Slide 1: Financial Update Q3 FY20
Financial Update Q3 FY20 NYSE: CRM @Salesforce_ir
Slide 2: Safe Harbor
Safe Harbor "Safe harbor" statement under the Private Securities Litigation Reform Act of 1995. This presentation contains forward-looking statements about the company's financial and operating results, which may include expected GAAP and non-GAAP financial and other operating and non-operating resu
Slide 3: Company Overview
Company Overview Delivering durable growth at scale - Salesforce is the #1 CRM software provider based on total software revenue worldwide in 20181 - CRM is the fastest growing segment in Enterprise Application Software (projected CAGR of 13% 2018 – 2022)2 - Consistently delivering durable revenue g
Slide 4: Financial Overview
Financial Overview Quarterly Results 4
Slide 5: Q3 FY20 Results Highlights
Q3 FY20 Results Highlights Durable top-line and operating cash flow growth • Revenue of $4.51 Billion, up 33% year-over-year, 34% in constant currency1 • Current Remaining Performance Obligation of approximately $12.8 Billion, up 28% year-over-year, 28% in constant currency1 • Remaining Performance
Slide 6: Q3 FY20 Financial Summary
Q3 FY20 Financial Summary GAAP Non-GAAP1 Quarterly Results Increase (Decrease) Y/Y Quarterly Results Increase Y/Y Revenue $4,513M 33% $4,542M 34% CC Current Remaining Performance Obligation2 $12.8B 28% N/A 28% CC Total Remaining Performance Obligation2 $25.9B 22% N/A N/A Operating Margin 1.4% (126)
Slide 7: Total Quarterly Revenue and Operating Margin
Total Quarterly Revenue and Operating Margin $4,513 $3,392 Q3 FY20 Y/Y Growth $2,701 19.4% 33% / +34% CC 17.6% 16.9% + 1 Revenue 5.7% (126) bps 2.7% GAAP Operating Margin 1.4% Q318 Q418 Q119 Q219 Q319 Q419 Q120 Q220 Q320 250 bps 2 Non-GAAP Operating Margin2 Quarterly Revenue Operating Margin Non-GAA
Slide 8: Quarterly Subscription and Support Revenue by Cloud
Quarterly Subscription and Support Revenue by Cloud Complete portfolio of CRM products +15% Y/Y +24% Y/Y +73% Y/Y +32% Y/Y $1.29B $1.17B $1.14B $1.02B $0.92B $0.74B $0.64B $0.49B Q319 Q320 Q319 Q320 Q319 Q320 Q319 Q320 Sales Cloud Service Cloud Salesforce Marketing Cloud Platform & Other & Commerce
Slide 9: Q3 FY20 Revenue by Region
Q3 FY20 Revenue by Region Incremental investments in international markets driving growth $3,216M $880M $417M +33% Y/Y +37% Y/Y +28% Y/Y +33% Y/Y CC1 +42% Y/Y CC1 +28% Y/Y CC1 1 Non-GAAP revenue CC growth rates as compared to the comparable prior period. We present CC information for revenue to prov
Slide 10: Remaining Performance Obligation
Remaining Performance Obligation Represents future revenue under contract $25.9B Q3 FY20 $21.2B Y/Y Growth 28% / +28% CC $13.1B $15.8B + 2 $11.2B Current RPO (CRPO) $7.9B + 22% Total RPO $12.8B $10.0B Remaining Performance Obligation (RPO) is a metric disclosed $7.9B with the adoption of Topic 6061.
Slide 11: Quarterly Operating Cash Flow
Quarterly Operating Cash Flow Delivered $298 million in operating cash flow in Q3 Q3 FY20 Y/Y Growth 1729% 108% FCF1 OCF Our fourth quarter has historically been our strongest quarter for new business and renewals and we generally invoice our customers annually. As a result, our first quarter and, i
Slide 12: Cash, Cash Equivalents, and Marketable Securities
Cash, Cash Equivalents, and Marketable Securities Strengthening Cash Balances $6.5B Q3 FY20 Y/Y Growth 89% $3.6B $3.5B Total Cash and Marketable Securities Y/Y Growth Q318 Q418 Q119 Q219 Q319 Q419 Q120 Q220 Q320 Cash Marketable Securities 12
Slide 13: Business Overview
salesforce Business Overview
Slide 14: Digital transformation is accelerating and capturing spend
Digital transformation is accelerating and capturing spend Worldwide Nominal GDP Driven by Digitally Transformed vs Other Enterprises ($T) ~$52 ~$haly ~$24 ~$14 ~$68 a5 ~$51 Bere Worldwide DX Spending vs Other ($B) $1,376 $998 $2,696 TM go 574 2018 2020 2022 2023E 2018 2020 2022 HB Non-Digital GDP B
Slide 15: Put Your Customer at the Center of Your Business
25% average increase in revenue 30% higher customer satisfaction 30% higher marketing ROI 4 Put Your Customer at the Center of Your Business Trusted - Smart - Flexible - Sustainable ~\& * ol 26% Sal o g . gv decrease in Success Service IT costs Q Partners Marketing 57 % faster app A =] development I
Slide 16: The Global Leader in CRM
The Global Leader in CRM Continuing to take share in a growing market 17.3% Bo 5.5% ORACLE 53% Ty 05, BE Microsoft 3.5% /.\ Adobe 2014 2015 2016 2017 2018 2019H1 Ranked #1 for CRM Applications based on IDC 2019H1 Revenue Market Share Worldwide. Source: IDC, Worldwide Semiannual Software Tracker, Oct
Slide 17: History of First Mover Advantage
History of First Mover Advantage > Setting the stage for future growth and innovation Integration rebleau Cloud ¢ ClickSoftware Salesforce.org + cy MuleSoft 1 ’ t 1 H ° : ‘ 1 Datorama + a ry 2 Lene Commerce ©! Einstein Cloud Platform a Trailhead Gout hange ee Salesforce Analytics 107 Service Cloud L
Slide 18: Innovation Drives Growth
Innovation Drives Growth Serving customers with the most complete portfolio of products ys @2ooO 0 6 Sales Service Marketing eCommerce Communities Collaboration Platform Integration Industries © 90 © © © 060 I Inbox _ Field Service Social Studio B2B&B2C Self Service Slides &Sheets | Heroku Connectiv
Slide 19: Large and Growing Addressable Markets
Large and Growing Addressable Markets > Total Addressable Market growth from CY17-CY23 CY17-CY23 6YR CAGR?2 ™ §168B Total Addressable Market? @ 13% $1208 tH 7% © 15% @ 13% S60B @ 10% Bea @ 12% I Commerce H Mee (yAly/ cY18 (Ak) cyY20 Cail Ca es) ‘arketing I Service I Platform & Others Calculations pe
Slide 20: Core Values
CORE VALUES TRUS
Slide 21: Continued Environmental Leadership
Continued Environmental Leadership => Committed to creating a sustainable future for all Net-Zero Emissions & Carbon Neutral Cloud Delivering an eco-friendly customer success platform Global Green Real Estate Strategy Aligning with LEED and Net Zero Carbon Building Certification Step Up Declaration
Slide 22: Values Attract Top Talent
Values Attract Top Talent 47,677 Unmatched scale focused on CRM Headcount Growth Y/Y Q3 FY20 39% ~800 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Q320 Total Company Headcount 22
Slide 23: Strategic Technology Partners
Strategic Technology Partners Extending the capabilities of the Salesforce Customer 360 aws @ S= 5 salesforce stfectfue CISCO. | Dia Group BE Microsoft
Slide 24: Trailhead Momentum
Trailhead Momentum Paving the way for the next generation of Trailblazers +50% YoY A 2400 15m TRAILHEAD Badges Earned A +88” YoY ¢ @ ie) [PALS FY16 FY17 FY18 FY19 i
Slide 25: Autodesk is a Trailblazer
Autodesk is a Trailblazer “Trailhead helps us reach more people, Autodesk depends on faster, and gives us a deeper understanding of Salesforce capabilities.” Trailhead to deliver sales Damian O’Farrill, Product Manager AI, onboarding and enablement. Sales Automation and Analytics, Autodesk. Challeng
Slide 26: Ecosystem Advantage: SIs
Ecosystem Advantage: SIs Partners and ISVs are aligned by industry Consulting Partners QP > rs ‘S) accenture YOfarririo —_ bluewolf [3] Capgomini® e@. Cognizant Deloitte. +30% ~100 ness pe Partner Certified Industry Focused Individuals Partners W PP Publicis (1000+ Total Partners) 1 Growth stats bas
Slide 27: Ecosystem Advantage: ISVs
Ecosystem Advantage: ISVs Largest B2B app exchange in the world supports our innovation Independent Software Vendors APTTUS Sc ne) MN AY ——< DocuSign @ FINANCIALFORCE ZIOVIAN 5,000+ +20% App Exchange FY20 Installs Listings ill ncino. veevad @Vlocity 1 Growth stats based on FY20 H1 compared to FY19.H
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Slide 29: Appendix
Appendix 29
Slide 30: Notes on our Financial Results
Notes on our Financial Results Topic 606 Accounting Standards • Salesforce retrospectively adopted new accounting standard Topic 606 on February 1, 2018 (Q1 FY19) • Topic 606 includes changes to accounting policies for revenue recognition and costs capitalized to acquire revenue contracts (primarily
Slide 31: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes information about non-GAAP diluted earnings per share, non-GAAP income from operations, non-GAAP operating margin, free cash flow, and constant currency revenue and constant currency current remaining performance obligation growth rates (collect
Slide 32: GAAP to Non-GAAP Financial Reconciliation
GAAP to Non-GAAP Financial Reconciliation (in millions) Three Months Ended October 31, Non-GAAP income from operations 2017 2018 2019 GAAP income from operations $ 155 $ 92 $ 65 Plus: Amortization of purchased intangibles $ 70 129 266 Stock-based expense 251 351 543 Non-GAAP income from operations $