Salesforce (CRM) 30 Aug 232024 Q2 Earnings call transcript

Welcome to Salesforce Fiscal 2024 Second Quarter 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 2024 second quarter results conference call.

Our press release, SEC filings and a replay of today's call can be found on our website.

Officer. call President Marc and and President Chief the CEO; Chair Brian on and Weaver, Amy Chief Operating me today Benioff, is and Millham, Joining Financial Officer;

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

these recent should which statements uncertainties to could results not XX-Q risks, our the subject financial assumptions XX-K, these of comments call over that could Except Should our be company and let is other Some factors Marc. change. with SEC SEC are incorrect, our or responsibility these forward-looking and hand today required materially results any affect that may forward-looking A do risks on any our to prove we could risks, report statements. And of by law, and that, description filings. assumptions of Forms our from contain in other assumptions, materialize update statements. most forward-looking actual to and as undertake uncertainties included filings these differ to including me

Thanks so here We're results and this on very really much, appreciate today. of these there everyone and thanks excited being about with out being for Mike, obviously getting all right. And All you. call.

calls, So listen, as has really Salesforce last earnings our we've over accelerated to of you shared growth. with couple transformation profitable the

what and margin clear numbers, huge excited, from I super today. line on that's the like is top our be think and couldn't this I especially looking beat more

areas of executing been year, key all our X As last you know, these we've over transformation. against

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So welcome Sabastian.

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of with As innovation we CRM, leading way we half of #X the the are an second as with AI year, all-time head -- a at into the pace the high. the path sorry,

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Thank you, Brian.

of continue quarter we now bottom key line top to areas and that make in another show X, results QX our great of progress transformation, expansion. X, delivering Our

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growth Our QX framework our execution against our drove results. profitable

with let's So start the top line commentary.

than growth driven in performance XX% strength more modest XX% same points clouds. second In offset platform. million last XX% continued number The was our X was multi-cloud improvement The States grew grew margin average their clouds year-over-year XX.X%, an and revenue continued QX, and reflects restructuring and perspective, $XX by of for were annually more in in revenue strong by model retail saw growth service by a currency. more evidenced mission-critical in some to and Canada, years, the greater our tailwind. very $XX geographic of revenue timing. I grew and X solid QX professional measured. XX% continues customers our energy of and quarter, revenue internationally, consumer operating or second the saw And and attrition or investment nature a new XX% services. the billion, XX%. am in in business partially goods strategy currency, constrained. From by X%. constant highlighted the up India, durability has at approximately million-plus rose our expansion while automotive MuleSoft tripled, The a invest row. EMEA resilience, This non-GAAP or XXX number France tech the momentum, was than United ended business high has weakness the constant FX currency. the manufacturing, perspective, doubled. From continued and from the $X.X the more our the and while in and For sales We basis savings margin quarter X,XXX proud be industry was and quarter by unified Americas constant to of primarily is average of This customers who nearly actions, driven our up APAC progress. and

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obligation, represents Current due of performance MuleSoft. ended remaining revenue obligation, year-over-year year-over-year. ahead was momentum up QX and remaining all billion, the or ended under expectations, constant to future to $XX.X RPO, in in contract, at XX% billion, This notably cRPO, $XX.X currency. turning which performance up Now at XX% XX%

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guidance, to briefly to environment. current I turning Before macro wanted the touch on

additional businesses. guidance. customer the elongated our heard you and we incorporated macro factors layers deal support from sales seeing in environment in are These still measured impact Brian, to continues our decision-making. are approval As subscription compression cycles, and and deal professional And services

by to guidance representing raising and both On in year $XX.X to year-over-year our The in growth revenue, strength and 'XX. we billion in support increase is $XX.X fiscal are subscription constant with XX% currency. our start revenue, billion, MuleSoft. driven Let's nominal particularly

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this to improve remain a on focused also above percent to and slightly revenue. stock-based expected as year compensation of We X%

is $X.XX $X.XX these now 'XX the estimated for GAAP charges updates, to diluted of of to EPS we year including expect of $X.XX. EPS expected restructuring be $X.XX. Non-GAAP result now $X.XX, fiscal a to diluted As

to operating We are raising from our a This flow fiscal year restructuring. cash XX-point to 'XX guidance XX%. continues growth include XX% to headwind XX to approximately

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

of carryforward. for free our XX% fiscal XX% in the for down approximately tax cash year credit greater to we expected slightly We results headwind below year next the fiscal of flow cash expect tax be This year. fiscal an draw revenue. even X.X% as to CapEx remaining is growth

slightly guidance in QX. constant for XX% revenue, $X.X growth On to for XX% billion, nominal to expected cRPO above we currency. be $X.XX expect above in XX% approximately or XX% slightly billion of QX in constant to and currency. year-over-year Now growth is

growth. of to expect point services professional cRPO approximately X to We continue headwinds

we As the to year. July began QX we full that the of in environment is quarter a last reminder, first see lapped measured buying first

cumulative we begin continue measured effect will sales performance. X impacted the of normalize, While to expect growth cRPO the be bookings materially by of quarters to previous to

in shareholder continue closing, want EPS offset QX, For we And focus $X.XX. allocation, support. fiscal I And return 'XX. In as dilution we of year to $X.XX compensation share our EPS on fully and continued our $X.XX. $X.XX to to capital thank GAAP through repurchases non-GAAP expect we for of to to their disciplined shareholders expect our stock-based

out attend maintained team you're our able delivering. we our while virtually, strategic in our AI the capabilities. And notably hope profitable to radically cost to latest person we growth. We've new make innovation laid transformation our finally, approach continuing is to quarters ago, data As to to I hear or investments, have the for and you Dreamforce, on disciplined incredible X management AI whether in accelerated

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the Now open questions. Mike, for up call let's

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from comes question the line with of Goldman first Your Rangan Instructions] Kash [Operator Sachs.

the The economy. job an not to overused term landing, team has done a spectacular use a to doing with soft respect

cost controls, that's So operating et discipline, cetera.

out So there's there but and maximized for generative sort really seemingly to that impressively. you is to new We've Marc. A I you -- Salesforce hope are there environment customer we've seems customer got days question you of room landing. AI share product therefore, Do its spending Salesforce soft Francisco, wallet does sales congratulations gain there's of growth, Or in we AI. on San the Is enough that. to enough is is And think The excitement think continues the stay market, excitement. a in get the better And tremendous product capabilities. do be got to share? Dreamforce The all days -- back this can enough ahead? has have very, hyper generative with share? stabilizing. play very growth, seen wallet story there margin more not Because economy

nice we economic can faster out, growing having So if longer when a you no a a still are at with all constraint. shot it margins conditions Congratulations. while job even net still do

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that AI about a revolution. ignite think really I is to buying

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exceeded geographies in this quarters all success especially last call of product and the especially our Now would technologies MuleSoft well. products, the a expectations, that has seen over number and is out of that several that to including our I said, several our of amazing incredible we've as also core far and a because growth our like

customers areas are that not it is this new So many grow of that's everywhere, by these a intelligence. Brian, this they that something your is driven some kind artificial we're with next customers. think one occurred, sure IT-buying see I in to Salesforce I to Dreamforce technologies. products, there is example of this level, permeated as just start these our really as perspective? see new us, areas. And to see opportunity I'm isolated become to going to to catalyst think this that to for get what's Cloud investments budgets can their Data with of quite but hangover happen kind we And reignite that post-pandemic of going new kind is

for thanks Kash, question. Yes, the

to us, room a Data there to with to us in and drive us big they're new focus see success outlined there's for our around and like Obviously, in we certainly continue and calls bit. see to expand our multi-cloud a customers, to to go growth run economy using, for clouds strategy, and more and the more efforts we'd a number industries. Cloud, opportunity then of for one customers as our there's plenty we think as a opportunity of finally, previous our markets. appropriate. technology turn a growth three-pronged, we've think big going opportunity investments international to And acceleration I the We're make customers it's love the value AI expanding continues well. International that huge back for and on

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Yes, Hopefully, Dreamforce we're of very excited us. about next week's can conference. all join you

of year. the said, it's the biggest AI to As going Marc event be

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next question Kash. we'll the Thanks, Emma, please. take

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

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the Great. question. Thanks for

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Jefferies. Brent comes with question Thill Your from

growth long you cRPO the term business? last you the a reaccelerate XX% can this to Marc, do With quarters. XX% growth to XX% X model, believe building AI into

you growth CEO. my a on right, I'm day. that's Well, And I'll tell single every mind you're certainly

with bottom So very that's to But for like I'm ways capability, into our revenue I all this like about the as trust this a mean we've numbers reframe year, X of these of there's future. tell as so am nothing kind of I I I'll about what forward. But there's been me. for we more these you, do. months, excited margins lots investors. incredible I including world. grow. lots line that's the quite software addicted And I grown that's and next I in growing third well. business said also, the stakeholders, largest the than head levels the important to to that And incredible move company last as to of the now top earlier, our line to have And

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for thanks, and Brent, Dreamforce few everyone, Thanks, us weeks. to joining look seeing at a forward hopefully We in everyone today.

today's This concludes conference call.

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