Salesforce, Inc.

Welcome to Salesforce's fiscal 2025 third 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 that time, simply press star followed by the number one on your telephone keypad. To withdraw your question, press star one again. 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.

Thanks, Regina. Good afternoon, and thanks for joining us today on our fiscal 2025 30-quarter results conference call. Our press release, SEC filings, and a replay of today's call can be found on our website. Joining me on the call today is 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 earnings materials 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 and 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. Mike Nygren, At 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 over to mark.

Mark Warren, All right, well hey thanks so much Mike and I just really appreciate everybody being on the call today we have so many exciting exciting things to talk about and. Mark Warren, I hope you all had a great thanksgiving we're incredibly excited about these results that we've delivered in the quarter and. Mark Warren, very strong performance across revenue operating margin CRP and cash flow, but. As I'm sure everybody knows on the quarter, these numbers are not what we're really excited about at Salesforce. And while the quarter numbers are fantastic, the real excitement is really what is hitting with the technology. And I'm really excited to talk to you about that. Before we do, let's do talk about that incredible financial transformation that we have undergone over the last few years. You're going to hear more from Brian and Amy about what we're doing to redefine success, delivering this kind of financial value for our customers, but achieving these incredible results. So this is about so much more than another great quarter. We're really at the edge of a revolutionary transformation. This is really the rise of digital labor. Now, for the last, you know, I would say for the last 25 years, you know, at Salesforce Uh, you know, we've been helping companies to manage and share their information and you can see that across our whole product line. Um, and whether it's in sales or service or marketing or commerce, uh, whether it's analytics, Slack, uh, across the board. Um, um, but now we've really, uh, created a whole new market, a new TAM, uh, a TAM that, uh, is so much bigger and so much more exciting than the data management market. It's hard to get our head completely around. This is the market for digital labor and Salesforce has become right out of the gate here, the largest supplier of digital labor. And this is just the beginning and it's all powered by these autonomous AI agents. All of you know that this is fundamentally reshaping how businesses operate. It's fundamentally shaping how we operate our business and how we think about the industry itself and how you're thinking about the industry. how we're thinking about Salesforce. And with Salesforce, AgentForce, we're not just imagining this future. We're already delivering it. And you should know that in the last week of the quarter, AgentForce went production. We delivered 200 deals. And our pipeline is incredible for future transactions. We can talk about that with you on the call, but we've never seen anything like it. We don't know how to characterize it. This is really a moment where productivity is no longer tied to workforce growth, but to this intelligent technology that can be scaled without limits. And agent force represents this next evolution of Salesforce. This is a platform now. Salesforce is a platform where AI agents work alongside humans in a digital workforce that amplifies and augments human capabilities and delivers with unrivaled speed and You can see that, and I'm going to get into it. You go to help.salesforce.com. You can see we've unleashed that on our entire support organization already. We've created this incredible agentic layer around the whole company. And this is just the beginning of a complete digital transformation for the world. On top of this agentic layer, we'll soon see a robotic layer as well, where these agents will manifest into robots. And how all this is going to change society is You know, only visible today in the movies or in our imaginations, but we can see it unfolding right here through this company's Salesforce. And that is what we are really excited about. These agents are not tools. They are becoming collaborators. They're working 24 seven to analyze data, make decisions, take action. And we can all start to picture this enterprise managing millions of customer interactions daily with agent force, seamlessly resolving issues, processing transactions, anticipating customer needs, freeing up humans to focus on the strategic initiatives and building meaningful relationships. And this is going to evolve into customers that we have, whether it could be a large hospital or a large hotel where not only are the agents working, you know, 24 seven, but robots are also working side by side with humans. robots manifest manifestations of agents this idea that it's all happening before our eyes and that this isn't just some far off future it's happening right now and with agent force we're unleashing this new area of era of digital labor for every business and every industry and the implications are just simply profound for decades economic growth depended on expanding the human workforce you know it was all about getting more labor but with labor And with the labor force stagnating globally, agent force is unlocking a new path forward. It's a new level of growth for the world and for our GDP. And businesses no longer need to choose between scale and efficiency. With agents, they can achieve both. And our customers are already experiencing this transformation. Agent force is deflecting service cases and resolving issues, processing qualifying leads, helping close more deals, creating and optimizing marketing campaigns, All at an unprecedented scale, 24 seven, you know, we all saw this unfolding, a dream force in San Francisco. You were all there. I really appreciate you all coming and being with us. But I think what you saw and what was remarkable was the huge thirst that our customers had for this and how they built more than 10,000 agents in three days. And I think, you know, that we then unleashed a world tour. of that program. And we've now built thousands and thousands of more agents and these world tours all over the world, giving our customers the ability to understand and get their hands on the technology and envision for their own companies what they're going to do. And now we're seeing this demand for AgentForce, like, as I've said, you know, just became available on October 24th. And we're already seeing this incredible velocity, more than 200 AgentForce deals just in Q3 doesn't mean anything because the pipeline is in the thousands for potential transactions that are coming up in future quarters. So companies like FedEx, DECO, Accenture, Ace Hardware, IBM, RBC Wealth Management, and many more are now building their digital labor forces on the Salesforce platform with AgentForce. So that is the largest and most important companies in the world across all geographies, across all industries are now building and delivering agents. And Salesforce is unique as we are perhaps one of the only companies at scale in enterprise that is now delivering this globally. We could not be more excited. We could not be more proud of our teams, our technology teams, our engineering teams, our product teams, our marketing teams, and our distribution teams for getting this to market first. And look, we are not only prepared for this agent-first future, we're leading it for our customers and ourselves. And as you know, we pride ourselves on being customer zero for all of our products and AgentForce is no exception. We're excited to share that AgentForce is now live on help.salesforce.com. I hope that you've all gone there and checked it out. And you might've also noticed that we have a test going on for our US customers. where we put an agent at the front of our website as well to kind of see what that is like. This is an ungrounded agent, but it's really a vision for what the potential of what agents can be doing at every part of marketing. Our help portal, help.salesforce.com, which is now live. This portal, this is our primary support mechanism for our customers. It lets them authenticate in. It then becomes grounded with the agent. And that help portal already is handling 60 million sessions and more than 2 million support cases every year. Now that is 100% on agent force. It's going to have dramatic implications for our company from not only the technology point of view, but also from a human resource point of view, where we can really start to look at how are we going to rebalance our headcount, you know, in the areas that now are fully automated. And two, into areas that are critical for us to grow, like distribution. I think you've all heard that we're trying to hire 1,000, 2,000 more salespeople because we see not only maximized our productivity of our current Salesforce over the last couple of years, but we just need to grow and expand to reflect this incredible distribution opportunity. It's a once-in-a-lifetime opportunity to really help customers achieve something they could never have done before. And while these legacy chatbots have handled these basic tasks like password resets and, you know, other basic mundane things, agent force is really unlocking an entirely new level of digital intelligence and operational efficiency at this incredible scale. Now, when you use help.salesforce.com, especially as an authenticated user, as I mentioned, you're going to see this incredible level of accuracy and responsiveness. And you're going to see remarkably low hallucinogenic performance, whether for solving simple queries or navigating complex service issues. Because agent force is not just grounded in our Salesforce data and metadata, including the repository of 740,000 documents and 17 languages, it's also grounded in each customer's data, their purchases, returns, that data. It's that 200 petabytes or 200 to 300 petabytes of Salesforce data that we have that gives us this kind of, I would say, almost unfair advantage with agent force because our agents are going to be more accurate and the least hallucinogenic of any because they have access to this incredible capability. And agent force can instantly reason over this vast amounts of data, deliver precise personalized answers with citations, James Pfeiffer- And seconds and agent force can seamlessly hand off to support engineers delivering them. James Pfeiffer- Complete summary and recommendation as well, and you can all try this today this isn't some fantasy land future idea. James Pfeiffer- You know this is today reality, and I just want to compare and contrast that against other companies who say they are doing enterprise. AI, you can look at even Microsoft, we all know about co-pilot, you know, it's been out, it's been touted now for a couple of years. We've heard about co-pilot. We've seen the demo in many ways. It's just repackaged chat GPT that you can really see the difference where Salesforce now can operate at company. On our platform. And I don't think you're going to find that on Microsoft's website. Are you, I know many of you are specialists in Microsoft. Go ahead. and try to find this running on Microsoft.com. And I'm looking forward to getting your responses. Look, we expect that our own transformation with AgentForce on help.salesforce.com and in many other areas of our company is going to deflect between a quarter and a half of our annual case volume and in optimistic cases, probably much, much more of that. AgentForce is going to deliver the same unprecedented accuracy speed and cost savings to our customers. Now, when we look at customers that are starting to implement this today, there's a lot of great examples. One of them is this smart home security provider Vivint. They've struggled with this high volume of support calls, a high churn rate for service reps. It's a common story, but now using the agent force Vivint is creating a digital support staff to autonomously provide support through their app, their website, troubleshooting, a broad variety of issues across all their customer touchpoints. And in addition, Vivint is planning to utilize AgentForce to further automate technician scheduling, payment requests, proactive issue resolution, the use of device telemetry, because AgentForce is across the entire Salesforce product line and including Slack. So now here's another great customer example that's already, you know, It's incredible the work they've already done to get this running and going in their company at Deco, the world's leading provider of talent solutions, handling 300 million job applications annually. But historically, they have just not been able to go through or respond in a timely way, of course, to the vast majority of applications that they're getting. But now the agent force can operate in incredible scale, sorting through the millions of resumes, 24-7 matching candidates to opportunities, proactively pre-qualifying them for recruiters. And in addition, agent force can also assist candidates, helping them to refine their resumes, giving them a better chance of qualifying for a role. Now, listen, we've been talking on these earnings calls for, I don't know, more than a year, maybe two years, why Salesforce has an unfair advantage in AI. I think we took one earnings call just to talk about the power of data and what the power of data meant for Salesforce. Now you're really seeing that get manifested right into the customer themselves and getting that value. We don't have to just pull us off delivering the philosophy anymore. We're really showing you that yes, Salesforce is already the largest supplier of enterprise AI in the world, 2 trillion Einstein transactions a week. No one is delivering this level of enterprise AI that we are, but now We're not just delivering that Einstein transaction, we're delivering these incredible agent force capabilities as well. This is a bold leap into the future of work where AI agents with humans unite to transform all of our customer interactions. Another powerful example is a nonprofit, College Possible. College Possible matches eligible students with counselors to help them navigate and become you know, you know, ready for college. And in California, for example, the statewide average stands at slightly over one counselor for every 500 students. It just isn't enough. Where are we going to get all that labor? Well, we know where we're going to get that labor. We're going to get it from agent force. This means the vast majority of students are not getting the help they need, and now they are going to get the help they need. College Possible creates a virtual counselor built on agent force and under a week They already had all the data. They had the metadata. They already knew the students. They already had all of the capabilities built into their whole Salesforce application. It was just a flip of the switch. I mean, you have to think about that for just a second. We have 135,000 customers, and those 135,000 customers have now been endowed with AgentForce. It's in every single one of those implementations today. It's just a switch. that needs to get flipped on. And our job is to motivate, to excite, to inspire our customers to turn that switch on right now. And when you look at College Possible, yes, it's very exciting. Any high school student will have access to this college counselor that knows about their goals, their transcripts, all the information on the colleges that can deliver this highly personalized experience for them. But why? It's because all of the work and the data and the capability that College Possible has put into Salesforce over the years and years that they had it. It's not the week that it took to get them to turn it on. They have done a lot of work. And when you look at those 135,000 customers that we have, they have so much work in the Salesforce to organize and get all that data and workflow ready. And now they can just turn those agents Now we're working with, you know, across all kinds of industries to do so many different and exciting areas. We could go on and on and on. Now, over the last few years, we've really aggressively invested in integrating all of our apps on a single core platform with shared services for security workflow, user interfaces, and more. We've been rewriting all of our acquisitions into that common area. We're really looking at how do we take all of our applications and all of our acquisitions and everything and delivered into one consistent platform. We call that more core internally inside Salesforce. And when you look at that more core initiative, I don't think there's anyone who delivers this comprehensive platform, sales, service, marketing, commerce, analytics, Slack. All of it as one piece of code. And then now deeply integrated in that one piece of code is also our data cloud. That is a key part of our strategy, which continues to have this phenomenal momentum as well to help customers unify and federate with zero copy data access across all their data and metadata, which is crucial for AI to work. And now that third layer is really opening up for us, which is this agentic layer. We have built this agentic layer that takes advantage of all the investments in Salesforce for our customers and made it in our platform. It's really these three layers. And in these three layers that form a complete AI system for enterprises and really uniquely differentiate Salesforce, uniquely differentiate agent force, you know, from every other AI platform. You know, that this is one piece of code. This isn't like three systems. It's not a bunch of different apps all running independently. This is all one piece of code. That's why it works so well, by the way, because it is one platform. And we understand that this extraordinary technology is also to require us to have some kind of extraordinary responsibility. That Salesforce trust is our number one value. It's never been more critical, especially with this pioneering new technology. We're committed to building agent force with accountability and fairness and transparency at the core. And we've been focusing on empowering our customers and partners to also navigate this era, equipping them with the tools, skills, and education to thrive in an AI-driven economy. You know that because you've heard so many presentations and thoughts on this that we've put together with our team. And because we, obviously, this is just our latest moment in ai so the transformation is not without challenges jobs are going to evolve roles are going to shift and businesses will need to adapt and listen at salesforce jobs are going to evolve and roles will shift and businesses will need to adapt as well we're all going to need to rebalance our workforces as agents take on more of the workforce and then we can rebalance and reshape our companies into new ways you know history has shown us that with every disruption comes an explosion of new opportunities. This morning I was on the phone with one of our large customers and they were telling me how they're targeting inside their company, 25% more efficiency with artificial intelligence. Incredible goal. You know, this is an incredible moment. Entire industries are going to emerge fueled by innovation and creativity of people using agent force to solve challenges, to reach new heights. It's just the beginning of a level of innovation and change that none of us have really ever seen. It's a radical expansion of our total addressable market. And it's really the beginning of a change that we're going to see that's including agents, that's going to include robots, that's going to include the use of the data and the metadata and all the technology that we've been pioneering now for the last several decades. This is more than a technological revolution. It's an opportunity. to create a better future for all of us. And at Salesforce, we believe business is the greatest platform for change. And with AgentForce, we're leading the way into a new horizon of digital labor. We're excited to take this vision for deploying a digital labor force for every organization even further. And you're going to now, and this is incredible even to be able to say this, because we just introduced AgentForce in October, but I want to invite all of you to join us for the launch of Agent Force 2.0. And it is incredible what you are going to see. The advancements in the technology already are amazing in accuracy, in the ability to deliver even additional value. And we hope that you're going to join us in San Francisco. This is going to happen on December 17th. You'll see Agent Force 2.0 for the first time, and you're not going to believe it. You're not going to want to miss it. And now over to Brian.

Hey, thanks, Mark. Really appreciate it. I've been at Salesforce almost as long as Mark and Parker, and this is the most exciting time in my career. As a company, we redefined enterprise software with cloud and social and mobile and predictive AI over the past 25 years. And now we're doing it again with agent force. As Mark said, this is the beginning of a revolutionary transformation that will fundamentally redefine how we work and how work gets done. Our strong results in the quarter reflect the trust our customers, partners, and stakeholders have in Salesforce to lead them into this new agent-first world. We made great progress in the quarter against Salesforce growth pillars, first and foremost with AgentForce and Data Cloud, but also with our multi-cloud deals, international expansion, industry solutions, and our ecosystem. AgentForce will enable companies to achieve a new era of abundance. With more efficiency, more productivity, even stronger customer relationships, higher margins, and higher revenues across every industry. It's a new technology model and a new business model. And we built a complete agent-first platform for customers that will save them millions of dollars and provide them with limitless workforces to drive greater value. Companies like Remarkable and Wiley are already seeing incredible results. Wiley, an early adopter, is resolving cases over 40% faster with agent force than their previous chatbot. Heathrow Airport, one of the busiest airports in the world, will be able to respond to thousands of travelers' inquiries instantly, accurately, and simultaneously. Shark Ninja, a new logo in the quarter, chose AgentForce and Commerce Cloud to deliver 24 by 7 personalized support for customers across 28 international markets and unifying its service operations. Our customer success with AgentForce and our AI solutions is driving strong results. In Q3, the number of wins greater than a million dollars with AI more than tripled year over year, and we signed more than 2,000 AI deals, including more than the 200 agent force wins that Mark shared. To capture this increased demand for agent force, we're hiring 1,400 AEs globally in our fourth quarter, and we're also using new sales SDR agent and sales coaching agent to augment every seller. We're also seeing amazing agent force energy across the ecosystem with our global partners involved in 75% of our Q3 agent force deals and nine of our top 10 wins in the quarter. Over 80,000 system integrators have completed agent force training and hundreds of ISVs and technology partners are building and selling agents. And our partners are also becoming agent first enterprises themselves. In the quarter, Accenture chose agent force to streamline sales operations and enhance bid management for its 52,000 global sellers. By integrating sales coach and custom AI agents, AgentForce is improving deal quality and targeting a 75% boost in bid coverage. We see an incredible future with AgentForce, not only for our customers, but also for us. As customer zero, we can leverage AgentForce ourselves to realize the benefits of digital labor force to amplify and augment our human workforce. Mark talked about how we've reimagined Salesforce customer service with AgentForce. or also deploying agent force to engage our prospects and on salesforce.com answering their questions 24 by seven, as well as handing them off to our SDR team. You can see it for yourself and test it out on our homepage. We'll use our new agent for SD agent force SDR agent to further automate top of funnel activities from gathering leads, uh, lead data for providing, uh, providing education and qualifying prospects and booking meetings. Initiatives like this and many others mean Salesforce will become a new lever for productivity, growth, and efficiency for Salesforce, which should save millions of hours and free up hundreds of millions of dollars to reinvest into our strategic growth initiatives. Becoming an agent-first enterprise starts with having unified data. That's why we continue to see amazing momentum with Data Cloud, which was included in eight of our top 10 wins in the quarter. Today, 25% of the Fortune 100 are Data Cloud customers. Mark mentioned the ADECO group. They're centralizing more than 40 instances and legacy systems with Data Cloud to build a foundation to implement agent force at scale. Usage is a key indicator for our product's value to our customers, and our customers are now processing 767 trillion records every month. Indeed, the world's leading job site hires three people every second on its platform. Using Data Cloud as its go-to-market data architecture indeed matches 580 million job seeker profiles with over 3 million employers, with agent force indeed aimed to have time to hire and help 3 million people overcome employment barriers by 2030. IBM, one of our valued strategic partners, selected Data Cloud in the quarter to enhance their global client service with a unified view of all client interactions and actionable usage insight They can deliver even more efficient, personalized experiences. Proprietary unstructured data is a powerful fuel for AI, and we're excited that we were able to close the acquisition of ZoomIn to accelerate and unlock the unstructured data to power AI agents, making them more personalized and context-aware for every customer interaction. We also finalized our acquisition of the Young Company. owns data management capabilities, complement our existing offerings, and will strengthen data security, privacy, and compliance across our platform. As Mark described, AgentForce is a game changer for our core products, enabling customers to leverage AI-powered insights and actions directly in the flow of work across our entire product portfolio. This is evidenced by the strong demand for Sales Cloud and Service Cloud, both of which achieve double-digit growth in Q3. We also just wrapped up in another incredible cyber week during which Commerce Cloud powered close to 50 million orders on digital storefronts with nearly 100% uptime. Salesforce powered nearly 60 billion AI-powered product recommendations, a 21% increase year over year, and over 56 billion marketing messages were sent via Marketing Cloud. Service Cloud also helped our customers field and resolve 3.8 billion cases. Clearly, the scale, reliability, intelligence of our integrated platform is unmatched. And we continue to see solid momentum with Slack, with wins at Capital One, Snap, Rivian, and Volkswagen Group Technology. Annual spend on Slack AI grew nearly 50% quarter over quarter, and Slack was included in more than a third of our deals greater than a million dollars. Since the release of Slack AI, our customers have summarized over 600 million messages, saving them a collective 1.1 million hours. Tableau and MuleSoft continued to be foundational and fundamental to our customers' transformations. In the quarter, Tableau had wins at Allegis, SiriusXM, and Hitachi, and MuleSoft had wins at Northwell Health, 3M, and CalOptima Health. Our industry clouds continue to fuel our growth with strong demand in highly regulated industries like healthcare. Notably, our new agent-first life science cloud was in three of our top 10 deals in the quarter. We also saw strong momentum internationally with wins at Brentag and Finnair. Once again, half of our top 10 wins for the quarter were international. We continue to unlock customer spend through new channels, including the AgentForce Partner Network that launched at Dreamforce, which allows customers to customize and deploy specialized agents using trusted third-party extensions from Salesforce AppExchange. And AWS Marketplace continues to be a growth driver. Our Q3 transactions doubled quarter over quarter with 10 deals exceeding a million dollars. Salesforce's business and financial performance has delivered unprecedented results, and we're doing it again with our product transformation and agent force. We're starting Q4 with strong momentum, and no one is better positioned to capture the massive agent force opportunity ahead. Now over to you, Amy.

Great. Thanks, Brian. As you heard from Mark and Brian, we are incredibly excited about the opportunity ahead with agent force. Simply put, Salesforce is uniquely positioned to become the leading enterprise AI platform and the source of a digital workforce for companies around the globe. And as customer zero for AgentForce, we're already seeing a significant pickup in case deflections for our customer service organizations. This is just the beginning of a new world of humans and AI agents working together to fundamentally reshape the economics of business. As Mark mentioned, we've been on a financial transformation over the past several years, and you'll see it in our results. Q3 represents another quarter of focused execution leading to strong outcomes. Q3 revenue was $9.44 billion, up 8% year-over-year in nominal and constant currency, driven by resilience in our core clouds. Subscription and support revenue grew 9% year-over-year in nominal and constant currency, led by another quarter of double-digit growth in both sales and service, driven by strong ARPU growth. As expected, this was partially offset by deceleration in our license revenue growth in U.S. Austin tab low in Q3 on tough prior year compares. From a geographic perspective, America's revenue grew 6% in nominal and constant currency. EMEA grew 12% or 9% in constant currency. And APAC grew 16% or 14% in constant currency. We saw strong new business growth in LATAM, Canada, and Australia, while the United States and parts of EMEA remained constrained. From an industry perspective, in Q3, health and life sciences, manufacturing, and automotive and energy all performed well, while retail and consumer goods were more measured. Our multi-cloud momentum continues, with our top 25 deals averaging more than five clouds each. Now, you hear us talk about this metric every quarter. It's an incredible proof point that our customers trust Salesforce to transform their entire customer experience, from sales to service to marketing and commerce to analytics and integration. But our multi-cloud strategy is also core to our financial strategy. Multi-cloud customers have higher spend, lower attrition rates, and drive significant ARR expansion for us each quarter. That's because Salesforce is the only company that can deliver a 360-degree view of your customers, which is essential for every company as we move into an agent-first world. Data Cloud also continues to be the foundation for every AI transformation, and it was included in one-third of all of our deals this quarter, over $1 million. As you heard from Brian, Data Cloud helps unlock AI with our customers, and that's why eight of our top 10 deals included both Data Cloud and AI, inclusive of AgentForce. This is really the model for all future transactions. Q3 revenue attrition ended the quarter slightly above 8%, in line with recent quarters. Q3 non-GAAP operating margin was 33.1%, up 190 basis points year over year, driven by top line outperformance and disciplined expense management. And I am very pleased to share that this quarter our GAAP operating margin hit 20% for the first time in company history. Q3 non-GAAP EPS was $2.41, inclusive of $0.18 charge driven by mark-to-market adjustments of our strategic investments portfolio. Excluding this impact, non-GAAP EPS would have been $2.59, well ahead of our guidance. Q3 operating cash flow was $2 billion, up 29% year-over-year. Q3 free cash flow was $1.8 billion, up 30% year-over-year. Turning to remaining performance obligation, RPO, which represents all future revenue under contract, ended Q3 at $53.1 billion, up 10% year-over-year. Current RPO, or CRPO, ended at $26.4 billion, an increase of slightly more than 10% year-over-year in nominal currency. This includes a $100 million FX tailwind, which results in 10% year-over-year growth in constant currency. CRPO outperformance was driven by early renewal favorability and strong new bookings performance. Of note on the bookings performance, over the past couple of quarters, we have seen stabilization in our transactional businesses, most notably Create and Close and S&B. One call out on the Q3 CRPO results. As you heard from Mark, Agent 4's momentum in Q3 was incredible. with over 200 deals closed in only one week. However, given we are early in our adoption cycle, it is not yet a material contributor to CRPO. On capital return, in Q3 we executed $1.2 billion in share repurchases and paid nearly $400 million in dividends. This brings our total return to shareholders in the quarter to $1.6 billion. Through our capital return program, we continue to expect to more than fully offset dilution from our FY25 stock-based compensation. And I'm pleased to share that since inception of our capital allocation program, total capital returns have now surpassed $20 billion. Now, let's turn to guidance. Note that after the end of our third quarter, we closed our acquisitions at the own company in ZoomIn. As such, our guidance incorporates contributions from both these deals. Let's start with the full fiscal year 25. On revenue, we are raising the low end of our guidance range to $37.8 billion and maintaining the high end at $38 billion, growth of approximately 8% to 9% year over year, reflecting the strong execution and revenue outperformance over the last two quarters. For subscription and support revenue, we still expect approximately 10% growth year over year in constant currency. A few reminders on our revenue guide. On FX, our revenue guidance continues to incorporate a $100 million FX headwind year over year, or a 30 basis point impact. We continue to expect our professional services business to be a headwind to revenue growth. And as we shared last quarter, our guidance incorporates deceleration in our license revenue growth in the back half of this year. On attrition, we expect attrition to remain consistent at slightly above 8% for the full year. Now, turning to profitability and cash flow. On margins, we are pleased to raise our fiscal year 25 non-GAAP operating margin guidance to 32.9%, representing a 240 basis point improvement year over year. This incorporates intentional investments and growth opportunities, most notably in agent force and data cloud. As we said last quarter, stock-based compensation is still expected to be approximately 8.4 as a percent of revenue. For fiscal year 25, GAAP operating margin guidance continues to be slightly below 20%, representing 540 basis points of improvement year over year. We expect fiscal year 25 GAAP diluted EPS of $6.15 to $6.20. Non-GAAP diluted EPS is expected to be $9.98 to $10.03. We are raising our fiscal year 25 operating cash flow growth to approximately 24 to 26%, inclusive of cash tax headwinds. And we continue to expect CapEx for the fiscal year to be slightly below 2% of revenue. This now results in free cash flow growth of approximately 26 to 28% for the fiscal year. Now the guidance for Q4. On revenue, we expect 9.9 billion to 10.1 billion, up 7 to 9% year over year in nominal and constant currency. CRPO growth for Q4 is expected to be approximately 9% year-over-year in nominal, including $100 million FX headwind, and slightly above 9% in constant currency. Similar to Q3, we do not expect a material contribution to CRPO from Q4 agent force-related bookings. For Q4, we expect GAAP EPS of $1.55 to $1.60. and non-GAAP EPS of $2.57 to $2.62. In closing, I am very pleased with our strong execution this quarter, and we remain focused on driving profitable growth, optimizing free cash flow, and delivering a new era of customer success with agent force, which truly represents the next evolution of Salesforce. Now, Mike, let's open up the call for questions.

Thanks, Amy. As a courtesy to everyone on the call, we ask that everyone only ask one question, please. With that, Regina, let's go to the first question, please.

Our first question will come from the line of Brent Till with Jefferies. Please go ahead.

Good afternoon, Mark. On AsianForce, I'm curious if you could just talk about the halo effect you're starting to see across the product lines, perhaps some of the other products getting pulled in. You mentioned data cloud. Can you speak to what you're seeing from that? Thank you.

Oh, Brent, thanks. It's a great question. And, you know, Amy really hit a very subtle line in the middle of her script, and it probably requires a little more illumination, which is, you know, Amy really said to you that in our top 25 deals, we saw five, this kind of collaboration with these five clouds each. And what that means to us is that our top customers are really loading in this complete agent first cocktail. And this idea that we have sales, we have service, we have marketing, we have analytics. We have our data cloud, we have slack, um, and every customer wants these products and wants them together. You know, we have the, we have an incredible sales cloud number one in the world. You know that, and it is the only agent first sales cloud today. Uh, it's highly differentiated. We have the number one service cloud in the world. The Gartner just published the new magic quadrant. We're number one way up into the right. And we guess what we are now. David Wiltshire- part of their up into the right because we're the only agent first service cloud marketing cloud. David Wiltshire- Analytics data slack across the board and i'll tell you a story, which is, we have an incredible customer on the healthcare industry and they. David Wiltshire- Recently, called me in there you thinking about how are they going to deploy these agents and on and on and on and it's huge opportunity for healthcare and I can talk to you exhaustively all about that, but. Um, what gave them the whole pitch went through the whole thing. And then the next day they called us back and they said, we really want to talk to you now about, um, our marketing cloud choice. And, you know, we're looking at Adobe and, you know, how should we think about that? And I'm like, well, we really probably should bring in our team and show you what we're doing, but it's, it's really, you have to look at the whole platform that we can do because yes, we have an incredible, incredible marketing cloud and incredible email capabilities and, promotion capabilities and on and on and deeply integrated into our workflow. But take a look how it operates across all of your customer channels and all of your customer touch points and how this is one comprehensive customer suite and it's all agent first. And then he sent me a text and it's a very large customer and said, of course, we are going with you on the marketing as well. Because I think when customers realize that They are going to build agent first companies that the agent needs to have a comprehensive access to this entire data set and metadata set that we are the only ones who have built this platform. Nobody else has a comprehensive platform that does sales service, marketing, analytics, data, cloud, Slack, all integrated together as one piece of code and operating across all languages, all currencies. and can scale from the smallest companies to the very largest in the world. And that is what is unique about Salesforce. And we have something very special right now because, and you know, Brent, cause you've been covering this for a long time. We always have the best enterprise AI and our Einstein is the best, you know, it's been, we've been working on that for more than a decade. So of course we were able to, you know, put it in an overdrive and deliver agents first. But because it's within the platform, everything is in the platform. This isn't some distinct discrete piece of code. It's just another light switch on for the customer to get the full level of functionality. So I couldn't be more excited about it. I'm sure it's coming through on the call. I really think that for all of us, you think about Brett, how long we've been working together for decades before I started Salesforce. And you think about the conversation we just had on this earnings call. is unlike any conversation you and I have ever had about software. We are all about to learn and grow and expand and evolve and become a different kind of industry that's providing a different kind of value. And this is the most excited I've ever been about the software industry.

Thanks, Brent. Regina, we'll take the next question, please.

Your next question comes from the line of Keith Weiss with Morgan Stanley. Please go ahead.

Excellent. Thank you guys for taking the question and definitely hear the excitement coming through on the call. Maybe a question for Brian. When it comes to those 200 deals that you've already signed for agent force, maybe you could give us some color on what those deals look like. Do they tend to be upsells? What type of uplift do you see if you're upselling to customers? Do they tend towards like one cloud or another? How expansive are there? Any kind of color that we can use to try to kind of understand this opportunity better?

Yeah, Keith, thank you for the question and a good one. We are seeing incredible traction with our customers as add-ons to many of our Service Cloud offerings. Obviously, you know, Service Cloud is our largest cloud and our initial agent force opportunity is with our Service Cloud customers right now. And we saw a ton of add-ons happening in our customer base with Service Cloud. But what our customers also recognize is that this is a platform. And the opportunity to move from, yes, of course we want to have autonomous agents that are supporting customers like we have on help.salesforce.com. But what are all the opportunities you have in your interactions, in the flow of work with your customers where you can deploy agents? And so while we have tremendous excitement in the initial 200 deals, we're largely in the service cloud space. We feel great about the opportunity with sales cloud and with marketing cloud and with commerce cloud. And of course with Data Cloud, which is included in all of our agent force deals. And so those 200 deals sort of tip of the iceberg when we think about the opportunity that's ahead of us for agent force.

Thank you.

Regina, we'll take next question, please.

Your next question comes from the line of Ray Molinshaw with Barclays. Please go ahead.

Perfect. Thank you. You're obviously creating a lot of value for your clients. Like how's the discussion about

um how you kind of participate or work with the clients about pricing uh for agent force going or like how should we think about it what are you hearing there thank you thanks for the question uh i'll start i think mark is probably going to chime in as well but we but we uh we're super excited about and i would say as you all know it's a usage-based structure and at two dollars a conversation uh we feel like the value is very high for our customers given what they're spending today um in a lot of their conversations please

Everybody knows I've been wearing a boot because I ruptured my Achilles while I was on a scuba diving trip to Fakarava, which is an incredible place in the Tuamotos in French Polynesia for my birthday. I was having a great time, ruptured my Achilles, unfortunately, and I'm sure we all know the international motto of Fakarava, which I have close to my heart, which is I don't give a Fakarava. James Pfeiffer- So I think that I just got a call from my hospital telling me that i'm coming in to get scheduled for another MRI and incredible service, you know ruben knows that this great relationship with UCSF and there. James Pfeiffer- They pay a lot of attention to me, I pay a lot of attention to them credible organization and they had a lot of questions for me about getting me ready for my next MRI and. And at the end of the call and this kind of preoperative care, and then we had another call postoperative and so forth. And I was just saying to myself, wow, what did that cost them? And they just don't have enough people as it is. Their doctors are already burned out. Their nurses are burned out. I talk to the folks all the time. You know, there's a lot of pajama time for all these doctors is what they call it because they're all working late at night with their families, trying to get through all of their messages. Everybody's maxed out at UCSF. I mean, it's an incredible org, but I can't believe, you know, the amount that they have to do with such an actually limited workforce. And then, you know, I got this call. I said, you know, they kind of know all of this already about me. They've got all of my data. They have all of my care. They have my family history. They've got all my scans. They can have an agent do this work. And that call probably cost them $100. And it didn't have to happen. And I think that we could have done the call for probably about a buck 50. And I think that that is the message to our customers, which is. How are you going to give some of your people a break, let them get back to their strategic work, let them focus on what really matters, their customers, and some of the work that's a little bit more administrative and bureaucratic and political that's done by these political layers or higher levels. That's like. You know what? I think that that could have happened with an agent. And that's kind of how I look at it. And I think we're just at an incredible moment where we can really grow our country's revenue or GDP, do a lot more, have a lot more productivity without hiring a lot more people. And the hospital example is the best example. And consumption pricing isn't new to Salesforce. You all know that we have our Sandboxes and our Commerce Cloud and Heroku and Data Cloud and many, many. But this is a consumption product. We have per user products, you know, which are for humans. We have consumption products, you know, for agents and robots. And that's how I think we should look at it, which is the comparative cost is there's just no comparison. And do you want to add more to that, Brian?

Our customers really understand the cost of their labor right now. And when we can deploy agents to help them manage their interactions with their customers, the pricing conversations are significantly easier. And so, you know, you can even see it on our website. We've got calculators that allow our customers to go do the work themselves. And it's been a great add for them to go understand what the cost structures look like and, you know, It's been an enlightenment for many of our customers to see the value that we can deliver for them with AgentForce. Great. Thanks, Ramo. Regina, we'll go to the next question, please.

Our next question comes from the line of Brad Zelnick with Deutsche Bank. Please go ahead.

Great. Thanks so much for taking the question. Mark, I wanted to ask about the more core initiative that you mentioned in your remarks. It would seem further integrating the platform can only be a good thing for customers. Can you talk more about what's involved and the size of the prize as you come out the other side of this initiative? Thanks.

Well, we have been working on this now for a couple of years, really, since we started our transformation, which I think maybe this call is the two-year anniversary of our transformation. Is that right, Amy? I mean, it was about two years ago that we were like, whoa, we're about to go through an incredible transformation. And I think we would not have gotten through that transformation without the support of all of you. And I think you know that you gave us a lot of the advice and thinking and strategy to do that. And it's been an incredible 24 months. It's been a financial transformation and it's been a technology transformation. And, you know, now when we really think about what are the things that we really invested in, it's, you know, we really tried to look at how do we try to make our organization stronger. to be able to deliver the numbers that we want to be able to do, and we want to expand our distribution organization. That's something that we wish that we had done faster. We're still not where we want to be there. I would say where we've made very significant investments were in AI, and I think that's evidenced by agent force. And we also made very significant investments in more core. We've dramatically increased not only the productivity, but also the number of engineers in the company over the last two years as well. That's been an incredible focus for us. That's why we're able to deliver this technology capability. And when we look at the company, I would say more core has come out of it. So at Dreamforce, you saw how commerce and marketing, for example, which always had been outside of the core platform are now inside the core platform. And the idea that We want sales, service, marketing, analytics, data clouds, Slack, all to be in one platform. And that is because we want all of the workflow, the data, the metadata, all to be in one platform. And the reason why is because the AI does not work if you don't have that. If the AI needs this ability to look across these huge data sets and capabilities to kind of pull it all together, because you can imagine that I'm on the, on the phone with UCSF and I'm talking now to the agent, you know, at some point in the future, instead of talking to the person who I spoke to today and they say, you know, you still owe 500 bucks on that last visit, which is not uncommon for me. There's some additional fee or something that I have to pay. And I'll say, yes, go ahead and process that. And that's all just happens on our platform. So the commerce can happen on the platform. The confirming email can happen on the platform. The case management can happen on the platform. The patient relationship management can happen on the platform. And it can happen by industry. It can happen by geography. It can happen by currency. And that is what's really, I think, unique about Salesforce. It's not just that we're delivering, you know, this agent-first solution. It's the comprehensive functionality set underneath there that's all possible.

Great. Thanks, Brent. Regina, we'll go to the next question, please.

Our next question comes from the line at Brent Bracelet with Piper Sandler. Please go ahead.

Good afternoon. Thanks for taking my question here. I wanted to ask about the new foundations offering. This seems like a new strategic approach to multi-cloud packaging. That could also drive broader agent adoption. What's been customer response to foundations so far? And do you have any sense on what adoption might look like in the coming year?

I think that foundation and when you look at other initiatives that we have, and this is all coming out of more core. So, you know, when you look at essentials, when you look at our focus on the SMB market, when you look at kind of James Pfeiffer- you're seeing the fundamental rewriting of the product in real time, it is a little bit like we are flying the airplane and rebuilding it in real time. James Pfeiffer- I would joke with my team, you know, two years ago, what happened was we were flying the airplane. James Pfeiffer- We found out the two pilots were gone in the front and one person of the parachute jumped out of the plane. James Pfeiffer- And we were all left on the plane and we were on the phone with all you going well we're going to put it all together and just trust us we're going to get this done and. You know, while we've been doing that, uh, not only did we lay on the plane successfully, but we rebuilt the whole airplane in real time. And that idea that the platform itself has been rebuilt and, um, it's pretty incredible foundations is really a glimpse at what's happening. It's the same code set, but you can see how foundations is kind of a whole different way to use Salesforce. And we're making as much of our functionality available. to all of our customers as possible. So we're shipping foundations so that every customer can get a taste of sales and service and marketing and analytics and data cloud and Slack and everything that we have because we realize, and I'll include one thing I didn't mention is platform. So, you know, it's very important that these customers see that they don't have to go buy another best of breed product. They can just flip the switch and everything comes on and that is working and we still have a lot of work to do to educate our customers on all the capabilities that we have. Still, a lot of our sales cloud customers don't have service cloud and a lot of our service cloud customers don't have sales cloud. And that's true of marketing cloud. I could go to each one of these clouds because in some ways we've been selling a lot of these clouds in their own silos. So they've built on their own customer bases. And we have a lot of customers. We have a lot of software to sell to a lot of people. But it's an exciting moment because we're so highly differentiated. Great. Thanks, Brent.

Regina, we'll take our last question now, please.

Our final question comes from the line of Kirk Matern with Evercore ISI. Please go ahead.

Yes. Thanks very much. Congrats on the quarter. And great to hear all the excitement around agent force. off the launch. Brian, this is probably for you. I was just curious and dovetails back into some earlier comments. Really strong attach with Data Cloud thus far. I was just kind of curious, how far along are your customers in terms of having their data in order so that they can get value from agent force somewhat out of the box? I'm just trying to get a better understanding on how long does it take from the conversation with customers and sort of scouting out what they're going to do, getting their data in order, and then bringing, you know, sort of agent force to bear. Is it a three, six-month process? Just trying to get a sense if you have an idea on that quite yet. Thanks.

Yeah, it's a great question, Kirk, and I appreciate it. It varies by customer, honestly. If you've had a very strong data protection strategy for many years, your ability to turn on data cloud, harmonize your data, and leverage it in our AI solutions is months. You know, weeks, even, uh, there are other customers who have data siloed across their business. Um, they built data lakes. It's, it's across different divisions that they want to bring together and data cloud. And that can take a bit longer, you know, six months even to, to bring that data together. Um, they all want to move faster, which is, uh, the great opportunity for us. They all recognize the need for harmonized data to make their AI and their agent force opportunity better, um, with their customers. And so. What we're seeing is tremendous demand for not only the technology, but the people to go harmonize the data, get it in a state that they can now leverage agent force to really deliver for their customers. So it really depends, honestly, is the answer.

Thanks, Kirk, and thanks, everyone, for joining the call today. We look forward to seeing everyone over the coming weeks and wish everyone a happy holiday season.