofA to become their CRM standard. We're delighted to have such great success with them over many decades and to expand this relationship to the business bank, to the corporate bank and the investment bank, it's really an expansion. And I just want to thank Brian for his tremendous loyalty, but also his partnership over so many decades, and it's just a great organization to work with every single day. Well, before I go on, first of all, I want to give you an invitation. I hope that, you'll all plan to join us in New York City next week, where we're going to host our Salesforce world tour on December 8. Join us in person or online, where we're going to announce some new innovations. And you're going to hear from our incredible customers and so much more. Now before I end, I have to say something, and it's something that I did not want to say ever, and I'm extremely sad to tell you that, Bret Taylor is going to be leaving the company. Bret and I are like brothers. I love him very deeply. He's an incredible person. And one of the great joys of my company has been having him here. And I'll tell you, for me, this has been a feeling of tremendous loss. I'm experiencing that right now. You can probably hear it in my voice. It makes me think of all the great people that we have actually lost in the company over the time as well, so many great leaders of our industry, but especially now with Bret. This is just really hard for me, and I'm extremely sad to see him go. I know he has created two great companies. I know he wants to go create a third great company. And you can't keep a wild tiger in a cage. And we got to let them be free and let him go, and I understand, but I don't like it. And Bret, you know that you're always going to be our brother. You know that you -- we love you very deeply, that you have a home here. We're going to try to get you back somehow. So don't think that you're going to somehow get out of this alive, because you're not. And you're always going to be part of our Ohana. And we are really upset about this, and it's going to be a difficult moment for us. But I know that you're going to be with us through the end of the year, and I know you're going to continue to work with us even after this point. But Bret, we love you, and we're so sorry to see you leave the company at the end of this year.

Amy Weaver:

Great. Bret, thank you. And let me just start by saying you, it has truly been a joy to work with you for the last six years. I am going to miss you carefully, but I'm also equally excited for you on your next steps, and I know they will be incredible success again. So taking that left turn to our results here. I am pleased to report another quarter of double-digit top and bottom line growth. Despite increasing macro pressure, revenue grew nearly 20% in constant currency. And as we discussed at our Investor Day in September, it's a new day for profitability. I'm very proud of our Salesforce team and all of our employees for generating record operating margin during Q3. Reiterating Marc's comments, profitable growth is a major focus as we lean in on best-in-class operational excellence across all aspects of our business. As customers focus on optimizing time to value, driving cost savings and consolidating platforms and vendor relationships, we remain well positioned to support them through the current economic environment. Now to our results for Q3 fiscal year 2023, I'll begin with top line commentary. Total revenue for the third quarter was $7.84 billion, up 14% year-over-year, or 19% in constant currency. Foreign exchange continued to be a headwind to our results, as the dollar further strengthened throughout the quarter. For Q3, the total FX impact was $300 million, approximately $50 million more than we had forecast. A few highlights from the quarter. Again, as we outlined at Investor Day, we have three balanced growth pillars

Operator:

Thank you, Mr. Spencer. [Operator Instructions] We take our first question this afternoon of Keith Weiss of Morgan Stanley.

Marc Benioff:

Well, thanks, Keith. And I think it's a great question. And obviously, we're still in a little bit of shock and extremely sad and feeling a lot of loss for losing Bret. Again, I don't have to tell you, one of the best people ever to have worked with in my life and also just a great person. And I have to also tell you that we have a lot of fantastic people in the company, and Bret's management team, what we call the ELT here at Salesforce, includes some incredible people who have been with us in some cases for decades. And they're some of our most capable and incredible people, and I think you know a lot of them, Keith, very well on a personal level as well. And I couldn't -- I have to tell you, I couldn't be more proud of Bret and everything he has done in the last seven years. But while we have a huge light on Bret, I think it would be unfair to not also put a huge light on these other managers and leaders in the company who have done such a great job, whether it's our product leaders or operational leaders, geographic leaders, many of them who you know and have met over the years, whether it was at Dreamforce's or World Tours or at Investor Days, whether it is people who do our impact work or philanthropy work or human resources, our incredible marketing leaders, many of whom we have such deep personal relationships with because we've done such unbelievable marketing in the company now for so long. Folks who have joined us after acquiring their companies, and we have many of those folks as well, and which is also how we ended up with Bret when we bought this company, and people who are doing work in core work in our areas like the quality and sustainability, as well as operational leaders, where we've brought in some great new folks recently from organizations who are bringing us a new level of operational excellence. I don't have to tell you, I think we have the finest engineering team in the world, the leaders in engineering and some of them are what we call boomerangs, people left and didn't find greener pastures, and came back to reclaim their leadership positions and the company are probably the greatest. They don't have to call out my co-founder, who you know very well, Parker Harris, who happens to be in Tokyo today and not on the call because he's running a world tour with our phenomenal team there, delivered what I expect to be shortly the second largest software company in Japan, and on and on and on. But I do want to bring it back to Bret, because this is his moment, and I think it's very important that we really send him the appropriate gratitude and also a call out. And until he walks out the door, don't worry, I'm going to be keeping - trying to keep recruiting him back and I am a good salesman Keith, as you know me very well. And it's not -- the deal is not over until it's over, but we do have to tell you that he has decided to leave. But I tell people all the time, we lose deals all the time, Keith. And for me, I never lose. I keep going back until, I win, Brian, how long have you been in the company now?

Marc Benioff:

23 years. Is that true, Brian?

Marc Benioff:

And do you feel like I [Indiscernible]?

Marc Benioff:

Yes. And I'll break him down– - . So he's in trouble. All right. Amy?

Operator:

Thank you. We take our next question now from Mark Murphy of JPMorgan.

Marc Benioff:

Yes, absolutely. And First, Mark, I hope that you see that the operating margin in this quarter, which has hit a record level at 22.7%, that we are fulfilling our commitment to you and to others that we are deeply focused on this. And you're 100% right, that there's a lot of things pre-pandemic that we had in our company that are expenses that we don't need post-pandemic. Now in regards to being in the office, well, all of us are in the office today. And there is no remote workers here. And it's an interesting metaphor, but there's companies that I work with very closely. And I have to tell you, someone who's influenced me greatly is the CEO of Honeywell, Darius, and [Indiscernible] and the Board member, Robin Washington. And he's made a plea for me for many years that he has factory workers and those factory workers still every single day during the pandemic were in the factory. And that it's a very critical part of how he runs this business. And when I have advocated for new kinds of work and folks having the flexibility in their working environment to remember is factory workers. And I think he's absolutely right and 100% correct. Well, I would also say we have factory workers. Now today, we are the factory workers. The work that we're doing is required here in our factory. And you know where that factory is very well, Mark. You know where we are. And we have different factories, around the world that we call our towers and our hubs and core offices. But I think we also realize and I think that even Darius would agree with me, that the percentage of folks who are working remotely is going to be higher. So before the pandemic the percentage of remote workers for Salesforce was approximately 20%. For other companies now, we're seeing that normalize at somewhere around 50% even with mandatory workdays. So I do think that we're going to have a rebalancing. I think even at Salesforce, we have what I would call factory jobs, folks that do are required to be here, whether they are doing maybe very core work or even new folks who don't have maybe the tribal knowledge yet or need the mentorship or folks coming in from college who benefit from being in the office. But we're never going back to how it was. We all know that. I'm sure a lot of you actually are at home right now. And before this, even maybe your companies, especially the banks, especially the New York banks and some of those New York bank leaders who have made impassioned pleas for return to work. But even though many of you who belong to some of those banks, I bet you're not at those offices right now. And I think we are in a new world, and we all realize that. But I think that we're finding a new way forward and there will be more in office, and there will be -- but we'll maintain the flexibility to be at home. And I will call out one more thing, which is probably one of the most successful things we've done is come up with new ways to work, and you've probably been down with the Salesforce Ranch, and we'll have about 10,000 of our employees go through that this year in training and collaboration sessions, and we'll find other new ways to work. And that's also one of the reasons why we acquired Slack. And I think why we've seen just great growth in Slack, why Slack channels are so important, why you saw the tremendous new multimedia environment in Slack? And we have got quite a few other surprises coming in regards to the integration between Slack and Customer 360 and line of business capabilities and other areas regarding systems of record involving Slack. And all of that's because we're in a new way to work, and we're going to need new tools. So that's how I look at it, Marc. I'm trying to be straight, honest with you, that you have to have a beginner's mind, and we're finding our way through this. And we're going to have more in work in the office, but we're never going to go back to how it was. Brian, do you want to talk about what you're doing with your organization?

Marc Benioff:

Go ahead, Brian. Why should today be any different?.

Amy Weaver:

Great. And so then Mark, turning to your question about how that may assess our real estate strategy and margin and savings going forward. So over the past two years, we have continued to re-imagine our real estate strategy. That is not only to optimize for scale, but also continue hybrid work environment and how people are working and how they're using their space? And this has included reducing our footprint fairly significant right now. Some of that you see when we do large write-offs over these times, but a lot of it has also been opportunistic. When leases come up, and we don't renew when we consolidate into areas. It's something that we are continuing to benefit from. It is also seeing that we are continuing to evaluate. We have a new head of real estate Relina Bulchandani, who is doing an incredible job along the deeper share and really looking at every aspect of our real estate and say how we use it the best and the most efficiently in this new world.

Operator:

Certainly. We'll take our next question now from Raimo Lenschow at Barclays.

Brian Millham:

Thanks, Raimo, for the question and really appreciate it. Certainly, the buyer environment has changed out there in the market. It's become more measured. But our platform is still mission critical to every one of our customers out there, and we're seeing that play out in the demand environment. The pipeline that we're creating is very healthy in the market right now. The interest in our customers C360 platform remains very high. We've repositioned our products and our selling teams to sell not just to the CEO, but to the CFO, actually across the entire C-suite. We want to make sure that we're covering off everybody that could potentially say yes or no to a buying process. We're going to focus on what we can control. We have plenty of capacity in the market right now. We have lots of AEs that we've hired over the past couple of years. And we want to make sure that we're doing the things that we can to continue to grow market share across the entire portfolio. We continue to see multi-cloud expansion. You mentioned that. We think we have a huge opportunity to continue to sell to our existing customers, more of the products that are in our portfolio, both inorganic and the acquired companies that we have. And so we still see a big opportunity for us to spend a lot of time with our customers, selling the entire product portfolio. And the size of our selling base, the customers that we have still a very big opportunity for us to expand our TAM and execute on our growth strategies.

Operator:

Thank you. We go next now to Brad Zelnick at Deutsche Bank.

Marc Benioff:

Yes. Thank you Brad for the question, because I think it's probably what's on my mind every day. And first, before I go to the question, I want to go back to Raimo, and Raimo, I want to tell you that our thoughts and prayers are with your CEO for a full recovery, and we're so sorry to hear about his diagnosis, and Barclays is such an important partner of ours, but your CEO is so fantastic and we're thinking of him every single moment right now. So Brad, you're right. We are in a moment here were one of our goals, strong goals, as you can see by these results is to increase our operating margin. And we're not going to do anything that's going to prevent that increased momentum. And as a shareholder myself, that's my thought every single day. We also realize we want to reduce dilution. That's also why we're doing our stock buyback. And we've talked about that extensively. It's been extremely important. I think that we bought back a considerable amount of stock during the quarter that we, I think, set a goal that we're going to buy back about $10 billion. And I think that we have bought back an extensive amount I think, over $1 billion in the quarter.

Marc Benioff:

So I think that's extremely important as an action. So reducing dilution is very important to us, an increase in our operating margin is very important to us, increasing our profitability, but this is a massive opportunity. Every company is going through a digital transformation. You and I both know very well, it's all begins and ends with the customer, and that's why we're closing these incredible transactions globally. At the same time, you know that there's all kinds of opportunities out there, but it has to be balanced and we have to weigh those. And I think some of the transactions that we were able to do in the past, when we're a smaller company, a more tactical company or maybe some more from the hit from an acquisition perspective, and I think we've done, I don't know, Amy, would you say more than 60 transactions or more.

Marc Benioff:

So as we do even the smallest transaction to the largest, it has a different frame and a different calculation. Look, it's one of the reasons why we recruited Mike to the company. He had the background, and you all know Mike from Microsoft, because we wanted that kind of financial discipline. Amy and I talked about it very closely. As she came in, we spent a lot of time thinking about who we would recruit and as we identified somebody who could guide us specifically in that area, we picked Mike, and this was important. And we've also made other major changes to Amy's team so that she had the best A-team possible. And now when we look at this going forward, we want to do it all. We want to continue to grow revenue, we want to continue to grow our operating margin and we want to look at strategic opportunities. But we're not going to do that at the expense of our operating margin. We're going to continue to grow it. And I think you know at Investor Day, we said that, we have the short-term goal of 25 points. But I think that the reality is, is that we like to feed our targets, and we're not going to get crazy with you on this call, but we're doing everything we can to make these numbers go up, and we will continue to do that in all these areas that you see and you know the company, as well as anybody who's been inside and outside this company, you know every single part of it. You know that we have lots of opportunities, lots of levers, lots of things that we can do. I think that you also watched us very closely through 2008 and 2009. And you can see how we acted then to increase operating margin, and we are going to continue to do everything we can to make this the best company possible, best numbers and also the highest values in the industry and be an example for others as well.

Mike Spencer:

Bo, let's go to the next question.

Kirk Materne:

Yes. Thanks very much. I'll add my best wishes to Bret on his next endeavors. Maybe this one is for Brian. Brian, you mentioned that the pipeline bill levels still remain healthy. I was just kind of curious, if you could talk to us a little bit about industries that are seemingly more impacted for you all due to the macro backdrop and maybe products? And kind of what's your thought process on some of the sales elongation that you've been seeing? I assume that, you're not expecting it to change anytime in the near term. But I was just wondering, if you could just talk to us about industries and products in particular that might be getting hit a little bit harder or perhaps those that are hanging in there better than others? Thanks.

Kirk Materne:

Just any products that you'd call out, and we obviously see the revenue, but I was just kind of curious on a bookings basis.

Brian Millham:

There's been kind of interesting anecdote there around commerce. In our Commerce Cloud, obviously, we have blowout numbers in Cyber Week despite lapping the pandemic, but it was interesting, commerce page views were up 14%, but commerce orders were only up 2%. So you can see not only our customers' impact, but even the consumer behaviors becoming more measured, and we're obviously a B2B company, but all consumer companies are seeing this right now and sort of doing more or less and a lot of people browsing for products and buying a little bit less than they did last year, which I thought was very interesting.

Mike Spencer:

Great. Thanks, Kirk. Bo, let's take our last question now.

Sarah Hindlian-Bowler:

Great. Thank you so much. I really appreciate you squeezing me in. And I'll add my congratulations and best wishes to you, Bret. Hopeful that you have an incredible opportunity in front of you. This was a question for Amy. I think one topic that we touched on, you mentioned briefly on the call where your retention rates, which continues to be a great way to add revenue that's really high margins. So maybe we could drill down into that a little bit, what you're doing to drive your retention rates higher? And maybe how some of the product bundling or suite strategy plays into that would be helpful as well? Thanks Amy.

Brian Millham:

Amy, thank you. I appreciate it. I'll quickly address it. Thank you, Sarah, for the question. First of all, I think it's part of our heritage, our DNA, as a customer success is the core value of ours, and we own it across the entire company. So it's not just the success teams with services teams that the entire organization from product to our financial teams. Everyone owns customer success. We've made some investments in the way that we go to market touching our customers more frequently from a success perspective, and the motions that we're running. As I mentioned earlier, customers from the industry cloud perspective, where we're seeing better adoption rates there and better usage. We've also made some strategic investments in our own services organization alongside a great ecosystem of partners as well that are driving better implementations upfront, faster time to value for our customers and better results from a customer success perspective. And some of the motions that we're running that are new, great leadership under a gentleman named Jim Roth, who's running our success organization; Lori Steele, who joined us to run our services organization; and now has turned over the reins to Mark Wakelin, doing great work with our customers, very oriented to speed to value and ensuring they're getting tremendous customer success on our platform.

Operator:

Thank you. Again, ladies and gentlemen, that will include Salesforce's Fiscal 2023 Third Quarter Results Call. I'd like to thank you all so much for joining us, and wish you all a great evening. Goodbye.

Operator:

Welcome to the Salesforce Fiscal 2023 Second Quarter Results Conference Call. [Operator Instructions].

Michael Spencer:

Thank you, Emma, and good afternoon, everyone. Thanks for joining us today for our fiscal 2023 second quarter results conference call. Our press release, SEC filings and a replay of today's call can be found on our IR website at www.salesforce.com/investor.

Marc Benioff:

All right. Look, you're not going to want to miss it. Look, before handing off to Bret, I'd like to congratulate Brian Millham, our new Chief Operating Officer. Brian is employee #13 and has been helping us to build this company from its earlier days.

Bret Taylor:

Thanks, Marc. And congratulations, Brian and Gavin. As Marc said, we had another strong quarter delivering strong top and bottom line performance. Our results demonstrate the durability of our business model and the strength of our strategy. Our Customer 360 product portfolio is the industry standard and the market leader, a leader in 12 current Gartner Magic Quadrant reports. And the platform is helping hundreds of thousands of companies in every industry digitally transform.

Amy Weaver:

Great. Thank you, Bret, and congratulations, Brian.

Operator:

[Operator Instructions] Your first question comes from the line of Keith Weiss with Morgan Stanley.

Operator:

Your next question comes from the line of Brent Thill with Jefferies.

Marc Benioff:

Well, that would be my pleasure. I mean I think a lot of you know Brian, he's been a trusted part of our management team for over 20 years. And look, the last time he was the head of sales was only 2 years ago when we went into the pandemic and went through the transition with Keith. You may remember, I put Brian in for, I think, 1 or 2 quarters to run global sales, did a fantastic job. He didn't want to continue with it. So we asked Gavin to step up from his role of -- I think it was International Chairman or European Chairman, I can't remember, honestly. And really proud of Gavin for the last now 2 years. And then Brian is right here. And I asked Brian if he would come in and take this forward and he agreed. And I couldn't be more grateful to that. I know we have just a trusted hand.

Bret Taylor:

The other thing I just want to add is Brian has been running our customer success, professional services and partnership organization for a long time. And I think the story to the pandemic has been our historically low attrition rates and our focus on customer outcomes. And I'm really excited about the opportunity of bringing our global sales organization together with our customer success organization. And it's a really important part of our philosophy. And I think this move...

Bret Taylor:

And deeply connecting that success motion to our sales motion, I think, reflects a philosophical view from Marc and me about really our philosophy.

Brian Millham:

Yes. First of all, I'm humbled by the opportunity and, Marc, to your comments. I've been very close to this business for the past 2.5 years, working side-by-side with Gavin. I actually was operating in a COO role for him running this business. And I think it's critical as we look at sort of the second half of this year and beyond, this motion of customer success and sales together will drive the outcomes that we're looking for and our customers are looking for. And so I'm thrilled with the results we've seen on the attrition side, thrilled with the results that the customers are getting from the investment they're making in our technology and just so excited to lead the sales.

Brian Millham:

I think it was measured in hours, actually, Marc. I've been running forecast calls already. I'm in the business travel industry customers. I met with 4 customers yesterday, there will be no transition time. There are no big changes that we're going to be making in our go-to-market other than getting closer to our customers and ensuring that we're delivering value to them in every single transaction that we're working on with them. So very excited to take this on with 0 transition time.

Raimo Lenschow:

Can you -- obviously, the slowdown that we're seeing or the lengthening of sales cycles, there's nothing that is kind of unique to you guys. We heard from other vendors as well. Can you talk a little bit about what you see in terms of client prioritization, in terms of certain projects? Because I do remember from the old times that the front offers always had higher priority because it's revenue generating, et cetera. Are you seeing that now happening as well? And can you speak to that?

Operator:

Your next question comes from the line of Brad Sills with Bank of America.

Bret Taylor:

I'll start and then Brian, I'd love your commentary as well. As you said, I think the story, actually, the past number of quarters have been the strength of our core CRM business. Sales Cloud growing at 19% in constant currency is remarkable. This is the product that Marc and Parker built 23 years ago doing -- so much revenue growing at 19% is incredible. And you're seeing it just in, I think, the continued strength in our core business.

Kasthuri Rangan:

Lots of exciting news for Salesforce. Congrats on all the changes. My question maybe, Brian, congrats to you as well in your new position. What would you do to turn around the data cloud? I know, clearly, it has had some very significant momentum. But I can, in some sense, look at the new guidance versus the old and say a lot of that delta is basically the slowdown on the growth rate in the data cloud that is the Tableau and MuleSoft business. Brian, want to get your opinion on that.

Brian Millham:

First of all, Kash, thanks for the question and I appreciate the kind comments. On the data business, it's a unique business for us because some of it is license based. And you can tend to see some of the headwinds we saw in July show up more immediately there. We feel very good about where both those businesses are right now, particularly in MuleSoft that as you heard Bret say is on a great trajectory and will be a tailwind to our revenue growth in the second half of this year. We feel great about that.

Karl Keirstead:

Maybe I'll direct this to Marc and Amy and it's about the $10 billion share repurchase. So maybe a 2-parter. Marc, maybe for you, why do you think this is the right time in the company's development to move forward with your first large repurchase?

Marc Benioff:

Well, it's a great question. And I'll tell you this was kind of -- I looked at this quarter very much as kind of a milestone. I'm a big fan of SAP and I have a lot of respect for their business and what they've done in the market over the last 40 -- almost 50 years. And to see our business in July do more than they reported in June in terms of revenue, that was very meaningful to me and I'm very grateful and proud of our team for kind of hitting this tremendous level of scale.

Bret Taylor:

Yes. I think, Marc, you articulated it well. I mean when I mentioned this before, but the pillars of our capital allocation strategy are

Bret Taylor:

You created a great business model in Software as a Service, Marc, and I think...

Bret Taylor:

It is. And number two, we're going to invest in organic innovation. And we talked a bit on -- there's a question Amy earlier on investment. I'm so proud of our investment in organic innovation. You'll see a lot more of it at Dreamforce, but I think we have a better pace of organic innovation that we've had in our history.

Marc Benioff:

And you can see like we've picked up some great companies, whether it was ExactTarget, which was kind of the beginning of really augmenting Customer 360 with our Marketing Cloud and then moving on to MuleSoft was amazing. It's really provided all the integration and the connectivity, and then on to Tableau and giving this extension of analytics. So important to so many of our largest customers.

Marc Benioff:

Yes. And I really think that when we get to Dreamforce and you see how we brought all of these platforms together, integrated them, you're going to see some really powerful integration capabilities. You already saw some of it at the World Tour in New York with kind of the first level of the customer data platform. You're going to see a whole another extension of that kind of capability when we get to Dreamforce. And it's -- I think, as Bret said, it's in a very exciting moment in time when it comes to innovation with the company.

S. Kirk Materne:

I think this one is sort of for Bret. Bret, I was just wondering if you could go into the industry cloud strategy a little bit and what you're seeing going on there. And can you just talk a little bit about how important that strategy is as budgets come under more stress and the ability for you all to go deeper with your customers on an industry basis? I was just kind of curious if you can give us an update on that and then how that strategy maybe plays out in a more choppy macro backdrop.

Operator:

You last question today comes from the line of Phil Winslow with Credit Suisse.

Bret Taylor:

Yes, I'll take that one. This is Bret. We are really happy with the performance of Slack. I think it's interesting, we acquired Slack in the midst of this pandemic. And now we're coming out of the pandemic into this new era of flexible work. Office occupancy rates are at historic lows. If you look at the lines of business that we serve like customer service, I've met tens or maybe even hundreds of executive teams whose contact centers are no longer buildings. They're literally just in the cloud now and people are wearing headsets in their kitchens and basements to answer your phone calls.

Marc Benioff:

And I think a lot of the reasons that we bought the company that they really could benefit from our credibility with customers and our distribution capacity have really paid out. It's such a great product. And in June, you probably know that Bret and I did the World Tour in New York. Many of you were there, but the day before was the Frontiers Conference for Slack. And if you haven't looked at the demo, you really should because the product has come a long way since we bought the company. It's an incredible piece of technology...

Marc Benioff:

You have to see it to believe it. I mean don't you agree like it's something that's like really -- and for a lot of you are coming to Dreamforce, I think you're going to see how a lot of our products have become Slack first. And also the number of integrations that we're going to be able to kind of bring forth, how many integrations now do you have with these core clouds that you've been able to put together?

Marc Benioff:

We've integrated Slack with Tableau, which is really cool, right? Because you can do collaborative analytics.

Marc Benioff:

But a lot of our customers still haven't seen this. And I think that's why I'm so excited about Dreamforce because when you come to Dreamforce, and you see the keynote, obviously, this will be highlighted. And I think customers will see in real time. What we saw, for example, in Frontiers, even we didn't really have the opportunity because COVID was so freshly integrated into our World Tour keynote, which Bret and I have lamented many times. But I think that when you start to see the incredible innovation that have happened in the Salesforce core clouds like sales, like service, marketing, commerce, even Tableau, you combine that with Slack. You bring that into the Customer 360 with MuleSoft, the single source of truth.

Operator:

This concludes today's conference call. Thank you for attending. You may now disconnect.

Evan Goldstein:

Thank you, Emma. Hello, everyone, and thanks for joining us for our fiscal 2023 first quarter results conference call. I'm Evan Goldstein, Senior Vice President of Investor Relations. Our press release, SEC filings and a replay of today's call can be found on our IR website at www.salesforce.com/investor. With me on the call today is Marc Benioff, Chair and Co-CEO; Bret Taylor, Vice Chair and Co-CEO; Amy Weaver, Chief Financial Officer; and Gavin Patterson, Chief Revenue Officer. As a reminder, our commentary today will primarily be in non-GAAP terms. Reconciliations between our GAAP and non-GAAP results and guidance can be found in our earnings and press release. Some of our comments today may contain forward-looking statements that are subject to risks, uncertainties and assumptions, which are subject to 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 included in our most recent report on Form 10-K. Before I hand the call over to Marc, I'm excited to welcome Mike Spencer to Salesforce. As many of you know, I will be taking on a new role here at Salesforce, supporting strategic planning in our product organization, and Mike has joined Salesforce to lead Investor Relations. Mike is familiar to many of you as he previously led Investor Relations at Microsoft. Thank you, Marc, Bret, Amy, Gavin for allowing meaningful rotations that enable career development. It is one of the many benefits of working at Salesforce. And thank you to the investment community for welcoming me over 2 years ago. Leading IR has been one of the most rewarding experiences in my career. And with that, let me hand the call over to Marc.

Bret Taylor :

Thanks, Marc. As Marc said, we had a great quarter, and we see strong demand across our clouds, our industries and our regions despite the unprecedented foreign exchange headwinds, and our results really demonstrate the power of our strategy. Our products are more relevant than ever before, as companies invest in our Customer 360 platform to connect with their customers and to drive cost savings in this new digital economy. Our technology is deeply differentiated, with our Hyperforce infrastructure and Einstein artificial intelligence, enabling our customers to reach global scale with levels of trust that are unmatched in the industry. Einstein is now doing 164 billion predictions per day, which is just incredible. Our ecosystem is unparalleled. We have over 15 million trailblazers, creating what IDC estimates will be $1.6 trillion in economic impact for our customers and for our partners. And our business model, as Marc said, is durable. It's diversified across industries, regions, lines of business, ensuring we're resilient in the face of any economic cycle. And finally, our leadership team continues to focus on disciplined execution, which is driving both top line performance and sustained operating margin cash flow expansion. As Marc said, we've all been on the road, and we've been reconnecting with our customers, our trailblazers and our partners. And the common theme from the customers I have met with, from Singapore to New York to the 30 CEOs I met one-on-one at Davos last week, is this digital transformation trend that dramatically accelerated during the pandemic, they continue full steam ahead, despite all the volatility in the global economy. One great example is ADT, the leader in home alarm systems. ADT used our Service Cloud to execute over 200,000 virtual service visits in its first quarter. As a result, the company avoided sending out technicians and trucks in 80% of its service cases. They lowered their costs and they lowered their carbon footprint, all while achieving higher customer satisfaction. This is the promise of technology, to drive productivity. And our Customer 360 platform is relevant whether you're trying to scale growth, increase productivity and profitability or meet your sustainability goals. And all 3 are increasingly relevant to our customers across the globe. We had strong year-over-year growth across every region in the quarter, 21% in the Americas, 33% in EMEA and 24% in APAC. We saw strong momentum across every cloud in our Customer 360 platform as well. Sales Cloud continues to accelerate, surpassing $1.6 billion in the quarter, growing 18% year-over-year with great wins like DoorDash and Stellantis. Stellantis, which was formed last year from the merger between Fiat Chrysler and the French PSA Group, decided to standardize the entire company on Salesforce. They replaced more than 2,500 apps with Customer 360. And with Sales Cloud, they now have a single source of truth for all their customer engagement to drive growth, while delivering best-in-class personalized service. Our Service Cloud grew at 17% year-over-year to $1.76 billion in revenue in the quarter. State Farm, a long time Salesforce customer, was a great Service Cloud success story this quarter. They're now combining our Field Service platform with Sales Cloud, Service Cloud, Financial Services Cloud to enhance their entire end-to-end customer support experience, especially during catastrophic events. We also continue to see strong momentum with our Marketing Cloud with customers like Bose and Colgate Palmolive. Our Marketing Cloud has become even more relevant to CMOs as they navigate the significant changes in mobile operating systems and new privacy regulations around the globe. This is the new cookie-less world, and it's made growing and measuring consumer engagement harder than ever before, and it's driving investment in our Customer Data Platform, which has become one of the fastest-growing products we've ever released. Bose is using our CDP to unify their customer information from hundreds of different sources to drive hyper personalized marketing, multichannel campaign management and real-time engagement, all with compliance and trust built in natively. We also saw Commerce Cloud wins at YETI, L'Occitane and Goodyear, continuing the digital commerce trend that accelerated so rapidly in the pandemic. Together, Marketing and Commerce stood 22% year-over-year in the quarter. Our data clouds, including MuleSoft and Tableau, grew 15% year-over-year in the quarter. Data is the fuel for every digital interaction, and MuleSoft and Tableau continue to be foundational for every multi-cloud Customer 360 deal. Tableau wins in the quarter included ADT, Bose and Lookers Motor Group, a top auto retailer in the UK MuleSoft was also part of some of our largest deals in the quarter, including NTT and continues to deepen our relationships with existing customers like Rocket Mortgage. As you know, we've been working through some issues on MuleSoft's go-to-market motion over the past couple of quarters. Amy will get into specifics, but I'm encouraged by the progress we're making, and we have a strong pipeline for the back half of the year. I'm also excited to say that Slack continues to exceed our revenue expectations, with wins of the self-driving car company, Cruise and the UK Ministry of Justice. This was the fourth consecutive quarter we see more than 40% growth in customers spending more than $100,000 with Slack annually. We also continue to see strong momentum across our 12 industry verticals, including financial services, health care, consumer goods and manufacturing. Our industry-specific clouds were part of 7 of our top 10 deals this quarter. I'm so grateful for our 15 million trailblazers, all of our partners and our 77,000 employees for helping provide our customers with the innovation, agility and resilience they need to navigate these uncertain times. Our customer success drives our financial success, and this unrivaled community is why our customers choose Salesforce as their trusted digital advisor. Now over to Gavin to talk about some of the customer success stories from the quarter.

Amy Weaver:

Great. Thank you, Gavin, and good afternoon, everyone. As Marc and Bret said, we had strong financial results this quarter, and our pipeline remains robust. We are well positioned to serve our customers in this uncertain macroenvironment. Let's go through some of our results for Q1 of fiscal '23, beginning with top line commentary. Total revenue for the first quarter was $7.41 billion. This is up 24% year-over-year or 26% in constant currency. A few key highlights from the quarter. The momentum in Sales Cloud continued in Q1, with revenue accelerating to 18% growth year-over-year, 20% in constant currency. Slack again outperformed our revenue expectations with $348 million in Q1 compared to our guide of $330 million. The number of customers spending more than $100,000 annually, grew 45% year-over-year. Our industry's products remain in high demand and are providing out-of-the-box solutions to customers with specific needs. We saw an industry's product included in 7 out of our top 10 deals this quarter. And from a geographic perspective, EMEA performance was strong with particular strength in both the UK and France. Now to provide an update on MuleSoft. Total revenue increased 9% year-over-year against a strong prior year comparison, driven by lower-than-expected new business as we work through the go-to-market organizational changes we discussed on the last call. As a reminder, on average, 50% of MuleSoft's total contract value is recognized in period, resulting in more quarterly volatility than our core products. And as Bret mentioned, MuleSoft's pipeline remains strong, and we still anticipate seeing the benefits from these changes in the back half of fiscal '23. Total company revenue attrition remains at record lows and in Q1, again, between 7% to 7.5%. And as Marc mentioned, our remaining performance obligation, representing all future revenue under contract ended Q1 at approximately $42 billion, up 20% year-over-year. Current remaining performance obligation, or CRPO, was approximately $21.5 billion, up 21% year-over-year and 24% in constant currency. Slack represented approximately 5% -- or 5 points of that growth, in line with our guidance. This strong RPO performance at our scale reflects the relevance of our product portfolio and strategic relationships with our customers. Turning to operating margin for the quarter. For Q1, non-GAAP operating margin was 17.6%. Q1 GAAP EPS was $0.03 and non-GAAP EPS was $0.98. Mark-to-market accounting as the company's strategic investments benefited both GAAP and non-GAAP EPS by approximately $0.01. Moving to cash flow. For Q1, operating cash flow was $3.7 billion, up 14% year-over-year. CapEx was $179 million, resulting in free cash flow of $3.5 billion, up 14% year-over-year. Now before turning to our guidance, I'd like to call attention to the impact that foreign exchange is having on our financials. As a reminder, our primary currency exposures are to the euro, the Great British pound, the Japanese yen and to a lesser extent, to the Australian dollar. Since we last provided our outlook for fiscal year '23, the dollar has continued to strengthen against all of these currencies. And as such, we are providing increased transparency this quarter into the impact of FX on our guidance. Now let's get to that guidance. For the full year, the change in currencies represents an incremental $300 million year-over-year headwind on top of the $300 million we provided last quarter, bringing the total year-over-year FX headwind to $600 million. As such, we are now guiding to fiscal '23 revenue of $31.7 billion to $31.8 billion or approximately 20% growth year-over-year. Our guidance continues to assume a $1.5 billion contribution from Slack. We expect Q2 revenue of $7.69 billion to $7.7 billion or approximately 21% growth year-over-year. Our Q2 revenue guidance includes a $200 million year-over-year headwind from FX and a $360 million contribution from Slack. For Q2, we expect to deliver CRPO growth of approximately 15% year-over-year. This includes a 3-point headwind from FX. And as a reminder, Q2 represents Slack’s fifth quarter of contribution to CRPO and therefore, the year-on-year growth rate is now normalized. We expect GAAP loss per share of negative $0.03 to negative $0.02 and non-GAAP EPS of $1.01 to $1.02. For the full year, we expect GAAP EPS of $0.38 to $0.40 and non-GAAP EPS of $4.74 to $4.76. And please recall that our OIE and EPS guidance both assume no further mark-to-market adjustments of our strategic investment portfolio. Turning to operating margin, I am very pleased to announce that we are raising our fiscal '23 non-GAAP operating margin guidance by 40 basis points to 20.4%. This includes 100 basis points to 125 basis points of headwind from M&A. This guidance increase represents an expansion of 170 basis points year-over-year and 270 basis points over 2 years, all driven by a continued focus on disciplined decision-making across the organization. And as a company, we are committed to continuing to improve profitability over the long term. With respect to FX, because our regional revenue and expenses are generally in the same currencies, there tends to be a natural hedge in our operating margin. As such, although we've seen FX headwinds to revenue, we don't currently anticipate a material impact to our operating margin for the full fiscal year. Moving to cash flow, we remain well on our way to drive another year of record cash flow generation, and we are reiterating our fiscal '23 operating cash flow guidance of approximately 21% to 22% growth year-over-year. In addition, our guidance continues to assume a 3-point headwind from cash taxes associated with tax law changes requiring the capitalization of certain R&D costs. We continue to expect CapEx of approximately 2% of revenue in fiscal '23, resulting in free cash flow growth of approximately 25% to 27% for the fiscal year. To close, while there is uncertainty in the macroenvironment, our customers are continuing to come to Salesforce to transform their businesses. The demand we are seeing from our customers is a testament to the strength of these strategic relationships and the relevance of our product portfolio. This gives us confidence in the durability of our business model, and we're excited to help our customers navigate in this changing economy. Now before we wrap up, I do want to thank specifically Evan for his incredible leadership with the IR team over the last 2 years, his partnership and friendship and wish them all the best in his new role. And let me say officially welcome to Mike Spencer, who I'm delighted to have joining us. And with that, Emma, let's open the line for questions.

Mark Murphy :

Yes. Mark [indiscernible]

Mark Murphy :

Apologies [indiscernible]

Amy Weaver :

Yes. Let's move on. Let's see if we can come back to Mark.

Keith Weiss :

Really nice quarter in Q1. Two questions. One on Sales Cloud. This is probably the part of the portfolio that investors have been most worried about maturation and sort of the high market share that Salesforce has. You guys have been able to see accelerating growth. Can you dig in a little bit on kind of what's driving it? Is it the vertical solutions or something in particular that has really reinvigorated that line item? And then one for Amy on the operating margins. I don't think anyone was expecting operating margins going up after this quarter. Can you talk to us a little bit about those initiatives that are enabling better operating margins? There's some speculation in the press about maybe slower headcount growth or some calling of expenses. Is there something programmatic that's enabling you guys to drive that better operating margin on a go-forward basis?

Amy Weaver :

Sure. I'd love to. So, hi, Keith, thanks for the question. As you noted, I really am very, very pleased about the raise on our operating margin up to 20.4% for this fiscal year. This is not the result of any single change. It's really driven by disciplined decision-making and trying to really unlock incremental efficiencies across the entire business. We've asked each leader to step up to really look across their business and to strategically prioritize their investments. And this is really to make sure that we're getting the highest return for every dollar that we invest. You asked about hiring, again, as a result, we're going to continue to hire, we are hiring. But we're doing it in a much more measured pace, and we're focusing the majority of our new hires on roles that will support customer success and the execution of our top priorities. This focus on margin, this is really over the long term, and we are all committed that this is going to make us a stronger company. But I do want to reiterate, this is not just a finance-led initiative. This focus on discipline is being applied across our entire organization. This is supported by Marc, by Bret, by Gavin and truly by our entire leadership team.

Kirk Materne :

I don't know who wants to take this, Marc or Bret, but you mentioned Salesforce well to sort of performed through economic cycles. I was wondering if there's any change to the go-to-market playbook in a tougher economic environment, if at all, in terms of which products might be better to lead with when you start getting in these periods? And then second question would be for Amy. Amy, you basically kept your fiscal year guidance -- revenue guidance unchanged when adjusting for FX. I think everybody is wondering if that guidance probably now reflects a little bit more conservatism, given the more uneven macro backdrop. Could you just comment on that a little bit, maybe versus where we were 90 days ago?

Gavin Patterson :

Well, I think in this type of environment, the key word is relevance. Listening to your customers, understanding what the challenge -- the specific challenges they are facing and making sure that you tailor the approach to that. So in many cases, Sales Cloud is the right lead, particularly with new business and new customers. Other customers is right to go with -- to lead with Service Cloud and use that as a way of taking cost out of the business and we've used both. And then we have customers who -- as I said in my comments earlier, who were taking the Customer 360, our multi-cloud take up this quarter is very strong, up 21% with customers taking 5 or more clouds. So I think it's about listening to the customer, it's about being relevant, understanding that actually we're going through a period now where productivity and transformation is more important than the last few quarters and making sure that we tailor our messages accordingly.

Amy Weaver :

Great. Kirk, I'll take the second part of your question here on the guide. Look, we feel good about what we're seeing. And you've heard that from Marc, from Gavin, from Bret, to put about our pipeline. But we're mindful of the uncertain macroenvironment, and that includes continuing FX volatility. And so I believe that our guidance is appropriately conservative under the circumstances.

Mark Murphy :

Bret, our survey work has shown potential for Slack to be adopted by 1/4 of all employees in the next several years. It looks like a huge number above Google Workspaces and it looks like it could be rivaling Zoom. What do you see as the best use of this $4 billion R&D budget you have to try to accelerate the Slack innovations and achieve that level of ubiquity? And I'm wondering if you would see any opportunity to potentially do more with native video conferencing?

Operator:

Your next question comes from the line of Brad Zelnick with Deutsche Bank.

Amy Weaver :

Brad, thanks for the question. As you know, historically, we've not done buybacks, but I will tell you that, as a company, we are always looking at our capital allocation strategy. Our Board consistently looks at this on a quarterly basis, and it's really to assess the best use of cash. Right now, our overall focus is on strengthening our balance sheet to really capitalize on all of the opportunities in front of us.

Brent Bracelin :

I guess one of the themes we're starting to hear more from customers is this idea of vendor consolidation, particularly given the tightening business cycle. Have you seen any shift in the pipeline relative to the mix of multi-cloud deals? Any sort of color around the customer appetite to consolidate the number of vendors would be super helpful.

Marc Benioff - Chairman of the Board:

Yes. I would add, I think that one of the highlights in the quarter was Goodyear. Rich Kramer, someone who we've built a really great relationship with over a number of years, they deployed a number of our different products. Now they're deploying our Commerce Cloud. And it's a great example by having a full suite of products and also by augmenting those products with our acquisition strategy over the last few years, we really have just a tremendous opportunity with every single customer to extend and expand and land and go and -- this is just a moment where I think that there will be some consolidation with vendors, and they'll rely on the vendors that they have the most trusted relationships with.

Brent Thill :

Marc, many are asking on the M&A strategy, given the pullback in valuations. Do you change your philosophy and be more aggressive here? Or you're sticking with the playbook in digesting Slack and some many of the other past acquisitions?

Amy Weaver :

No, I think you've got it, Marc. Right now, large-scale M&A is not part of our current plans. Obviously, we're opportunistic as all strategic tech companies are, and I never say never, but that is just not something that's on our current radar screen.

Kash Rangan :

Congratulations on a terrific quarter. And Marc and others who have been through multiple cycles on the call here, I'm wondering why are you so confident with this economic cycle? I mean, what is so different about this cycle? Certainly, we -- you talk to CEOs, you meet with them on a daily basis. What is top of their mind? And what do you feel differently about Salesforce's positioning in this economic cycle? And then one for Amy. I just wanted to understand what gives you confidence? I think you've said something faster cash flow growth and margin growth in the press release, just very assuring, just a little bit more detail on for you plan to get there would be great.

Bret Taylor :

Well, you put it well. I had a privilege of having about 30 one-on-one CEO conversations in Davos, CEOs from different regions around the world, different industries. And it was really pleasantly surprised to just hear how much customers are leaning into their digital investments. Some like the consumer goods companies have been really impacted by both the supply chain and inflation, and we're really focused on how to invest in digital technologies to take down some of their costs to absorb some of that and avoid price increases. And then some other businesses, I talked to the CEO of a beauty company has seen increased demand as we all leave the house for the first time in the past couple of years and was really focused on growth. But the theme in all of them was whether you're investing in digital technology to connect with your customers or investing in digital technology to drive productivity, we continue to be one of the most strategic vendors and the trusted digital advisor all of these CEOs across every industry. So I read the same headlines as everyone else, and I'm cognizant of the volatility in the economy. And as Gavin said, we're just focused on being relevant being the most trusted digital advisor to each of our customers. And as Marc said, we believe that if we form those trusted relationships, especially in times where our customers need that resilience, and need that from us, we will come out of these gaining market share and gaining trust with our customers.

Amy Weaver :

Davos is something. It's -- there's no other opportunity to connect with hundreds of customers across there. One of the things I really heard was a focus on efficiency. And companies are looking for partnerships and looking for companies like Salesforce that can help them both grow and become more efficient as they do it. So it was an incredible week and a great opportunity.

Gavin Patterson :

Yes. I mean what I heard from customers last week and more generally, I think we're just more important to our customers than we were in previous cycles. We've got a more strategic relationship that is more of a trusted advisor. And I think that's because we have a full suite of cloud and a full Customer 360 solution that can solve multiple problems for them. So if their issue is growth, we've got a solution that will allow them to drive growth. If it's about productivity and cost transformation and efficiency, we've got the right combination for that as well. So it's about relevance, and we heard this time and time again that increasingly the digital transformation agenda that the narrative around it is not running out of steam in spite of concerns about the environment. It's becoming more -- I think even more important, and we're better placed than any other company to help our customers through that.

Amy Weaver :

Kash, to follow up on your question on cash flow. For cash flow, our philosophy is that our OCF and FCF should increase faster than revenue as we're increasing our operating margin, which we are. In terms of confidence levels, both on the cash and the operating margin, much of this comes back to the focus on disciplined growth. This is not a passing fad. I'm a huge believer that constraints make for a stronger and more innovative company. And this is the focus across every part of the company. So when my confidence comes from is really seeing all of our leaders at Salesforce stepping up to this challenge in meeting us.

Phil Winslow :

You've touched on sales, marketing and commerce clouds. I wanted to focus in on service because you've been pretty vocal about just the transformational changes that are going in on customer service. What are customers telling you right now in terms of where they are in their journeys there in terms of transformation? And also, we've obviously seen some big contracts signed from contact center vendors kind of along the team, too. So I wonder if you could just talk us through what you're seeing from customers and what your kind of conviction level is in Service Cloud going forward.

Operator:

This concludes our Q&A for today. Mr. Evan Goldstein, I turn the call back over to you.

Marc Benioff :

Evan, I want to congratulate you on 2 great years in IR. And we couldn't be more excited for you. So let's end this the way we started it with some big props and congratulations for you.

Operator:

This concludes today's conference call. Thank you for attending. You may now disconnect.

Operator:

Good afternoon, ladies and gentlemen, and welcome to Salesforce's Fiscal 2022 Fourth Quarter and Full Year Results Conference Call. Just a reminder, today's call is being recorded. [Operator Instructions] Now I'd like to hand the conference over to your speaker, Mr. Evan Goldstein, Senior Vice President of Investor Relations. Please go ahead, sir.

Marc Benioff:

Well, thanks, Evan. This is probably one of those calls that the most difficult type of call that we can do, and the reason why it is the most difficult call that we can do is all of the grim things that are happening in the world. And of course, all of us are witnesses to tragedies that we cannot believe our eyes. And at the same time, we're here on the call to tell you that Salesforce had perhaps the best quarter it's ever had in its history, and we are trying to measure our response. And this is actually very personal for me. I'm sure many of you know that my great grandfather actually immigrated from Kiev from -- growing up, it was Kiev in our household. And -- but my great grandfather, Isaac Benioff came to the United States from Kiev, and my grandfather was born here in the United States and then came to San Francisco and met to my grandmother who was the second generation San Franciscan. And that's why I'm here now, I'm a fourth generation San Franciscan, but looking back and looking at my family now and Ukraine, my heart is really breaking for them, and the senseless pain, the suffering, the -- it's just unbelievably difficult to see what is going on in the world. And while we really don't have employees or do business in the Ukraine or Russia of any consequence, I would say that we do have employees and families like mine, and with loved ones there and deep connections to the region in this part of the world, and our heart is continuing to break. And we've provided ways that we provide humanitarian care. I just provided some response through World Central Kitchen, which I highly endorse, Jose Andres, and someone who I've worked with for many years. And as we find more ways to provide humanitarian care, we will. This is very important to us and who we are in our core values at Salesforce. So, as I said, this is a difficult moment for us because we are not blind to what's happening in the world, and yet we did have probably, I would say, the best quarter we've ever had in the history of the company. And I'm here on the 61st floor of Salesforce Tower. We've got significant numbers of our employees back here in the office. I was just with them. And I also just spent a tremendous amount of time surveying the city and how things are coming back to life here kind of in our post-pandemic reality that we're now entering, and it's powerful. This energy around here is amazing. We're really turning the corner in our battle with the virus. And I believe, in many ways, COVID is behind us. And certainly, I know that Omicron and BA.2 are very serious viruses, but we are in a very different position in the world today fighting these things than we were a couple of years ago, and I want to thank everyone who has done so much for getting us through the last two years. It really became very clear to us -- a couple of weeks ago, we had our fiscal year kick-off in New York City. We had 5,000 employees attending in person at the Javits Center. It was amazing to be with 5,000 employees again. We had -- we have 75,000 employees now in the company. 35,000 of our 75,000 employees have started since the pandemic, so we've had quite a bit of growth here at Salesforce. And I would also say that when we asked -- we're in the room -- and how many of you have not attended a Salesforce kick-off, stand up and be welcomed, I would say 75% of the room stood up. And Bret and I are conducting this kick-off together as a team, and I think we are both in shock. And wouldn’t you say that that was…

Marc Benioff:

It was, right?

Marc Benioff:

Being back at the Javits Center with 5,000 employees, doing a kickoff, and with tens and tens of thousands of employees online. And I'll tell you that we were able to get together safely, thanks to our safety cloud. We were interconnected with a number of COVID tests that wesre dynamically updating how we were doing and trying to keep the virus at bear. There’s still some virus there, but not a lot. And we did our best to have a very safe program, and we've been doing this now. We've had two Dreamforces with this program, with our safety cloud we’ve had the kick-offs. We’ve had all kinds of events and programs all over the world using this technology. And it's very powerful, Mayor de Blasio came, and he was talking about how we had built the contact tracing system for New York, which we did, and the vaccine management system for New York, which we did, and many apps and talking about how we landed a 787 during the height of the pandemic in New York, which we did, and providing millions of pieces of PPE and so forth. But the emotional part for me, and I don't know, Bret if you were, but when he said everywhere where our employees were sitting was a FEMA Field hospital just a short time ago. And we were sitting in a hospital and having a kick-off, and we realized, wow, we've somehow gotten through this. And wasn’t that a moment?

Marc Benioff:

I'll tell you, I added up how many CEOs I've been with in the last 90 days and it has been about 46. And as I've talked to all these CEOs all over the world and travelled and so forth, it's been a powerful couple of years and difficult. And I mean I'm grateful for what all of our Ohana have done and all of our employees have done, and also our customers and the first responders and scientists and everybody to get through this because it does feel like -- and I think as evidenced by what we just went through in New York, we're kind of coming to the end of this. And it's not that this isn't still raging. I just read some horrible articles about what's going on right now in Hong Kong with BA.2. But we are kind of coming to another stage here, and I hope that we're about to get back to a more normal world. And we're doing that, unfortunately, a war in a pandemic, this is not an uncommon story and very sad to see what's going on here. So with that, I have to tell you, though, that I'm speaking now to our investors and analysts directly and I'm speaking directly about the performance of the company, we had a phenomenal quarter. We capped off, which was just a phenomenal fiscal year '22 with just incredible numbers. And we continue to see just tremendous, tremendous demand from customers across every industry, every geography and every product category. And I think that like many of the portfolio managers who are on the call and will ask questions later, we're managing a full portfolio. We see that with products and geographies and industries. And across the whole portfolio, I would say there's a remarkable strength. And every company that I speak to and these CEOs that I'm speaking to, they're all going through major digital transformations. And those customers, they all -- are all beginning and ending with the customer. And our job remains to help these companies grow and achieve this transformation. And that's why we've had such an incredible year, and I'm confident that, that will continue. And you can see that in kind of these incredible numbers, but also our very deep commitment to this kind of very disciplined, very profitable and very cash flow positive, as you can see, the $6 billion number and the $7-plus billion number scheduled for next year and going up in the years to come. For the fourth quarter, revenue rose to more than $7.3 billion, up 26% year-over-year. That's pretty awesome for a company of our size that we did a 26% growth quarter at $7.3 billion. I don't think there were too many $7.3 billion quarters at 26% growth in the world this year. And for the full fiscal '22, revenue was $26.5 billion, again, up 25% year-over-year. Again, a $26 billion company growing 30% to 25%. And of course, that's why we're coming in on this $32.1 billion year. So we're continuing to be the fastest-growing top 5 enterprise software company in history. Salesforce is on track to becoming the world's #1 enterprise cloud, software applications company. This operating margin for the quarter was 15%; and for the full year, 18.7%. And we've just continued to deliver this disciplined approach to margin expansion. And you can see that in the forecast for the quarter now at over 20% operating margin with the $32.1 billion year. So with our unique business model, we continue to grow revenue at scale, drive operating margin expansion, leading to strong cash generation, I mean you can see that in all 3 aspects of this quarter. And we closed fiscal year '22 with really incredible cash flow, reaching a milestone of $6 billion in the year, and that's really up 25% year-over-year. That's really amazing, and I would say, far exceeded our goals. I'll tell you that based on our strong fiscal year '22 results, we're excited to raise our fiscal year '23 revenue guidance to $32.1 billion, something I've been excited to talk about at the high end of the range, representing 21% growth year-over-year. Amy, I hope that, that is just the beginning of the [revs-in] for the year. And we are committed to delivering a fiscal year '23 operating margin of 20%. And customer success is just continuing to just drive this financial success. And our product innovation is providing customers with the resilience they need to navigate these, I would say, grim and uncertain times. And that's why Salesforce has been ranked by IDC as the number one CRM for 8 years in a row. We have a tremendous focus here, being the number one CRM. Our entire Customer 360 portfolio, that is the Sales Cloud and the Service Cloud and the Marketing Cloud and the Commerce Cloud and Slack and Tableau and MuleSoft. And by the way, other great clouds, too, that aren't even listed when we talk about these things like our Financial Services Cloud or our Safety Cloud or Sustainability Cloud. Putting them all together for our customers, well, it becomes the single source of truth, virtually, the entire Fortune 500. And all of this customer success is being led by an incredible management team, which I think everyone on the call will agree and I certainly believe never has been stronger or more aligned. Now I want to talk about a couple of customers real quickly and then wrap this up. Ford -- well, you're going to hear more from Bret and Gavin. We're helping major companies like this around the world transform their business. And you know I love this company, I think it's one of the great companies, very transformational, tremendous new CEO, Jim Farley, he has got a great vision for the world. You've seen that, if you haven't been inside this Lightning 150 truck. It's going to be the electric vehicle for everyone. It's the e-transit van. It's amazing. And I have 2 of these MACH-Es, a yellow one and a white one. And if you haven't tried it, you should go to the Ford dealer because it's just worth it to test drive the car because it drives very different than other electric cars, and I've had probably every single one because I love these things. And a few weeks ago, I was with Jim Farley, and we launched the Ford Pro business unit. And it -- they're doing a B2B business unit at Ford to complement their B2C unit, not so unlike a lot of our other customers like Home Depot. But I'll tell you that Ford Pro, they're really looking at targeting professionals, targeting productivity. They're really looking at giving the motivation for the professional. And I'll tell you, I live in a rural area, and I even have a Ford 550 truck, which is configured as a fire truck. That is when things go wrong, I have to be ready for that. And they have telematics, but I am excited to be able to build all these Customer 360 services around this Ford 550 truck because I'm trying to turn that Ford 550 into a Ford 360. That's how I look at this world. And I'll tell you that Jim Farley and I were up [indiscernible], not so far away from here a few weeks ago, and it was awesome to see their product line, but also how their customers and their partners are all really connecting with this, these new products in incredible new ways. And when you look at Ford and kind of they're driven towards, well, sustainability, it -- I find it to be very much aligned with what's happening in the world because we all know we're in a climate emergency. We need everyone to get to net 0 as fast as possible. Salesforce now coming into the Fortune 100 this year. We are a net zero company already, fully renewable across our entire value chain. We've achieved 100% renewable energy for our global operations. We're reducing emissions further. We're very sensitive to what we're doing with all of our products with sustainability, and we know we can't stop. There's no finish line on sustainability. It's really one of our very core values now. And we're operationalizing sustainability in every part of our business. It's an area I’d spend a lot of time on in the last, I would say, 6 months, even looking at new investments. Bret and I just looked at a very cool company together. When you say we were surprised the type of companies that we're looking at in carbon relationship management that before we were not, it's the new CRM, carbon relationship management. Because there's a lot we can do in analytics, in information management, and in helping our customers get the carbon that they need to be successful. And every business can be a platform for addressing climate change. The first step is for each and one of us to commit to being net zero ourselves. I have a lot of friends who are venture capitalists who are saying they're going to move into the sustainability world. And I said to them, the first thing they need to do in their portfolios, get their portfolios to be net zero. All of our work around sustainability might be the most important rewarding work of our lives. Well, it's one of the things we celebrate. Salesforce is going to be 23 years old, amazing, on March 8, just a few days from now, a quarter versus century. It's getting there. Just partner is not with us today. He's traveling. So I want to just say happy birthday to Parker, and thank you for starting this great company with me so many years ago, and we look at all the evolutions of the company and the management team and the products and its -- employees and all of our Ohanas, and all of our stakeholders, thank you. When we started this in 1999, I never dreamed we would have become this amazing company and entering the Fortune 100 in 2022. So this is awesome. And our values have created so much value when we look at $0.5 billion in grants now to our communities, $6.7 million in employee volunteer hours, more than $100 million here to our San Francisco and Oakland public schools who so badly need it, especially right now, running 55,000 nonprofits and NGOs on our product for free and so many other things that we've been able to do here, the children's hospitals here in San Francisco or so many other things around the world. So thank you to all of you for making that happen. And we're also delighted -- and thank you to our trailblazers, especially who believes so much in our products. They've lifted us up. And again, Parker and I are just so very grateful. And now over to you, Bret.

Gavin Patterson:

Thanks, Bret. I would echo Marc and Bret on just how many remarkable customer success stories we saw in the quarter across all our full portfolio of products, industries and geographies. The dynamics we're seeing in customer engagement are absolutely fantastic. Just over the past few months, I've done more than 75 meetings with C-Suite executives, and the accessibility, that sense of urgency and interest from the highest levels of companies is incredible and shows no signs of slowing down. What's clear is there is a tremendous appetite for digital transformation, and we fully expect that to continue. In the Americas, we grew relationships with Accenture, Banco C6, Scotiabank State Farm, the State of Michigan's Department of Health and Human Services, U.S. Bank, Zoom and so many more. In EMEA, we continue to deepen our relationships with Airbus, CloudFactory and AlphaSights. And in APAC, we had significant wins with incredible organizations like Bank of Philippines, Panasonic Corporation and Hitachi. Health care also stood out with wins like Humana, IQVIA, Cecelia Health and Teladoc Health. Moderna is another one in that category. Their intent on becoming the first fully digital biotech company, embedding analytics, AI and automation across every step of their value chain. We are a key partner on that journey. With Health Cloud, Moderna will gain a more complete view of its customers. And with Einstein and Tableau CRM, they will be able to analyze data across all departments and use predictive analytics to make better decisions. And we continue to build our relationship with Sanofi where the CEO, Paul Hudson, and his team are already using Health Cloud and Service Cloud. In Q4, they added Consumer Goods Cloud Tableau CRM and Salesforce B2B Commerce, which will let them better engage with health care providers, patients and pharmacies around the world. This is another great example of our complete Customer 360 portfolio at work. We also grew our partnership with Mercedes-Benz in the quarter. They're using Salesforce to transform the way they engage with their customers. And as Mercedes becomes even more sustainable and reimagines their fleet for the electric future, they're relying on Customer 360 to unite their sales, service and marketing teams around a single shared view of each customer. Ralph Lauren is another great expansion. And I'm not just saying that because the CEO of Patrice Louvet, was my former boss at P&G. We're helping Ralph Lauren deepen its connection with its customers in both digital and physical setting, particularly as they expand into new regions. In fact, Commerce Cloud is helping grow their North American online sales by over 30% in the December quarter. And throughout the pandemic, Ralph Lauren has relied on Slack to keep their geographically distributed teams working together seamlessly from anywhere. 18 months ago, Australia's state of Victoria Department of Health selected Salesforce to deploy a COVID-19 contact tracing system. In Q4, Victoria tapped Salesforce to provide a technology foundation for managing the state's COVID response efforts. For example, Victoria is using MuleSoft to integrate information from various systems, detecting COVID cases as the virus moves between outbreaks and steady-state living, and has also deployed Marketing Cloud to enhance communications with citizens affected by the pandemic. These are just some of the highlights from an amazing quarter of customer success from anywhere. We are proud to have supported these and so many other companies and are grateful to all our customers for their continued trust. And as Marc and Bret said, our customers' success drives our financial success. I'm really grateful to be part of this management team, which I think has never been stronger or more aligned or even more committed to generating disciplined profitable growth at scale. Also, I want to thank our team for their outstanding execution for continuing to do such a great job in the midst of a massive global change. Amy, over to you to share the financial details of our quarter.

Operator:

[Operator Instructions] We go first this afternoon to Alex Zukin at Wolfe Research.

Marc Benioff:

I really appreciate the question, and it's a question that I've heard quite a bit in the last quarter, especially because the numbers that we're putting up are really unprecedented. In many cases, I've never seen them in the software industry. For 40 years, I've never seen numbers like this, put up like this, at rates like this, and I think because of that, these questions are actually quite reasonable. But the reality is, over the last 2 years, what we have seen has been incredible demand. And really, that demand is really linked to the digital transformations that our clients are going through. Our customers -- it doesn't really matter by geography or by industry -- are very deeply committed to their digital transformations of their businesses. I think that if the pandemic put a light on anything for them, it was that their businesses were not going to have a future if they did not go through a digital transformation, and that these digital transformations, as I said in my comments, were going to begin and end with the customer. I mean I think that the Ralph Lauren story is a great story because it's a digital transformation like we've seen with many retailers, okay? But of course, they have to go through this and not just stop what they've done. There's -- we're just at the beginning with that client, and with so many clients and our product line has not become more narrow, it's become more broad. And I think our acquisition strategy that has been executed, I believe, really well in the past few years really has expanded our total addressable market so significantly that when you look into these clients, these Chief Information Officers and really the Chief Executive Officers who I primarily work with every day, they see us so strategic to the future of their fundamental businesses. That is why our relationships with them have become just paramount for our company. You can't compare it to where we were 10 years ago or 15 years ago or, of course, when we started. But today, this relationship is that these CEOs are very much the transformational -- digital transformation officers. I'm not telling you anything you don't know. This is the most important thing that they can do every day. And this is really very much to the core of who we have become in our company that we can show up with our products and services and say to a great company -- and we've told the stories this year of the AT&Ts, for example, or the Sonos’, we were talking about, on this call, so many amazing customers. But without us, they would not have the growth rates that they have had. And it's -- our growth rates are just a reflection on theirs, but by no means in any of these customers, have we completed our work. In many cases, we're in the 10% or 20% or 30% growth areas where we're just at beginning of what we can do with these customers. So that's what I'm very excited about, and we've really cracked the code on building a relationship, an emotion with them. And I'd really like Bret to come in because I think, especially with the extension with Slack. Again, Tableau also really transformed. I was with a -- recently, I was actually in the White House with a Fortune 100 CEO and turned to me and said, “I start every day with Slack.” And this is not a customer that we have even a big Salesforce footprint. And I just said to myself, these acquisitions, they've just opened so many doors for us and transformed who we are and the conversation that we can have. All right, Bret, can you just continue this narrative?

Marc Benioff:

And this quarter, especially, we were really shocked with adjusted cap accelerating through the quarter. And I really think we don't talk about create and close and -- but this idea that we're creating and closing these opportunities in the quarter themselves, very much the momentum aspect of the total market, I mean how do you see the current rate of growth in the market itself as reflected by our total product and geographic or vertical portfolio?

Marc Benioff:

If they don't digitize, they're not going to grow.

Marc Benioff:

If they don't implement these products, they're not going to grow. I think that I’ve also had a debate with so many of these CEOs, well, everybody is coming back. No, they're not. Well, everything is going back to the way it was. No, it's not. And I think now, even some of those the CEOs took these really hard positions. They're like, okay, we're going to have a flexible work environment. And Slack is obviously right there in the middle of that motion.

Marc Benioff:

And it was critical that we did that at that time because it's kind of setting up the future of work combined with the #1 CRM.

Marc Benioff:

Okay. All right. Thank you for the question.

Keith Weiss:

Congratulations on a really nice end to FY '22, and really given us a lot of confidence on the durability of growth with that FY '23 guide. I had a question for Amy on the margin side of the equation. Bret talked to us about sort of the near-term pause on M&A as you guys focus on integrating Slack. But at some point, Salesforce is going to come back to doing larger M&A as you should. It should be a strategic tool that you guys use on a go-forward basis. With Slack, you guys have been able to still grow operating margins despite digesting a big acquisition. Is this something you think you could do going forward when you do additional large M&A? Is Salesforce now at the scale and you guys have the efficiency muscle toned enough to be able to do large M&A and still get this 125, 150 basis point margin expansion year after year?

Operator:

We take our next question now from Phil Winslow at Credit Suisse.

Bret Taylor:

Well, I'll start and maybe pass it over to you, Gavin, to talk to some of the conversations you're having with customers. Fundamentally, we talk about our strategy at Customer 360, and that's really the end-to-end customer experience across sales, customer service, digital marketing, digital commerce and the foundations and the platforms you need to power that, in MuleSoft and Tableau and Slack. And I think when we talk to the C-Suite, I think when we talk about customer wins like Ford and GEICO and Mercedes-Benz and PayPal, they're really trying to solve for that end-to-end digital customer experience. And point solutions don't get them there. Point solutions mean, essentially, their IT department becomes software development shops. What they want is to digitize their customer experience. They want to do it quickly, and they want to do it fast time to value and high return on investment. And I think because of the completeness of our portfolio, we're really the only software company that can provide that experience to our customers. And I think that, that's really our differentiation is that we come with the complete Customer 360 portfolio rather than just a point solution. And I think that's led to not only our ability to compete in new accounts, which was a meaningful part of our growth this past year, but also, as Marc mentioned, as we're expanding our relationships with our customers, they know that they can trust us to really truly build a single source of truth and actually achieve the business objectives and the growth formula that you need in this new economy. Gavin, do you want to provide some color on that?

Operator:

And ladies and gentlemen, we do have time for one final question this afternoon. We'll take that question now from Tyler Radke at Citi.

Marc Benioff:

Well, we've certainly seen the software industry contract, and I think it's probably best reflected by that ETF. I watch it very closely, IGV. And I think that when you look at it overall, kind of that precipitous fall, which we've seen happen over many times in the last 20 or 30 years, it's not unprecedented, but it does happen, and that's where we are right now. In regards to the change in the M&A environment for us, we continue to look at tactical M&A. But really, since we made a major decision now more than a year ago to acquire Slack, it became our most strategic initiative in the company. And it's going to take us quite a long time to be able to digest this acquisition. We also obviously still have other parts of our portfolio that we have our eye on and that are requiring a lot of our focus and making sure that our entire portfolio is working for our investors. So I don't really see us doing any kind of strategic acquisition for some time until we can get our hands fully around Slack and say that we've done a great job. Bret, what is your perspective on that?

Marc Benioff:

I think that really, the key point for us on how we're looking at managing our business and providing value back to you, our investors, is we are delivering a portfolio of product. We're not an ETF by any means, but we are a selection of some of the most important products in the software industry. Even our service product, if you look at it as an absolute business, is probably the largest service product in the industry. It has a tremendous growth rate. It has a tremendous leadership position. Analysts rank it and look at it uniquely. We pay a lot of attention to it. So as we manage our portfolio here at Salesforce, we look at service as a part of that. And we're focused on making sure that that is the most innovative, highest level of customer success it can have. And also, it's transformed many times since we've introduced it, not so unlike our Sales product, not so unlike what we've done with our Commerce product where we've completely written it and now operates as a platform, as a kind of what we call a headless commerce or an API architecture. Slack now is part of our portfolio. Tableau is part of our portfolio. MuleSoft is part of our portfolio. And many of our -- these exciting new vertical opportunities. We saw a lot of excitement and interest around our sustainability cloud this quarter. A lot of customers realizing they need to go net zero now, and they're going to have to do carbon accounting. They're going to have to do -- their kind of carbon reporting and certification. And we're looking at net zero cloud or safety cloud as well as growth capabilities for us. And each one of these components in our portfolio, Brett and I go through piece by piece to make sure it's working. And of course, the geographies, each geography is an important part of the portfolio. I'll tell you kind of a part of on the side, one of the areas where I've spent a lot of time in making sure we're highly competitive and successful was Japan, but I haven't been able to go to Japan in a couple of years. So now it's kind of -- the pandemic is kind of coming to a close. I'm looking forward to getting back over there. It's very important to me to get over there. I haven't really been able to work on many parts of the -- our Japanese business, our CEO over there has done a fantastic job Koide-San. He's amazing. He has a brand-new office. My close friend Yoshiki was at our office. I was very jealous. I haven't even been to our new office, which is on the grounds of the Imperial Palace in Japan, the largest office building there given to an American software company. We're very proud of that fact. And I don't know, Brad, how do you look at this part of our business today?

Marc Benioff:

It's kind of amazing. It's -- really, it's unprecedented in the software industry that you'd see something after 2 decades deliver such kind of a growth rate.

Marc Benioff:

We've all got the TAM wrong.

Marc Benioff:

Not just them. I'm right in there. I couldn't -- I can't I believe it. It's doing -- it's $6 billion on its way to -- I don't know, 10. I have no idea what it's going to. It's unbelievable.

Marc Benioff:

And we have such a rich and deep portfolio in so many --

Marc Benioff:

I agree. Amy, anything you want to say before we wrap this up?

Marc Benioff:

Gavin, anything you'd like to comment on before we wrap the call up today?

Marc Benioff:

Well, I think that, that's well said. And I'll tell you, we spend a lot of time with our investors. I know that I do, and I know we spent a lot -- a lot of them are portfolio managers. They're running a full portfolio, which is how they're trying to get a return on their investment. And the more time I've spent with them, I think they've influenced me and how I run our business here. And I think we're very much at that same perspective, and we want to deliver an outstanding return to our investors as well. Thank you so much for everything. And our hearts and our thoughts and prayers are with all those right now who are going through these troubled times.

Operator:

Ladies and gentlemen, thank you for standing by. Welcome to the Salesforce Fiscal 2022 Third Quarter Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] I would like to hand over the conference to your speaker, Mr. Evan Goldstein, Senior Vice President of Investor Relations. Sir, you may begin.

Marc Benioff:

Well, thanks so much, Evan. And I hope everyone on the call and all your families had a wonderful Thanksgiving and happy Hanukkah to everyone celebrating the festival of lights this week. Now this year, I'm grateful for many things. But I'll have to tell you, I'm very grateful for my good friends who I'm sitting here with, Bret Taylor. And Bret, congratulations on becoming the co-CEO of Salesforce.

Marc Benioff:

Well, Bret, when I first met you, you were at Google. You did an amazing job with Google Maps. And you started your own company, then it was acquired by Facebook. You became the CTO of Facebook. And then you let Facebook and started another company. And Salesforce was very lucky to buy that company quick. And then you've had an amazing run here over the last 5, 5.5 years at Salesforce and most recently as our Chief Operating Officer and now as Co-CEO. We couldn't be more grateful for you and your leadership, and congratulations, and it's just amazing to watch you grow.

Marc Benioff:

Well, it's super exciting. And I'll tell you, we're going to get into this, Bret. But you've had a lot of great experiences with customers this quarter and also with all of our Ohana. And just give us one insight out of the quarter. Tell us about the world? And what's one thing you learned this quarter that really has surprised you or enlightened that you can share with all of us?

Marc Benioff:

It is a rollercoaster of a pandemic. You're absolutely right. Well, it's been an amazing 6 quarters. And I'll tell you, the last 6 quarters, well, that's -- they have been unlike anything Salesforce has ever been through, that I've ever been through. And we -- I would say this is -- things are still changing and transforming. We're almost in a pandemic age, and we're kind of getting used to what it means to be inside of a pandemic. And yet at the same time, Salesforce has never been more successful. And I think Bret, when you look at the financial results, I'm sure you'd agree, this was an amazing third quarter. Revenue in the quarter was $6.86 billion, up 27% year-over-year. And it's really driven by all these amazing products, but really by this incredible customer success. And we can see it where we're #1 again for the eighth year in a row in CRM according to IDC. It's really exciting. Were you surprised to see that?

Marc Benioff:

Wasn't it awesome? And our sales and service clouds, well, they've become massive individual businesses at this point and generating more than $6 billion each. I mean that's bigger than a lot of cloud companies that I know by themselves and they're continuing to grow in the double-digits. It's amazing. I mean Sales Cloud is amazing this quarter. And operating margin in the quarter was also very good at 19.8%, and that exceeded my expectations. And we delivered $404 million in operating cash flow, up 19% year-over-year. And now for fiscal year '22, we're raising our revenue guide again. Just raised it at Investor Day a couple of weeks ago and now we're raising it again to $26.4 billion, at the high end of the range, representing 24% projected growth year-over-year. That's a $100 million raise since Q2 when we initiated guidance for revenue in December of last year. We've now raised guidance, since that initiation, $850 million, pretty awesome. And we're delighted to raise our full year operating margin once again to 18.6%. We have obviously a new team. We have a new structure now. We're in a new world. We're talking about that. But we have an incredible new model, and it's really reflected in this incredible operating margin performance really for this year and also the operating margin guide for next year as well. And this is really an incredible reflection of this new way that we have, the new way we're thinking and how we're driving a leading Salesforce. And as we shared at our Investor Day in September, we're expecting fiscal year '23 revenue guidance of $31.8 billion, that's the high end of our range, and operating margin of 20%. Now as everyone knows, no other software company of our size and scale is really performing at this level, we know that because we're talking to other cloud CEOs every day. And I'll tell you, I couldn't be more proud of our Ohana. And then Salesforce is soon going to enter the Fortune 100. We -- really if you think about it, we only spent 2 years to the $20 billion. To think about how long I was waiting to get into the $20 billion in revenue for Salesforce, and we're done with it. It's kind of like now we're talking about being in the $30 billion. And I am kind of like, I wonder, wow, this is amazing. How long are we going to end up in the $30 billion? So you got to enjoy every moment because it goes fast. And you look at the growth, and I really think it's all about this customer success. It's been awesome. I know we're going to tell some great stories here on the call, LVMH and VMware and ADT and so many of our customers. And we're hearing some great stories from Slack customers too. I'm looking forward to Bret telling you a couple of great stories. I even had a great story yesterday from a friend of mine who was at a check-in counter for an airline. And they were using Slack entirely to make the reservation and book the tickets. It's an incredible story with this company. So well, I guess all of this is just an overnight success story for Salesforce, doing it now almost a quarter of a century, and it's been a great quarter. All right. Well, Bret, congratulations. And why don't you take it from here?

Marc Benioff:

That's amazing, right?

Marc Benioff:

Might as well have another Dreamforce next week. Why not?

Marc Benioff:

Sales Cloud, that is amazing, right, especially sales and service cloud together.

Marc Benioff:

Yes, that's just awesome. Congratulations. That was just beyond my expectation.

Marc Benioff:

Incredible.

Marc Benioff:

Also, you have to give a call out here in reliability. Because both of us went through some very difficult moments in the weekend, getting calls from customers who are not using our Marketing Cloud but are good customers of ours. Because products that they chose from other vendors were not working on Black Friday and Cyber Monday and we're like, wow, we were just so grateful to all of our Ohana for the tremendous, tremendous performance they delivered over the weekend.

Marc Benioff:

I hope so. I hope so.

Marc Benioff:

Well, I think that, that is definitely what I saw firsthand where I was like, how could it be that an airline is basically front-ending their entire system with Slack? That's a shock to me.

Marc Benioff:

Well, it's pretty cool. What an incredible new part of our portfolio.

Marc Benioff:

Right. It really flies in the face of all of these kind of -- you hear companies like a CEO say, "Oh, everyone has to come back in the office now. This is a mandate."

Marc Benioff:

Well, I have to be very careful because when I say like on a broadcast television or at a conference, "Hey, employees are going to have flexibility in how they work. And they're going to have a digital headquarters. They're going to have physical headquarters. They're going to mix and match. They're going to move around a little bit," I get phone calls. And it's just so contrary to what we see in our own business.

Gavin Patterson:

Thanks, Bret, and I'd like to add my congratulations on your promotion.

Gavin Patterson:

So as Marc and Bret said, we are in a new world. And I've seen it through the eyes of our customers, which I've recently been visiting in New York, San Francisco, Frankfurt, Paris, Amsterdam, Zurich, Middle East and of course, London. I am very excited by the early results of how our new operating model is playing out. The strength of our core business is incredible. And the power of Salesforce Customer 360 and Slack together is creating the Digital HQ that is enabling our customers to get back to growth. And as Bret said, Salesforce has never been more relevant. In the quarter, we saw strong growth in every region, especially in the Americas. We grew relationships with Amazon, Builders FirstSource, IQVIA, Sunbelt Rentals, Tapestry and so many more. In EMEA, we deepened relationships with incredible brands like Fennia, Primark and Puma. And in APAC, we had significant wins with FOXTEL, Fujitsu, Hitachi and the New Zealand Ministry of Health. Now we all know the incredible security company, ADT. They're using Salesforce Customer 360 to unify their entire customer experience, empowering 4,000 customer service agents and 7,000 field service agents with a complete view of their customers, which is driving operational efficiencies as well as growth. And as Bret said, we expanded our partnership with VMware, which has been a Salesforce customer since 2008. This quarter, they kicked off a pilot of Slack plus Service Cloud to accelerate customer support. They also partnered with Tableau to extend data and analytics across their entire business, enabling the presentation of deep analytics to help innovate even faster. LVMH continues to expand with Salesforce to deliver luxury goods from anywhere. Globally, 40,000 retail associates and customer service agents use Salesforce to deliver personalized retail journeys for their customers. And our win with the Boohoo Group, which is a leading UK-based online fashion retailer, uses our technology to deliver their incredible online shopping experience. With Commerce Cloud, Boohoo is now expanding shopping by social media, marketplaces as they look to build for the future. And the State of Nevada's Department of Motor Vehicles is another great story in the quarter. They selected Salesforce as the platform to power its digital transformation across its entire business. This will mean a whole new experience for residents renewing drivers’ licenses, credentialing, titling and registering vehicles and so much more. And this is another great example of digital transformation powered by Salesforce, of course, another great reason to move to Las Vegas. These are all great organizations that have pivoted their business to navigate this new world and deliver customer success from anywhere. They're relying on us more than ever and inspiring us to leverage the power of our Salesforce Customer 360, Slack and so much more to continue to fuel that business. And finally, a word on Q4. I'm really encouraged about how we started the quarter. Demand and pipe looks strong, and we're looking forward to a great finish to what has been an exceptional year. I want to thank our incredible team for continuing to do such a great job in the massive global change. The work they do and the technology they deliver powers our customers' success, and we couldn't be more grateful. Amy, over to you to share the financial details of our quarter.

Operator:

[Operator Instructions]. Your first question will come from Brad Zelnick from Deutsche Bank.

Marc Benioff:

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

Operator:

Your next question will come from the line of Raimo Lenschow from Barclays.

Bret Taylor:

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

Operator:

Your next question will come from the line of Brent Thill from Jefferies.

Marc Benioff:

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

Gavin Patterson:

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

Keith Weiss:

Very nice quarter, and my congratulations to Bret as well. Two questions for Amy, one in terms of the Q4 guide that’s getting a lot of attention. FX is kind of working against us on a go-forward basis. Can you talk to us to the degree that there's any FX impacts already incorporated into that Q4 guide? And to what extent have you incorporated the strong U.S. dollar into the margin commentary and FY '23 guide? And then the second question is a little bit broader. You guys have been working on this new philosophy of a better balance between growth and profitability for a couple of quarters now. How is that progressing? Can you give us kind of a status update in terms of are you finding this to be an easier, harder job than you originally anticipated in terms of pivoting the company with -- to more of an efficiency focus?

Marc Benioff:

He wants to talk about our kind of march towards greater efficiencies. I mean I think this has been really the highlight of the last 6 quarters, which is we took advantage of the pandemic to reset our model. We've talked about that we have a new model. We're taking that extremely seriously, not only just in how we budgeted fiscal year '22, which is what we're finishing right now, but also we're finishing up our budget for fiscal year '23. That obviously also takes into consideration these changes in foreign exchange, the strengthening of the U.S. dollar is something that I'm sure all of you are watching, and we watch as well. We're a global company. These things matter to us. How our numbers shake out always depend on currencies. And there can be variation quarter to quarter based on that. So when we look at efficiency, we saw an opportunity when the pandemic hit to really look at how are we spending money overall. And we were really taken by changes in the pandemic cycle

Amy Weaver:

That's good. So Bret and Marc, I think you both said it very, very well. Cases we look at this, we continue to benefit from the revenue outperformance, from everything we've learned at the pandemic, from a new way to work, and really from, I think a heightened sense of discipline. But what I would emphasize most of all is that this is really a commitment by the entire management team. And what has really impressed me as we've been putting in place new policies, tightening up budgets is the fact that every team has really stepped up and shared in the commitment and shared in changes.

Gavin Patterson:

Thanks, Marc. Well, this is something I touched on at Investor Day. I truly believe that we can continue to drive growth, and that will continue to be our #1 priority. But we could do so at the same time as driving efficiencies through the business through disciplined decision-making. You heard it from Amy, and it's a mantra that we're using throughout the business. And some of the things I talked about then are really to do with providing a tighter grip across the business, deploying best practice across our operating units. When we've got a successful model, how do we replicate it across operating units around the world. I've put a lot more focus on things like participation and driving productivity, so ensuring that we're getting the most value out of our 10,000-person sales force, which is one of our sources of competitive advantage. But how do we make sure everybody is contributing every quarter and that we're looking to eke out both small deals and big deals throughout the year. And then finally how do we open up new channels. So the direct model continues to be our strongest muscle, there's no question about that. But we're finding that customers, and not just small customers, are keen to use more and more -- who purchase more and more through digital and online. And that's an area that we're revamping, and it's going to be a bigger part of our overall delivery of new bookings going forward. So the focus for me has been about driving best practice across the Salesforce ecosystem and having a flatter organization that allows for faster decision-making and stronger leadership within the units themselves.

Operator:

Our next question will come from the line of Kash Rangan from Goldman Sachs.

Marc Benioff:

Well, I think you're right, Kash. We're doing a very good job of absorbing Slack and integrating it deeply into the company, not only into the distribution organization with Gavin and not just with its financial characteristics with Amy but you can see the tremendous vision. Especially if you watch the Dreamforce keynote that Bret brought to Slack and Salesforce together with Slack-First. And I'd love for him to talk about that. Because I think when we get to Dreamforce New York City, which is going to happen on December 8 at Javits Center, and I hope all of you will join us there. We'll have 2,000 customers there with us, and we'll be broadcasting that all over the world as well. Well, I think that you'll see that this has fundamentally changed the tone and tempo and future of Salesforce, that we're really a very different kind of company because of this amazing acquisition. That said, this is a large acquisition. It is taking a lot of work time from the management team to absorb it. And it still will take several more quarters before we can tell you that we're really running deeply integrated with Slack And Bret, you've done so much of the leadership here with Slack and with Stewart. So maybe you could just address where we are and how you see the future acquisition environment.

Marc Benioff:

Yes, I'll really add to that, that you've seen us, Kash, do so many incredible acquisitions, starting with ExactTarget, moving on to MuleSoft, to Tableau, Slack. But let me tell you, there is no finish line on these acquisitions. There it's a lot of work. It's a lot -- it's skill, it's art. It's luck also to keep them all going. Because look, we're innovating organically and also we have innovated inorganically. And then we're deeply integrating these acquisitions into Customer 360, our ultimate vision of where all of that is going. Well, that's still something that we're continuing to reveal and is being revealed to us. So it's a dynamic process, and it requires all of our attention. And we're very excited about Slack and how far we've been able to come in such a short period of time.

Operator:

Your next question will come from the line of DJ Hynes from Canaccord Genuity.

Bret Taylor:

I appreciate the question. As Marc said, there's really no finish line with integrating acquisitions. And we've made some changes that we think are right for the long term and what it's been. I think maybe perhaps, Marc, our fastest-growing acquisition today that you saw in Amy's slide at Investor Day. So we feel very confident in the decisions we've made and have to get through a bit of this change management, we are seeing in the short-term results. But we feel very confident in the future of MuleSoft and certainly no change the demand environment. Actually, Gavin and I were just talking about this, just before the earnings call, just how important MuleSoft is a lot in our Q4 deals, particularly the Customer 360 deals where our customers are connecting multiple clouds to multiple back-end systems. And how much integration is such an important part of our customer conversation. So we feel confident in the long term of the business and recognize we have some short-term growing pains as we integrate our acquisitions.

Gavin Patterson:

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

Bret Taylor:

We would like to answer the second part of that question, please?

Evan Goldstein:

All right. Thank you for joining us on the call today. If you have any other follow-up questions, please e-mail us at [email protected]. Look forward to speaking with you next quarter.

Operator:

Welcome to the Salesforce’s Fiscal 2022 Second Quarter Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that this conference is being recorded. [Operator Instructions]. I would like to hand over the conference to your speaker, Mr. Evan Goldstein, Senior Vice President of Investor Relations. Sir, you may begin.

Marc Benioff:

Well, thank you, Evan appreciated. And thanks to everyone for being on the call today. I am actually here in Geneva, Switzerland, with Gavin Patterson, our Chief Revenue Officer, and I'm attending the World Economic Forum's IBC meeting and Board of Trustees meeting. And it's been a great experience being here in Geneva very much. The world is open for business here. And it's great to be meeting with our customers face-to-face and in-person and discussing our business with them and talking about their businesses and how their businesses are doing in this new normal. And we're learning quite a bit about how different the U.S. is from Europe right now. And also, how much has really changed, which is quite a bit. So, I'm actually excited to be here, but I'm also extremely excited to share our phenomenal Second Quarter results with you. You can really see we had a phenomenal Second Quarter or we just had a phenomenal second half, you're about to hear. We're about to have a phenomenal first-half as well. And we're also going to have a good chat about what we're doing with Slack. A very exciting acquisition that's now closed and you are going to hear about number 1, CRM just got better. And it's incredible what's going on with Slack, and looking forward to addressing all that with the -- in the script with you. So, look, we are in a new world, there's no doubt about that. I'm sure that all of us realize that, and we are delivering success from anywhere as well. For Salesforce, we've gone through a tremendous transformation and we're now delivering this new world for our stakeholders. And from a business perspective, well, I'd say it's been an absolutely extraordinary 18 months for Salesforce, I know for all of you, and certainly, for all the CEOs I met with today. We're navigating this global pandemic. We have been guided by our core values of trust, customer success, of innovation quality, but through all this and through our perseverance and through our, I think dedication to our customers; we've been able to deliver record financial results. And with these results, we've now can say -- and looking over this, we've now had 5 outstanding quarters in a row. Really delivering the success from any [Indiscernible], pretty awesome. So, let's take a look now in the second quarter because the numbers are incredible and you can see we delivered our first $6 billion quarter, about 6.3 billion, and continue to maintain our very strong growth rate, our profitability, our cash flow, our margin growth, continuing to execute our new operating margin model. And you can see right now revenue in the growth -- in the quarter, you can see 6.34 billion, up 23% year-over-year, pretty awesome. And above where we thought we were going to be, considerably above. And I guess as excited as I am about the revenue amount, I'm also very excited that as we're executing this new operating margin model, we can see the margin of the quarter. It was also very healthy, 20.4% up 20 basis points year-over-year. And also delivered 386 million in operating cash flow. For fiscal year '22, we are raising again, our [Indiscernible] to 26.3 billion, which is now at the high end of our range. It's a raise of 300 million and it's going to represent about 24% projected growth year-over-year, and just really reflects, I think, how well the Company is doing in its core, not just through the Slack acquisition, but you can see organically, especially when you look at the numbers over the last 5 quarters. And we're raising our operating margin to 18.5% up 80 basis points year-over-year. Again, based on just the outstanding performance of the Company, we are able to do some amazing things here with the operating margin. I don't think Salesforce has really ever been -- had better execution, better management team, greater momentum. And as I have spoken to so many customers today, I don't think we've ever been more well-positioned for them. And I will tell you that in two areas. One is in our core products, our focus on customer success, the Customer 360. Now with the Slack user interface and everything being Slack first. But also our core values, so many of our customers are attracted to us because in many cases they're going through an amazing values transformation and the areas of -- that we've pioneered, and now especially in regards to sustainability, which we'll talk about, because as you know, Salesforce has been a net-zero Company, but now we're fully renewable as well, and as we start to head towards the Fortune 100, I think that a lot of the companies that we've -- I met with today, were mostly Fortune 100 CEOs. They crave to have that same net-zero and renewable profile, which is very exciting to see the world has this kind of sustainability focused. So, I'm absolutely thrilled to see how the core business grew in the first half of the year. And I am excited about the outlook, I'm excited about our positioning with our customers, and I'll tell you, I'm very excited that 5 out of the last 5 quarters that we've had that 20% or greater revenue growth. And that 3 of the last 5 quarters, we're having greater than 20% operating margin. I don't think we could have said either of those things 5 quarters ago. So, I have -- my hat is really off to the management team and to the employees for making this happen. And we're raising our guidance for the fourth time in a row as we see increased opportunities for additional revenue growth and additional operating margin capability this year. And look, we're the fastest-growing enterprise software Company ever, you know that. You're tracking us. You see where the numbers are going. You can see what the trajectory is, the velocity of the Company, both in revenue and margin. And now you can also see that no other software Company of our size and growth -- size and scale is really performing at this level. So, we are really quite confident and remain on our path to generate 50 billion in revenue by fiscal year '26, which doesn't seem very far away from right now. And when we first gave that number, it didn't seem as -- it seems like it was so far away. Now it seems, wow, this is going to happen.

Bret Taylor:

Well, I think we have a few technical difficulties with Marc there. This is Bret Taylor; I'll continue with the script. Thanks, Marc for that amazing introduction, and just a reflection on the momentum in the Company right now. It really was just an incredible quarter. Our products are more relevant than ever, and I have never seen this kind of momentum in the business. And honestly, that's because CRM is more strategic now than it's ever been. Every digital transformation begins and ends with the customer. And that's why around the world more and more companies are putting their trust in Salesforce to help them get back to growth. That's the agenda on every CEO's mind in Switzerland and it's on the mind of every Board around the world. IDC just released their April 2021 SaaSPath vendor Radiance, which has surveyed more than 2000 companies worldwide. And Salesforce is rated number one in trust, number one in the product, number one in industry specialization, and number one in value for the price. That is just amazing. It's a true measure of just how mission-critical we are to our customers. And you can just see it in the incredibly strong performance of all of our Cloud this quarter. Sales Cloud has been number one in its category for more than a decade. And this year, we've reimagined the product to be the growth platform for digital sales teams. We are already seeing the results as Sales Cloud accelerated to 15% growth year-over-year. Our Service Cloud is also seeing amazing momentum. All aspects of customer service have gone digital from the contact center to field service, to self-service, and [Indiscernible]. The scale of Service Cloud is just incredible. This is a $6 billion business, whose growth has accelerated to 23% year-over-year. Our marketing and commerce clouds also grew 28% year-over-year as every organization in the world is investing in direct, trusted relationships with their customers. And every one of these digital transformations is also a data transformation, which is driving the unprecedented success we're seeing in Tableau and MuleSoft. Tableau is within 9 of our top 10 deals this quarter, and MuleSoft is within 8 of our top 10 deals. The real power Salesforce platform is bringing all of these capabilities together into a customer 360, a single source of truth for your customers. Our industry strategy is enabling our customers to get started with an end-to-end Customer 360 faster than ever before, tailored to the specific needs of every industry. Our industry cloud saw 58% year-over-year growth in annual recurring revenue. We had an especially strong performance in the public sector in our Health Cloud Business and Financial Services. In fact, 4 of our top 10 deals in the second quarter came from the public sector. Our core organic business has never been stronger, just like Marc said. And now with Slack, we're bringing a whole new dimension to Salesforce. There could not be a more relevant product at a more relevant time for every single one of our customers. If you talk to any CEO, read the headline of any paper, or even look around the home office most of you are sitting in it right now, you can see the depth of the transformation work has gone through this year. Sales mediums have moved from conference rooms to Slack and to Zoom. Contact centers used to be buildings, and now they exist entirely in the cloud. My commute has moved from the highway to primarily my hallway. Slack is at the center of this. Slack is how organizations all around the worlds are finding success in this all-digital working anywhere world. It's your digital HQ. It connects your employees, your partners, your customers on a single platform, and a platform that people love to use. And the Slack-First Customer 360 makes every Salesforce product more powerful and more effective for our customers. Our engineering teams have really hit the ground running on this integration. Just last week we announced our Slack-First sales, service, marketing analytics at our launch event, and we've got a ton of Slack innovation coming at Dreamforce. IBM is one of my favorite examples of a Slack first Customer 360 Company. Arvin Christian is a close friend of mine and in talking to him, he talked about how he believes that bringing Salesforce and Slack together is key for IBM to become even more connected, even more, productive and more innovative. IBM has built their entire Customer 360 on Salesforce. Over 530,000 customers, 380,000 employees, and 50,000 partners using our platform. And all of these employees are working in Slack. They've connected their workflows across Sales Cloud across Service Cloud and enabled them to connect and take action from anywhere. Slack comes up in every single one of my customer conversations. And I could not be more thrilled with momentum in the business. Slack's revenue accelerated to 39% growth year-over-year on a standalone basis. And a great customer win at Target, Lowe's, Conde Nast, UNICEF, Norton Healthcare. And what's really fun about this is looking at the growth of Slack Connect. We've talked a lot about this. Slack Connect is the capability to enable you to connect not just with your fellow employees but to connect with your partners, your vendors, and your customers. Slack Connect grew 200% year-over-year. This really illustrates the power of not just Slack for employee engagement, but the Slack-First Customer 360. Slack is a once-in-a-generation Company that is transforming the way we work, and it's transforming the vision we have for our Company over the next decade. I am so grateful to be able to work with Stuart and the Slack team every day. And I'm really excited to bring this vision of this Slack-First Customer 360 to all of our customers. And if the technology gods will allow, I'd love to transfer it over to Gavin to talk about some of our customer's wins for the quarter. Gavin, are you around?

Bret Taylor:

Yes.

Gavin Patterson:

Thanks, Bret. Thanks that we see in the business. And you can see that really reflected in some of the remarkable customer wins, [Indiscernible] not just in the U.S. but around the world in the last quarter. But starting in the U.S. we saw our largest ever deal [Indiscernible] new annual return revenue, which in the public sector, friends state, the public sector being a fantastic force in the second quarter. Other examples we expanded relationships with great companies like PayPal and Coinbase. Well, in EMEA, we had significant wins behind. We have [Indiscernible] things like Safelight and [Indiscernible] Freshfields, Dicen, Vodafone, and a cracking business, Canyon bicycles, which is already a great case study. And then APAC, we continue to deepen our relationships with many businesses, including things Afterpay and FWD Thailand. So, we're seeing strengths internationally, as well as in the U.S. Now a couple of examples I want to go into a little bit more detail on it, and one is a win with You might remember that more as Herman Miller, but it's a fantastic example of a Company pivoting with a great customer experience. So, after the start of the pandemic, Miller Knoll saw a huge spike in demand for their furniture. Well, surprise. Of course, they turned to Salesforce to transform their e-commerce experience in the quarter. And they're already seeing a significant improvement in conversion rates on the back of that. Since then, they've been providing an even better experience, tailored product recommendations, streamlined checkout experience, and next-generation video chat. And now on top of that [Indiscernible] is a net-zero Company, and they're now using Salesforce's sustainability cloud to track their carbon footprint and other climate-related initiatives. So, you can see it's a great example of how we're building partnerships, building multi-cloud solutions around the Customer 360, and we go from strength to strength. And I want to look at RBC Wealth Management, which is another great win in the quarter. They're using Customer 360 to streamline processes, integrate data from over 26 different systems to create a unified wealth management platform that provides advisors with a 360-degree view of every client. And I think that's something that really brings the Customer 360 to life for more than 2100 RBC financial advisors. I think this example to me is very powerful. They've been using Salesforce workflow automation to transform the client on-boarding process, which was several weeks, more than 100 pages of physical documents, and it is now a digital task that takes just 24 minutes. Then that is quite remarkable, I think. GEICO was a great win in the quarter, needs no introduction, of course. But in case you don't know GEICO, it is the second-largest auto insurer in the U.S. And they're really leaning into the power of the 360 -- the Customer 360 to create a single view of their customers across the heart of the entire business. And is now moving to 25,000 agents are going to be putting that trust in that Customer 360, which is now providing AI-powered analytics to improve those customer relationships. And 3M, now this is one we've talked about in the past. You had Marc talked about they've been using Customer 360 across 83 countries. And for that relationship continues to expand. Now 3M are using Trailhead to train thousands of customer-facing employees as they join the Company. Salesforce Maps is now being used as part of that proposition. Tableau CRM is giving actual intelligence to better manage operations, engage with customers, boost productivity. And then in Q2, 3M selected a philanthropy crowd to help empower nearly 100,000 employees to give back to their communities with the goal of achieving 2 million employee volunteer hours over the next 5 years. I think a really, really powerful example. And then one more, just before I hand it over to Amy, and it's IKEA. So, IKEA, fantastic business over here in Europe. Another great example the Customer 360. We've already been helping them with marketing to be getting a great [Indiscernible] with Marketing Cloud across over 30 markets. Now, as home improvements were soaring in the pandemic, they turned to us to use field service, to help [Indiscernible] planning visits, installations, after-service support across the U.S. So, another example of how we're building our relationships, adding Clouds to existing customers during increasingly into partnership type relationships. So, I think these are a few examples. There are many more, but they're all, I think examples of how we're helping customers deliver success from wherever they are from anywhere. So, net-net, my conversations with customers, I think it gives me great confidence, not just in the demands for our products and services, but I think in our ability to execute in the second half of the year. So, it's both demand and execution. So, I continue to see this being maintained during [Indiscernible] really strong demand environment across Salesforce in the second half. And I think Slack is really going to enhance that. So just before I hand it over to Amy, I'd just like to say a quick thank you to the amazing effort of the sales teams around the world. They've been able to adapt to a different way of work, a new normal. And in doing so, we've been able to continue to support our customers. And I'd like to thank them for that. Amy, over to you.

Marc Benioff:

Well, thanks, Amy. Hopefully, I'm back here.

Marc Benioff:

And I'm actually now talking through Amy's cellphone connected to our speakerphone at our conference in San Francisco. So, turns out the cell phone technology is a big winner so anyway, thanks, Amy. That was a great job on earnings and congratulations on another great quarter of your organization, everything you're doing. I couldn't be more excited about the strength of our core business, our revenue growth, our margin growth, our cash flow growth, as well as the addition of Slack. Now to our team of unicorns, if you will, it's absolutely true the best CRM just got better with Slack and I -- if you listen to what Bret has to say about the integration of incredible things like Slack Connect, these are becoming extensions to our CRM capabilities, so it’s a very exciting moment for our entire product line and our technology team. And I think, with that our leadership team has really shown through this amazing perseverance and execution over the last several quarters these amazing results. Now we're going to have our digital Dreamforce coming out from San Francisco in less than a month, from September 21 through September 23rd. We'll have tens of millions of customers from all over the world tuning in with us, and we'll have hundreds of customers with us live in San Francisco as well. So, it's going to be extremely exciting. We want you to all have a front-row seat, and please talk to Evan so you're all connected to this program. And we will also be redeploying our Dreamforce 2 U program as well, delivering custom Dreamforce capability for all of our customers. So, I hope that you're all going to join us. Okay. So as Amy mentioned, we're also looking forward to having you then at Investor Day, that will also be amazing. And we're expecting some awesome conversations with all of you. So that, I'll open it up to questions. So, everybody is online right now and we can take all your questions. So go ahead, Evan.

Operator:

Thank you. [Operator Instructions] Please stand by while we compile the Q&A roster. The first question comes from the line of Kirk Materne of Evercore. Your line is now open. You may ask a question.

Bret Taylor:

Thanks, Kirk. I think, first and foremost, we're excited about this vision for the Slack-First Customer 360, and that's really building not only an integrated division between Slack and our Customer 360 platform but also integrating our products. And actually, I think we've made a faster start integrating our technologies than any acquisition in our history. We did an event last week on this idea of a digital HQ, where we announced Slack-First sales, things like deal rooms inside of Slack Connect integrated with Sales Cloud, Slack-First Service, which are things like Case Swarming for digital customer service teams. Slack-First marketing Slack-First analytics. So those capabilities are going to be in the hands of our customers soon and we have a lot more innovation coming at Dreamforce as well. And with that [Indiscernible] what we're measuring it's, as you said, it's going to show up in things like multi-cloud deals that include Slack. It's also going to show up in a lot more departments, at a lot more companies who are perhaps using these new digital collaboration technologies for the first time. In the context of doing their job, in the context of customer service, in the context of sales, in the context of marketing, and really realizing this vision of the digital HQ. I think Marc has talked a lot about how we're in this new pandemic world, that this isn't going away. We've opened half of our offices. But as you can imagine, not as many people are signing up as we had hoped to at this point because of this pandemic. I've started two companies and it all started by planning my office space. And now if you're starting a Company, you start by planning your digital HQ. And that's really what we want to bring to every Company in the world. Help them build the digital infrastructure, help them succeed in this new normal. And one thing that I think we're really excited about that Marc also mentioned is Slack Connect, which is really bringing these digital tools outside of the walls of our customer's buildings and bringing them to partners and customers as well. And you're seeing that in a lot of the product integrations we announced.

Mark Murphy:

Yes. Thank you very much. Congrats on a fantastic quarter. Gavin, we have heard that you're selling Slack by actually using it with customers in the selling process itself. Was wondering if you could help us visualize that. And is that something that's transforming the buying experience in a pretty profound way? And then -- just a quick one for Amy. It's fantastic to see the operating margins, 20% plus again, consecutive quarters. Where are you identifying new efficiencies to try to create this trajectory on margins? Because it seems like it goes beyond the temporary COVID savings.

Amy Weaver:

Great, thanks, Gavin. And you're right, we use Slack to negotiate to do -- we conducted our due diligence, our negotiation, and integration for Slack. So, I do think that that's the ultimate example of a terrific sale, all conducted with Slack and Slack Connect. Marc, turning to your other question about operating margin, where we've really seen this growth this year. First, we are getting the benefit of very strong business performance in Q1 and Q2. And that does it while it's brewing to provide profitability and that's while still investing in growth and absorbing the impact of M&A. Second, we are continuing to build on what we learned during the pandemic, about how we can work effectively in a digital-first to a hybrid environment. Some examples of that, virtual go-to-market motions, sales enablement, which is largely virtual at this [Indiscernible] were digital. And also, a renewed emphasis on financial automation, which I believe will pay off in the long run. And then finally, it's simply an approach of disciplined decision-making. And when we're seeing those investment opportunities, we're taking a very hard look. We are challenging ourselves and we're finding ways to shift our operating model where necessary.

Brad Sills:

Great. Thanks for taking my question and congratulations on a real nice Q2 result here. I wanted to ask another one on Slack, but more focused on Slack plus Tableau. With the combined offerings, you really have a powerful solution to not only see the data but act on the data. You highlighted this last week at the marketing event where you launched a number of these scenarios and activated notifications and watch lists were included. I'm just curious about that concept of Slack plus Tableau combined. What are you hearing from customers and the reception there, and could that actually accelerate these cross-cloud Customer 360 deals? Thank you.

Operator:

Thank you. The next question comes from the line of Kash Rangan of Goldman Sachs. Your line is now open. You may ask your question.

Amy Weaver:

Great. Thanks, Kash. On the operating margin, as I said, I think we have to be able to drive growth and increasing profitability at the same time. As I mentioned, we've been doing that this year through terrific business performance, through efficiencies, through the work from anywhere, and as well as through discipline. And Marc talked about the new operating model. I actually like to think of it more as a new operating mindset. And it's a real focus on discipline, and looking at what is going to make us a Company that not just only gets us at 50 billion, but makes us a strong, durable Company when we get there and positions us to sales through that. So, these are multiple changes around the Company, but I've been really gratified to see everyone jumping in. This has been really an effort from the entire executive leadership team.

Marc Benioff:

And could you also add, what do you see on the selling motion versus the U.S versus hear in Europe?

Operator:

From the line of Keith Weiss of Morgan Stanley.

Marc Benioff:

Let me take a swing at that. They're having the -- let me -- Number one, because of the Greenland deal that's happening here in Europe, and they realize that for them to continue to be successful in this environment and this economy, they're having to make a net 0 transformation and that's been very important to us. We've merry made that transformation and now we're fully renewable as well as I mentioned. The second thing is, I think every CEO that I mentioned and talked to today and yesterday and probably in conversations that I've had in the last several months, I'm sure you're hearing that in your own sha -- with your [Indiscernible], but that's been very surprising to me. And I would say that's the second CEO priority. And then I'd say that the third CEO priority is exactly what we've been talking about it here, which is size their employee is not coming back exactly as they wanted. I have some stories about when we first started talking about success from anywhere and those employees would have a choice between office, home, maybe working in an environment like we had last week in Hawaii with our leadman program. Or as you know, we're building this new ranch. CEOs would call me and say, Marc, you don't understand, and I think now those calls have stopped, and people realize things have really changed. This pandemic has changed things, and work has changed, and when we talk about digital HQ, we might've been talking about a digital HQ before the pandemic, but after the pandemic, it means something very different. And I think that what Bret said kind of on the fly there, which was very powerful, that he's obviously been an incredible entrepreneur as well as an operating executive in several companies, but because he was starting a new Company, he's not planning his physical office space, he's planning his digital office space. And we're running this call now on a cellphone and on Zoom. And it's very much an example of success from anywhere. But every Company estimates this transformation. And that is what is driving our success going forward. This is not -- that the world has changed. But the past has gone. That we are in a new world. And yet we made, I don't think the Delta variant will be material to our business. If anything [Indiscernible] one of these things that we're going to see, we see [Indiscernible] seeing a constant now a parade of these variants going by. So, we know that in fact here in Europe if you haven't [Indiscernible] you probably should. We're looking to [Indiscernible] life has to go on, and it is, and if you were here with me today, you'd say, well, there's probably some risk to what's going on. There probably is. But I'm vaccinated. Gavin is vaccinated. And we were running our business going on and I think that this is what we all have to kind of get our head around. And I think consumers how it is right here in Geneva, Switzerland, let me tell you. It's very, very different. Today, my -- there's nobody at my office building right now, and also people are not wearing masks and all in-office buildings here. Everybody is supposed to wear a mask legally in San Francisco right now. So, this is what is amplifying us. So, we're in a tremendous [Indiscernible] never been more positioned [Indiscernible] or well, I would say Salesforce has never been better positioned for an economy and for a world. The first thing that I'd heard from [Indiscernible] business and this is where we're [Indiscernible]

Marc Benioff:

That's amazing, isn't it?

Marc Benioff:

And I think it also speaks to what Bret said as well in terms of -- we've had a real focus with our acquisitions to make sure they are integrated, that we're selling a platform. We don't use the word suite that sells hard to say it hasn't been part of our nomenclature. But we have a very nice, integrated platform and we have a [Indiscernible] world. It's kind of amazing, isn't it?

Marc Benioff:

And you've been able to -- and I think you even hit this point Bret did as well, but this new operating margin model that we're executing, I think several of the -- several of our friends who have been asking questions [Indiscernible] I picked up that we are operating at a different type of model here. We've had now 3 out of the last 5 quarters greater than 20%, and we have a lot of swaggers when it comes to our operating margin. The pandemic let us re -- kind of have a beginner's mind in regards to our entire business. And we made decisions, but we also made decisions that are the core way that we're operating our business, and you can see that with these operating margin results. And also, I'm sure it was subtle to everybody, but after doing one of the biggest acquisitions in our history, we also just raised our operating margin again. Very exciting. Amy, do you want to just add to that?

Marc Benioff:

[Indiscernible] Switched to several very powerful values, operating value. Since the pandemic started, the management team understands very well Salesforce, but we wanted to make sure that we're relevant to our customers, and that they understood our relevance. I don't think we've ever been more relevant. We also realized we had a lot of people who are really scared during the pandemic and we need to get down, to be confident, and that they could participate. And I think that's definitely an asset. We need to make sure that we were able to execute tactically and strategically and to fully enable what you can see as an extremely large workforce heading towards to make sure those people are enabled and rolling and focused. And we've done that. I think in all of those things that the management team has executed. I'm very grateful to the management team and how well they've done. We've also gone through a lot of management transformations. I'm sitting here looking also at Mark Pockets (ph.), who is our CFO in [Indiscernible] test. So, Mark, thank you for everything you've done for the Company as well. And he is on the call here helping us and coaching us through. And Evan and -- you need to know that I look out at all over Ohana and all of our employees for everything that everyone has been through. We have a lot of these amazing moments. And this is not our last amazing moment. There are some more amazing moments coming. I'm very excited about the future. So, with that, I will turn it back over to you Evan.

Operator:

Thank you. That concludes today's conference call. Thank you all for participating. You may now disconnect.

Operator:

Welcome to Salesforce's Fiscal 2022 First Quarter Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised, that today's conference is being recorded. [Operator Instructions] I would like to hand the conference over to your speaker, Mr. Evan Goldstein, Senior Vice President of Investor Relations. Sir, you may begin.

Marc Benioff:

Well, thank you so much, Evan, and thank you for everyone on - being on the call today. I mean, it's just going to be a great call. I'll tell you this is the best quarter Salesforce has ever had. It was just a phenomenal Q1. And everyone is so excited to do this call with you and to talk about it and also just to talk about so many of the things that are important to Salesforce because everyone knows business is the greatest platform for change. We do believe that you can do well and do good at the same time. And before we go into these incredible results, we just want to let everybody know that our hearts and prayers are with all of our Ohana and India. They're on our mind every day. And we're so sorry for everything that they are going through. So I am now here with Amy and Brett and Gavin and Evan as well. And I'll just tell you that we're all vaccinated. We're grateful that we can be together. We're grateful that we are in a moment where we've been able to do that. We just finished a two-day off-site with our top managers from around the world. We - this is our third off-site we've done. We've done about eight total management off-sites. And through the miracle testing and now through the miracle of vaccinations and ability to get back into business and be in person where we're just grateful for that. We definitely are missing each other. And it's been great to be able to run our business in person. And we opened our offices. Amy and I were in our offices on Monday in San Francisco together on our Ohana floor. And it just was an emotional moment to know that we're back and that our Ohana are back in the offices and that we're opening back up. This is just a critical time. So it's an amazing quarter. And it's juxtaposed against - the pandemic is not over everywhere, but it's starting to be over somewhere. And certainly in San Francisco, where we have 850,000 people, but we only had a couple dozen infections per day last week. So it's a great moment. So we are grateful. We're grateful for this incredible performance by our team. We're grateful for the phenomenal quarter, it far exceeded our expectations. And I've just never seen a quarter like this. I mean, Gavin will go into the details. Bret will go into the details. It was just incredible. It was beyond our expectation. It's not just the best first quarter we've ever had. I think it's the best quarter we've ever had. We delivered $5.96 billion in revenue. It was up 23% year-over-year. Just the customer velocity, the pipelines, the growth of the company, the ability for the teams to interact and have a huge impact, it was just awesome. We delivered $3.2 billion in operating cash flow. And as a percentage of our revenue, it's just amazing what Salesforce could do today. Salesforce as a company, I said, doing well and doing good. I mean, here's the doing well part, $3.2 billion in cash flow on $596 billion in revenue, and that's up 74% year-over-year, reflecting the strong performance we've had since the impact of the pandemic began last year. Operating margin, again, and a huge call out here to Amy, and I'm going to talk more about. Amy's amazing performance for the company and how she's rebuilt this incredible operating margin model and operating model and how she's really kind of almost redesigning the company from the bottom up, it's awesome what she's been doing. And you can see it here, operating margin in the quarter was a healthy 20.2%. You look at the last four quarters, now starting in Q2 of last year, Q3, Q4 and now Q1, our margin, our revenue, our cash flow is awesome. And to see these changes that Amy has brought to the company has just inspired me. Now for the fiscal 2022, I'm thrilled, we are raising our revenue, our guide by $250 million to $26 billion. This is really one of the most - this is one of the largest raises we've really ever had. It represents 22% projected growth year-over-year. And we're not just raising revenue. And again, thanks to Amy, we're raising our operating margin to 18%. So that is amazing - incredible. And in a few years, we're going to be doing $50 billion, and by fiscal year 2026. So that is an incredible thing. I mean, we're really seeing some momentum and some cadence that's very powerful for the company. And the quarter, once again, demonstrates the strength and durability of our business, the quality of our leadership team, you're going to hear that today on the call, the relevance of our products, the incredible demand for digital transformation, but ultimately, it's been about customer success. And what I can talk about some of these customers and their amazing success with our products, companies that we know, like Honeywell and 3M and Sonos. And I mean, the Sonos story is just awesome, where they've just had this 84% growth, when they went to consumer using our products. We're so grateful to them. But also, you're going to see into the core products like, I'm going to hit some of the key things like how eight out of the top 10 deals included Tableau, what a successful story, that acquisition has been. And MuleSoft and ExactTarget, now it's all worked out so well for us. This quarter is really just demonstrating that strength and durability of our business. And I'll tell you, we're the leader in the CRM market, we all know that. We all know we're number one CRM. Everyone's just saw the IDC again, ranked Salesforce number one by market share in CRM, everyone knows the strategic nature of CRM. And this is the eighth year in a row that we're number one in CRM, which is awesome. And last week, Salesforce also received one of the very highest ratings from Gartner as a vendor. We tracked that information. It's our customers talking to Gartner. We tracked it and saw this incredibly, what we call, strong overall vendor rating, that meant a lot to us. And I'll tell you with something else that means a lot to us. And this is kind of a moment. And I think we can say this, we have to kind of get our head around this. We're about to pass SAP as the largest enterprise applications company in the world. And all the analysts have their models, they - I know you all track SAP and Salesforce, you don't really talk so much about SAP since they mostly exited the CRM market so many years ago. But I'll tell you that it's awesome to see not just be number one in CRM, but we're going to be the number one enterprise software applications company in the world passing SAP. This is a moment. We can see it's imminent. And this pending acquisition of Slack also, I mean, we've never been better positioned for the future. This is all digital, it's an all work from anywhere world. It's made our company, Salesforce and Slack, well, more important to customers than ever. So bringing them together is so exciting. And once this merger is approved, we're going to be able to build Slack and all of our products will all become Slack first. It's going to make our customers more productive. We're going to work with software companies on building incredible new capabilities. Like we've seen these amazing examples of what Slack could do. I'll tell you, we're really excited about creating this number one enterprise applications company. And I can't wait for all of us to be back together and with you, and hopefully, we'll be together in person at our Investor Day coming up. So, of course, the real highlight of every quarter is the success of our customers. Customer success is one of our highest values, trust, customer success, innovation, the ease of use of our products, quality, and we just had amazing traction during the quarter across all parts of our business. We hit an all-time high and seven-figure-plus transactions. And I hope that Gavin will talk about that. It was really - this kind of first really quarter where a company history more than 120% growth year-over-year in these huge transactions. It really shows the whole world is going digital, and customers are connecting with their customers in a new way, and everyone needs CRM to do and they need the analytics and they need integration. And we are the leaders in that area. And we're able to partner with them to deliver this incredible capability. You know, on average, these seven figure transactions they included four or more of our clouds. That's awesome. It really goes to show the durability of the business built by so many amazing products Sales Cloud, Service Cloud, Marketing Cloud, you know, Community Cloud, Commerce Cloud, Integration Cloud. The Analytics Cloud with Tableau its awesome. And our successful integrations of ExactTarget and Tableau and MuleSoft continue to drive this incredible results for our customers and gives us so much confidence in this pending Slack acquisition. You know, we're seeing more and more inclusion of Tableau and MuleSoft and our large deals, as customers accelerate their digital transformations. I mean, I'm sure it will shock everyone, that Tableau, Tableau was part of eight of our top 10 deals. That really is evidence and the integration we've had with Customer 360 of its success. And MuleSoft was included in five of these top 10 deals. It was awesome. Honeywell is a great example. And you know I love theories of Darius Adamczyk and credible CEO, a great example of a company investing in Salesforce across their business. Now they've been manufacturing innovative products for more than 100 years, creating connected customer experience, breaking down silos for their 100,000 employees globally. But with Sales Cloud, Honeywell is enabling its global sales team to manage thousands of customers and sellers from anywhere. And anyone who was with Bret, and I in Washington, DC or got to watch it online, we went there to be with our customers and employees in person. And we did this incredible world tour. And we had the Honeywell executives there talking about this incredible transformation of their global sales team and then [ph] it was really cool. And Tableau Dashboards at Honeywell are providing their sales teams with these key insights to improve their productivity. And with my trailhead, which is our re-skilling platform, you know, that's Honeywell rescaling their sales team right in their flow of work, increasing their performance. And Service Cloud, Service Cloud together with field service and Experience Cloud is enabling Honeywell to seamlessly dispatch technicians for on site product maintenance and proactive asset management and connected service partner experiences and customer experience for scheduling appointments and instantly troubleshooting problems. In fact, it was really that field service capability that helped us to amplify our relationship with Honeywell. And that's where Darius and I started to really collaborate and say, wow, we could bring this to the aviation business in Honeywell and transform how they're doing their amazing jobs. I'll tell you for a long time, we've had a trusted relationship with Dell Technologies and their incredible founder and tremendous friend of Salesforce, Michael Dell. You know, last year, Dell partnered with Salesforce Professional Services, implemented the world's largest deployment in Sales Cloud to support sales reps, go to market channel partners. I'll tell you I just finished Michael Dell's new book. It's called Play Nice but Win and it inspired me, and it really was exciting and that Salesforce and Dell have this partnership that helped them win, it was powerful. And with Service Cloud, Dell is also giving a service agents a 360-degree view of every customer, that was so awesome to see. And they're using Marketing Cloud for B2B customer journeys. They're transforming their seller experience, its incredible. Another amazing CEO that we work with Mike Roman at 3M and for those of you who watched Bret and I in Singapore, Bret and I flew to Singapore for the kickoff of the quarter. And we were there in Singapore and we're live with our customers and with our Ohana employees and everybody and government leaders and well we had the opportunity to talk to Mike Roman, the CEO of 3M, the iconic innovator, the center of efforts to combat COVID-19 and we were so happy to partner with them. And today 3M is using Customer 360 across 83 countries. And when Mike, you know, realized there were counterfeit masks that weren't providing the protection of 3M masks, they partnered with us to make sure we could immediately deliver fraud reporting center with Service Cloud, and we did it, it was an awesome story. And we had to do it instantly, immediately. There's been so many stories like that, especially in our governments, you know, you see them what happened, what just is going on right now in Australia in Melbourne. You know, they're again relying on Salesforce contact tracing system, to resolve this breakout. They're all locked down, I hope that they'll be able to identify everyone quickly and open back up quickly. And I know they've got the infrastructure to do it with salesforcework.com. It's incredible story that's going on down there. 3M is getting back to that, well, they're also piling Tableau to create a single dashboard for their entire business. Tableau continues to be a strategic part of so many of our customers business. And we're working with the pioneer in online mortgage lender Rocket Mortgage, to make complex transactions like buying a home or a car and evaluating personal loan. I mean, it's amazing what's going on with Rocket Mortgage. I'll tell you, I really enjoyed working with that company. And they're inspiring because they themselves are just such tremendous, tremendous innovators. And if you know their CEO, Jay Farner, well, you'll understand, how they're using our Financial Services Cloud and Marketing Cloud to deliver a source of truth for all their customers data and drive personalized engagement scale. You know, Jim is incredible. And during the quarter, they also selected MuleSoft to integrate across all their various systems. Of course, I mentioned Sonos before, it was incredible story. They went digital direct to their consumer, well, grew their business 84% year-over-year, and with Marketing Cloud, Sonos is connected with their customers through email, through mobile, through social channels. They built the Customer 360. They started pioneering a single source of truth. And it continues to scale its business. They've even invested very deeply in e-commerce with Salesforce, as well as Tableau, great story. And I'll tell you, those stories, and the story just mentioned, like what's happening in Melbourne, well, that's all about our public sector business, or the country of Japan with our vaccine cloud, in order so many places here in the United States like Clay County, it means it's been an unbelievable year, it's been an unbelievable quarter. I mean, it really has been a lot about doing well and doing good. It's been about really showing how Salesforce is, you know, the business, and you know, that business could be the greatest platform for change. Now, I'm telling you something that's really exciting and something new. And I couldn't be more excited to tell you this. And we're going to take another huge step forward here. Now, I've been telling you that we've been doing a number of off sites, you know, bringing our executives together, or both in our offices now, we have our employees back, and we're about to take another huge leap forward. We're taking a huge leap forward, because Dreamforce is coming back in person in 2021 to San Francisco, as well as simultaneously in New York, Paris, London, it's going to be a global Dreamforce. And we're going to have thousands of people at every venue. We're going to work closely with local officials. And we're going to do an amazing show. I hope all of you will be there, September 21 to 23rd. It's going to be the first global Dreamforce. And we're going to host groups with trailblazers in COVID-19 safe places, along with tens of millions online, it's going to be a hybrid event, physical and digital. Now we're going to follow these public health guidelines for every city. And I expect all of you to follow them as well. And in the US, we're going to require our attendees to be fully vaccinated to attempt, that's going to be a critical part. And it's how our core epidemiologists and medical teams and Salesforce have decided that we can do this amazing reopening, Dreamforce. We've worked with our long-time partner and customer Marriott. We've worked with leaders in this - in our local medical communities and university, including Dr. Larry Brilliant, he has been a great friend of our company, a tremendous epidemiologist, to follow these best practices, and to create this amazing new Dreamforce. So Dreamforce 2021 is going to be the most inclusive, the most accessible Dreamforce ever. It's going to bring the magic of Dreamforce to anyone, everywhere, anywhere. I mean, it's going to be great to be back together and be with all of you. It's going to be a family reunion, an incredible family reunion. And I'm also thrilled that earlier this month we opened Salesforce Tower. As I mentioned, Amy and I were together in San Francisco, was also opened it in London, I think it's great to be back to work and we want to do, we want to be the pioneers and back to work. We know that people are going to still be working at home, but they're going to be in the office too. And we're going to be doing these off sites in advance and get togethers and collaboration. And we're even going to have this incredible new training facility, a cultural-immersion facility, a place where we can bring large groups of our employees or even customers and their families together with Salesforce ranch [ph] And we couldn't be more excited about that. And we see those four things together in the office, at home, events, like off-sites and Dreamforce. And even this incredible new training facility. I mean, it's really inspired by General Electric, you know, I went to Crotonville when I worked so closely with GE and their digital transformation. I was wondering, wow, if we ever have something like this, I never saw the need, why would Salesforce need Crotonville but today we knew, because so many of our employees are at home, how are we going to immerse them in our values, how are we going to educate them on our products, how are we going to show them what Salesforce is really all about. And that's why this incredible facility will be so important to us. And we're looking forward to talking about that. You know, over the last 20 years we build an amazing culture, amazing company, to be the number one enterprise applications company in the world, already the number one. CRM in the world. Now, I'll tell you, when we started this business, we had three dreams. To create a new technology model, we call that the cloud, a new business model, subscription, we all understand that now. And a third model, a third model based on 1-1-1, 1% of our equity, 1% of our time, our products. And that becomes the businesses the greatest platform for change. We couldn't be more excited. And I'll tell you 6 million employee volunteer hours, well that's evidence that this is working, 450 million in grants so far, 51,000 non-profits running on our service for free, its more evidence. I'm happy to give this testimony that our culture has enabled us to create an amazing company, but also to attract and retain amazing talent. And I'm enormously proud that Fortune just ranked us as one of the best places to work in the world. Again, I think this year, we're number two. But it's that 13th year that we've been on this list. It's really evidence that, you know, we can all do more in business, we can do well and we can do good. And before I turn this over to Amy, and I want to make sure you know about two amazing reimagined events that are also coming up this month. We're going to have Connections on June 2, our digital marketing event of the year and on June 23 Trailhead DX., I hope you're going to be with us for both of those. I hope you'll be with us for Dreamforce. We're so grateful for your incredible partnership during this year. And we're delighted to deliver the best quarter we've ever delivered. And now a key part of that, Amy. Amy, go ahead.

Operator:

Thank you. [Operator Instructions] Our first question comes from Kash Rangan with Goldman Sachs. Your line is open.

Amy Weaver:

Hi, Kash. Thanks for the question. So when I look at the balance between growth and profitability, I want to be clear that growth remains our #1 priority. Investing into growth, especially in this demand environment, is simply the best thing we can do for the company. That said, I am a big believer that a focus on discipline makes for a stronger and more durable company. So over the long-term, I believe we need to be able to deliver both.

Bret Taylor:

It's a great question. And more importantly, it's a question on the mind of every CEO in every single one of our customers. When you look at the trends of this past year, like that wonderful Honeywell story that Marc mentioned in his script, they shifted 7,000 salespeople from in-person to virtual customer meetings. Customer meetings aren't going back to conference rooms only. They're going to stay on Zoom as companies like ours just realize that we can execute, as well as ever before in this digital environment. The contact centers that move from being buildings to be in the cloud, thanks to the power of Service Cloud, they're not going back to buildings anymore. When you think about to move from doctors' offices to telemedicine, you look across our portfolio, the move to digital commerce and digital marketing, and incredible Cyber Week numbers we talked about last quarter, we really think that this digital Customer 360, this platform we've been building is an absolutely crucial part of the future of work for every single one of our customers, in particular, because things aren't going to snap back to the way they were. It's also, as Marc mentioned, I think, one of the reasons we're so excited about the prospect of closing this Slack transaction. When you think about what does it mean to succeed in the all-digital work-anywhere world, it's Customer 360, which enables you to digitize your entire customer experience and get back to growth in this incredible economy. And it's the digital HQ from Slack, which enables you to connect to all of your employees, all of your partners, and all of your customers together in this incredible new engagement platform. And we think the two together represent an incredible opportunity that I think is truly the operating system for growth for every company embracing this new way of working and getting back to growth in this new normal.

Brent Bracelin:

Thank you for taking my question. I guess, first, great to hear this new concept of a regional in-person Dreamforce. Looking forward to an in-person reunion here. I guess for maybe Marc or Bret here, Salesforce has, by far, the broadest portfolio of different cloud applications today. I was hoping you could parse out what customers are asking for what cloud application could see the highest uptick in interest. As you look at the pipeline, you mentioned Tableau being a meaningful part of the large deal pipeline. But would love to just better understand what cloud applications specifically are ramping the most here in this kind of post-vaccine era that we're entering.

Operator:

Our next question comes from Keith Weiss with Morgan Stanley. Your line is open.

Marc Benioff:

Well, I'm so excited that you're excited about Amy's new model. I mean, I, by the way, am also - I mean, she - I think Kash said it well. She has reimagined the business. She has rebalanced our ratios. She's figured out how to take this kind of changes that have occurred in the pandemic, which is less travel and less real estate and less events, and kind of rebuilt the company from the bottom up. And I think that's where we're really starting to see Amy's genius kind of take place, which is that -- when I look at the revenue, $5.96 billion, up 23%, 20% in constant currency. The cash flow, $3.23 billion. But then when I really get down into this operating margin at 20.2% but also the ability to raise for the year, it really gets down to this new model that she's really pioneered and has installed in the company. And it's given us a fresh look at how we run our business and what we're going to do in the future and how we think about the right balance between revenue and cash flow and margin. And the pandemic gave all of us the ability to reset our lives but also our businesses. And when we look at resetting our businesses, we also have to reset our financial models. And I think that this is the result of now four amazing quarters of this financial model emerging. And I think we're going to see that continue to pay out for the rest of the year and future years as well that we will benefit from this. And I don't think it's something that's getting pulled forward or pushed back or this or that. It's all zero-based from the bottom. So that's what's exciting, and it's a commitment that we have to a new model and a new approach. And also, this idea, though, it's a new way to work. Now, in regards to the customer focus, I think, well, we just have never seen customer demand like this, and there's certain applications that we've been asked not to profile on the call, for example, in regards to some things that the US government has done in terms of making sure that stimulus gets to the right place at the right time. And we were asked to do things in a matter of weeks. It's not just limited to our government. It's other governments. It's other businesses. I mean, I've never seen, and I said this in the last couple of calls, so many, what I would call, emergency deployments. Usually, they say, hey, we like to have this in six months, 12 months, the most 18 months. That's one of the reasons they come to Salesforce. Very fast time to value, this is critical. But for us, they want instant time to value. We're like, wait, we have to build this in the cloud. We don't go - we got to go. All right, we'll build. We'll build it. We'll deliver this. We'll make this happen for you. And I've been so fortunate to have Gavin really by my side during all of this. I mean, everybody knows Gavin's tremendous lineage. And Gavin and I worked together, have been friends for more than a decade. But of course, as the CEO of BT, I always admired his business process and business practice and his ability to bring discipline. But now watching him run our customer organization and what he's done now over the last year, that's just been a shock to me. But, Gavin, I think you should just kind of come in here because it's not just Amy, who's re-imagined the financial model. You've re-imagined the entire customer model and how we're going to market and the balance of sales and service, and you've re-imagined the level of management that we have and where we're putting that management level of capacity, the relevance, the participation, I mean, the enablement, these things that you've laid in. So would you just tell us - give us what's happening on the customer side? And how do you see the market today?

Marc Benioff:

All right. And I really want to ask a follow-up question, Gavin, because you mentioned this, but I think it's important to illuminate this, which is Q1 was very much frictionless. We decided we're going to do digital kickoffs. We're going to get all of the quotas and the territory assignments out as quickly as possible. You've really led this amazing program to do this and to make sure we have this fast start to the first quarter into the fiscal year. You brought a level of discipline into the sales org I've never seen before. So I never really understood how the British did it. So let me just -- if you just fill in the detail there in terms of the velocity of the distribution organization is just incredible.

Marc Benioff:

It's inspiring, Gavin. And I'll tell you, we've had a lot of great distribution leaders in our company and a lot of great people by my side over the last two decades, who have been running this distribution organization, but you've just done an incredible job. And I just want to congratulate you on not only a great year last year but now just this amazing first quarter and the execution you've done. Amy, do you want to just come in here now, go into details? Because this velocity that Gavin has given us, well, now you're really paying it out with this new model, aren't you?

Operator:

Our next question comes from Brent Thill with Jefferies. Your line is open.

Gavin Patterson:

Look, the recovery from the pandemic is not at the same stage in every market. I think that's fair to say. But our business is strong. The new business has been strong across the board. There might be one point or two difference region by region, but there are no, what I would call, weaknesses across our global organization. So we do see strength across the board, and we see a strong pipeline importantly across the board. So I wouldn't read into anything. I'll point difference here or there. I'm very confident that this growth in the US but also outside the US and around the world.