Salesforce, Inc.

Welcome to Salesforce's fiscal 2022 first quarter results conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would like to hand the conference over to your speaker, Mr. Evan Goldstein, Senior Vice President of Investor Relations. Sir, you may begin.

Thank you, Chantal. Hello, everyone, and thanks for joining us for our fiscal 22 first quarter 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 slash investor. With me on the call today is Mark Benioff, Chair and CEO, Amy Weaver, President and CFO, Brett Taylor, President and COO, and Gavin Patterson, President and Chief Revenue Officer. As a reminder, our commentary today will primarily be in non-GAAP terms. Reconciliation between our GAAP and non-GAAP results and guidance can be found in our earnings press release. Some of our comments today may contain forward-looking statements that are subject to risks, uncertainties, and assumptions. In particular, our expectations around the impact of the COVID-19 pandemic on our business, acquisitions, results of operations, and financial condition, and that of our customers and partners are uncertain and subject to change. If any of these materialize, or should our assumptions prove to be incorrect, actual company results could differ materially from these forward-looking statements. A description of these risks, uncertainties, and assumptions and other factors that could affect our financial results is included in our SEC filings, including our most recent report on Form 10-K. With that, let me hand the call to Mark.

Well, thank you so much, Evan, and thank you for everyone and 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 in 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 we're grateful that we can be together uh we're grateful that we um you know are in in a moment where we've been able to do that we just finished a uh Two-day off-site with our top managers from around the world. This is our third off-site we've done. We've done about eight total management off-sites. And through the miracle of testing and now through the miracle of vaccinations and the ability to get back into business and be in person, 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 to open our offices. Amy and I were in our offices on – Monday in San Francisco together on our Ohana floor. And it just, you know, was an emotional moment to know that, you know, 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're 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. Brett will go into the details. It was just incredible. It was beyond our expectation. It's 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 can do today. You know, Salesforce is a company. I said doing well and doing good. I mean, here's the doing well part, $3.2 billion in cost 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 with 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 Q2 of last year, Q3, Q4, and now Q1, our margin, our revenue, our cash flow, it's 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 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 by fiscal year 26. 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 when 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, you know, 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 it in the core products. Like, you know, I'm going to hit some of the key things, like how 8 out of the 10 deals included Tableau. What a successful story that acquisition has been, and MuleSoft, and ExactTarget, and how it's all worked out so well for us. You know, 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 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 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. I know you all track SAP and Salesforce. We 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 an all-digital, it's an all-work-from-anywhere world. It's made, you know, our companies, Salesforce and Slack, 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. You know, it's going to make our customers more productive. We're going to work with software companies on building incredible new capabilities. You know, like we've seen these amazing examples of what Slack can do. I'll tell you, um, 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, you know, the ease of use of our products, quality. And we just had amazing traction during the quarter across all parts of our business. You know, we hit an all-time high in seven-figure-plus transactions, and I hope that Gavin will talk about that. It was really this kind of first, really, quarter of our 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 it. And they need 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. It's 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 in our large deals. if 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, you know, a great example and You know, I love Darius Adabchak, an incredible CEO, great example of a company investing in Salesforce across their business. You know, 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 Brad and I in Washington, D.C. or got to watch it online, you know, 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 it was really cool. And Tableau Dashboards and Honeywell are providing their sales teams with these key insights to improve their productivity. And with MyTrailhead, which is our reskilling platform, You know, that's Honeywell reskilling 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 when 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 and Michael Dell. You know, last year Dell partnered with Salesforce Professional Services, implemented the world's largest deployment of Sales Cloud to support its 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 in that Salesforce and Dell have this partnership that helped them win. It was powerful. And with Service Cloud, Dell is also giving its 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. It's incredible. another amazing CEO that we work with, Mike Roman at 3M. And for those of you who watch Brett and I in Singapore, you know, Brett and I flew to Singapore for the kickoff of the quarter. And we were there in Singapore, and we were live with our customers and with our Ohana and 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 realized there were counterfeit masks that weren't providing the protection of a 3M mask, 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 even what happened, you know, or what just is going on right now in Australia, in Melbourne. You know, they're, again, relying on Salesforce's 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 an incredible story that's going on down there. You know, 3M, getting back to them, 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 pioneering online mortgage lender Rocket Mortgage to make complex transactions like buying a home or a car and evaluating a personal loan. I mean, it's amazing what's going on with Rocket Mortgage. I'll tell you, I've really enjoyed working with that company. And they're inspiring because they themselves are just such tremendous innovators. And if you know their CEO, Jay Farner, well, you'll understand, you know, 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 and scale. You know, Jim is incredible. And during the quarter, you know, they also selected MuleSoft to integrate across all their various systems. Of course, I mentioned Sonos before. It was an incredible story. They went digital, direct to their consumer. Well, grew their business 84% year over year. And with Marketing Cloud, Sonos connected with their customers through email, through mobile, through social channels. They built a 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, great story. And I'll tell you those stories and the story I 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, you know, or 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. 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 offsites you know, bringing our executives together. We've opened 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 21st to 23rd. It's going to be the first global Dreamforce. And we're going to host groups of 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 U.S., 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 at Salesforce have decided that we can do this amazing reopening dream force. We've worked with our longtime partner and customer, Marriott. We've worked with leaders in our local medical communities and university, including Dr. Larry Brilliant, who's been a great friend of our company, a tremendous epidemiologist, to follow these best practices and create this amazing new dream force. 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. We also opened it in London. I mean, it's great to be back to work. And we want to be the pioneers in 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 and events and get-togethers and collaborations. And we're even going to have this incredible new training facility, a cultural immersion facility, a place where we could bring large groups of our employees or even customers and their families together with Salesforce Ranch. 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, would we ever have something like this? I never saw the need. Why would Salesforce need a 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 22 years, we've built an amazing culture, an amazing company, you know, soon to be the number one enterprise applications company in the world, already the number one CRM in the world. And I'll tell you, when we started this business, we had three dreams. To create a new technology model, you know, 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's become the business's 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 nonprofits running on our service for free. It's 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 2nd, our digital marketing event of the year, and on June 23rd, 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.