Salesforce, Inc.

Good afternoon, everyone. My name is Leila and I will be your conference operator today. At this time, I would like to welcome you to the Salesforce second quarter fiscal 2026 conference call. This conference is being recorded and 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. At this time, I would like to turn the call over to 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 2026 second 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, and Robin Washington, Chief Operating and Finance Officer. We also have Srini Talapurgada, President and Chief Engineering and Customer Success Officer, and Miguel Milano, President and Chief Revenue Officer, joining us for the Q&A portion of the call. 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 or outcomes 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 or outcomes is included in our SEC filings, including our most recent report on Forms 10-K, 10-Q, and other SEC filings. Except as required by law, we do not undertake any responsibility to update these forward-looking statements. 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. And with that, let me hand the call to Mark.

All right. Hey, Mike, thank you so much. I'm really excited to get into the call. And as you saw, we really had a great quarter to close out the first half of the year with outstanding performance across all of our key metrics, including our revenue, our margin, our cash flow, our CRPO, and even our AI and data cloud numbers were all incredible. You know, we outperformed on Q2 revenue with $10.25 billion up. 10%, and year over year, and 9% in constant currency. Miguel's sales team drove incredible momentum. Net new bookings from deals over $1 million grew 26% year over year, and we closed deals with companies like Dell, Marriott, Eaton, U.S. Bank, Japan Post, Bank, Lululemon, and the U.S. Army. And non-GAAP operating margin came in strong at 34.3%, and we outperformed on CRPO with $29.4 billion. up 11% year over year, and the AI and data product line is up 120% year over year. We're on track to close out fiscal 26 as a record year, raising our guidance on the low end for revenue, raising on non-GAAP operating margin and cash flow, and we expect to finish with nearly $15 billion in operating cash flow. That's just incredible and a huge raise from the previous quarter. Make no mistake, these results aren't just financial milestones. It's the growth that we are seeing particularly with agent force and data cloud. And it's proof, and you're about to get into this now as I start to really give you our fundamental organizing principle for the company and what I believe the enterprise software industry is about to become because the agentic enterprise, the agentic enterprise, the real manifestation of what AI was meant to be, well, that agentic enterprise has arrived. In the three quarters since we launched agent force, We have now won more than 6,000 paid deals and more than 12,500 overall. And 40% of our agent force new bookings this quarter came from existing customers extending their investment with Salesforce. And it's demonstrating the value that they're getting and how the flywheel is really working. We've seen a 60% increase quarter over quarter in customers who've gone from pilot to production and they're expanding use cases and scaling consumption. And this is just the beginning of the most transformative time in our industry ever. I've never been more excited about anything in my entire career. We're about to get into it. I spent weeks on the road this summer meeting with CEOs, CIOs and frontline teams. And one thing is extremely clear to me. Every single one of our customers is becoming an agentic enterprise. It's a huge vision for the future. It's a huge vision for the future of business. And really, it's a huge vision for the future of Salesforce. But this isn't just an upgrade. This isn't simply just some automating some existing business process. These agentic enterprises, well, for Salesforce, it's certainly true. It's a complete transformation. And for our customers, the agentic enterprise is a complete reinvention in many cases of who they are and what their potential is. It's a shift from traditional hierarchies to reshaping the entire company, from busy work to orchestrating workflows, from siloed teams to seamless collaboration, from clicking and routing to natural conversations. And hours are shrinking to seconds. Employees and customers are being augmented. But ultimately, it's about this. It's about humans and agents working together with every decision grounded in trusted data. This is, as I said, what AI was meant to be. And I just like to talk about what that agentic enterprise means for us at a very high level, how we're going to define it, and then also like to talk about what some of our customers are doing and what we're doing as well. I mean, I think that across our portfolio, we are adding these native agentic capabilities into every single one of our products. In sales, every prospect is finally getting a callback. Agents qualify at scale. Humans close the deal. I mean, let me just get into that for just a minute. Now, our sales cloud for years has been an app that thousands, well, millions of salespeople use to manage their sales every single day. But now, riding alongside every salesperson is an agentic salesperson. And that agentic salesperson is calling every single person back. And how that relates to Salesforce, well, let me tell you that, well, maybe somewhere between 20 and 100 million people who have contacted Salesforce in the last 26 years, they haven't been called back. It's just because we didn't have enough people. But now, with our new agentic sales, everybody is getting called back. It's a huge breakthrough. And and something that every company is going to benefit from. And in service, we've been talking about that now for months. You can see our agents are handling millions of conversations. while humans are delivering the empathy and expertise. Well, it's a bigger story than that, where you know that we have delivered in the last nine months about a million and a half conversations just for our own company on our help.salesforce.com. And you also know that we continue to have thousands of humans who are also delivering their support answers. Well, guess what? The CSAT scores are about the same. In field service, agents orchestrate scheduling and logistics so technicians can focus on solutions. I saw it myself at my home. I have this incredible device from Eaton, one of our large customers using our field service product. And it actually connects my Airstream trailer to my house. And when the technician comes out to work on it, well, they're able to use the agentic capability to learn as much as possible about the product that I'm using and how to fix it and how to repair it while also managing the traditional system of record that's on the field service capability, managing all the field service and service operations through the field service capability. It's really amazing. Pretty awesome. And we've been showing now for a few months, starting at our Tableau conference, the new version of Tableau where agents surface insights and make recommendations instantly and where agents and humans are working together to make smarter, faster decisions. One really cool thing. when we look at our marketing product, and I'm sure you know we do about 11 trillion emails a year to our customers. Well, those are all one-way conversations, but now we're demonstrating to our customers and about to release our new email platform that provides every one-way conversation into a two-way conversation. And agents are going to turn these one-way emails into two-way conversations. And commerce is the same thing. Agents are giving every seller superpowers and shoppers a personal assistant. And if you've seen anyone from Salesforce recently, have them show you how we're using Slack as our interface to our own agentic enterprise where we have dozens of agents with people and apps and LLMs all in one conversational agentic workspace. It's pretty cool. And these agents are operating across apps, departments, silos, all running off of our data cloud, all running off of agent force. It's an incredible transformation of our product line, but really of our company, not just of our company, but of our customers too. This is a moment in business that we'll never forget where every business is becoming an agentic enterprise. If we look out into our customers, we're already starting to see some incredible examples. Let me tell you, Direct TV saved billing reps nearly 300 hours of inquiry handling with agent force and the employee AI agent executed 50,000 actions in a week. You know, I've been working with direct TV for more than 20 years at Salesforce. And I'll tell you, when I wrote that line for the script, it just, you know, kind of occurred to me, wow, I think only about a year ago, we hadn't even started using the word agent or agentic or agent force at Salesforce. And here we are Talking about one of our largest and most important customers receiving this incredible benefit. Engine, incredible company, projecting millions in annual savings by cutting call times. PenFed, who we talked about, many scripts that we've had already projecting millions in annual savings by using agents forcing its loan underwriting. And our good friends at Under Armour and Kevin Plank, well, he more than doubled his case deflection rate and boosted customer satisfaction by double digits. And they did it in under 60 days. Kind of an incredible thing to see the speed of these deployments in enterprise software. Now, a lot of our employees are excited about Reddit because they've reduced average resolution times from 8.9 minutes to 1.4 minutes. And Telepass, well, they've powered more than 275,000 agenda conversations over five months. And the way they got it in the script is, we can't believe the speed and growth of these conversations just in the last few weeks. It's a conversation at the management level that they've become one of our fastest growing agent force customers. So it's no wonder we're seeing so many companies build on their initial success. Our good friends in Copenhagen, Pandora, the amazing jewelry retailer, Alex, has an entire team scaled from one agent to three in a single quarter. And I'm so glad they're coming to Dreamforce to show everyone exactly what they're doing. And our friends at Indeed have more than doubled the number of actions taken by their customer-facing agents and added another agent in Slack to drive internal productivity. And finally, I have to mention, because it's kind of an amazing story, you know, that William Sonoma, and we've only been live for a few weeks, started with agent force powering customer support for just one of their brands. I think, you know, they have like quite a few amazing brands like Pottery Barn and West Elm and others. Well, now it's rolled out along eight of their brands and as well as agents for other use cases. including a sous chef agent that is helping customers choose cookware and guiding them step by step through recipes. They are finding all incredible new ways to use the AgentForce platform and they're doing it side by side across their entire Salesforce deployment. Now, these are all examples, including Salesforce, of an agentic enterprise in action, but it's really about how each company is transforming to become an agentic enterprise. And none of this is possible without Data Cloud. Data Cloud is the heart and soul of the success of these agents because it is providing the data and the metadata that you need and the context to get the accuracy. You know, we probably have the highest accurate agents in the industry and the way that we're achieving that is through our data cloud. It's this data cloud as well as Tableau and MuleSoft and soon Informatica all working together to really helping our customers to clean and harmonize their data and provide it in a way that can be consumed by our agent force platform to provide this level of accuracy. I think the data business is probably the most strategic and most important business for Salesforce going forward. And already it's a $7 billion business and Data Cloud is having a great year. It had 140% year-over-year growth in customers and 326% growth in rows accessed by zero copy integration. The usage numbers are really just off the charts. but over half of the Fortune 500 are already on Data Cloud, but it's really just the very, very beginning. Now, FedEx, and you're going to see them at Dreamforce, their chief operating officer, Richard Smith, is coming to be part of my keynote. Well, let me tell you that they've got unified data across all their platforms now with Data Cloud, and the numbers that they're telling us that they're saving, well, I'm not going to take away Richard's punchline from the Dreamforce keynote. It's like numbers I've never heard in terms of what the amount that can be saved by technology. And now if a business customer isn't actively shipping, our own marketing cloud campaign is automatically triggered And sales reps are alerted and it's all happening through our data cloud. And this idea that FedEx has seen a double digit increase in the percentage of customers who've signed the contract and proceeded to start shipping. It's dramatically surprised them what has been possible in such a short period of time. And honestly, it's also surprised us now. I want to mention two areas where relays are focused and where the opportunity remains absolutely enormous, and that is public sector, but also a new product category for us, which a lot of you know, ITSM or IT service. Now, let's talk just briefly about the government. Now, you already know our government is already our largest and most important customer. It's a multibillion-dollar customer for Salesforce customers. And we've been driving efficiency and performance and taxpayer savings for more than a decade. Everybody knows that we run the VA, the Veterans Affairs, and the U.S. COCARD, and so many great agencies. But, you know, we're starting to expand what we're doing even more and moving more into these DOD agencies as well. And this quarter, we finalized an incredible agreement, another one with the U.S. Army, a fast pass that enables Army teams to quickly access and deploy Salesforce. It was a huge win for us and already we're helping the Army operate more efficiently, streamlining how they identify and elevate leaders, simplifying congressional reporting, powering Amazon like marketplace for their tactical gear. I spoke with them yesterday and I just, of course, first wanted to thank them for their service. But second, I just wanted to say that it's incredible how they're looking at our technology to really transform their own operations. And now with agent force for public sector and FedRAMP high certification, we're able to sell more to the government than ever before, because we're bringing the power of the agentic enterprise directly to the government. The army is already planning to launch a digital front door for its human resource command, providing 24 seven powered service and support to all soldiers and personnel. and millions of veterans, and we have lots and lots of ideas of where we're going to be able to provide value for the U.S. Army. And in the 21st century, agents just aren't optional. We know that. They're mission critical. Well, there's another area where that's absolutely true, and that's in the world of ITSM and IT service. It's an application area that we just haven't gone to before. But I'm very excited that next month, and you're going to see this at Dreamforce as well, that we're launching our own agentic IT service platform. A lot of our existing customers have been asking for this. We're bringing a whole new level of capability. It's agent first and it's Slack first. That is right inside Slack. You're going to be using our agentic IT service capability. It's natively embedded where employees already work. with zero learning curve, and with agentic IT service, well, every request is becoming a conversation where agents work hand in hand with IT teams, proactively fixing their problems. It's gonna be incredible joke driver for the company, but it's just really another example of how every platform is gonna become agentic. And I think we're really excited that we're getting there first. And it's a very democratic platform. A lot of the ITSM products have only served the very highest end of the market with maybe 1,000 customers here or 1,000 customers there. But, you know, the thing about Slack is that it's used by about a million customers worldwide. And I think all of them are going to be able to benefit from this IT service platform. No one else is delivering this level of agenda capability and digital labor to scale. Now, we know how to do this because our own for his customer for this? Well, it's us. We are customer zero. And over the last six months as customer zero, we've been doing all of these critical things that I've mentioned. Yes. Yes, we've done the 1.4 million customer support conversations with the 77% resolution rate. Yes, we have the sales agent that's qualifying prospects and generating pipeline. And yes, over 26 years, we just let too many millions of prospects go untouched. Mea culpa, that was our fault. But in the last seven weeks, this sales agent that we've just built, well, it's had conversations, conversations. with tens of thousands of inbound leads, even setting up appointments with human SDRs and helping close deals. And we have it running in customers as well. It's been incredible what the opportunity is. We all know the agentic enterprise is here. We all know the agentic enterprise is the next wave of business. We all know that it's going to fundamentally reshape and rebuild and recast all of our companies. We know that what's going to happen is going to be something that we could never have expected, where humans and agents are going to be working side by side. And Look, Salesforce is going to lead the way. There's no question about that. We've built the software infrastructure for the agentic enterprise. We have our metadata platform unifying our apps, our data and agents into one powerful agentic operating system. We are rebuilding every single one of our products to be agentic. We're delivering almost every single one of those products at Dreamforce. And at Dreamforce, you're going to see all of these products You're going to see hundreds of customers that have deployed these products. And you're going to hear directly from leaders like Dell and FedEx and Accenture and Smartsheet and Williams-Sonoma and Pfizer and OpenAI and Anthropic and so many others about how they are becoming agentic enterprises and using our Salesforce agentic operating system. You know, it's a funny thing. I don't think in the last... I guess maybe if you go back a year ago, was I even talking about agentic or agent force or agents? And now if you talk about the agentic enterprise, it's another layer above that. So you're going to see that we are rapidly moving to what the next generation of technology is. And at Dreamforce, you're going to see incredible new capabilities, like I said, not just the ITSM product and All these new platforms. You're even going to see Age Enforced Version 4. Well, it's going to be amazing, and you're not going to want to miss it. It's going to be October 14th through 16th in San Francisco. We have an incredible show put together. We've even got a great concert for our children's hospital put together with Metallica and Benson Boone. We've got some amazing... surprises for our keynotes, but you're going to just see the future of technology. And let me just say this, at Salesforce, we've always believed that business is the greatest platform for change. You know, we believed that when it was in the world of mobile and social, and we believed that before, you know, there was AI, you know, that was true in the cloud. Well, You know, the agentic enterprise for us is just not about efficiency or growth. It's about making a positive difference in the world. It's one of our core values at Salesforce, from helping companies serve their customers, to driving sustainability, to supporting communities. And this transformation is grounded in our purpose and in our values. And you're going to see all of that at Dreamforce as well. Okay. Well, I'm really excited to have all of you on the call and answer your questions. And now over to Robin.