Salesforce (CRM) 1 Mar 232023 Q4 Earnings call transcript

Welcome to Salesforce Fiscal 2023 Fourth Quarter and Full Year Results Conference Call. [Operator Instructions].

I would like to hand over the conference to your speaker, Mike Spencer, Executive Vice President of Investor Relations. Sir, you may begin.

Good afternoon and thanks for joining us today on our fiscal 2023 fourth quarter results conference call.

filings on replay our SEC can today's release, found be website. press and of a call Our With me Finance on Chair Millham, and the and call today Amy President President is Weaver, and Operating Chief Chief Officer; Brian CEO; and Officer. Marc Benioff,

our earnings reminder, include will and GAAP press today between can be non-GAAP and non-GAAP release. results commentary guidance Reconciliations found our a As measures. and in our

change. and incorrect, Should prove statements our of and contain are assumptions, comments which materially risks, to to results of materialize could Some risks statements. differ forward-looking uncertainties any assumptions these these or actual today subject our forward-looking from could may should company be

of Forms Except as could undertake update including any SEC description other filings, any filings. risks, financial XX-K, and other most to statements. SEC in assumptions factors affect report recent do XX-Q our A our that we not responsibility and forward-looking on uncertainties results these required and our is law, by these included

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

Mike, joining the of hey, call. you for thanks Thanks, to all and

As our this had Improving quarter. quarter. strong showed highest results, that is you our from another profitability priority, up we and see can really

to world, doing. profitable and the Salesforce company in we software the Our largest is and goal what make is that most are

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we accelerate forward needed As goals and we transformation radically exceed the button that press time fourth and them. to need bring recognized our quickly to frame. hyperspace the entered we quarter, plan the We X-year

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want customers, all In our to for And all partners Ohana, and over closing, Brian, another our thank employees, our our you. shareholders now, I of strong our to quarter. of

Thank you, Marc.

fourth underway customer said, buying execution, pleased a Marc in we're the profitable to how our with delivering transformation in the results accelerated measured I'm positive our success growth ongoing reflected impact strong environment. in is As as already have we improving having the quarter.

the and long-term doing our are and part size with profitable go in been efficient, market the how organization to productive, by As and of XX% We've short-term more we've work sales further success reduced and planning way. we restructuring, a re-architecting through we're of Bain. improvements the

all We're teams. and accountability also laser-focused performance, on productivity of of our

our with We every G&A. margins, find and control even are inspecting opportunities higher to unleash and cost reduce aligning spans to marketing of layers performance. increasing sales, business better incentives of to We're of drive and efficiencies removing part

our not to onboarding ensure product learned our months. customers speak that of in reps we the and better able entire We've faster needed process to enablement entire weeks, with to portfolio understand sales our reboot language

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deepened recorded products, Now our across share New relationships geographies. all before I more Siemens, is which our teams many Group, leading We how off productivity I'll XXX attrition to industries, York, our the hand that from it very record customers cost wins need our providing customer proud the State highlights a some Volkswagen Amy, of had and Customer efficiency Hitachi Farm, savings quarter, we low companies. great testament once briefly I'm and to State is with segments We IBM, this quarter. again customer and of the Walmart, platform gains today.

looking are seeing growth many a for complexity, we're consolidate expansions, and us. customers key reduce As strategy to platforms multi-cloud

is Our top of in X or our cloud. customer XX Customer X of included example working. our or included wins our strategy an quarter top our more clouds. the X more This of And XXX wins

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to and we're our And relevant core And proud most deals service progress the our we're largest the leadership to under more Tableau as and and seeing acquired these MuleSoft strategic new and Slack deeply into highly be for noted continue motions. very companies the part they're sales quarter. our of his customers. comments, integrate in of in Marc

to clouds, Cloud, Data on integrate huge seeing We're our Data Insurance, American mentioned new going are use It's who using Cloud. Cloud. seamlessly platform Service be TOUR Marketing going Family this some organic the like and capabilities are incredible driver also companies deliver into real-time and of Cloud, forward is to customer engagement. Marc these amazing Cloud more largest a as Superstore of Sales Commerce technology opportunity. an X, growth and many Formula Cloud automated, PGA intelligent, It built

customers, support. and our In our continued shareholders and for partners our grateful to closing, I'm immensely their employees

customer unwavering to in commitment in transformation our our We are and deliver growth. profitable success to

Amy. to over Now

here Brian. about transformation today the great Thank results underway. be our to is It and you, to financial talk

day As September, new we laid at Day for in Investor Salesforce. a out is it

our out, As importance build long-term Marc and product key employee me, we innovation; to productivity; and on called relationships of continuing to areas: are restructuring; on with focusing shareholders. X short- particular expense our

absolutely is our restructuring step necessary long-term to our Near a reach goals.

our countless restructuring actions profitable very the Over last have days to Marc, and together since leadership our earnings team intense goals. past I hours XX ensure our our spent growth call, Brian cost with and accelerate

on have our decreasing and our taken workforce, already footprint. are We difficult consolidating action estate we a real

first to I want emphasize that these are the steps. just

closely longer-term As working a we structural on across company comprehensive drive go-to-market forward improvements, and the look operating I to review.

Since the ago, our more time enjoyed years than spending hearing from on the feedback role X and with truly I CFO took of shareholders. I've

in was Just San able and both to meet shareholders in New in Francisco, person, I this with and Europe. virtually York across quarter, extensively, past

disciplined based in growth on allocation framework, capital immensely Your than valuable drive profitable transformation. feedback I confident and And opportunity more to am shareholder our ever been us has that value. in our helping shape feedback, strategy,

fiscal for top with Now year line beginning our commentary. 'XX, turning results to QX

revenue a constant quarter, the primarily foreign currency, was year-over-year or up slight driven MuleSoft and and beat with in reignite fourth exchange $X.XX on Tableau the improvement XX% For by rates. billion, XX%

was full fiscal total was year foreign year, in billion, XX% exchange the the $XX.X for or For million. headwind constant $XXX The currency. approximately up revenue XX%

we in transportation weakness. and services travel the an France hospitality, XX% XX% Kingdom, currency. In and saw sector public grew the grew saw QX, grew strong high-tech United in Switzerland, financial industry in APAC new States From growth XX% EMEA while sectors business and constant United revenue XX% environment Geographically, strong XX%; remained showed sales or constant measured. the we Americas growth and or perspective, while currency; in the and

expectations, a mentioned, continue Tableau from perspective, Marketing. and in spending as And outperformed customer both pressure see MuleSoft product our while and we to Commerce

success. we attrition, the ending services that revenue their providing X.X%, the and our record For lows, value customer reflecting quarter customers at our remain are below

expected the than XX.X% margin higher-than-expected some year. fiscal The in XX.X% benefits include want Non-GAAP and onetime I out. operating does to stronger QX finished performance full call at for

for a approximately is of restructuring points there X.X QX. benefit First,

of savings. there normalizing performance, performance. annual QX, Even other highest and benefits, these for represents were rationalized approximately X.X onetime revenue well as as business ever compensation our non-GAAP still when in this benefits from for and performance, annual license-based Additionally, points temporal quarterly margin efficiencies

was operating XX% was $X.X up XX% flow billion, year-over-year. cash QX cash QX year-over-year. flow billion, up free $X.X

For fiscal year flow operating billion, cash 'XX, XX% year-over-year. $X.X was up

that tax headwind with require changes capitalization As cash reminder, from includes this certain X-point the of law associated a R&D a costs. taxes

collections year. Free driven $X.X billion, year-over-year, the the up cash of during flow XX% strong finished quarter final by at

all or obligation, recovery currency. and future go-to-market up year-over-year. renewals up $XX.X exchange in billion, obligation, This particularly which performance Current in under by XX% constant QX $XX.X MuleSoft ended some The RPO, driven XX% remaining at revenue or at strong performance represents rates. was on ended billion, to foreign outperformance remaining XX% and Turning contract. and year-over-year CRPO, execution, early

$X.X we to Finally, to fiscal flow cash share August. program on returning 'XX. shareholders. cash ever quarter in free first We of than of deliver billion our returned the year total announcing our since commitment XX% billion a repurchase for represents for This $X during to more continue

quarters. to and briefly additional over the This deal Before continued environment. we've moving measured in In called to approval resulted again environment to current compression. guidance, see sales QX, discuss I macro we the the deal our layers elongated want past out cycles, X

assumes deterioration. Our with no persist these or improvement guidance trends material

our guidance. to Now

with Let's fiscal start year 'XX.

and 'XX, to on At we by our guided to Salesforce for beyond framework. last to we day accelerating ambition the discussed margins emphasized XX% and our structural we've that committed grow profitable we plus content. new FY As margins Dreamforce, growth is deeply year, are over margin expansion,

of a are we X.X we our we year-over-year and XX%, margin 'XX, started. exceeding goal representing share by point year And non-GAAP just expect pleased to fiscal X years. improvement for operating are getting that Now

our to item change depreciation includes equipment by of One the note, due slightly to useful points a of X one half X. effective benefit of February certain year guidance under life

infrastructure-related from X employee for IT the to equipment, approximately our And changed life useful approximately equipment, changed X For to X years. years. this from this X

there a hedge operating And be same natural the are our because typically as in regional and to our currencies, FX margin. a revenue in reminder, general expenses tends

FY On On $XX.X metric. the MuleSoft billion, constant to currency. billion and growth the same Tableau over expecting in $XX.X and revenue, XX% we we in are in starting are representing attrition, year-over-year including 'XX,

attrition be above slightly expected to result, a is X.X%. As

Next, for revenue prior M&A begin trending the as planning well as we to equity of adjustments fiscal This 'XX. below lower being decreasing from a program. impact as are made in X% stock-based compensation primarily percent result year to of this a year to is our

We of $X.XX. restructuring EPS Non-GAAP charges January expect $X.XX. $X.XX, for expected the to estimated EPS including 'XX GAAP is be year fiscal of $X.XX to to $X.XX

to growth our Important to expect restructuring. 'XX includes We flow related note, operating an XX-point estimated year approximately XX% this be fiscal headwind XX%. cash the to to

As cash our in will a taxes losses. our reminder, draw as 'XX in down fiscal see net operating remaining increase we we an

below above. is year, slightly fiscal for to of mentioned revenue. flow the year the for in growth XX% X.X% XX% restructuring expected fiscal charge to inclusive CapEx cash of be This free approximately of results the

we headwinds. expect of million FX billion, to to On approximately Now guidance QX. currency. revenue, or This in $X.XX a constant $X.XX $XXX reflects growth XX% XX% for billion

expected be of to and expect to XX% EPS $X.XX constant to for QX of approximately currency. is we and $X.XX non-GAAP the year-over-year same $X.XX QX, CRPO $X.XX. For EPS growth in GAAP

persistent to continues measured the incorporate buying customer behavior. guidance Our

a like few long-term I'd to targets, On updates. provide

in in announce pleased 'XX, we destination. expect year to margin want operating And of non-GAAP I on with QX XX% of to our a least FY acceleration at framework fiscal XX% I but the now emphasize achieve First, very 'XX. that that not am milestone, represents to profitability the

are We putting aspirations. a ceiling margin not on our

to at Investor target Note that due further currency year reiterating our $XX thrilled are We and at we have that of plans updates billion Day. advance. long-term not are environments profitability 'XX time FY macro exceeding discussed. this our We the we are that uncertain anticipate having to our 'XX years next goals in fiscal revenue our we

on disciplined like repurchase billion updates. to Next, our from increase has the as Board approved return to and $XX a to an shareholder allocation, we to $XX additional I'd few pleased share share continue billion. focus capital I'm that authorization

to our through 'XX. expect our now we compensation dilution fully year result, in a share As offset stock-based repurchases fiscal

to on are On focused our have and current committee. M&A, from M&A integration Reflective that current this, of confident of portfolio already you Marc decided our Board disband the we are assets. in heard continued has

like shareholders, especially I for to deep and employees. our a In our closing, our would share customers gratitude

relentless to fiscal close management and the proactive up and for environment us on a in execution current focus transformational out 'XX. Our a allowed strong our year quarter us sets

front Salesforce. us and for is new opportunity day at growth we a value. drive continue profitable we It excited ahead, shareholder of And look to as as I'm in the

Mike, we should the questions? . open for Now up call

questions, please, please. Operator, Yes, Amy. let's to go

[Operator Instructions].

question the from Stanley. first line with comes Morgan Your of Keith Weiss

so to terms place market. side a It to question QX, but on lot Both of growth might go-forward restructuring on -- be on guys a exceeded of in fiscal to within because equation. you strong Congratulations like, changes actually well it you the how like a there's of going are of, so wanted basis, lot I the for year. Salesforce, terms how sounds guys expectations a really in Brian taking begin a end the of in

that, see, growth like, How do sharply? a go-forward you as grow basis restructuring going to headwinds impact through you're or to you to cut you ability like, and going that's your don't, additional garner not to this go on confidence not too

in expectations then to did execution around down execution restructurings? of for you into you these account any or the equation. to negative Amy 'XX, any FY your assume you for of impact this sort any from maybe take sales terms challenges productivity restructuring? When of bring Did And risk guided

is the the strong And of first we question. to had made Really quick Very for all, our our in salespeople differently the happy better-than-expected transformation, we and values value efficiencies about customers, our it. customers agree And customers with their digital organizations. critical job very see enabling in Keith, performance. pivot to Well, to appreciate the thanks to very cost talk I that message to performance in QX. our reductions beautiful we did drive quarter to fourth automation, Time a our get.

some that year changes about work in question about doing. the next your good seeing we're the On of organization, feel and our we we're very

organic in mentioned organization commentary, the we our the innovation coming is of that's As out product phenomenal.

We Customer sell have an them product portfolio to sell the that can in incredible Data XXX, go new go Cloud. we

the And grow you continues also have fast salespeople. would I in double market very to market say, amongst like taking to and higher be think an as digit, know, I share CRM productivity we market think environment. our should we that we to in drive opportunity

an differently show we products to opportunity past. bundle customers, the to organizations think I front in of stand-alone been to together sales organizations our and have consolidate in that have up

to changes architecture Bundling salesperson that per want making, of year. the to we're of impact is Amy, the the driving really you. year. an on impact . products some the don't And next ASP what think that growth to is go higher going of we over together, have next we our do organization

Great. so Thanks, a couple of things. Brian. Keith,

a see were that we way know, a slight exchange our what in growth was primarily in to beat improvement you the gives from out we for license on And QX. revenue expecting. foreign subscription. and boost revenue we I back strong it point beyond that, going came very want the account in just Tableau. First, do of question your on QX. quarter That more license to as did MuleSoft for Also, than that and

So a led all strong QX revenue on of to side. very that the

factors 'XX about, including taken a talking account We've all for guide, XX% assuming On we're year. macro. to very it terms about really selling we change feel environment. the when In is little the above the of near-term coming into FY in, we're comes the this what of good no that macro, guide

So expecting already And we're hit upside, material the deterioration. a Brian I expecting on an really not nor restructuring. . think

question next with from of Kirk the Your Evercore. line Materne comes

next outlook year. you question you. the and going comprehensive for the very Marc, the on is Congrats into quarter, for thank

I think for this a new obviously is chapter Salesforce.

as sole back CEO. You're

you're I new folks now, think going these I lot be to get from time out given parameters company. your spending execution questions how prioritizing be of how your a going of for you're the asking time you're setting to

So that you wondering I a bit. could just if comment little on was

quarter really are to for don't have and this really support on much the so without appreciate shareholders, analysts everyone from were really able it. guidance that think Thanks different could had, and everyone's the the we the to support I grateful during execute I call. enlightenment, very question. their appreciate really, the especially we we plan. because, We who's through I quarter. a had

back, none us think I is to think year and when Obviously, calendar we to I technology the look in have XXXX experienced we have like the business. that look It look forward. backwards go ever something of incredible. was

see can You that throughout the whole industry.

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pivot, XXXX to see adjust talking around We started think when a to right that's we really had what I'm we and So had and incongruence, little of really now, happened then calendar Dreamforce. and and that's out XXXX, I years planned we it. where shift

said, hit there ago now. you year said, fiscal framework. can behind hit hyperspace had don't XXXX can through Day profitability targets We all these matter. And you like we you to Investor and targets. you together hyperspace guys it our our hey, out when happened. have all. great put with know We that go put what We everything XX We days the again. But we button, It We us. button, said, did. we and just the doesn't I It's hit happened,

operating for my where time, team X very my don't energy, really I'm North years, our delivering putting of proud because and the like that effort. We my XX.X% that's become of to margin has have Star. wait this I'm QX

we're said, forth, that Amy even this As is we living in next be to should so world, look we plus XX% just that. in QX saying year, and as this

that's We our guiding we had team of name of methods It's direction. same the have management a one at quarter. great time, part And It's onboarded the VXMOM. the entire that a our we are And XX% our worldwide of that plus. fact. to core

just $X.XX was heard, great you really a our some reasons, our like extremely and expectations revenue for MuleSoft lot from Tableau with exceed team, in QX the execution. at and but product X execution execution corner billion, impressive many Just currency, lines

$XX.X out And incredible year is cash great the an I'll a in unbelievable this also call the flow just got huge market. billion, company that and performance and at software for great a just great position margins has what

So that's is where at. my head

we why year just motions here. One heard, has motion really ACVs. of deliver X basically we're our This the us. deliver ACV. in That's just keeping organization one. like maintaining for critical productivity, the That's a in sales is is, stability There's now, the right to continue lot Brian number to

this the number the thing XX Motion of about we deliver That is we and And that team. is days. the our strategy, my start that's in talked what we at That's that time, profitability. with focused -- #X able our #X in #X same every strategy. Profitability also, company. I've to two been the on have why truly at is meeting is were management

and bad grow. back. where been where company that had moments pull know had efficiency before we years had because had pull focus back. we've incredible There recession, back of just we've had never we've an 'XX, pull reassess. we to had 'XX, 'XX, to to all You grow, grow, we've in XX the to 'XX, have

incredible reassess. We moment. is at we can deliver looking great hey, results. a as, This of kind this moment We're can

obviously, -- is we're for deliver delivering growth, higher. but margin XX% saw growth want more but more this we growth going than the XX% revenue You much not -- growth to growth, margin year And the rate target. actually -- and we're than

of amazing that we've points, points that, that points, me, lot year, great X just a playbook. delivered Oracle and to focus. X.X him. coaching. a time this I spent that's Larry mentor, year, very I'll call has more points main grateful huge last I think And I'm of is not X than basis I've lot Ellison, mean giving to who the out me and gotten -- my my with

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and to would your someone great be to as because all that all have great side without have well to on this we our deliver quarter. you, side of able it's like on you not So

for So thank everything. so you much .

Your next line of Sills America Lynch. the of from question with comes Brad Merrill Bank

nice year CDP solutions how the and a of and outlook. concept to on I wanted vertical important are. ask finish margin and the to Congratulations

all sales asking components reps the really the sell of and stack, important time? those those As this you in in great solution of more the and Salesforce over pulling are pivot productivity of how towards ongoing to components more solutions

But know. verticals And also Well, so thank great like would quarter, CDP. I that's that, evolution great products, Cloud, of a for you question, you I Service your support. our or such Sales the that course, a to to and have Cloud, say our Brad. been much, Commerce just Cloud, we platform, Cloud there's think thanks an lot you of Marketing of

platform onto customers try all they are in it customers these ways. AI. our have Marketing, relationships with who of incredible and it's this always connected our to AI And much so in their started and think of by of IoT better We're been world to new new I of kind can devices entering and become intelligent seeing influenced them in their the we've more. world so add

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to that integrated this their this way. that amazing unify and idea use another incredible Cloud Scientific, mentioned, back front story were Data able Boston they to together I really systems in office office

last only fans reviewed just the of come I -- they -- X, to they Formula fans FX -- how night, they're X% only Formula X that races. the

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some of into now where Tableau You it integrated saw deeply -- we've it.

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just A our on in Brad, success industry of invest for industry the coming in and us years comment another the our we the play. as heavily a cloud. quarter part And big big bet in quickly

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big industry of the So a strategy. our is part

comes the question Lenschow from next Your line Barclays. of Raimo with

Congrats quarter. quarter tough this on the decisions the and great

you Brian. were the productivity sales A you praised and we hard be out sales, that as more the for from guys work me, you've question January. around think all through there Obviously, comments I for done. for So kind of went

the If productivity and you're you here? at have you think see actions And where the Salesforce now, about do you're setup do where the you sales seeing that that think moment? [indiscernible] you taking that

little I'm Raimo, sure out -- bit cutting there. you're a not exactly

growth to . a is productivity. to more component get our try do I'll every your component sell Productivity is account to our great of Enablement deduce and question strategy got So around quarter each some customers? going around executives each strategy that. a what our we We've of and forward. was that. big How big every month,

we're important the commentary on learning we're our in people office bringing that forward. that sales teams as to growth us the productivity, so we is for my focused heard around product You that enabling about to ensuring drive very entire entire and think earlier portfolio our going back that that

to and also we I maybe put buyer, for sellers do several versus together to opportunity win a those a go have how an customers drive ASPs products higher around all our deals. for of mentioned our motion to problems together motions more we some selling bring with selling solve our single today, bundles

and We're frankly, forward forward. to an kept strategy going driver as going AEs to about And productivity inverse so productivity and think growth productivity, hired equation more our always our that we've forward, effort, our growth. going that a going big drive driver of flat

breaking the was So it and line question really got up. I hope because your appreciate

comes of Your Goldman with next question from . the Kash Sachs. Rangan line

to brighter can for Question maybe, end Marc. you And ahead. amazing better much Much fiscal an year. chime What the team. of days here. Congratulations much in expected, than Brian,

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economic next of So curve help the us Salesforce in think the about cycle. recovery

through, To in numbers understand did we're Kash, and in 'XX, back quite going enlightened And at 'XX I 'XX. you said, that. what all what the really 'XX, is go and looked

the stop hit when methodology I companies, recession. -- where marketing, 'XX, spending course, Of dramatically. the we and on the marketing a course, moment knows in we what, spend X points marketing that I ACV of happen, sales accelerated And but right? these a 'XX spending, during break CEOs, numbers, think, of CEOs stop hiring things time. exact how they it know They margin, we off fall on don't saw was salespeople. in you see Everybody behave and

they As soon brakes. market as CEOs, stock the the implodes hit

So I what that, that's saw 'XX. think we 'XX, in

we like, really 'XX, execute middle maybe we think we to of that exited I Certainly, that think November. as our in playbook. I October, Dreamforce, started the see were can we've September, August,

profitability our saw launched key executive profitable is what every on it this a really you doing are of our we're keep and in really largest a playbook. we're the doing, highest mind have We just things in priority know how fastest and we a growing. just -- company. growth days that Well, not recession company sure making Salesforce strategy. part launching transform the knows sure the very to This the We in last where that of our is is forefront the that one making that of XX

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growth have a We of lot things.

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of Your comes line question Jefferies. with from the Brent next Thill

outline profitability, can Can this coming Amy, big a of cut? can given you the big really give us profit #X is of areas that you you that -- Marc's goal jump just sense you feel where from?

guess, it even back at Marc, higher keep rate a seems can you margins. like to with good I And growing pretty

a So this double-digit doesn't you're to it's feel guiding really like really still when number. sacrificing growth

the Brent, thanks for question.

we've great plans this for got So year.

the As on that guided following you year for plan we know, 'XX, is in a excited quite to time. some hit we and we've for year. we're to XX% been fiscal doing. journey early XX% about Very what This

basis Just in have points, XXX the absorbing while almost margin Slack. operating our last increased X years, this fully and we was

I going We gas by were announced last at I XX over hit front. as That's mentioned that 'XX. We days, ceiling. as you. on we Day, of more the that a and the XX to started FY just the and really the Investor a to XX% really XX said, on to keep getting this going us set And don't pedal or out XX, goal view I at even accelerating again,

global considerably leading been doing be the We to this looking estate. up Now real we've our steps discipline going on, the with has this for over in there across We in company, of going been terms how a announced real lot upcoming January. that major the to years. was One are is savings. shrinking X estate took we

other headcount. the The was

job that. the want on pause for do I moment a eliminations, And to on just

dollars call realize whose all these this, sight decisions. I And beings, and never lose it's easy clinically were that careers families and assure and want our to to employees of fully we there's human that lives deeply the represents talk just On just real not as headcount about we the employees very impacted by like that that.

to our plenty weren't first to going forward. our take steps, actions going But these be are that margin more actions there operating we increase and

and in a going operating started Brian G&A go and and to with us business. We led with the and we -- opportunities, X Sales our is do initiatives coming have of talked through have quite to our few sales to are go-to-market and work review really all a greatest in has that although This underway. number of area. a marketing of Bain about this across this. is comprehensive

I that think got great initiatives we've underway. a

them productivity that would an skills became now back fastest-growing And we for asking we're the comes we that we no we to other of to of confidence, XXX. finally, I and ever. terms class enterprise on behind And to be on and and the going focus world When talented employees to I in software When efficiency. focus passion product, these employees. doubt The all incredibly our focus thing us, say, really of we all it my the of bring Customer are with have passionate profitability. unmatched sales, same created . company

comes next of Keirstead the Karl with Your UBS. from question line

I'm Amy, margin what if close you just desire levers bit the do conversation, a between gap comments you hinted earnings. the continuing GAAP to key non-GAAP in to using you're a just on your about wondering that. little about and talk could

frame that little You It a bridge what do to be hear might program. hinted might adjustments time interesting equity close? bit the And you over that think to more.

that Europe into in is thing focus stock-based non-GAAP our the for with does. GAAP that Karl. an January. compensation in the everyone on Great. a back meeting is bit and investors There And time increasing spent on question, in in I margins, Europe, first adding margin. certainly quite of particular, operating Thanks

So very mind. top much of

we're below came years. of lot -- M&A are that was this through burning year last X XX%. We getting recent we're with done over drive for compensation there the of in some a the One to year. levers there. actually stuff stock-based key X% is just Our of plan And that that we've

So drive to down. in going that help system is the that's through way our the numbers rolling

The form making that grant thoughtfully equity the others of are changes equity Committee grant. has very how to at we been we Compensation our and

have So over get see we this well the . we'll but next into years. more proxy as on that going I season, coming up few

the Macquarie comes line of Capital. question Your Sarah last from Hindlian-Bowler with

compensation ask. entire going Congratulations Oscar-worthy team question quarter. great really the of job a I to was Karl asking the to on stock-based an did

little this understanding within where Brian, build your your otherwise vertical question points outward for your environment getting of back guidance. sense of stickiness of maybe various or of bit saw a to So points like maybe the a that helped pivot towards categories. or for you is you macro in you a disruption I'd terms getting

you, we facing of are There's that elongated cycles that things multiple environment. And Sarah. Appreciate it. Thank of no even measured yes, maybe Yes. impact in buying sales about we're and and the deal like question. the are a doubt approvals shrinking And layers some sizes.

that our nice the of those in market done, to we've 'XX. happen got we're saw One happen We year is the though, that go better. QX, we've in make that see and navigate we'll things execute people headwinds to sure to fiscal in training

a industry economic side, and bit the maybe side, SMB that segment tend our market, in to On little harder. even hit headwinds the

so market. And headwinds we saw our in SMB some

for impacted Some strategies the headwinds. self-serve the Slack we of that economic and were motions have by

manufacturing, around us industries in excuse engineering of me, from strength then hospitality the quarter. industry an public saw sector, And -- actually we a was energy travel a perspective, in for lot strength and

of that not also belief headwinds have a around probably we a bit see financial FY areas quarter and continue in for headwind but us a the Some turn lot to in 'XX. to technology anybody, that is we in can services were surprise that a of

the so Sarah, much for So thank Appreciate you question. it.

joining seeing us and everyone look everyone taking over the today. coming appreciate thanks, weeks. time Sarah, several Thanks. and everyone, for We Thanks, forward Okay. to the

all. Thanks,

Aloha.

you call. Thank attending. today's conference This concludes for

disconnect. now may You