Salesforce, Inc.

Good afternoon, everyone. I am Shivani Ahuja, and welcome to our Q2 Earnings pre-show live from San Francisco. Now, you've probably heard the SaaSpocalypse story and the idea that AI kills enterprise software. I don't buy it. We don't buy it. What we're actually seeing is the opposite. Consumption is growing at an incredible pace, and customers are unlocking more value than ever before. Nathalie Scardino, Now, these are different reasoning engines, entirely different interfaces, but underneath all three is the same trusted foundation, Salesforce. So let's get into it. And first up, we've got Xero. Now, Xero helps small businesses around the world manage their finances. The company serves nearly 5 million subscribers, and that includes accountants and bookkeepers. Now, Xero has been a Salesforce customer since 2014, running on Service Cloud and now AgentForce. Joining me here in the studio live today, right now, this moment, is Xero CEO Sukinder Singh-Cassidy. Thank you so much, Sukinder, for joining us today. We are thrilled to have you on the show. Well, thank you for having me. Now, Sukinder, how critical is Salesforce to running Xero today? And, you know, not to lead the witness, but put simply, what would become harder or stop working without it?

Thank you so much for joining us. So it is critical infrastructure for us. And so what would happen if we stopped using it? Well, even before we get into AI, I think our GTM would grind to a halt and our customers would be pretty disconnected from their experience of Xero. But it is a very critical part of our tech strategy and stack, including in an AI forward world.

I love that. And so you've got sales, you've got service, you've got marketing. It's almost like the pipes in which all of this rich data is flowing through. And now agent force. So talk us through a bit about your experience with agent force. What agents have you built? How quickly did you move from idea from like this idea of an agent doing work to the agent actually doing real work?

Right. Well, I think at Xero, I think agent force has been, I'd say, foundational and instrumental to changing our customer experience in our support area in particular. And there are a couple of things I want to call out because I think they were things that were never before possible at Xero. So Xero was built entirely as a digital first customer support experience. So believe it or not, we've never had call centers. Wow. became the critical opportunity. And about nine months ago, maybe 10 months ago, we started talking about what if we could give 100% of our customers real-time support. And I think that the first fear was like, well, if we had an agent, and internally we codenamed this Lucy, and we offered it to 100% of customers, and we were willing to route people to an agent if the to a live agent, if the AI agent could not answer their questions, would we see explosion in staffing costs and volume and even the ability to talk to somebody? Would that blow our gross margins? And instead, what happened, of course, is we set ourselves a goal and agent force was the enabler. We built a custom workflow and a custom journey for our customers on the chatbot. We now just call it our customer service agent. We don't call it Lucy anymore. And I challenged the team when they had rolled out to 25% and we're seeing good results. I said, take it to 100. And their fear was, well, what if CSAT's not good enough, what have you? And I said, look, this is an experience we've never had before. For our customers, it is something that hasn't existed and could only exist in an AI world. and so we rolled it out to 100% of our customers just a couple of months ago. We're already seeing, of course, many, many questions answered instantaneously. I think it's a 62% deflection rate. We've had over 200,000 interactions, you know, tens of thousands of interactions going on in any given month. Thank you for joining us.

And this whole idea, again, CSAT would have been zero because it didn't exist before. Exactly. So how do you measure something that hasn't existed? Incremental value. Yes. And it sounds like this internally named Agent Lucy is not just stopping at service because now you're starting to build upon... Thank you for joining us.

and so that has been one of the big agent force implementations. There's one more that is worth highlighting, which is our ability to really nurture leads and procure more leads like any business. You know, lead gen is another great opportunity. And here we've used agent force to build an AISDR. Srinivas Tallapragada and the use of our AISDR. Of course, we are booking more leads than would have been possible previously. And of course, we're avoiding the staffing costs of trying to do this manually at scale. So another really exciting implementation.

I love these use cases because they're examples of like something you didn't have before. Like you didn't necessarily have folks that could call back all these leads to now you're seeing outcomes. You didn't have enough folks to answer all the calls. Well, I think you're hitting the...

Thank you for joining us.

Now, Xero spent more than a decade building its customer data and workflows on Salesforce. This doesn't happen overnight. What has that foundation made possible as you've moved faster with AI? Well, you've hit the critical word, right?

Data. At the end of the day, Salesforce is, of course, a system of record for us. Thank you so much for joining us. and new journeys in much the same way we do for our customers. We're their critical infrastructure and we built agenda capabilities on top. So I don't know. I think it's hard to have a powerful, you know, ongoing increasing reasoning without, you know, access to great data.

We always say trust is our number one value and it is for a reason so that we can extend that trust to you. Sikandar, I really want to thank you for joining us today. We are so proud of what we've built together and we are so excited to see what's next for Xero. Thank you. Thank you. Srinivas Tallapragada Expanding from roughly 600 to more than 1,500 employees in just six months. Huh, that's interesting. Joining us remotely is David Eckstein, CFO of Legora. Welcome, David. It is such a pleasure to have you here today. Thank you for joining us.

Thanks for having me, Shabani. We're very excited.

Now, David, Legora was built in the AI era with no legacy systems, no bad habits, nothing to unlearn. Like, that's pretty special. As a result, what do your employees do differently?

Great question. So I have lived in the SaaS world now for over 15 years, and I can tell you the first seven months that I've been at Legora have been truly transformational. The clearest tell is how we're organized. We don't have one central organization that you file tickets to. We have a go-to-markets operations team, we have a marketing operations team, we have a product operations team, and each one owns building their first AI workflows for its own function. It seems intuitive, but it's harder to do in practice. The people closest to the work are the ones that build the systems for the work. So let me give you a quick example. A rep at Legora, they don't write their own outbound. They don't even type up their own call notes. That's all automated. What they do is they walk into a partner meeting at a law firm or a Fortune 500 company, and they already know the practice mix. They know the deal history. They know who's in the room because the research was done before they even sat down. This limits the number of ad hoc requests. It also enables them to become more self-service. and we bring this back to the hiring phase. Every single contributor to our organization, they need to demonstrate that they can build their own agents, not do you use ChatGPT. We are a real show me, don't tell me organization.

This is incredible what you've been able to do. And so your employees, they're using Claude and ChatGPT to be these builders every single day. So where does Salesforce fit into that environment and why is it more important now than ever?

It is the critical system of record. So we moved to Salesforce consciously because at our scale, we needed that enterprise layer. We needed permission. We needed audit trails. We needed governance. And we've been through several generations of frontier models since we've made that move. And we'll go through several more. The AI world is rapidly changing but some things are constant. What can't change every four months is that system of record. Who do we sell to? On what terms? Who should have access to what? If that layer moves, everything sitting on top of it stops being trustworthy. So when I think about Claude and ChachiBT, that's about how people work. Salesforce is what they leverage to get that work done. I'd actually push back on any of the framing that says that that AI layer will eventually replace the system of record. To me, it makes it more valuable because the agent is only as good as the context that you give it. And that context has to come from an authoritative layer. So Legorah, is the fastest software company with a sales force to go from 1 to 100 million ARR. We did it in less than 18 months. And we cannot afford to change our CRM again.

No, and David, you're talking about some incredible concepts. You've grown from 600 to over 1,500 employees in six months, like in addition to your ARR. Everyone talks about AI replacing jobs. Like this is another angle and another dimension. Your proof point that it doesn't. So what are all of these new people actually doing?

Yeah. So to rewind the clock, January 1st, we have 220 employees in the organization. A few months later, we had 600. Today, we have 900 Ligurians. We will finish the year at nearly 1,500 Ligurians. So we're going to go from 220 to 1,500 in 12 months. What are they doing? It can be boiled down to three main things. So first, we are investing aggressively in our go-to-market organization, which benefits Salesforce. With over a 70% win rate at pilot, we need to have our reps be first to those accounts because we can close one of those accounts three out of four times. We're in over 50 markets. and laws jurisdictional is very relationship driven. It's very hard to sell to a customer or prospect in Tokyo or Toronto from a seat in New York. We need real people across our 17 global offices. Second, we are an AI company that sells software. and a lot of the change that we're driving, yes, it's software, but it's also change management. So as a result, we actually have more lawyers inside of the organization than software engineers. We call them legal engineers. Their job is not to do legal work. It's to redesign how a firm's work gets done, given what technology can now do for that organization. That's a role that didn't exist three years ago. And now we're hiring hundreds of legal engineers this year alone. And then finally, and this one is near and dear to my heart, the third bucket refers to the people that are required to scale an organization to those 50 markets. Finance, security, compliance, people, operations. My own function is a really good example of a job AI created, not destroyed. Overall, Legora sees AI as a capacity expander. In contrast to what you might think, our clients are actually adding more lawyers Thank you for watching.

and many more. Thank you for joining us.

I'm thinking about how the surface area is changing. So when I look at Legora and Salesforce, everyone is logged into Salesforce. But if you're thinking about are Legorians logging into Salesforce in the traditional interface, the answer, it's changing every single day and it's split by role. Thank you for joining us. Updates go into Salesforce via natural language now instead of typing. Or pipeline reviews are coming directly from the system rather than building slides from scratch. To me, that's wasted mental calories. So AI is handling the busy work. Great. That's AI's job. But the human layer, that's adding the judgment. That's the sales strategy on top. And that is the future of Salesforce and Legora.

Let's go. Thanks for having me. Let's go. Now folks, if you're catching this midstream, we're talking live with customers now, and the full earnings report follows at 2 p.m. Pacific. Now, for our final guest, we've got Replit. Now, Replit lets anyone build software simply by describing what they want. Can I try this on my son? No, I can't. It doesn't work that way. There's no coding required. The company is scaling fast with an ambitious goal of reaching a billion dollars in ARR. Again, a common theme that I'm hearing from the last conversation in this one. Now, ARR, for the folks that are on the call, that means annual recurring revenue. and they're aiming to do this by the end of this year. Joining us is Replit's Chief Revenue Officer, Ghazi Masood. Ghazi, welcome. It is wonderful to have you here.

Hey, good to see you. How are you?

Great, great, great. Nice to see you too. Okay, so Replitz growth has been a little bit wild. Your enterprise adoption took off so fast that your old go-to-market systems couldn't keep pace. That speed, it broke a few things. What broke first and why was Salesforce the fix?

Yeah, yeah, it wasn't really what broke first. It was really the scale element, right? So when I got here and knowing how fast we had to go scale and build our GTM teams, it was just a common sense type conversation. In order to kind of scale at the pace that we wanted to actually scale at, we needed a hard, robust system. So the question was, yeah, could we have built it ourselves? Sure, we could have. Is that the best use of our time or energy to do it? Probably not.

Yeah.

And, you know, I've been a go-to-market leader for many, many years at different companies out there, and I'm a big fan of Salesforce. And the idea of getting a trusted, proven system of record into our ecosystem was the right, easy decision for us. So that's what we did. And, you know, not only did it come on board early, it's really the foundation that's going to stay with us as we continue scaling to the levels we're scaling at over the next few years.

I love to hear that. And I love that you've actually called out that you had that contemplation, or maybe not really, to say, should we build it ourselves? I hear this day in, day out from a lot of folks to say, build it myself. Like, I've got a core business. I've got a core business of doing something. I should probably be focusing my efforts in that core business. And let alone, like, when you build it out, it's day two. What's the day two implications of building something out, the maintenance of it? So thanks for calling that out. Now, you grew Replit from 75... to 300 agent-force seats. So 75 to 300 agent-force seats speed while you also increase your Slack consumption. What gave you that confidence that you could expand that quickly?

Yes, a couple of points. So one, internally, if you look at our global employee base, we're all Slack users. So in addition to growing our GTM team, we're growing as a company internationally, globally, around the world. So we just needed more Slack licenses to help accommodate just our broad employee growth, which is great. We're also starting on the whole Slack code partnership with you all in early stages with that. So the team is pretty excited about that and what's to come with that. So the Slack usage and growth was just common sense, just to scale with our employee base. We live in Slack every single day. Then on the Agent 4 side of the house, I had to go build a sales organization north of 200 people by the end of this year. and looking at global expansion into regions like South America, Europe, Middle East, Asia Pacific. So we needed to go out and really expand our footprint of users on Salesforce. And by the way, it's not just the salespeople, right? We also have a BDR function that does both inbound and outbound. So while we use like our classic outbound dialing capabilities and tools, a lot of our systems of record all kind of pull off of Salesforce. So it's extremely important for us to kind of make sure we have the right capacity of licenses for the folks that we're bringing on board into the teams.

That's great. And you're able to adjust and flex as needed with as your needs are coming along. Now, you're also running Salesforce headlessly. And we talked again with our earlier guest, David, on this notion of headless. You've got your own pipeline dashboard that you've built on Salesforce data, and it's feeding directly into Slack. Now, what does that approach make possible for your teams?

Yeah, so the philosophy is we have no shortage of replica apps that we're building on top of Salesforce. And they're everything from, like, we have our own CPQ, which is our order from generator, which basically pulls out of Salesforce. We have our own revenue dashboard that we actually run our business off of. We have our own forecasting application. that our reps actually forecast their deals off of Salesforce. We also have our customer health dashboard that we actually call, which is like a gainsight equivalent, right? That we actually go out and build on top of that. So we have no shortage of it. And our philosophy is we, while Salesforce is important as our system of record, and that's where all the data harnesses, we want to go out and build the UI layer Thank you for joining us. and they're basically tasked with all of the tooling that we want to go do that pulls off of Salesforce. So while Salesforce is in the background, the idea is no one's really touching it. It's kind of, you know, they're hosting the data, integrating with their data warehouse, and then everything on top of that is a Replit application.

So it's, again, a common theme that I'm seeing come through in all of these conversations is Salesforce, use it as you wish. It's composable parts. We work well in the ecosystem with other technologies that you have or coding tools. And the other thing that you just talked about is a new role. It sounds like AI engineers, this idea that you've got new types of roles coming up at your organization. Maybe talk a bit about that.

Yeah, absolutely. I mean, you need somebody who is really good at dogfooding, who is really good at, you know, having the build versus buy type, common sense type conversation, and really coming up with a catalog list of libraries, right? You know, the crazy thing is, like, everybody internally at Repl.it dogfoods, and what that creates sometimes is duplicative applications and stuff that is happening out there. So putting that into a catalog and making sure that we actually have a source of truth of all of the value added applications and what we can automate and what actually makes sense is like extremely important to us. So that's really what this role allows us to go out and do. And these people that we're bringing on board, I mean, they're just passionate about building with AI and tooling like this. So this is kind of what they live and breathe every single day. and in the early innings, but we've seen just tremendous productivity in a very, very short amount of time.

And is that building that they're doing, is it happening? Like, again, I'm having these conversations with customers where this was traditionally just functions for technology roles and technology departments, whereas now this notion of citizen development where we want everyone to be a builder. Is that a bit of what's happening within your organization? Absolutely.

I mean, so everybody, irrespective of their role, is builders, right? So if you look at myself and my team, we're all non-developers and non-engineers. We're all builders. You look at people in the finance organization, they're builders. You'll get people in our people in HR function, they're builders. So everybody is building it because the tools and capability of applications like Replicate and others really allow people with like zero coding experience and knowledge to go out and bring their ideas to life in a very, very short amount of time.

And being able to use natural language to really just be able to describe very much so in line with your organization.

Yeah.

So what's next? What's next for you?

Well, next is to get to a billion dollars. That's a big priority. A lot of hiring to go do. We're opening up some big international markets. You're going to see us make a big presence out in Europe during Liberty Week. That's been out on social. So if you're out in London, come see us. We're going to be making a big splash in London. And then after that is Japan and then Latin America. So we have a lot of growth going. to go out and do a lot of hiring and big aspirations and keep an eye out on our launches because we ship at just amazing velocity and speed and you're going to continue seeing some amazing announcements from us as we close out the year.

I am looking forward to following you for many reasons. One is just all of the incredible development that you're doing. I think it's very applicable even to what we are doing. But I hope you're okay with time zones with all of that jumping back and forth.

I am. Yeah, jet lag to me, unfortunately, does not bother me these days. So we'll see how it goes.

You just suggest. Well, Ghazi, I want to thank you for taking the time to join us today. We really, really appreciate that. And good luck with your expansion. It's very exciting.

Thanks for having me on.

Thank you.

All right.

All right, folks, that is Replit moving super fast, AI native, chasing, you heard it, a billion dollars in ARR by the end of this year. We love to see it. The sky is the limit. There you have it, folks. Zero, Logora, Replit, three extremely different companies, three extremely different ways of approaching AI. But here is the through line. None of them are throwing out their enterprise software. No. In fact, they're using it more, building on it. They're unlocking value where they've never had it before. So much for the SaaSpocalypse. That concludes our pre-show. Stay with us, though. The full earnings broadcast, it starts now.

So what makes a company truly agentic? Agents operating inside your workflows. Not an assistant, no, a colleague. A true partner that knows your business. Agents that reason, that orchestrate, that determine the next best action across your entire business. An agent that actually gives you agency.

We're going from the dumb software era to the smart software era in real time.

Your AI business is actually going to be doing a billion dollars in sales.

Oh, it's over that already. Jim, agent force of data 360 growth is just incredible.

When we're working with Salesforce, it feels like we're right at the front of the pack.

None of this stuff works if you don't have context. When your data is connected, now you have a foundation. Data is everything for an agentic enterprise. This is where your intelligence is multiplied. Agents that reason with the full weight of the business behind them. Every function, every industry.

The U.S. government is our largest customer.

And this is where it gets really interesting.

Today, we are going to show you Salesforce Headless 360. This is the powerful moment. Headless 360 is a huge opportunity for us. The entire Salesforce platform is now available to any agent. We can actually pull data into our own components as we see fit.

We meet the customers where they're at to customize your experience and your interface.

And that changes everything because now context is connected. When you think big, you need to keep it simple.

Slack is the point of entry, the dashboard for the worker of tomorrow.

Today, I'm really excited to tell you about the launch of Slack Code with purpose-built spaces for teams and AI agents to build together directly in Slack.

It's the new front door to the agentic enterprise.

with Anthropic. Yesterday we made game-changing announcement. We launched Claude Tag, an agent that sits in a channel as if he were another teammate. This is transformational.

What's really exciting is now we're taking our partnership to the next level. The number one AI meets the number one CRM with Claudeforce.

Now you can just ask, which deal needs my attention? Because Claude is connected to Salesforce, it doesn't have to guess.

Salesforce was the one company that had all the tools in the toolbox.

Humans and agents in the same feed where all of your data comes together, coordinating in real time. Sales, service, marketing, commerce. Every signal, every customer, every conversation, unified, governed, and trusted.

The speed and growth of a company of this size and software has never happened before. It's incredible.

At this time, I would like to welcome you to the Salesforce Second Quarter Fiscal 2027 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'll be a question and answer session. At this time, I would like to turn the call over to Mark Murphy, Executive Vice President of Global Investor Relations. Sir, you may begin.

Good afternoon, and thanks for joining us today on the Fiscal 2027 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 Marc Benioff, Chair, CEO, and co-founder in Robin Washington, Chief Operating and Financial Officer. We also have Patrick Stokes, President, Applications and Marketing, and Miguel Milano, President and Chief Operating 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, including 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. Reconciliations between our GAAP and non-GAAP results and guidance can be found in our earnings materials and press release. Before turning to our prepared remarks, Marc and Dario just announced CloudForce a few minutes ago live on CNBC. Let's roll the clip.

This is really the best of both worlds. This is the number one AI in the world, Anthropic, and the number one CRM, Salesforce, coming together for the first time in an incredibly powerful way to build a new product called CloudForce. It's really a first in the industry, Jim. We've never seen anything like it. It's completely exciting. I think that this is the way all enterprise systems are going to run in the future.

We've found that this combination product that we've built together is the most useful thing in accelerating it. You know, within Anthropic, for a long time, we've been accelerating the research teams within Claude. But this is the first time that we've really been able to Thank you for watching. Claude Code, of Cowork, of other tools. We've put products like Claude Tag in Slack already, which is a part of Salesforce. And now this combination is a way to gain something that's, you know, it's one plus one equals three, something that's bigger than the sum of its parts. My chief commercial officer was just demoing this for me with some of the internal stuff we do within Anthropic, just half an hour ago, where he asked... What are the biggest accounts that Anthropic is trying to close now? Give me a list of the biggest accounts. Talk me through the risks of each one. All the data, all the information comes from being managed in Salesforce. But the conversation, the interaction, that comes through Claude. And so you can see how these two things can be more than the sum of their parts.

Thank you for joining us. The agents themselves and build complete applications, a total user interface to let you get all the value out of Salesforce that's been trapped. So customers have put hundreds of billions of dollars into Salesforce. You know, there is a huge amount of value that can be unleashed through this combination.

And with that, let me hand the call to Mark.

Thanks so much. I'm really excited to have the call. It was great to be on CNBC with Dario announcing Clawed Force. We're going to get into that in more details as well. Before I get into all of that, I really want to start here at the beginning and talk about the saspocalypse. A1E and A4X bookings more than doubled quarter-over-quarter. and contract-linked terms improved across all segments and new business and renewals. And agent-agentic use, well, use of the platform, it surged 6X, six-fold, via model context protocol calls and CLA calls. Apps are not dying. In fact, they're growing. And nine of the 10 AI companies, like you just heard from Anthropic that standardized on Salesforce, use Salesforce and Slack. Their spend is up 435% year-over-year. Frontier models depend on CRM. They make sure that it works, that it all comes together, they not replace them. Let me start from the beginning of my script and actually read my prepared remarks for you so you can really understand our vision for the future of where Salesforce is now, where we're going, and we cannot wait to get all of you to Dreamforce because we have some incredible things to show you. Look, we're here in Salesforce Tower in San Francisco. I want to welcome all of you, and I'm thrilled to share the tremendous progress we've made and the momentum we're seeing across the business. As everyone can see, we just had one of the best quarters ever, and we outperformed on all of our key metrics. And as I just went through in all these key metrics and these key areas, this nonsense of this SaaSpocalypse, I think it's time for it to stop. That's why I'm so excited about Cloudforce as well. It really shows how we're bringing together the world's number one AI and the number one CRM. It's really the best of both worlds. We're combining Claude's extraordinary intelligence and reasoning with Salesforce's trusted data and applications and workflows and business rules and governance. And while Claude might have been, for example, for developers, now it's also for knowledge workers. and when you do that, you get something the world has never seen. This is a dynamic, deeply personalized interface that thinks, reasons and acts. It's a truly game-changing experience for our customers and I'm gonna get into the highlights from the quarter but before I do, I wanna just tell you one quick story. I'm going to get into more details on this. I just spent two months in Europe, and I had an exhaustive schedule. I won't go through all the detail, but I've never met with more customers in my life. I was with one of our very largest, probably our largest customer in Switzerland, and I was sitting there with them. We went through, and they spent maybe, I don't know, they spent more than a billion dollars for sure with Salesforce. They spend about $100 million a year with us. And I'm talking with them, and it's a great meeting. It's three hours. And then at the end, we're like, no, I want to show you this thing. We haven't shown it to anybody yet, and we'll show them CloudForce because the head of all of our operating units have been using CloudForce to run their businesses inside Salesforce this quarter. It's one of the reasons why we're getting such great performance. And all of a sudden, literally, I could see Thank you for watching. We had record revenue in EPS, strong margin performance. CRPO accelerated. It was up about 14%. Look, we generated $1.1 billion in free cash flow. That was up 81% year over year. I'm going to come back to that in just one second. And our AI business, just incredible momentum. AgentForce ARR, it hit $1.5 billion. Our ARR for AI and data is about to cross $4 billion. It really helps, I guess, that we have 15,000 pure account executives. And the number of accounts with agents in production grew 70% over last quarter. We had great wins with Deutsche Calicom. I met with them when I was in Europe. FIFA, I met with them yesterday. NTT Data, I met with them, Cisco, all expanding their AI investment with us. Great companies, by the way, great visions for the world, and really exciting executives leading their companies who have tremendous vision for what they're going to do with their company using this new technology. And we also completed a multi-billion dollar agreement contract expansion with the U.S. Army. The Army Human Resource Command expects to drive up to $55 million Agent Force Conversations every single month. Amazing. The Secretary of the Army took me aside and said he finished recruiting four months early because he was able to use not only the power of all of his human agents, but AI agents as well. That was the Army being all they could be. And I'll tell you, we're expanding into markets and seeing an incredible success. Thank you very much. Not just marketing, not just commerce, not just analytics, but also IT service and other critical functionality. All of that can be revealed and now rendered through the AgentForce user interface. The more that's in the platform, the more CloudForce is going to be able to deliver for it. AgentForce Life Sciences has more than 140 customers, including all top five pharmaceutical companies, and AgentForce Ops is helping companies like Kellogg's and Dell turn manual back-office work and supply chains into agentic workflows. Thank you for watching. Revising for AI because it gives them the ability to actually look into something and do something with an area that really has not moved forward for in decades. With this strong performance and momentum and the strategic acquisitions, especially Contentful and FIN, we're expecting to close in the coming weeks, and we're raising our fiscal year 27 revenue guidance by about $300 million in constant currency. Now, what's driving all this? Well, it's a fundamental shift in the software industry. AI is unlocking value, as I said, across every part of our platform. AI is able to look into the platform and say, hey, I can see this application construct. I can see this user model. I can see the sharing model. I can put all of this together and deliver value in a totally new way. I've never seen a moment like this in my life. But for our customers, the question isn't whether AI is transformative. It's actually how they get there. And I want to talk to customers every single day. That's why I was in Europe. Most of them have not started their AI transformations yet. If you talk to most CEOs, they may say they have a project or they have a failed experiment or they were told to build a model but it didn't work out for them. That is not AI transformation. We're going to see AI transformation today. and you're really gonna see AI transformation when you start using Cloudforce. And the reason why I feel so strongly about that is I've seen it here at Salesforce. For our operating unit leaders, when we gave them Cloudforce, they came back to us and said, I built this app, I did that, I did this other thing. That was so exciting. They built their businesses on not just a few core systems. They're not going to just rip out how their company just runs to get to AI. They want intelligence delivered inside the software they're already using to run their business. And that's what Salesforce, that's what Cloudforce is going to do. So I show them Cloudforce. I show them reasoning across their Salesforce data and workflows. I can show it right inside Cowork. I also show it right inside Slack. One click to deploy, and their path to AI transformation just opens up in front of them. It's pretty incredible. It's a great experience as a software executive to see the customer's reaction. And this is what we're building with our new enterprise harness. So this new enterprise harness, AI Force, you're going to hear a lot about this at Dreamforce. Thank you for watching. and many more. Agents and Interface, when it's turned on together, that is when you start to see the true enterprise transformation. And I'm confident that when you come to Dreamforce for your own company, since so many of them are already on Salesforce, you're going to see how you are going to be able to transform as well. Now, let me show you what this looks like for Athena Health. Every time someone needed a case summary or opportunity insight, they had to ask IT to run a report. So they used Data360 to bring together all the product usage and account data from across their systems to create a single source of truth. Then with AI Force, this new user interface harness that sits on top of our core systems, they've connected all of it to their AI, complete with the context and the permissions, Thank you for joining us. Thank you for watching. Thank you for watching. But our system, our system, those four layers that we talked about with data and apps and semantics and agents, those are deterministic systems. But when you put those two things together, that's a level of value we've never seen before. We've been told our growth would slow, that net new AOV growth would not continue to grow. And yet it's the strongest it's ever been in four years and significantly outpacing AOV growth. And by the way, did you know that Salesforce – Salesforce has higher free cash flow, higher free cash flow than Costco, Coca-Cola, Home Depot, Ford, Disney, Pepsi. Oh, we also have higher revenue growth rates than Costco, Coca-Cola, Home Depot, Ford, Disney, Pepsi. By the way, all of them are great Salesforce customers too. I love all those companies and all those CEOs, but we have higher free cash flow and higher growth rates than them. I just think it's important for speaking directly to the analysts who cover us Thank you for watching. So we're told customers would pay less for our products, but what Miguel was about to tell you is they're upgrading. And A1E and A4X bookings? Thank you for watching. Thank you very much. Thank you for joining us. They're building custom apps that connect directly to Salesforce data and workflows. It all works together. By the way, Replit is a great tool on Salesforce. As you can see, AI isn't replacing Salesforce. It's unlocking more value across all four layers of our platform. Again, across the data layer, the apps layer, and the semantic layer. Thank you for watching. Well, all that data inside Salesforce now provides hundreds of petabytes of critical context so agents can actually understand your business. We're doing more to help customers clean up their data, to make sure that it's well harmonized, to make sure that they have the right level of data cleansing, building the right data warehouses. Then our apps, well, they can be more valuable than they've ever been because now they don't just run your business, they're running all of your agents as well. Thank you very much. Forecast the quarter and close cases. We know we've been using these models now for almost a decade. For a decade ago, I would sit in my staff meeting and I would ask Einstein, tell me how is the forecast going to turn out? And in many cases, it knew more than our folks. Why? Because it's able to see everything. So here's another great example, Uber for Business. They've got 30 onboarding specialists and a mountain of inbound leads nobody was ever going to reach. Their rules, their workflows, every deal that's ever gone through them. They've used Salesforce since the start of Uber and all of that lived inside Salesforce. Now this is how they sell. So they just pointed agent force at the pile, got to work, looked at their whole history of their whole company, all the institutional memory, everything that's inside Uber, now six weeks to launch, within two weeks, 60% more leads and converting. This is that power. We're introducing hundreds of packaged agents that understand your business and industry right out of the box so they can start delivering value within days, not months. And now with AI force, we're bringing all that to any interface. This is the magic moment. People don't have to come to Salesforce to get work done. Salesforce comes to them and Claude and Slack and ChatGPT and Teams, wherever they want to work. And it's a shift from software as the interface to software powering everything. of course this is already happening in Slack which had a phenomenal quarter it's the best acquisition we ever made regardless of all the financial analyst reports that I read about six years ago when we bought it we won't go through the details it's water that's now all under the bridge but let me just say this When you look at Slack today, it is where work happens, and it's where these AI lives and can do things. And not only is it where human work happens, now it's where you can build together, too, with Slack codes. AI isn't trapped in a single-player chat window. It's a teammate that works across all your people, finding the right agent, the right action, all in the flow of work, fueled by all the enterprise context that lives in Salesforce, the conversational context, in Slack. Companies like Anthropic, OpenAI, Lovable, Replit, on and on and on. I think there's more than a million companies on Slack now are all building their agentic products directly into Slack because Slack is where their customers want them. And Slackbot is our fastest adopted AI product ever. Five months after launch, it's got one million active users, up 150% quarter to quarter. If you don't have Slackbot turned on in your Slack, and many more. Robinhood's a great example of what's happening. Robinhood needed AI adoption across its whole workforce, you know, not just engineers. So what Vlad did was he put AI inside Slack, the place where the entire business comes together and connects to Salesforce, Google, Okta, and other systems. And now any employee can use Slackbot to surface past decisions and conversations, solve problems without engineering support, and Slack isn't just the best place to work with AI, it's also the best place to build with AI. We just introduced Slack Code, a shared place Thank you for joining us. Welcome, David. Fantastic. Welcome to the earnings call. Great to have you. And they're changing how we feed the planet with a breeding technology that boosts crop yields by 50%, maybe 100%. He already sent me a can of seeds. I don't know if I'm allowed to talk about what I got or not, but it was pretty awesome. and I'll tell you, David had chosen a CRM product when he first started Ohalo and how does it pronounce? Ohalo? Ohalo?

Mahalo? Ohalo? I should ask you. It sounds like a Hawaiian word. It sounds like it, but it's not. It's based on an important, actually, part of bioengineering history, right? Yeah, well, there was an agricultural find in the Sea of Galilee where they found this old pot of seeds, 20,000 years. So it kind of rewrote what we thought about the history of agriculture and plant breeding. So we named it after that little village.

Fantastic. Well, yes, you're right. It sounds like a Hawaiian word, but it's not. And I know that you started with another CRM product. We won't talk about what it is. But I remember when you called me and you said, you know, well, maybe I'll try to vibe code this whole thing, whatever. And then a few months later, it turns out you're... Well, we did a little vibe coding.

I did a vibe code to make a CRM product over the weekend. Thank you very much. and many more. We're not going to vibe code CRM, but then we build custom workflows, custom interfaces, custom prospecting tools at my sales teams. I've got agents that are out scanning public county databases trying to find where farmers are planting what crops, what their names are, what their contact info is. I've got agents doing all sorts of prospecting. That interface gives my sales team leads information. and we can build all of our custom workflows in parallel and in concert with the Salesforce tool.

Well, it's been very exciting, and I'll tell you, I'm thrilled to have you as now a large Salesforce customer.

One of your stars, but yeah.

Well, I would say large in terms of presence, in terms of, you know, everybody knows you now, Dave, because your podcast is so popular. The number one podcast in the world is what I heard.

In San Francisco, for now. That's right.

What I want to know is this. When you do think about the future and you think about your company and bringing the best of AI and the best of CRM together, how do you plan to do that?

Again, I think it goes back to this point about where do we create value? I'm not going to create value as a business by doing something that everyone else does. If everyone else is using Microsoft Excel, I'm not gonna go build Microsoft Excel. If everyone else is using an ERP tool, you know, we integrate with NetSuite, and I know that you guys have an integration with NetSuite. We're not gonna go build an ERP tool, and we're not gonna go build Slack. We're not gonna build communications and messaging. We're not gonna build CRM. We're going to build custom interfaces for doing plant breeding. We're going to build custom interfaces for prospecting customers. We're going to build custom interfaces for selecting the right product for a farmer based on my satellite and radar imagery that shows me what that farmer's field is going to look like next season, making an estimation and then making the right product selections for him. So the interface to do that for my sales team, for my customers, that's where we add value. and then the actual following up with the customer, connecting with the customer record, making that transaction record, storing it. That needs to be done safely, securely. It needs to be done with the right account settings, the right access. That's what we're not going to go build. And that's really where the partnership works. Now, when we make a selection, it has to be a selection with with standard platforms that we can work with, that integrate, that have the integration capabilities, that have the ability to service and support. I'll give you another example. Just internally, we use Slack. That's our primary communication messaging tool. And in Slack, we've got an Ask HR channel now. And so we basically use Claude to set up an Ask HR channel that anyone in my company can ask the HR questions that they would normally spend time calling up the HR people saying, hey, I got this question, I got this question. Ask HR has access to all of our internal HR documents, and it knows who you are, whether or not it can access your personal information, it knows standard benefits policies, and it can just answer all your questions for you through Ask HR. Thank you for watching.

Okay, now because I'm a competitive person, I have to ask you this last question, which is kind of where I started. You know, this all started because we were just talking on the phone about something else, because we're personal friends, and all of a sudden you said to me, yeah, I'm using the CRM product, and... Srinivas Tallapragada

As great a sales guy as you are, I wasn't sold in our first conversation. I was still pretty reticent. I'm like, Marc wants me to do this. I'm going to do it for Marc. But I'm not sure. This is what I told my team. And there's a guy, great guy, named Ben. Ben works at my shop. And Ben used Claude. He used Cursor. And he spoke to your Salesforce guys, stood it up. And what took us months of going back and forth trying to customize this other CRM tool and build the application and workflows around it that we needed We were like pulling our hair out. We're like, let's just build it all from scratch. And that's when you and I talked. So Ben used Claude and Cursor, got into Salesforce, and was able to get everything stood up in under a month. and so I wasn't sold until we did it. And then I was like, okay, I'll give Marc credit at this point and maybe we should, you know, send him a check and pay for the product. But yeah, I would say that was the... By the way, that's been a huge... You're a great marketing guy, but the product and the capabilities... Thank you, David. I appreciate that. That sold itself, actually. Like when we got in there and Ben was able to do this in under a month and he told me he did the whole thing in under a month. Just Ben. Right. And he ran the whole thing.

And I think that has been the huge shock for us that... These new next-gen tools, the cursors, the replets, the clods of the world, Make our product better. That's right. That all of a sudden it can customize the data, the metadata, set up the preferences, do the administration, do things that maybe you needed, you know, a bunch of service folks to kind of do. Now all of a sudden you're getting going in a month. Maybe it might have taken you before six months to a year. All of a sudden now you're fully automated. And your ability to add new functionality and do new things, this has provided this kind of very strong platform. And as I said, it's a terministic platform. Totally. And while Cursor is more... and many more.

But I think that it's a little more nuanced than that. It's probably this verticalized SaaS where you try and standardize a vertical on a bunch of workflows, which actually destroys value in that vertical because everyone's now doing the same thing in the same way. So no one can differentiate in that vertical. We've actually dumped all our verticalized software. We make all of our verticalized SaaS in-house. but the horizontal, the platform, Salesforce standardizing on Slack, this is really where I think we've realized that's actually gonna get bolstered and it's more valuable with all the other capabilities we can now build around it. So I'm definitely sold in that sense. I think there's still a SaaSpocalypse but with a lowercase S rather than the uppercase S for verticalized tools where I think AI really allows you to rebuild something that's unique which creates value for your business in a vertical. Rebuild it on Salesforce. Yeah.

Great. Thanks so much, David, for being with us.

We really appreciate you coming in today. Thank you. Thank you very much.

All right. We're so thrilled to have David here, and we're so grateful to have him now as our new customer. And I just thought everyone would love to hear that story because I think as everybody has heard, David has been wondering, you know, how will he use enterprise software in his new company? Where does he achieve that? Productivity. And I've just never been more excited about our future. The scale, the opportunity in front of us is extraordinary. You're going to see it at Dreamforce. Not only are we going to have great entertainment, probably the best entertainment we've ever had, so can't wait to announced that, but also we've got probably the best products we've ever had. And you're going to see it in just a couple weeks. It's going to be a huge accelerator for Salesforce, for all of our customers. We're going to bring 50,000 people here to San Francisco and show them some unbelievable capabilities. And we're going to show you some of the most exciting transformative technology we've ever built. It's the future of enterprise software, and I'll tell you, we're deploying it, not just for the Army or for the IRS or for all... 15 of the major US agencies, all these incredible new customers that Miguel has signed up from Uber to Deutsche Telekom, you know, to FIFA. and you're going to see not only meet all of them, but you're going to see an incredible lineup of speakers at Dreamforce. And yes, Dario is going to come there. He's going to be in my keynote. You're also going to see Sam there. Jensen's going to be there. Actually, all the major AI leaders are going to be there. David is coming. He's bringing all of his friends. And you're going to see how great companies like Amazon, NVIDIA, F1, L'Oreal are bringing humans, agents, platforms together to connect with customers in new ways that were never before. Thank you so much for joining us.

AI is amplifying the value of our platform. This isn't just a technology shift, as you've heard. It's a reinvention of how our customers work, and it is fueling our growth. So I want to take you through a few of the proof points. It starts with our operational focus on net new AOV, which is driving our reacceleration. Exceptional Q2 bookings, along with near-record low attrition, drove our Q2 CRPO beat. Half One Net New AOV growth significantly outpaced AOV growth, keeping us on track for second half organic revenue reacceleration. Contract lift terms for new business and renewals are increasing across all segments. Slack continues to shine. Q2 Slack Net New AOV was the fastest quarterly growth since acquisition. AI innovation across our platform is delivering measurable value. AgentForce ARR reached 1.5 billion, as you heard, driven by Slackbot and headless launches and continued AI momentum. Upgrades to our premium Slack additions have tripled since we launched Slackbot. Our consumption flywheel is turning. AWUs continue to scale as customers drive agentic use cases across the platform. In Q2 alone, customers drove 3.2 billion AWUs, up 97% quarter over quarter. And Slackbot users were up over 150% quarter over quarter. With this clear demand, we are making it even easier to adopt. Our premium bundles give our customers access to our innovation in real time. Bookings from AgentForce 1 edition and AgentForce for apps more than doubled quarter over quarter. Headless takes this even further, bringing Salesforce to the surfaces where teams already work. Slack, CloudForce, and with AI Force, many more to come. MCP and API usage grew significantly in the quarter as customers embed Salesforce intelligence, the data, metadata, and Semantics directly into their workflows. You can see the momentum in our results from the quarter. Q2 revenue came in at $11.35 billion, up 11% year over year, above the high end of our guidance in constant currency, driven by continued momentum in Slack and AgentForce. And we continue to accelerate Informatica's business. Subscription and support revenue was $10.82 billion, up 12% year-over-year in nominal and 11% in constant currency. Our top-line performance reflects the breadth and resilience of our portfolio. AgentForce apps delivered solid growth, anchored in momentum in Slack and resilience in sales and service with early signs of recovery in marketing. While it is too soon to call this a sustainable trend, we're very encouraged by the success enterprise customers are having on our next-generation marketing product. Headless platform, Data360, and other growth was fueled by continued momentum in Informatica and Data360, partially offset by license revenue headwinds and volatility in integration and analytics. CRPO accelerated quarter over quarter with $33.5 billion up 14% in constant currency. That's one point ahead of our guide, driven by strength in Slack, AgentForce, and Data360. Our continued focus on operational discipline is evident in our profitability. Q2 non-GAAP operating margin was 34.1% and GAAP operating margin was 20.5%. As customer zero, we are putting agent force to work across our own business. Salesforce's help agent has surpassed 5 million customer conversations with 64% resolved autonomously. Slackbot is driving 8.1 million hours of annualized productivity gains for our employees. That's more than double quarter over quarter. We generated $1.1 billion in free cash flow. That's up 81% year over year. Execution of our $25 billion accelerated share repurchase continues. We expect to repurchase at least 14% of shares outstanding through this program, thus far at an average price of $176 per share. Our responsible capital return strategy underscores Our conviction in our future. So turning to our outlook for the year, I want to walk you through the components of the 300 million constant currency raise to our revenue guide. We are raising our FY27 revenue guide for organic performance by 100 million. This is driven by the continued momentum in AgentForce, Data360 and Slack. These areas of strength offset the continued volatility in overall license revenue. Alongside this organic growth, our raise incorporates a $200 million expected contribution from the anticipated closings of Contentful and Fenn in the coming weeks. Of note, our FY27 revenue now incorporates a $100 million FX headwind compared to our prior guidance. This brings our updated FY27 guidance for revenue to 46.1 billion to 46.4 billion, resulting in subscription and support growth of slightly above 12% year-over-year and slightly under 12% in constant currency. We're holding our non-GAAP operating margin guidance at approximately 34.3%, and we're updating our GAAP operating margin guidance to approximately 20.1%. We continue to expect operating and free cash flow growth of approximately 4% to 5% year over year. So moving to our Q3 guidance, we expect Q3 revenue of $11.42 billion to $11.5 billion, growth of approximately 11% to 12% in constant currency. Q3 CRPL growth, is expected to be approximately 14% year over year in constant currency. I do want to note that this does not include incremental contributions from Contentful and FEN as we await deal closing to ensure accurate balances are reflected. In closing, building on the momentum from a strong first half, we are delivering record revenue and cash flows this year. We look forward to sharing more on our latest innovation and Financial Framework during Investor Day at Dreamforce next month and connecting with many of you here in San Francisco. So before I turn the call back over, I want to thank Mike Spencer for his incredible leadership of investor relations. His candor and clarity earned the trust of the investor community and I'm personally grateful for his partnership. Luckily, he's not going far. He's now taking on a broader role in our finance organizations. I also want to extend a very warm welcome to Mark Murphy as our new head of IR. He's covered Salesforce as a top sales site analyst going all the way back to our IPO. So he knows many of you and our story very well. Back to you, Mark.

Thank you for the kind words, Robin. With that, we will move to questions. It is imperative that you limit to one question per analyst, and one brief question would be preferred because we need to move quickly. Sophie, please queue up the first question.

We'll now begin the Q&A. For today's session, we'll be utilizing the raise hand feature. If you would like to ask a question, simply click on the raise hand button at the bottom of your screen. If you've joined us by phone, please press star nine to raise your hand. Once you've been called on, please unmute yourself and begin to ask a question. Please limit to one question. Thank you. We'll now pause a moment to assemble the queue. We'll take our first question from Kirk Maturne from Evercore ISI. Please unmute your line and ask your question.

Yeah, thanks very much. And thanks for taking the question. A lot of great things going on this quarter, but I have to ask about CloudForce and Marc. I think specifically, I'd love to understand how you and Miguel are going to be taking this product to the field next. What are you doing with Anthropic to make sure that this gets out and gets into the hands of your customers as soon as it's available? And I assume we can be seeing Anthropic and Salesforce salespeople working together to bring a lot of value to both your collective customers. Thanks.

Well, we're really excited about this product. This is the best of both worlds. It's the number one AI meeting the number one CRM and putting them together. As I said, when you do that, you get this incredible result, a radically different type of interface on top of Salesforce's entire platform. It's really powered by this incredible new AI harness that you're going to see at Dreamforce AI Force. And that harness is able to power not only Cloudforce, but a new version of Slack that you're going to be seeing. as well as Coworker, which is something inside our Lightning interface, and other amazing things as well. But once you have that enabled, then you're able to really unleash the power of our data, our applications and semantic layer, our agentic layer, and all of it comes to light in a whole new way. And I really saw it myself, as I said, in Europe where we would really show these exhaustive demos to customers and when they could see that all this value that they have in their systems that has been trapped Thank you for watching. and you're right, we'll also work hand in hand with Anthropic sales executives as well and we'll do whatever we can to make sure that this becomes a huge part of our sales ecosystem. I think this is going to be an incredible opportunity for both companies. And I'd love for Miguel to come in and talk about his vision for how this has come together and Miguel has been a huge driver of the relationship with Anthropic as well as really broadening the capabilities of both companies.

Thank you, Marc. Listen, I've been obsessed with this surface. I, myself, and a number of my leadership team have been using very profusely the surface, connected. We've done it manually, connected the SAP servers, created skills on our own. So I just can't believe that we have now this product available. We are rolling it out to the whole enterprise, to the whole company. And then we're going to make it, Patrick, we're going to make it available to GA in September to everyone. Of course. at Dreamforce. Every single seller of Salesforce will be demoing this product as one of the surfaces. By the way, we love Slack as one of the surfaces, but not everybody has Slack. They are complementary. Slack, you are working with your teams. It's a multiplayer surface. We co-work, you and Cloudforce or Salesforce for Cloud We are simply going deep and researching, understanding your business. By the way, you're able to engage also through Slack, through email with your team members. It's going to be very powerful. Every customer will be able to buy. They will have to upgrade to our premium editions, and it's going to be a new wave of demand. I'm very excited about it.

And Miguel, just give us just a couple antidotes because, you know, I just know like when we turn this over to several of your European leaders specifically, and obviously I was in Europe for that time, and they started using it just even at the most basic level, the kind of things that they were building and the kind of things they could see about their business and how to drive their business forward really changed. Can you explain that? Sure.

So currently, and by the way, this is what I want all our sellers to do, we're going to be living in three surfaces. What we built, and, you know, this innovation came from Europe more than the U.S. I'm very excited about that. We basically created a cockpit to understand the business.

So you're saying that Europeans can innovate? You know, sometimes we can. They let us. All right. Yeah.

So we build our own agents based on clock. Thank you very much. I mean, at the time, our co-work now is CloudForce. But I also do it in an app that I build with Cloud Code. So depending on the moment, I use one of the services. But I do one thing that is very powerful. Every time that I visit a country, and don't tell anyone because I don't want my team to know, But essentially, what I do is, okay, I'm visiting Italy. I mean, we have an amazing leader there, Vanessa Fortessa. She's a forza della natura. And I said, okay, give me all the opportunities, open opportunities for the month, and then send a slack to every account executive, copying the whole chain all the way to Vanessa. Telling them, look at the opportunity record, look at everything, make it sound like it's me. I review all the emails, all the slacks before they go. And all of a sudden sends 50 very customized slack messages to the AEs asking them if I can help, if we can do anything. It's incredible. The engine is very smart. It proposes already ideas to close the deal. And then when I visit the country, everybody's mobilized. Everybody has been working over the weekend. Vanessa is crazy, running around, and we close deals faster.

Yeah, very exciting. Thanks, Kirk. Sophie, we will take our next question.

Our next question comes from Alex Zukin with Wolf Research. You may now unmute and ask a question.

Guys, thanks for taking the question and congratulations on a fantastic quarter. Marc, you're seeing a pretty big debate and tension in the industry about open-weight and open-source models versus frontier model adoption. I was wondering if you'd set the stage for us because what you're seeing in customers is important as you're offering the best of both worlds with both CloudForce and AIForce slash Headless. So maybe talk about how you see this debate settling and about the monetization opportunity for both CloudForce and Headless and kind of when we should start thinking and seeing it in revenue growth.

Yeah, I think a lot of customers ask these questions and, you know, there are a lot of us, I'm sure you can relate, live in this podcast universe. We just were with David Friedman. He's one of the Srinivas Tallapragada and I think that that is just the world that we live in. We live in a world of misinformation where everybody has an agenda, financial agenda. They're trying to move a market. They're trying to make things happen. You see that as well with shorts in your market where you'll see people come in with all kinds of misinformation to try to get something to happen. So I think that one way to handle that is to go talk to customers. and this is what I do. So I have spent a lot of time with customers and customers, it's pretty simple. They have, you know, if you talk to customers, what they'll say is, we only have three platforms. We have you, Salesforce, doing the front office. We have SAP, they're doing the back office and we have Microsoft, they're doing productivity and that's it. The reality is, yes, they have those three platforms. They also probably are hanging out with a hyperscaler. There's probably three or four different ones depending on what country it is in Europe. They also probably have a data lake supplier, and they also have a collaboration supplier, Slack or Teams. And I think when we look across those six things, they do not want to also then say, I have all these models, okay? Which kind of gets to your question, which is like, you think that these customers then are going to all of a sudden set up and maintain... and build the human expertise to be able to build and maintain and train models? No. I believe what they're going to do is consume AI through package software. Not a huge statement, just they're consuming their AI through package software. You're using Slack, you're consuming AI through package software. You're using Salesforce, you're consuming AI through package software. At some level, when you use Cowork, you're consuming AI through package software. and when you're using cloud force, you're certainly using AI through package software. And I think that's the right way to think about it. I think the model, it's like, do you even know what chip you're using? Do you really know what data center you're on? Do you know what router you're on? What switch? What type of fiber? What cable you're using? What interconnect you're using, at some level, we do, we'll get abstracted back to kind of how the way the world used to be, which is we operate at a certain level of value, you know, and I believe the highest level of value is at the application layer. Thank you for joining us. Thank you for joining us. Nathalie Scardino, Thank you for watching. and I'm not sure I don't think that's what customers well I don't think that's where customers heads are at at least when they talk to me that's not where their heads are at maybe some customers are obviously if you go talk to my engineers maybe they're interested in what's going on but I don't think the customers that I speak to are at that level does that help you understand how I think about it super clear thank you so much thanks Alex Sophie we will take our next question

Our next question comes from Elizabeth Porter with Morgan Stanley. Please unmute your line and ask your question.

Hi, thank you so much for the question. I want to just circle back on this strong agent force ARR growth. And in particular, what proportion of current agent force is coming from paid production customers rather than pilots? And how has the timeline from pilot to paid deployment and refilling credits changed over the last couple of months? For instance, are we seeing any sort of lengthening as customers are evaluating a broader set of solutions, or is Salesforce's increasingly open and headless posture helping de-risk some of these decisions and potentially accelerate engagement with the Salesforce platform? Thanks.

Can I take that?

Yeah, I'm going to turn it over to Miguel, but the first thing I'll tell you is, you know, we offer our customers a wide variety of capabilities, products, and functionality today. and you mentioned AgentForce is one. Coworker, if you haven't seen Coworker, it's our fastest growing AI product. We have another super fast growing product, Slackbot. We expect CloudForce to be growing super fast. AgentForce also is growing super fast. We have a lot of them. And what we're trying to do is let customers have very flexible capability so that they can choose all of them and grow with them as they want. and we have these new bundles that you've already heard about and these new bundles let customers do that. See, customers want to buy and want to price in different ways. This is something I've learned really aggressively recently. Some are still buying by user and by agent. and that's important for them. Some of them want it by consumption and that's important to them. Some of them are just basic usage customers and they wanna pay that way. Some of them even wanna pay by outcome and that outcome could be by a transaction outcome or a business outcome. Because customers want that kind of diversity in pricing, we've created a high level of flexibility. And that, I think, has really expanded our ability to sign very large transactions with our customers.

Miguel, do you want to go into the details? Yeah. I mean, the top line numbers are obviously very impressive, but I like to go a little bit deeper under the hood. When you look just at bookings, not just the cumulative ARR, our bookings, Elizabeth, grew triple digit, so we doubled year on year. That was pretty fantastic. Fifty percent of the bookings came from customers refilling the tank. So they consume, they use the flex credits, they want more, they raise their hand, we go there, which, by the way, is good for AE productivity because these sell cycles are very short. The time to production. Production is very important for us because consumption is very important to us. We bring customers in the final. We want to bring them down. The first thing is to get them to production. We added 2,000 paying customers into production. That's 70% more quarter on quarter. We are not happy with production only. We want them to really be ready. Thank you very much. Thank you very much. If you want to write down names of websites that you can go right now and see the agents or call them, Bodewell, geappliance.com, Lululemon. If you're going to Mexico, Volaris.com. Erlingus, if you're going to Ireland, my two daughters are in Ireland now. You want to call Amazon Blink. I mean, you want to call B-Berg. Amazon Blink is such a great example, Miguel. Will you just tell the story just briefly? I actually have the phone number. Amazon Blink, basically, if you have anything going on, Thank you very much. and I'm actually going to give you the phone number, 402-200-3104. Just call. So 402-200-3104. And the experience is incredible because it's not just a chat. It's a voice that is anchored to your trusted context and that can execute across our deterministic applications. But anyways, I give you a bunch of websites, et cetera. But let me tell you one story of some of the agents that are working the enterprise that people don't see. Big digital platform company here in the U.S. 45 million, 45 million AWUs is one of our largest, grew 14 times. We started this six months ago in Q2. The AWUs, the consumption grew 14 times, 14-fold. And what it does is they call it the activation agent. They go to all the merchants that are already registered with this platform, but they are not transacting. They're not getting money from the merchants. and the agents has 1,500 interactions every day. Getting these dormant merchants alive and then kicking and then generating revenue. This customer, for instance, was one of the customers because we're meeting them where they are with pricing. They didn't want to buy up front and do a big thing. They just wanted to try and see the value. So now, Marc, we're negotiating either, we're giving two options, either outcome-based deal. I mean, we're talking, I mean, this is a $40 million customer for us. So it would be a monster deal. I think that's the most important thing for us.

I mean, I think that we've heard so many companies say, we're doing outcome pricing. We're doing this pricing. We're doing that pricing. You know, we're just too big. We have to do it all. And so we've built these new flexible pricing schemes that let our customers choose the price that they want. and we're going to get more and more into that zone. But this last thing that Miguel said, that some customers want business outcome pricing, that's very exciting and that's never been true before in enterprise software. And Miguel, one more huge announcement we had in the quarter was that Miguel is now our Chief Operating Officer. Congratulations, Miguel. Thank you.

Thanks, Elizabeth. Sophie, we will take our next question.

Our next question comes from Gabriella Borges with Goldman Sachs. Please unmute your line and ask your question.

Hi, good afternoon. I think this follows nicely from Elizabeth's commentary on the different types of pricing models. If I listen to what Xero and Regora and Replot is saying, you've got some customers that are using the agent-first stack, you've got some customers that are going headless, and now you've got the court-first announcement today as well. My question is a little bit on the economic value to Salesforce from these different types of cohorts. I know you're still figuring out monetization on headless. Do you think in steady state you'll be able to capture the same type of ACV from customers agnostic of whether they do agent for us or whether they do some sort of headless configuration? And then any early reflections you can share as you progress on figuring out monetization for headless would be very helpful. Thank you.

Maybe I'll start, Gabriel. It's a great question, and even going back to Alex's question as well. We feel really comfortable with, like you said, we're working through headless monetization, but just to further double down on Marc's point, what we ultimately think is predictability and flexibility is what's important to customers. and as Marc said, they're gonna buy a lot of different type of ways. I think most importantly though, we think with our new platform, AI Force, we really are gonna unlock the potential for knowledge workers in great ways. I think that's gonna be pretty impressive The other thing is, is the way we're delivering this is through our premium upgrades that we also talked about. So they're going to get innovation in the moment. That is a early stage for us relative to our installed base or opportunity to continue to upgrade our customers to those premium additions that gives them instantaneous access to this innovation is an amazing future opportunity for us. So we feel really comfortable. with the monetization strategy that we have, and most importantly, the flexibility that we're giving our customers that allows us to capture that. Quick thing.

The AI opportunity, you can see, you know, first, augmenting employees. That's where our premium editions come very handy because when you are on one of those premium editions, you basically have a limited usage to augment yourself as an employee. and then the customer-facing use cases, which is monster. This is the digital labor world. It's monster. That we monetize with IELAs, with flex credits, and here we meet customers where they are in their journey. Sometimes they want to buy as they go. Sometimes we just charge for overages. And many times they buy up front a bunch of credits. AI Surfaces is going to increase the demand across the board. What I can tell you is every time we're measuring this, we're going to give you an update in Dreamforce, but we started last year. Customers that start the agentic journey with Salesforce, On average, they are already at double the AOV with a perspective of nearly quadrupling, three times to four times the AOV. Think about this. The only thing that I need to do is to convince every single customer, and that's why Marc is on the road from time to time, meeting customers, and convince them to come, like he did with David Friber, to come with us in their agentic journey. Because once they make the decision, double, triple, quadruple the AOV with us.

Yeah, and I think that that's what's really key. Wow, all this new action on the network, call it agentic action, new user interfaces, new applications, it's just a lot more activity on our service. I mean, the amount of action at Salesforce on our service, the value that we're adding, the actual value that we can give to our customers is immense. So have we fully optimized that yet? No way. You know, we're still trapped in some ways in old, you know, per user pricing models. But their opportunity to build much more aggressive pricing, you know, to really represent the value that we're offering our customers, I think is enormous. And Miguel is really at the very beginning of what I think will be one of the most exciting journeys he's ever been on.

Only 5% of the knowledge workers that use sales and service have upgraded to the higher end editions. We get a 60% to 80% premium. So imagine.

Yeah. And I think that's a major. So if you want Clawed Force, if you want Headless, if you want all these value-added agentic additions and capabilities, you need to move to our premium edition, which is what's going to give you the power to fully operate inside your enterprise and deliver this high level of capability and unleash the huge amount of value that's been trapped for so many years. I hope that makes sense.

Good numbers there. Thank you.

Thanks, Gabriella. Sophie, we will take our last question.

Our last question comes from John DeFucci with Guggenheim Securities. Please unmute your line and ask your question.

Thanks for taking my question. Miguel, I know you've gone through the math of how the subscription net new AOV to revenue works, and we agree it's math. But there are two things that Robin said that I think are really important to that. One, net new AOV growth is the strongest it's been in four years. And two, you had near record low attrition. Those two things help that math work. We know that. Thank you for your empathy. But if Salesforce follows through on those statements and that math, both low attrition and strong new business growth, that term is going to be part of history, Marc.

You missed the third leg of the stool, though, John. You didn't say, and new value added for customers. I think that the key is three things. Yes, it has to be about low attrition and high net new AV. Very important. But the third thing that we have to do with this AI is deliver this new value added that's going to, bam, bam, bam, offer all these new capabilities. And I'll just come back to what we said. Whether you're using... Claude Forster. You're going to see the new version of Slack. I'll just go into it a second. Also has an incredible surface. And this idea that all of a sudden these, you know, kind of things that sit kind of theoretically at the top of the stack can dynamically build for you these applications. So you're going to work with it and you're going to say, hey, I'm managing this part of my business. I, you know, it involves these customers, these products, these competitors, you know, This technology and bring this together to me in a map, in a this, in a that. And where you used to have to take months or years to build very complex, very dynamic applications that look like they were built in. I'm not going to get too geeky on you, but like React, like a very complex user interface. All of a sudden, that is what the AI is really good at. And we're doing the heavy lifting down below, the sharing models, the business models, the security models, keeping it safe, keeping it controlled, keeping the data where it needs to be, making sure the wrong person doesn't see the wrong data, that kind of thing. Thank you for joining us. Not just kind of outcome-based pricing, which is we completed this many phone calls, therefore give us a dollar. We want to be able to say, no, we improved revenue by this much, so give us $2 because we made you $20 or we made you $40. And I think that that's like the next generation of enterprise software that is more than outcome-based pricing. And there's other enterprise software companies that are out there that are kind of – Doing well. They work with sometimes mid-market companies and get huge prices for their products because they've basically been able to write an outcome deal. Like, if I can generate this much more revenue for you, if you give me a percentage of it, whoa, you could do that at scale now that you have this kind of thing. And you don't need a bunch of FDEs and engineers and all that to do that because that's what the AI is really good for up here at this top level. Does this make sense, what I'm saying to you?

You know what, Marc? It makes absolute sense, and I really appreciate it, but I think you'd agree with me that even without that, the way Salesforce stock and some of your peers have been trading, they are not even looking at that. They were just afraid things were going to deteriorate into something. They're not looking at it.

Right. Well, yeah, take the value of Slack. Well, you're on your way. This tonight made a big statement. Thank you. Thank you.

Keep guiding us, John. On the confidence about the future, I mean, H1, H2 last year was a great NENUB growth semester. We knew, Robin and I, we partnered together, we knew that for organic revenue to reaccelerate, as we committed to happening now in H2, we had to continue with NENUB growth H1, NetNewUV, significantly growth outpaced AOV growth. We've already raised the guidance. We've already committed to the revenue acceleration organically in Q3. The momentum is there. We feel very, very strong. The demand environment is very, very good, very strong. Our pipeline are record levels. We have more opportunities to monetize that we have not even put in the pipeline. We have the capacity. Thank you, Marc. You pushed us to hire a lot of AEs when... Things were a little bit rocky.

Somebody's got to call these customers besides me, Miguel.

I know. I know. I do some calls also. Okay. Thank you for helping out. We have the capacity, and we have the innovation. We have the product. So if you think the demand is there, and it's going to get even better with the AI force, and the supply, which is for us supply is capacity, distribution capacity, which we have hired more than anybody else. We still have to hire 1,200 more AEs before the end of the year. We are now hitting 15,000 AEs. and the innovation. We have the best products we've ever had, most of it organic. We've made some tagging acquisitions to enlarge our times. We are very confident. Definitely we are committed to the H2 revenue reacceleration. That's already math. Q3 is math. Q4 is nearly math. But we are committed in sustaining that acceleration, and you're going to hear more at Dreamforce about fiscal year 2018.

And I think even to add to that, Miguel, is if you take a look particularly at sales and service, we're seeing durable growth in seats, right? So that's a fundamental proof point is that everything we're doing is amplifying our entire platform. It's amazing progress.

It's amplifying the need for trusted context and deterministic execution.

Very clear. Thank you for joining. This concludes today's call. You