Salesforce, Inc.

Welcome to Salesforce Fiscal 2024 First 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. If you would like to ask a question during this time, press the star followed by the number one on your telephone keypad. If you'd like to withdraw your question, again, press the star one. I would like to hand over the conference to your speaker Mike Spencer, Executive Vice President of Investor Relations. Sir, you may begin.

Good afternoon, and thanks for joining us today on our fiscal 2024 first quarter results conference call. Our press release, SEC filings, and a replay of today's call can be found on our website. With me on the call today is Mark Benioff, Chair and CEO, Amy Weaver, President and Chief Financial Officer, and Brian Millen, President and Chief Operating Officer. As a reminder, our commentary today will include non-GAAP measures. Reconciliations between our GAAP and non-GAAP results and guidance can be found in our earnings and press release. Some of our comments today may contain forward-looking statements that are subject to risks, uncertainties, and assumptions, which could change. Should any of these risks materialize, or should our assumptions prove to be incorrect, actual company results could differ materially from these forward-looking statements. A description of these risks Uncertainties and assumptions and other factors that could affect our financial results is included in our SEC filings, including our most recent report on Forms 10-K, 10-Q, and any other SEC filings. Except as required by law, we do not undertake any responsibility to update these forward-looking statements. And with that, let me hand the call to Mark.

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 shared with you how we hit the Piper Space 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 of investment, every resource, and every spend, and we're transforming every corner of our company. Our progress over the last five months, well, it's very impressive, and I could not 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 in 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 US 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 FY24, we're raising our non-GAAP operating margin to 28% in 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 25. We could not be more excited about our progress. We're maintaining our fiscal year 24 revenue guidance of approximately 34.5 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 AHANA culture. It's our superpower. And again, I'd like to thank our amazing team for this incredible accomplishment. Last quarter, I told you about how our AI team is getting ready to launch Einstein GPT, the world's first generative AI for CRMs. At Trailhead DX 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, Anthropic, 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 Trailblazers, Einstein GPT will provide a toolset to design generative AI apps built on reasonable prompts. For pro-code Trailblazers, Einstein GPT will offer an extensible ecosystem of LLM providers with configurable grounding. And Einstein GPT is the culmination 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 one 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 of 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. And this month, we also announced Tableau GPT at our Tableau conference where 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 already deploying this technology is Gucci. We're working with them to augment their client advisors by building AI chat technology that creates a Gucci-fied tone of service. Well, incredible new voice, amplifying brand, storytelling, and incremental sales as well. It's an incredibly exciting vision for generative AI to transform what 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. For 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 cell 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 LLMs 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 in 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 could not be more excited about our AICRM 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 creates 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 outpatient facility or ambulatory facilities, and their own medical school all in New York. By integrating Data Cloud with Health Cloud, Tableau, MuleSoft, well, our entire customer 360 vision, 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've 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 to 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 company in the world, and the number one safest and most trusted AI CRM. With that, Brian, I'll turn it over to you.