Salesforce (CRM) 29 Nov 232024 Q3 Earnings call transcript

Welcome to Salesforce's Fiscal 2024 Third Quarter Results Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker, Mike Spencer, Executive Vice President of Investor Relations. Sir, you may begin.

Thank you. Good afternoon, and thanks for joining us today on fiscal 2024 third quarter results conference call.

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

Joining me Financial 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 release. materials GAAP and today between can be non-GAAP and non-GAAP press results commentary guidance Reconciliations found our a As measures. and in our

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

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get me this let talk Brian. of kind script you to messages a into and me little turn let the and the So over to bit, structured give then

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America's environmental solutions sustaining company, a Here is leading great provider. North

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we really profitable our growth testament with laser points. simplify a full you reduced the full-scale costs In the focus to quarter, very on and an margin amazing pricing the we've results revenue seeing year-over-year. performance points as our of X our Yes, it's much. And initiatives. of I drive GAAP matured and and operating And We're packaging Marc. basis I'm and our growth experience. to of a high operational really is non-GAAP pleased appreciate buying marketing percentage QX, so and sales company. transformation our excellence, XXX up by it, Thank

multi-cloud next said, year. we portfolio and QX, our we're transformational growth measured of well in largest the continued and fiscal grew deals. continue Marc driven positioned quarter buying the quarter, as strength to the Despite by drive primarily As our largest product revenues into environment, we into to profitable head

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As logos new Starter customers productivity Salesforce traction this and X,XXX offering time-to-value we look quarter. new with our solutions for gains, quick nearly added saw with

and data as evolution bringing Bain we're a global the partnership Marc together with existing Salesforce as deliver transform every As them find, open products. and AI to and AWS are it who are in make our the significant like consulting Southwest to business to relationship easy their adviser And between integrations & AWS expanding our energy the new cloud We're our partners, offerings. NZ integrated established with #X around #X do us of and and management platform provider And to marks amazing Marketplace. the for industry companies our geography AI Airlines, we've CRM, Fujitsu, the McKinsey. Bank Salesforce We're like an opportunities manage milestone -- build products ecosystem looking turning deepening and seeing global GSIs more partnerships mentioned, buy AWS. It with future. public the AI their ISVs trusted in to with AI AI CRM Amazon, across us to with our leading help a companies to

into I want the Before I highlights. to momentum, some share get operational product

XX%. expenses, our better execution, non-GAAP continue exceeded manage seen, approval of is ever. buying our margin, effectively our you've as and We is Today, operating to which than understanding inspection and customers our improved reflected and in process

and this and and the and internally. deployed AI launched becoming doing we're how tools we been applications scaling QX. paying GPT focus quickly products generative and a in of year-over-year. We're efficient. sales growth And and impressed also bundling higher for Sales, drive We motion big experience dividends huge with XX% customers. while I've high our GPT, with so internally, our XXX,XXX and over global September, live Elevate team we're our since Sales, is Service introduction with year. own eliminating increase effective support streamlined deal further buying results. We've has human is our this AE process high-level is AI-driven than saw more to seeing with is all And Slack Our in which on We've performance incredible far the productivity a for refining automation, of seeing quoting and in our our manual simplify queries employee-related so our driver more our trusted events. autonomously and great reflected involvement. clearly and chatbot resolved need the engagement participation we're without customers, in success seeing thousands approvals We're products the our in

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Thanks, QX discipline. Great. Brian. represents another strong strong of and execution quarter

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to results. let's Now right get the

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X deliver to in we in Finally, QX, returned capital continue return $X.X our form In of another the just initial of we date, share our billion over authorization And $XX billion commitment. quarters. repurchases. we exceeded have on to

buying moving measured we continue to reiterate Before want a consistent guidance, environment. customer to assume to I that

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focused approximately compensation, which percent as to be now We also of on remain stock-based X% expected revenue. is a

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

We continues expected flow The upside approximately year XX% a include from discipline. CapEx to slightly our share strong to be XX-point to capital expense date and return XX- driven to on free is operating the approximately guidance year disciplined XX% our of are of X.X% as through for dilution our flow below repurchases And offset stock-based cash and raising to focus growth by year. is in year flow results in and this headwind fiscal the XX%, to XX% 'XX collections guidance cash for we to fiscal 'XX. restructuring. compensation expect growth shareholder continued continue This cash fully our to revenue. allocation, we our fiscal in to fiscal

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currency. in CRPO services nominal to both and revenue, headwinds Similar for growth growth. XX% quarter, professional to constant we $X.XX and of we expect QX X constant year-over-year expected $X.XX past is this XX% On to to point QX. XX% growth of currency. be CRPO in nominal for Now guidance expect in billion, to billion

For $X.XX $X.XX. non-GAAP of to $X.XX of QX, $X.XX EPS to EPS and we GAAP expect

As and year. thank transformation. forward disciplined the great focused has Brian. I strategy. In support, particularly shareholders echo strong more this This our our to than incredible the that, and an continued of want both extraordinary thank even a for Marc quarter execution work we I for I and been look want to we year, want but remain largest to our on investment past was our their throughout quarter, to of year employees closing, their

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

questions each we'll the now. to the Operator, on first of Out participating others Amy. we'll for ask X call, that ask And we courtesy operator, with person move take that, Thanks, only question. question.

comes first Materne from with Evercore Our line the Kirk of question ISI.

interest this order growth quarter This ready Cloud was you about nice And people a against if to the as a for we this get get estates the really but stand MuleSoft this tough their pretty wants harbinger in a of a in as MuleSoft interest if on to congrats view just is I sort if AI know AI broader harbinger try take in wondering comp don't market tough I does environment. a out quarter. just also bit more in And And or in little coming one, offering? -- in could Brian Marc that interest whether should of wave? of more to a Data data talk

And quarters, I'm calling the illuminate tell for have last I'll in and it seeing out that we that is few but now every able are seeing their going of is to the the of we which customers and going every not but you're have you customer another been have and Brian to goal, probably something level customer becoming that begin for and data. going those and AI really see the give that to what been numbers, you MuleSoft. the end soul to have every detail, to you heart level of customers data. And with transformation achieve to is to with to get for us transformation many customer that these excellence at is

in to addition together Cloud, about technology that year. continue is So it's And this completely very with Copilot lot out, think to our well addition that in transformations. it's Einstein, Data called exciting, their positioned to trend all that MuleSoft we helping addition customers unique in Brian? that, very and is this a been we their bring we're product that data our for AI and to going

the question. for thanks Kirk,

it. happening becoming together it customers The they asset I MuleSoft technology to out bring our to they there. important nailed want is what's exactly do think It's all our such that to it. leverage an you for data and want

opportunity. an it's so And really exciting

organization the platform. I'd Eric be well. who's year-over-year there on leading Eyken-Sluyters, it flowing As see an deals for XX the in you on data data of also X flows was the XXX% amount automated as can up through top and done job our incredible in MuleSoft the of quarter. how is, remiss as we I the an indicator out the stated, call didn't if important sales leader And

nailed And you it really I about for and future. customers think scaling for so us a we important in product your our think question. to critical is as the This

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

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terms But in on terms software that that of we like, that? that's Congrats that. the impressive. that was forward? and did of achieve learn XX% sales of year journey in the Never from Because big are Where you Brian, you industry. as very on The number a about how where in well. like productivity, all, first and increase me -- going theme is a sorry. we journey the very talked Sorry, this big are

-- productivity, a Thanks never-ending to calls big talked productivity But quarter previous about drive the for obviously drive We've What they're and talked large ROI before to I customers for the productivity. see proposals going be about front getting prouder you. we inspection to enablement our from of we the understanding that and solutions of couldn't is deep we and that focus us. very question, it our area for year to sellers in, a And very of stumbled really customers inspection in We executives. we're about maybe put that understand of all a customers that a of saw Deeply our couple not with about of making cycles we in account customers, the board. they ensure the journey, to we both are we increase in a process obviously, to focused all on a buying them. last of that in on It's we continue that Salesforce, deal want talk early and it. to really that can our was to investments being helped in an leaned nice driving. Really where and in really there's our talk our provide across of as go buying things. One, able oriented there the our and this pipelines of understanding bit, the in finally, all our broad that think out to I for ensuring we're our the some we process. them. business, understand products This portfolio out value

a quarters quarters in but the that have Miguel new the pipeline in looking a we're leader future Milano, to way who's only sales going discipline new brought existing forward. not the We in at

results discipline the question. that front. from the across a so And perspective the board driven productivity at driving we've these is you the for Thank great

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

of to out these a lot there, impressive quarter. not buying. the people that with customers. figure. I Really a XX% hearing Really are we're early about in technology because of nice Fortune lot a XXX the what of exploration a the wanted Very to cycle, lot what trying of Einstein ask to tools, out figure is a do Copilot of lot GPT

of well. of cycle. if bit expansion can adoption kind you expansion good such So And stuff a what's expect and what's we further you to head be see adoption color need with this 'XX? as to against but as into guys lot we year, Should give technology of Amy that on X could so a little us there's Great enabled FY get sneak to margin in I this margin maybe driving you investing for quickly? guys

take you this want first? Do me to Great.

Yes.

guidance, up this margin year. If margin this. happy expansion, operating really gone little XX.X% years years, of this for We've Okay, always last back have the mean, that looking basis which XXX end we for a on I over over expansion but the for address to year, thrilled I points to the X looking X margin, I Keith, fantastic just always XX% more ago bit am we'll year ending about. look from be had

I think have that do some we here. room

focus operating margin. view not floor, said our intend I've and before, as success, As our continue we we on ceiling this to on a a

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questioning We are levels.

well. maximizing we're that making sure lower-cost We're questioning locations high-scale, locations. really are We as

as we've as the this, do well margin to So our to efficiently. have the to our very we opportunities manage room I into feel invest like future got and

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margin going focused things as have we think optimize to and We our on the well. there. forward how of that want our to expansion. the talked packaging simplify pricing about continue I a really some go-to-market doing We strategies, we're team we

our business. and our look market to and at how channels AWS how location do We're force do drive own really about efficiency channel we we on sales our new estate for a New continue leverage own us. automation Marketplace the to Salesforce in products using to to our an real Amy as more excited mentioned opportunity, market. as technology, portfolio strategies,

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question next with Mark Your of line Murphy comes from the JPMorgan.

optimizations of an SaaS greater part of on on spend the seat-based then licenses. on and been Marc, weighing XXXX performance. congrats story And scrutiny amazing has hyperscaler

process, are spilling X that We shift the hear there from Sales starting mentality hyperscalers for up to some wasn't by months little maybe and AI Cloud optimizations example, budget seats a that are gen perhaps Sales that into attenuating. a GPT there or over sparked now sense ago? freeing the excitement some in on for thought Do you

course, I different revolution, into an of I think yen extremely the opportunity and if an #X customer revolution in of going which on buy. And much more know had guided the obviously, the in did with I I customers with use couple more go this transaction they've Vuitton, Vuitton. And higher -- have job. long incredible of sales built app didn't Louis with was trying who how When know more very They them. not amazing up with platform Tokyo, an see have because, into retail them the was be to customers, a was with I experience automation. They've work probably even or the see another products success the into walk what exact they And as yen store history. have couldn't well. technology. exactly to and They me. customers' times took product want to all. with And this they we this and Tokyo, Louis interested because test X This wherever get or X had every when I impressed wow, CEO is that my are They anything opposite. X productivity. I achieve is The to was so and one work incredible I'm our is the Oracle. experience. means you're The productivity revolution a It revolution was that full results to that it just not to called customers, They a am. depressed. and of just have was the and that lot in our lots productivity come They'd follow higher. walked done world, your is what stores, customer They I walked our complete company. thing me that to not ICON. still our It able as it's augmented. in at buying AI are customer the They about for salesperson is and in But data of a I to one of I financial our I me kind executives had to I a lot

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could I as if Marc, weigh on well. there

stated this really still now on are environment, productivity, I focused Marc think on automation, right on well. in it time to value. Companies

behavior, as it see CFO the the from has recently. And around in and does and reflect, certainly customer been create being on areas how help can you to seeing my professional terms also if in see Brian, in don't really excited to in customers self-serve, you close, SMB, really add. I'm anything we're about But this their our services. goals. of sixth like get and this know we what step have that spent. quarter counterparts every world. You now particularly we're that's that Real of focus measured We're entering buying continuing saying our dollar I

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question. the for you thank Mark, So

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

really Marc, nice year-over-year. in over XX% improvement up deals million, $X

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do. reality the that's which because in they have see done excited in When I to customers. When it technologists. Disney+. I was they think Disney a I could there guy recommend what And customers is of us same could we is and and welcoming At Disney mentioned be and can used in what lot I showed guys, and very the a time, are Everyone team guys excited use consistently, it is about organizations. think could our cannot huge be with in at enterprise what commercial Vegas the for the I become in which opportunity AI -- Slack comes in Hotel, call Salesforce hands, a Disneylands, something is I so use times the product. I excited for When AI The got Disney confusion success of year, out be Anaheim, happen. They are X customers stories the it's a AI. which very they flattering. because make and customers tell our their our one Disney me. government, also is and Anaheim. world. up use have customers about now I It Wynn largest opportunities everywhere Been is those of highly are Tokyo whole all center Salesforce also the to something these Monday to to about Every Disney Salesforce, and they talking this Disneyland go. very of I on obviously, AI product Vegas. to tours to they've for they're extremely in the lot the It

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

customers might front particular, the saw I'll guidance a significant that early to is get also, on Amy the you there some love a XX% extent fourth wanted you I'd in Maybe the to for this Amy the as the Brian. XQ which direct Salesforce and fairly And obviously in made constant of change it? to for way one drivers change in the get color some And in great. fourth price may the Okay, have maybe Brian, frame to renewals impacted maybe, was currency quarter? receptivity. quarter. in the perhaps that And early pricing of

Appreciate guess, there. price as out can, well question. I the with increase Price the for our thanks landed increases it. Karl, customers as

we're It's just think honestly. to delivering they're ability still seeing we few our We execute ago. I customers to technology, feel months about and when value good this. from introduced go this our a against benefits early, our

And roll see renewal. these seen as really, we'll up certainly in from X we for come benefits benefits these have contracts next, so years over some But the it.

there's yes, honestly, X to near And be it the years. seen to will our not comments? the impact been big Amy, in see in any so receptivity going numbers. next but term, it over the We're

Brian pretty Karl, summed it up. much Brian. Thanks,

not That mentioned time. last renewal in been pleased uplift material from an take execution and said, full we the that [indiscernible] this the guide really is roll showing out. by pricing a And do year. I impact for rolling As have we to around installed anticipate we're the very discipline some needs base, to the this which going

Bank of will of with Your line final America. Sills Brad question come the from

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will enterprises. Enterprises is can it demonstrations of amount models us. in soul the shocking to AI models, these Japan, great If models to you very cool and already and see Tableau back think ingested, this the you've of of on data you customers engine feature. idea this into that become or transactions. it's managing seen so can heart Cloud, product, is we our any be the and is your and the already that is to be productivity. Data recent what as This our apps amount need going the going this AI deeper going of all use capability. they for for you trillions can that of that really bring it's handling, Data to the Salesforce's into This trillions my Cloud And has to Tableau. And I AI of you're own end which data But the the say key and Cloud of a of the that also incredible deploy we're to Data and level all get level the with are the the that see deeper that data of idea working of want

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into So productivity while been of these applications consumer tap databases I we've on because that broad you think are Copilots using. exciting can kind

So Copilot I'm as is an writing example, e-mail. the an

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it's a So Salesforce. interesting moment for very

deliver time Dreamforce 'XX, have to customers were I I a in think get the 'XX that to at be done. we'll that we our months generative hold is or in 'XX earlier possibly company what September for see has before this. they on Dreamforce that we'll just taken could one XX these what through And have nothing industry. No think hold demonstrations by in really imagined the breakthroughs we whole demonstrations get of our able outstanding. be The will mind-boggling release February the will AI

that AI because point these at built models, I this think through open much responses are very that is much of way models source, it's responses. pretty very and are clear the commodity these commodity

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an is So moment. this exciting

wish that, Great. conclude appreciate We happy call. Brad. holiday you. everyone. joining everyone we'll Thank season. holidays, and the the With a call Thanks, Happy everyone

everybody. Thanks,

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