Salesforce, Inc.

Good afternoon, everyone. My name is Layla and I will be your conference operator today. At this time, I would like to welcome you to the Salesforce third 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 prepared 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 third 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, Robin Washington, Chief Operating and Finance Officer. We also have Srini Telapurgata, 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, uncertainties, and assumptions, and other factors that could affect our financial results or outcomes is included in our SEC filings, included in our most recent report on Forms 10-K, 10-Q, and any other SEC filings. Except as required by law, we do not undertake any responsibility to update these forward-looking statements. As a reminder, our commentary today will include non-GAAP measures and reconciliations between our GAAP and non-GAAP results, and guidance can be found in our earnings materials and press release. And with that, let me hand the call over to Mark.

All right. Great job, Mike. And thanks, everyone, for joining us today. Well, as you can see, first of all, great seeing everyone at Dreamforce. We were so happy that you were all with us. And now you can see we've delivered strong results for the quarter across all of our key metrics. We're continuing to execute on the path to our $60 billion dream that we outlined in detail with all of you at Investor Day. And we delivered really strong bookings. Miguel is here. He's going to talk to you about that. And we've delivered incredible results with AgentForce. It's really exceeding our expectations. We're going to hit all the details, but I think that you can see 3.2 trillion tokens delivered for our customers. It's all exceeding our expectations. We're going to get into all of that detail as well. That's the core of our organic innovation. We're making these discipline strategic acquisitions like Informatica, also now online in the company. We're really excited about the harmonization, integration, federation. that Informatica plus Data360 plus MuleSoft is giving us, and that's going to strengthen our overall leadership in data and, of course, AI. And we're ensuring that we have the distribution capacity. That's extremely important for us because we are a direct seller in place to support long-term growth, and Miguel has made some fantastic investments over the last 12 months in all of our core segments, and we're going to talk about that as well. And finally, Robin is going to speak in more detail about the capital allocation strategy and the investments involved that we're making for fiscal year 27, which we're getting very excited about, and a very clear focus on our continued paths for, you know, I would say very sustainable, profitable, durable growth and innovation in the company. Now, you are all at Dreamforce. You saw that energy, the level of customer success. It exceeded my expectations. And you saw how we're bringing humans, data, AI, apps together to build the agentic enterprise. And we... Just couldn't be more excited about that and how customers are receiving the message. Every CEO I met at Dreamforce, and I mean, every CEO I speak to, just in the last couple days, I had some great meetings. And I'll tell you that everyone knows that they want to get to the next level in their business to bring AI in, become more productive, become more efficient, become elevated, as Matthew said in the opening video. But they all know they now they've got to become these agentic enterprises and i don't think for a lot of them two years three years ago maybe even a year ago they really understood that opportunity and they are now more motivated than ever to do it we're going to hear about that some story great stories From the court from the quarter and of course, you know, we've all read that crazy MIT Study where you know customers went off trying to build their own models and trying to build their own toolkits and this and that and you know DIY it and now they realize the real value from AI is delivering, you know number one the customer agents and we have So many examples but now I think about five hundred million dollars in agent force revenue talking about customer agents, but also And what's really exciting here at Salesforce, and some of you have seen it, but probably a lot of you haven't, is employee agents. And we've really delivered an incredible new framework, deeply integrated into our Slack product. Every Salesforce employee already uses it every day. I do, and it's the core of every demonstration we give to our customers to show how we have unleashed with Slack something new called Slack Bot, which is really the heart of our employee agent strategy. And you're going to see that. It's incredible. It is able to go not only through Slack and not only through the whole internet, but also through all of our customers' data that they have basically, you know, provisioned in a secure way through Salesforce as well and deliver a context. And I'll tell you in Now, before I do a customer visit or call or whatever it is, I'll just kind of sit right down. I was with a really good friend of mine just this weekend. I had lunch with him, and he's a top venture capitalist, and he had been a huge investor in Coinbase. And I'll tell you that we were just sitting there just talking about, hey, tell me about everything with your venture capital company. Tell me everything about it. this venture capitalist, and then also tell me everything about Coinbase and the company and our relationship. And then, bam, it's able to deliver to me an absolute and complete not only analysis, not only a summarization, not only all of the detail, but next steps, how to sell, what I should do exactly for the customer. And I love doing this to customers because they don't think it's possible. And then when they see it, they say, wow, this is what AI was meant to be. And I'm like, this is context. This is data. This is apps. This is the best of the large language models and delivering it all to you. Well, anyway, let's get into the quarter. Q3 revenue was up $10.26 billion. It's up 9% year over year, 8% constant currency. Our non-GAAP operating margin came in strong. at 35.5%. And CRPO is outstanding. You see already 29.4 billion, up 11%. Miguel is going to talk about, you know, this great quarter he had, the best quarter I think we've had actually in three years. And 11% in constant currency. And RPO is nearly 60 billion, growing 12% year-over-year. Kind of huge numbers. But very exciting, considering we've also rebuilt all the products as well and delivering this AI future for everyone. You know, this really is signaling to us that it's a strong pipeline of future revenue as customers ground their AI future and agent force. And the third quarter operating cash flow was a whopping $2.3 billion, up 17% year-over-year. Free cash flow was $2.2 billion, up 22% year-over-year, and we expect to finish the year with nearly $15 billion in operating cash flow. Pretty awesome, I think. I think it's more operating cash flow at $15 billion than even Walmart, so that's awesome. AgentForce and Data reached nearly $1.4 billion in ARR in the quarter, up 114% year-over-year, including AgentForce ARR, of about $540 million, 330% year-over-year, and... I think all of our account executives, you know, we've got about 15,000 of them, I don't know what the exact number is out there, are all selling this now. People really can understand it. We can demo it. We can show it. But I think you've all seen, like, what our customers are doing and i've you know the one i love and that i use because i'm a huge customer is william sonoma's version of agent force which they call olive and if you haven't been on the william support william sonoma's website and seen the uh sous chef that they call olive and used it i think the quality is what i'm most impressed with that It's really very, very good. You don't see hallucinations. You see really kind of the customer personality, the quality, the ability to deliver value. And they are saying it's about 60% of their chats. We've got a whole other level to go with them with voice, which is coming, which is very exciting. This is our fastest growing product ever. And every Salesforce app now, not just sales, service, marketing, commerce, all of them, Tableau, Slack, our new ITSM, supply chain products. They've all been rebuilt, and Srini is here. He's going to talk about what we've done to bring AgentForce into every product we have. And we transform AgentForce from being a product to a platform so that all of our apps... can reason, learn, take action, collaborate with users, but it's really about humans and apps and the AI and the data all working together. And that is what's so exciting, that every part of our platform is now so deeply integrated and because all the data is unified and every app shares the same metadata, they speak the same language, and you really get that feeling when you are using the Slack bot, and Trini will tell you about it, because all of a sudden Slack bot is able to, like, read across all of our data, but then talk directly to you and give you that elevated experience. So when an LLM is interacting with agent force, it's getting that strategic context from our data, you know, from the data on the internet as well, from, you know, the data that it's been trained in, and then how your knows how your business operates, it's really able to give you that. And that's because Salesforce is unique in that we have the data that makes business more valuable it's that customer data the service data the sales data the marketing data and then we're able to deliver it in a tremendously friendly way we've rebuilt all of our products to deliver this agentic enterprise really just getting going i think sharini will tell you if we were really brainstorming a few years ago when we first created our GPT series where we started to begin to integrate the large language models. I don't think we exactly knew that at this point we'd be able to deliver this incredible customer agent experience and this incredible employee agent experience. In fact, six of our top ten deals in the quarter are now driven by companies that just want to transform with agent force. And that's a big thought because a year ago, We were basically just starting to ship the product. You know, it was just coming out of beta. It was like a very strong, you know, version one. But it's more than a strong version one now. And I think everyone can go and look at that example with William Sonoma or with Shark Ninja or with, you know – I mean, there's so many great examples that I use every day. I know Miguel's got his remarkable pad in front of him. So, you know, I think that in just a year since we introduced AgentForce, we've closed over 18,500 AgentForce deals. 9,500 of them are paid transactions. It's up 50% quarter over quarter. All of our reps now kind of have the acuity. They've got the nomenclature. They're enabled. That was a huge lift for us to start to bring the whole company into this AI revolution and give them the tools and now these great customer examples. And it's happening around the world. I just got back from Japan. I saw it there. I was in the UK. I saw it there. I've seen it obviously throughout the whole United States. It's really a global phenomenon. So, agent force is now powered. Here's a few interesting things. Agent force is powered 1.2 billion large language model calls. That's interactions when agents invoke a model to understand context and decide the next best action across the apps. You've seen the omni-channel supervisor like built into the service cloud where all of a sudden, I'm a customer, I'm coming into the website, even like Salesforce, help.salesforce.com or any of our customers' websites, and I'm in there and I'm working, and then all of a sudden I've hit kind of the limit of what the LLM can do. I can escalate immediately, also write to a human, and that's where the humans and the agents and the AI and the data all have to work together. And our top 50 customers, including, and Miguel's got this story in his pocket, but, you know, Fallabella, Vivint, DirecTV, there's so many great stories. More than 200 million agent force LLM calls in Q3 alone on track to power another 2 billion over the next year. And those LLMs now are calling these agent force actions such as updating the opportunities, creating a case, handling service inquiry, and the number of average weekly actions has now risen about 140% Q over Q. We're really seeing, you know, the adoption and the usage, and that's what's exciting. And here's a number we really haven't focused on, I think, in an earnings script, and I don't even think we hit it last time exactly, but agent force has processed more than 3.2 trillion tokens. 3.2 trillion tokens to our LLM gateway so far. And we're going to start talking about that concept. We saw that in OpenAI's recent announcement that we were in their trillion token club. And of course, we use all of the large language models. They're all great. We love all of them. We love all of our children. But they're also all just commodities. And we can have the choice of choosing whatever one we want. whether it's OpenAI or Gemini or Anthropic or there's other open source ones. They're all very good at this point. So we can swap them in and out. The lowest cost one is the best one for us, making us basically the top user of these foundation models. And that point that we did 3.2 trillion tokens let Bilbo Baggins know that we've got you know, adoption and usage happening here with this large language model gateway. That was just a cube out to JRR token himself. But that's the end of the jokes for the call. In October alone, token usage was nearly 540 billion up 25% month over month. And I just don't think any other enterprise software company has stats quite like this. This isn't your clippy. This is not your kind of a good AI demo. This is real enterprise adoption of software. agentic AI and capability at scale globally. And those numbers are going to keep growing as customers put agent force to work across their business, but not every task or step in a workflow needs to call the LLM. We call that determinism. And determinism is really important because for those of us who grew up in software, we used to call it if-then statements. But now we call it determinism. But determinism is that, hey, if I need to do this, go to the LLM. But if I probably don't need to go to the LLM, just do that. So that is going to even reduce our costs further and not hit the LLM as much as we do. And that's why we built hybrid reasoning and agent script. And our AI teams are just crushing it on that. And we're giving customers the best of both worlds, combining LLM-driven reasoning and deterministic precision. We had strong performance across agent for service agent for sales and slack. And those three apps are just a powerful combination for just as its sales force is how we use those every single day. We live on them. It is really the hat trick for Salesforce with large customers to say, let us show you what we're doing in service. Let us show you what we're doing in sales. Let us show you what we're doing in Slack. And it's a wow experience right now. It's only going to get better. And, in fact, if we included the full contribution of agent force just in service – we used to call it service cloud. Now we call it agent for service. But you look at agent for service – we would show an additional point of growth in Q3. Now, Mike likes to carve off the agent thing revenue, he wants to have it in his own line, blah, blah, blah, it's a huge argument between me and Mike. And, you know, the reality is, look, you're not going to have agent for service or agent for sales without the AI. So, you know, it's just moving and slack. is now where it's coming all together, and that is this incredible conversational interface for every app, every agent, every workflow. I'm going to get to a really cool point in a second. And when we release this new Slack bot, you've got to see it. So you've all got friends who are Salesforce employees. Take them aside and have them show you Slack bot. And just, you know, do whatever query you want and say, hey, I'm talking to this customer. I'm talking to that. Tell me this. And you're going to see some incredible things, how it has the ability to search across Salesforce and build agents and create things and do this incredible work on your behalf. Now, I'll tell you, and I'll just tell you that for me, you know, Slackbot is like chatting with just one of our Ohana that knows everything about Salesforce. So it's pretty awesome. But nearly 90% now of all of the Forbes top 50 AI companies are using Salesforce. Let's just think about that for a second. 90% of all the Forbes top 50 AI companies, those are the anthropics and the open AIs and the blah, blah, blah companies. Okay. That is, or cognition, cursor, figure AI. Okay. They all average about four clouds each already. And 80% of them are using Slack to run their business. So if you're with those companies, hey, say, hey, show me how you're using Slack. They may not have Slack bot yet because we've only turned it on for, you know, a small number of customers who are about to hit the switch and everybody's going to see this. employee agent power. Most people have seen the customer agent power. Now they're going to see the employee agent power. And they're going to see how it's built on agent force, how it's built on the apps, and how it's built on the data. Now, with all these companies, we're really partnering with them so we can really leverage the best of what they're building, the frontier models, the agents, and even Srini's using the coding agents now. And look, you've heard me say this Over the last few years, and, you know, we kind of – Miguel is going to come to this point, but we all know the speed of innovation in the last three years has far outseated the speed of customer adoption. And customers have been racing to catch up to what we've been doing. But we do see that changing, and we saw that at Dreamforce, and I know all of you saw that also, that customers are really saying, yeah, I'm going to use this now. I'm going to do this. I'm going to put in my customer agents. I'm going to put my employee agents. I'm going to get my omni-channel supervisor. I'm going to harmonize my data. I'm going to federate my data. I'm going to upgrade my apps. And customers in production with agent force have jumped now 70% year quarter over quarter. So customers in production with Agent Forest dropped 70% quarter over quarter. That's the stats that we're looking for. Great companies like Uber, like ConAgra, like LY, like Williams-Sonoma, like all these great companies that we've been talking about. And the consumption flywheel is gaining traction. In the quarter, more than 50% of new agent-forced bookings as well as 50% of data 360 bookings came from existing customers expanding their investment, which was awesome and really showed adoption. And we are very focused on adoption more than ever before, especially in agent force. Data360 is the foundation for every agent force deployment, and it's accelerating. In Q3, Data360, the product formerly known as DataCloud, in Q3, Data360 ingested 32 trillion records. 32 trillion records. Up 119% year-over-year, and that includes $15 trillion through zero copy data integration, up 341% year over year. So Dentsu, Moody's, KPMG, Ferguson, Zoom, and dozens more invested in Data360 in the quarter. And I couldn't be more excited about completing our acquisition of Informatica. It's three months ahead of schedule, as we like it here at Salesforce. We like things ahead of schedule, and we like them under budget. And I'll tell you, Amit, I know all of you know Amit. His team are great. We're thrilled to have them. And, you know, when we were doing the due diligence on the company and we saw a lot of things in the labs that we're looking for to bring into the market, because, look, that data layer, and I haven't done the math exactly, but I think if you do some of the math, I think it's about a $10 billion business for us next year now. You know, when you look at Data360 plus MuleSoft plus Informatica, Mike has got his pencil out trying to figure out if I'm right, but I think I am. When you look at a $10 billion business, that's the first layer. That's data. So Informatica with Data360, MuleSoft, I mean, that is taking everything to this new level. And when you get into the world of harmonization, integration, and federation, and then you're trying to deliver to the AI the intelligence, the accuracy, the reliability to wipe out the hallucinations delivering the AI context. Now, we're seeing momentum across multiple sectors. We had incredible wins this quarter. Miguel is going to talk to them about CVS Health and Telecom Argentina and TD Bank and the IRS, somebody who's going to be getting involved. A big check from all of us. They're now on AgentForce. So your IRS agents are AgentForce agents. And Engie and so many more are becoming agentic enterprises. And Costco. We love Costco. Well, we love all of our retailer friends equally. They're all of our children. But we do love that Costco warehouse experience. It's a great expansion for us in the quarter. We're driving AI and digitization across everything they do for their members. We're doing some incredible things there with Google. And we worked with, you know, Javier, if you don't know Javier, probably one of the top, I don't know, five, one, two, I mean, best CIOs I've ever worked with in the whole industry. It was at Coke, was at P&G, was it Mondelez? Now, somehow Costco got him. I still don't know how Costco got Javier, but congratulations to Costco. So many times, having great results there. So, really excited to see these customers, especially these big customers. And, of course, we know General Motors. We love Mary. Amazing. You know, have one of her new Escalade IQs. She's tired of me telling her how much I love it. expanding Salesforce across the automotive cloud, Data360, MuleSoft, AgentForce Sales, AgentForce Service. But really cool, AgentForce tossed their other collaborative product. We won't tell you what it is, but you probably know the name. And they're now using Slack. So, Mary, we're thrilled that you're doing that. We love working with you. You're an incredible CEO, and you're showing the world how to turn an iconic company into an agentic enterprise. great products and great systems. And with agent force, Mary is speeding up case resolution for her call centers. Slack is now the company's primary communications hub, scaling to 96,000 employees in just nine months. Last month, We launched AgentForce IT Service or AgentForce ITSM, or you know what company that we're targeting. We never really went after this before. And then all of a sudden we realized we have the top service product in the world, and then we've got the top field service product in the world. And customers want this kind of trinity from us that includes IT service. And for whatever reason – Because we had certain people in our company, we'll go into the names, who didn't want to build it. And, you know, building that database that drives it, well, already we're selling product and really doing a phenomenal job there. You know, the former CEO of AICera, Mudu, is running this thing. And, you know, PenFed went live with ITSM, with Agents for IT Service. And we've got all kinds of... customers who've bought you know products from these competitors never deployed them or don't you know like these guys well guess what we are going to deliver some incredible uh capabilities and you know we think that well you look at penfed you know i think they went live with agents for i.t service as well as member service and collections they projecting a 30 reduction operational expenses and 2 million in savings with this product is killer So tell your friends who need ITSM, they can get it now from Salesforce. And we're seeing incredible momentum also. And here's another competitive situation. Life Sciences Cloud. And with Life Sciences Cloud, with new bookings tripling year over year, always been a strong vertical for us. But we have this partner who decided to become our competitor, Viva. And, you know, we're taking market share from Viva. They even had to talk about it in their earnings call that they lost all these deals to us, but they have not seen the losses yet that are coming, highlighted by a notable new win at Haley on this quarter. But just in the past few months, more than 120 industry leaders have selected Life Sciences Cloud. I was talking to the CEO of one of the top five life sciences companies just yesterday. He's a good friend of mine. you know going to life sciences cloud all led by the way with pfizer and albert who decided to be the number first one and so grateful to him and it's a great product it includes five of the top pharma cut five of the top 20 pharma companies already but you're going to see them all use life sciences cloud and most recently novartis is gone salesforce life sciences cloud and i don't know All of Takeda, all of them are going to go. And our public sector solutions ARR also grew 50% year-over-year in Q3. Really cool products. I was just in Washington, D.C. last week. I already mentioned the IRS. I was with the Treasury Secretary. I was with a number of the Cabinet Secretaries. All of them are rebuilding what they're doing, reautomating, and we want to help all of them. And I'm inspired to see some of the largest, most impactful government agencies running Their businesses and their critical workflows and their agents and their data on Salesforce, including the Air Force Army, Dan Driscoll. We're really proud to work with Dan and the Army and, you know, just told him he came in and delivered, you know, his recruiting goals nine months early using agent for sales and Department of Agriculture. Of course, we run the whole Veterans Affairs. We have 120 apps there now. And it used to be a huge problem with Veterans Affairs for the whole country, and veterans were not getting the service and support they needed, and we cleaned that up for them. And as I mentioned, also the IRS, but for everyone, we're in there doing our best, and we're delivering at very reasonable cost and on budget. We're really excited to be working with the government and helping them to become agentic enterprises. And we're really excited to work with the IRS. I just want to say the Office of the Chief Counsel has automated up to 98% of their manual activities, decreasing the time to fully open a tax court case from 10 days to 30 minutes. Another division saving an estimated 500,000 minutes a year retiring multiple legacy systems. And now agent force with IRS is going to be able to further optimize, automate, accelerate business process across the entire agency. And just want to congratulate Secretary Besson for his tremendous leadership and what he's done in transforming the IRS and also all of the Treasury. This week, we launched the UK's first AI police officer. We work with multiple police departments to roll out Bobby. Everybody loves Bobby. It's the agent force service agent that is the public's first point of contact for non-emergency calls, and Bobby autonomously provides instant responses on more than 90 topics, and police departments have already seen a 20% reduction in non-emergency demand, and they are just getting started, and this is what real enterprise adoption looks like. No other companies delivery agents of this scale, and when you look at what others in our space are doing, the difference is clear. We're delivering this capability to a global customer base, more than 150,000 Salesforce customers, and 1 million companies are now on Slack, now have the immediate opportunity to work side by side with agents and agent force, and the apps they're already using every day to become elevated. And that's why we're uniquely positioned for this new area. We have the strategy, the platform, the global scale. And I would say also, you know, our core values very much trust, customer success, equality, and sustainability remain very much intact. I also want to thank all of our incredible Ohana for everything they've done during the quarter to make this quarter so successful, make Dreamforce so successful, and all the world tours that are happening, and so many great customer stories. But I especially want to thank all of our Ohana who have done 10 million volunteer hours to support the communities where they live and work. We are so grateful to them. And now I'd like to throw it over to Robin.