Salesforce, Inc.

Good day, everyone. Welcome to Salesforce fourth quarter and full year fiscal 2025 results conference call. If you have a question today, please press star one on your telephone keypad. Also, this call is being recorded. 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.

Good afternoon, and thanks for joining us today on our fiscal 2025 fourth 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 finance officer, Brian Milam, president and chief operating officer. In addition, we also have Robin Washington, our board member and incoming chief operating and finance officer here with us today. 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 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, uncertainties, and assumptions, and other factors that could affect our financial results is included in our SEC filings, including our most recent report in 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.

Well, Hey, thanks so much, Mike. And, you know, I'm so excited about this call and, and, uh, reading the script with you, because this was just the best quarter we've ever had. And I think you're going to see, uh, that as we kind of unfold what's happening here. And I'm, uh, sitting here with, uh, with, uh, Amy and Brian and Mike and, uh, and, uh, Sebastian is also at the table and our new mofo, I mean, cofo. Robin Washington is here. So welcome, Robin. We're thrilled to have you here as well. And look, I'm really excited about this. I really think that we have something incredible to talk about. And obviously, this was the quarter of agent force. We're going to talk about that. But it was really just another incredible quarter. And really, it's been another incredible year of growth and innovation. I'm sure you all can see we've had a really strong performance across all of our key metrics on revenue, on margin, EPS, cash flow, CRPO. We've passed some amazing milestones, including more than $60 billion in RPO. And this has been the highest cash flow in our company history. You can see we exceeded our cash flow guidance. I think Amy did about $12.9 billion last quarter, but I think we delivered $13.1 billion-ish. And that was just incredible for the quarter. And now we're giving guidance. I think it's around $14.5 billion in guidance for next year on the cash flow guidance. So just awesome cash production. Few enterprise software companies have really ever delivered these kind of numbers. And I guess only a couple have ever delivered guidance in the $40 billion, which is where we are. And our two newest major products are Data Cloud and AgentForce AI product line now we can see is a multi-billion dollar product line. So we're excited to be in that kind of rarefied era of delivering a multi-billion dollar AI product line. We ended this year with 900 million in data cloud and AI, ARR. It grew 120% year over year. We've never seen products grow at these levels, especially AgentForce. data cloud and AI agent force, this is now going to be incredible coming into fiscal year 26. As we begin this year, and well, since our founding, I couldn't be more excited about what's ahead. This is a moment like we've just never seen before. And in just a few months, we've seen this addressable market go from hundreds of billions of dollars. And I'm sure you saw those arc slides that got released over the weekend, where she said that she thought this digital labor revolution, which is really like kind of what we're in here now. This digital labor revolution, this looks like it's anywhere from a few trillion to 12 trillion. I mean, I kind of agree with her. I think this is much, much bigger than software. I mean, for the last 25 years, we've been doing, you know, software to help our customers manage their data. That's very exciting. I think building software that kind of prints and deploys digital workers is more exciting. And you're going to hear some of these incredible stories in a second. Our formula now really for our customers is this idea that we have these incredible customer 360 apps. We have this incredible data cloud, you know, and this incredible agentic platform. These are the three layers, but it's that it is a deeply unified platform. It's a deeply unified platform. You know, it's just one piece of code. That's what makes it so unique in this market. And that is why customers are having So great success with it. It's not a collection of just jointed parts. You have to kind of self-assemble DIY it, you know, all kinds of, how do you get the security ready? And how do you do this? How do you do that? It's this idea that it's a deeply unified platform with one piece of code, all wrapped in a beautiful layer of trust. And that's what gives agent force this incredible accuracy that we're seeing. I'm going to talk about. Even what we've seen at Salesforce with that is amazing. And I'll tell you that our customers are just seeing some great success with it. And that's why just 90 days after it went live, we've already have 3,000 paying agent force customers who are experiencing unprecedented levels of productivity, efficiency, and cost and cost savings. No one else is delivering at this level of capability. And we're really seeing a level of integration, simplicity, intelligence, power. I mean, customers are really telling us that we're light years ahead of other providers and their feedback really speaks volumes. So excited to go on the web and see agent force delivering labor for companies like Equinox, OpenTable, Jacuzzi, and others. I mean, I go to their sites, I'm going to their, you know, to their X feeds, their you know, social media presence and you see agent force running and look, a lot of other vendors are talking about their agent capabilities, but few are able to show that they've got this really running at scale. And, uh, as you're about to hear from Brian, we're seeing some amazing results on Salesforce as customer zero for agent force. Our digital labor force is resolving tens of thousands of customer service inquiries, you know, freeing our human employees to focus on the most nuanced issues and customer relationships. We're seeing tremendous momentum and success stories emerge as we execute our vision to make every company, every single company, every customer of ours an agent force company. That is, we want every customer to be an agent force customer. We want every trailblazer to be an agent blazer. And I want to share some of these amazing stories with you today. But first, let's hit a couple of these incredible numbers. We closed out fiscal year 25 with 10 billion in revenue. That's amazing. Our first $10 billion quarter. I remember we had our first $10 billion a year. Kind of amazing. $10 billion quarter up 8% year over year, 9% constant currency. And I think we even lost, Amy, is that right? Like a couple hundred million dollars in foreign exchange for the year as well. In Q4, we closed more than 400 deals over a million. All of our top 10 wins included data and AI. Brian, 400 deals over a million dollars, pretty awesome. And we also continued phenomenal growth with Data Cloud this year, which is the heart agent force. Data Cloud is the fuel that powers agent force and our customers are investing in it. And Data Cloud surpassed 50 trillion, that's trillion with a T, records, doubling year over year as customers increase their consumption investment in our data platform. And that is just becoming a critical and essential part of our solution because as customers turn on AI and agent force, if they don't have the data, we've been talking about this, I guess, for almost two years. If you don't have the data, you're not going to get the AI that you so badly want. And nearly a quarter of those 50 trillion records, that was trillion with a T, were ingested from outside of Salesforce through our zero copy partner network, which is amazing. We'll see increased investments in software to build an agentic layer as AI continues to advance and handle a higher percentage of workloads. And we're taking advantage of the huge investments that these infrastructure companies, we just, you know, we'll work with, of course, we have, you know, two substrates, you know, live where we have Amazon and we have Alibaba. You know, both companies are making huge investments in infrastructure. And the third one, Google is making a huge infrastructure investment. We're really getting great prices, you know, from these companies. Our deployment, our ability to deploy at a really low cost is just awesome. And it's just driving down our cost for our customers. So that's so exciting. Look, for the full year, we delivered $37.9 billion in revenue. It's up 9% year over year. operating cash flow reaching $13.1 billion, up 28% year-over-year. It's really one of the best performances, I think, of any software company. And with our continued disciplined approach to margin expansion, our non-GAAP operating margin closed at 33%. That was 250 basis points for fiscal year, 25, I think it's 50 basis points higher than we even gave you guidance for a year ago. Is that right, Amy? Yep, and that's awesome but we also passed incredible milestones more than 60 billion in rpo that i don't think we could have expected so this is this milestone isn't just a number it's a clear signal that our customers are trusting us deploying us getting great value from us and continue to invest in our vision for digital labor i mean i think it's going to be that digital labor vision that revelation that We're able to provide digital labor at scale with this trinity of apps, data, and agents that is going to drive this fiscal year 26 success. We expect to deliver fiscal year 26 subscription and support revenue of 9% year-over-year in constant currency. We remain deeply, deeply committed to profitable growth and expect fiscal year 26 non-GAAP operating margin of 34%. we're going to deliver another 100 basis points of expansion. Following two years, we expanded more than 1,000 basis points. The pace of change, the focus on productivity, profitability, the speed of innovation, the trinity of apps, data, and agents, it's all coming together. As I mentioned, we're seeing customers deploy agent force across every industry. Let's talk about a couple of examples. We've been working... with Lennar, the nation's largest home builder. And most of you know, Lennar is really an incredible company. And they've been a customer of ours for about eight years. They came to Dreamforce. And when they came to Dreamforce, they obviously got their hands, like many of you did, on AgentForce, got super excited, went back to Miami, talked to their co-COs. You probably know Stuart Miller, John Jaffe, amazing COs. And um those co-ceos called me and said listen these guys have done a hackathon around agent force we've got five use cases we see incredible opportunities on our margin incredible opportunities in our revenue and do you have our back if we're going to deploy this and we said absolutely we've deployed it ourselves which is the best evidence that this is real and they are just incredible their vision as a home builder providing 24 7 support sales leads through all their digital channels. They're able to sell all kinds of new products. I think they're going to sell mortgages and insurance and all kinds of things to their customers. And, you know, the cool thing is they're using our sales product, our service product, marketing, MuleSoft, Slack, Tableau, they use everything. But they are able to leverage it all together by realizing that just by turning it on, they get this incredible agent force capability. All right, I want to tell you another story. not just about Lennar and transforming a home builder, but I don't know how many of you know about Pandora. You've been to a shopping center. You will see the Pandora store. You walk in, they have this gorgeous jewelry. They have these cool charm bracelets. They have amazing, amazing products. And if you know their CEO, Alex, he's absolutely phenomenal. I think he's based over in Amsterdam or he's in the Netherlands. I can't remember where it is, but one of the Northern European countries, incredible CEO. Time actually just, gave them an award as one of the most sustainable companies in the world. Great company. You know, they're in 100 countries. They employ 37,000 people worldwide. And Alex has this great vision to augment their employees with digital labor. And this idea that whether you're on their website or in their store or whatever it is, that they're going to be able to do so much more with agent force. They already use, first of all, they already use Commerce Cloud. So if you've been to Pandora... and bought their products. And if you haven't, by the way, it's completely worthwhile. It's great. And you can experience our Commerce Cloud, but it's deeply integrated with our Service Cloud, with Data Cloud. It's the one unified platform approach. And now they're just flipping the switch, turning agents on, and they're planning to deliver 30 to 60% of their service cases with AgentForce. That is awesome. I really love Alex's vision of what's possible. And then the last customer I really want to hit on, which I'm so excited about, is Pfizer. And, you know, Albert is an incredible CEO. They are doing unbelievable things. They've been a tremendous customer, but now they're really going all in on our life sciences cloud. We're seeing so many, you know, I was in the business council last week in Washington, D.C., met with hundreds of CEOs, and so many of the people CEOs of the life sciences industry are going with our life sciences cloud. It was incredible. And you can see why, because it's just a natural upgrade of what they're already doing with us. And then this idea that our life of sciences cloud becomes this highly differentiated capability from everything currently available in the market. And then allows these pharma med tech companies, so many to be able to streamline, not just their clinical operations, all their customer facing, even the ones who want to go to direct to consumer, even the ones who want to do clinical trials. And this idea that agents are going to make all of that so much better. And with agent for sales agents, for example, with Pfizer, you know, that's, they've got 20,000 customer facing employees and customer facing folks, you know, that is just a radical extension for them with agents. And I'll have to slot in one last one because I'll tell you, I'm sure a lot of you, like I have, have flown in Singapore Air. You know what is a great airline. The COGO is amazing. And he has a huge vision that also came out of Dreamforce, where they've already delivered probably the best service of any airline in the world. They want to deliver it through agents. So whether you're doing it with service or sales or marketing or commerce or all the different things that Singapore Air is doing with us, you're going to be able to do this uh right on singapore air all right well i know all of you want to see this in person talk to these customers yourself you know you can go to help.salesforce.com brian's going to talk about that when you hear the numbers we delivered in the quarter there you're not going to believe it and listen a lot of people say to me hey how are you different from these other agent companies number one go to those other vendors go to their sites are they running their agent technology You've all been on help.salesforce.com. You all know this incredible capability that we're delivering. You've seen it deployed by these other customers like Equinox and Remarkable and others. You've got your hands on it. Do you see the other scaled vendors delivering this capability or are they just using the word agent? I think you've got to beware of the false agent because the false agent is out there where people can use the word agent or they're trying to whitewash all the agent, the thing everywhere. But the reality is there is the real agents and there are the false agents. And we're very fortunate to have the real stuff going on here. So we've got a lot more groundbreaking AI innovation coming. I can't wait for you to see it at our Trailhead DX event next week. And that's going to be March 5th and 6th in San Francisco. Looking forward to seeing all of you there and showing you that. And I'll tell you while you're there, and I didn't hit it, You've got to see this new product we've just built, which is Tableau Next. I'm sure a lot of you know Tableau. You probably use it every day. When you see what we have built, which is the new Tableau built with agent force on the data cloud and how it's deeply integrated into our product line, it is going to blow your mind. It is incredible. You've got to make sure you get a demo of Tableau next. You won't believe it. You're going to see the new Slack. You're going to see the new sales cloud, service cloud, marketing cloud, commerce cloud, the platform, agent force, all the products. This new field service product, which is incredible. You might get a glimpse of the new ITSM product that's coming if you look hard. But the big thing that I'm excited about, okay, the big thing that I'm really excited about is Tableau next, because that's about to deploy to customers at scale. And I think people are going to be absolutely blown away. All right. Now, before I do that, I have to get out the Kleenex because I have to say goodbye to Brian and Amy, who, you know, it's kind of a moment in time here where Brian has been here for, I think, 25 years, 26 years. He's just wearing one of the many watches that I've given him to recognize his performance. And Amy is here as well. She's not wearing one of her watches, but she has them at home, probably in her jewelry case or safe or something. And, you know, Amy's, how long has it been, Amy? 12 years? 11 years with Amy. And, you know, we're going through a little bit of a transition of our management team between fiscal year 25 and 26. And we want to say goodbye and thank you. We want to say mahalo. And we want to say goodbye, which is a hooey ho. and uh thank you so much for everything and we're going to let them talk and also say their goodbyes but we're so grateful to everything that you've done for us every single day over the last 25 and 11 years and uh it's been great to have you part of our management team and you're welcome back anytime so if you get lonely out there on the golf course or i know amy's got some big plans that she's not ready to announce yet in the in the ngo world but i'll tell you that um You know, you guys get lonely or you're missing the thrill of the hunt, come back and see us because we're going to be ready for you to come back. Okay. All right, Brian.