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.