Salesforce (NYSE:CRM) Q2 2027 Earnings Call

0:00 Good afternoon, everyone. I am Shivani Huja, and welcome to our Q2 earnings pre live preshow 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. Now three customers are joining us today to prove it firsthand. We've got Xero, we've got Ligura, and we've got Replit. And what's especially interesting is that they're taking different approaches to AI. Now Xero, going deep with Agentforce. Ligura's employees work with Claude and chat GPT every single day. And with Replit, they build with Claude code. Now, these are different reasoning engines, entirely different interfaces, but underneath all three is the same trusted foundation, Salesforce.

0:55 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 5,000,000 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? Well, first of all, as you noted, we have been a Salesforce customer since 2014, and we have scaled subscribers multiple folds since then, of course. We've also scaled geos multiple times. Right. And we use Salesforce not just as service cloud, but also marketing cloud and sales cloud. So it underpins all of our customer interactions, both outbound and inbound.

1:57 So it is critical infrastructure for us. And so what would happen if, 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, you know, their experience of zero. 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?

2:30 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 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 couple of things I wanna call out because I think they were things that were never before possible at Xero. So, Xero is built entirely as a digital first customer support experience. So believe it or not, we've never had call centers. Wow. Customers would have to self-service, which is great, on a site called Partner Central, which houses all of our repositories of of answers and knowledge base. But there was no way to ever talk to anyone live. Yeah. And there was no way to get real time support. And so as the team was building, agent force or looking at agent force and thinking about what we could do with it, you know, real time support became the critical opportunity.

3:24 And about nine months ago, maybe ten months ago, we started talking about what if we could give 100% of our customers real time support.

3:31 And I think the first fear was like, well, if we had an agent, and internally, we codenamed this Lucy, you know, and we offered it to a 100% of customers, would actually, and we were willing to route people to an agent if we could be if 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, would that blow our gross margins?

3:57 And instead, what happened, of course, is, we set ourselves a goal, and Agentforce was the enabler. We built a custom workflow and a custom journey for our customers on the chatbot. We now just called 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 a 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. Wow. We've had over 200,000 interactions, you know, tens of thousands of interactions, going on in any given month. And what we have really done is given them the ability to, a, get most of their questions answered instantaneously.

4:52 For those that aren't, they are able to be routed to an agent. So now for the first time, there is a human talking to them faster than what other have, previously been possible. And, of course, we've been able to do this while maintaining, you know, what is a pretty high margin of gross profit or gross margin profile for ourselves. And this this whole idea, again, that CSAT would have been at zero because it didn't exist before to that degree. So how do measure something that it hasn't existed yet? Value. Yes. And and it sounds like this internally

5:21 named agent, Lucy, is not just stopping at service because now you're starting to build upon Yes. Of course. I mean, the capabilities once as you know, once you have an agent and, you know, can work for certain use cases, you're going to start rolling in more. So now billing, we we don't just do accounting. We do payroll and payments as well on our platform. And so now we can support payroll questions as well. And so, you know, that customer service agent is just getting more and more powerful. 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.

5:58 And here, we've used AgentForce to build an AI SDR, and that SDR is taking leads from the website, from accounts and bookkeepers who come in. And it also will, renurture old old leads, effectively inactive accounts and bookkeepers who we want to restimulate. We see that they we have increased our email open rates three x with the use of our AI SDR. 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 wild. Yeah. I think you're hitting the key opportunity. Right? People always think about what you lose, but what you gain is a level of scale and the ability

6:54 to have new use cases that previously just simply weren't possible. That's right. You just thought about staffing people. Now now Xero spent more than a decade building its customer data and workflows on Salesforce. Like, this doesn't happen overnight. What what has that foundation made possible as you've moved faster with AI? Well, you've hit the critical word. Right? Data. I mean, at the end of the day, Salesforce is, of course, a system of record for us. But it also provides us clean data, proprietary customer data. And it also provides the infrastructure around that, security, compliance, all the things we care about because we ourselves are a system of record for small businesses when it comes to the financial operating data. So I appreciate what Salesforce does for us in enabling us to surface clean data upon which to build agents Right.

7:39 And new journeys in much the same way we do for our customers. We are their critical infrastructure, and we built agenda capabilities on top. So, yeah, I 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 that so that we can extend that trust to you. Sekinder, I really wanna 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. Now if you're just tuning in, we're talking live with customers right now. The full earnings report starts at two p. M. Pacific. And up next, another customer we've got is Ligora. Now Ligora didn't just bolt AI onto legal software. Nope, nope. The company was built around it, giving lawyers a faster way to handle contract reviews, due diligence and legal research.

8:31 And it's growing rapidly, expanding from roughly 600 to more than 1,500 employees in just six months. 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, Shivani. We're very excited. Now, David, Legora was built in 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 fifteen 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.

9:20 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

9:35 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 Chatty Pettit 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.

10:44 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 did 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 ChatGPT, 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. Right. 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.

11:32 So Legora

11:33 is the fastest software company with a Salesforce to go from one to a 100,000,000 ARR. We did it in less than eighteen months. Wow. And we cannot afford to change our CRM again. No. And and David, you're you're talking about some incredible concepts. You've grown from over six 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. You're proof point that it doesn't. So what are all of these new people actually doing? Yeah. So to rewind the clock, January 1, we have two twenty 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 go from two twenty to 1,500 in twelve 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.

12:30 With over a 70% win rate at pilot, we need to have our reps be first to those accounts because

12:37 we can close one of those accounts three out of four times. We're in over 50 markets, and law is jurisdictional. It's 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. Wow. 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.

13:35 Finance, security, compliance, people, operations. My own function is a really good example of a job AI created, not destroyed. Overall, Liguria sees AI as a capacity expander. In contrast to what you might think, our clients are actually adding more lawyers because they can now take on more work. Our $1,000,000,000,000 TAM that we operate in, the legal services TAM, is supply constrained. We're seeing more m and a, more litigation, more regulation, more companies being formed. And our 900 Ligurians, we're just getting started. The pie is growing. Ligurians, that's gonna stick, David. That one's definitely gonna stick. So Salesforce, Salesforce is bringing to you that deep trusted data, but it's actually not just the data. It's the context behind that data.

14:24 And and while you didn't mention it, I imagine there's an element of probabilistic deterministic, but it's also bringing this new way of working,

14:31 these new new new roles, like you said, like your own department being an entirely new function that wouldn't have existed before. There seems to be a common theme that we're starting to see where it's less about the old traditional thoughts around AI and what AI will take away or what AI will reduce and rather build and grow for the future. And so, what what are you thinking about for the future? I'm thinking about how the surface area is changing. So when I look at Legora and Salesforce, everyone has logged into Salesforce. Right. But if you're thinking about our Ligurians logging into Salesforce in their traditional interface, the answer, it's changing every single day and it's split by role. The service area has expanded and it's changed. And as a result, yes, opt in finance absolutely live in the traditional dashboard. Right. But reps likely are not logging into Salesforce in the traditional way. They're logging in via Slack.

15:23 They're engaging via Slack. Right. And so the surface area is constantly expanding in this new AI ecosystem. 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. Right. 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.

15:55 Keep this up. We're gonna have to bring you into marketing because you what you are describing so well is this whole idea of headless. It's like you're putting it into real words to say you're we're decoupling the Salesforce platform from the UI so that organizations like yours can build the way you'd like to, build what you want, build how you want to. David, I really wanna thank you. That's exactly what yours is exactly what an enterprise a genetic enterprise looks like. And you've been building AI native from the ground up. Thank you. 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 two 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.

16:46 The company is scaling fast with an ambitious goal of reaching $1,000,000,000 in ARR. Again, a common theme that I am 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 are aiming to do this by the end of this year. Joining us is Replit's Chief Revenue Officer, Ghazi Masud. 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 Replit's 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?

17:34 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. Or we could have. Is that the best use of our time or energy to do it? Probably not. And 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 not only did it come on board early, it's really the foundation that's gonna stay with us as we continue to scale into the levels we're scaling 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 or maybe not really to say, should we build it ourselves? I 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.

18:34 And let alone, like, when you build it

18:36 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, Ruplit, from 75 to 300 agent force seats. So 75 to 300 agent force seats speed, while you also increased your Slack consumption. What gave you that confidence that you could expand that Yes. Couple of points like 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. The team's 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 force 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.

19:42 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

19:58 systems of record all kind of pull off of Salesforce. So it's extremely important for us just to kind of make sure we have the right capacity of licenses for the folks that we're bringing onboard into the teams. That's that's great. And you're able to adjust and flex as needed with the with with as your needs are are coming along. Now you're also running Salesforce headlessly. And we talked again with our our earlier guest, David, on 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 so the philosophy is we have no shortage of replic apps that we're building on top of Salesforce. And they're everything from, like we have our own CPQ, which is our order form generator, which basically pulls out of Salesforce. We have our own revenue dashboard that we actually run our business off of.

20:50 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 KingSight equivalent, right? That we actually go out and build on top of that. So we have no shortage of it. And our philosophy is while Salesforce is important as our system of record and that's where all the data harnesses, we want to go out and build a UI layer utilizing Replit because we're familiar with our processes, we're familiar with the look and feel, we're familiar with kind of our culture and we're building those across the team. So in my rep ops organization, we actually have two functions. The classic name is go to market engineers, but we call them like AI engineers. And they're basically tasked with all of the tooling that we wanna go do that pulls off of Salesforce. So while Salesforce is in the background, the idea is no one's really touching it.

21:40 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 replant 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 having to build versus buy type common sense type conversation and really coming up with a catalog list of libraries, right? The crazy thing is like in everybody internally at reply.foods And what that creates sometimes is duplicative applications and stuff that is happening out there.

22:34 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 it was, this was traditionally just functions for technology 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.

23:19 I mean, so everybody, irrespective of the 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, right? So everybody is building it because the tools and capability of applications like Reply 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 long time. And being able to use natural language to really just be able to describe very much so in in line with your organization. Yep. So what's next? What's next for you? Well, next is to get to a billion dollars. Yeah. That's a big priority. A lot of hiring to go do. We're opening up some big international markets. You're gonna see us make a big presence out in Europe during Labor Day week. That's been out on social. So if you're out in London, come see us. We're gonna be making a big splash in London. And then after that is Japan and then Latin America. So we have a lot of growth 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.

24:42 But I hope you're okay with time zones with all of that, all that jumping back and forth. I am. Yeah. Jet lag to me, unfortunately, does not bother me these days. See how it You just suggest. Well, Gazi, I wanna 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. Thank you. 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, Legora, Replit, three extremely different companies, three extremely different ways of approaching AI.

25:27 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. 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 business is actually going to be doing doing a $1,000,000,000 in sales. Oh, it's over that already.

26:36 Jim, agent force of data three sixty 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's connected, now you have 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 US government is our largest customer. And this is where it gets really interesting.

27:24 Today, we are going to show you Salesforce headless three sixty. This is the powerful moment. Headless three sixty is a huge opportunity for to do that. Do And do because now context that. 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.

28:12 With Anthropic, yesterday, made game changing announcement. We launched Cloud Tack, an agent, the seat in a channel as if it 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 Clawdforce. Now you can just ask, which deal needs my attention? Because Clawd is connected to Salesforce, it doesn't have to guess. Salesforce were 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.

29:02 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 twenty twenty seven conference call.

30:09 This conference is being recorded and all lines have been placed on mute to prevent any background noise. After the speakers prepared remarks there will 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 twenty twenty seven second quarter results conference call. 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 and 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 and 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 ks, 10 Q and any other SEC filings.

31:28 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 Endario 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 are coming together for the first time in an incredibly powerful way to build a new product called Cloud Force. It's really a first in the industry, Jim. We've never seen anything like it. It's completely exciting.

32:16 I think that this is the way all enterprise systems are gonna run-in the future. We found that this this combination product that we've built together is 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 but this is the first time that we've really been able to incredibly accelerate our go to market efforts within Claude, and we want that for all the other enterprises. And we wanna we wanna me and Mark wanna bring it together to everyone. We've already worked with Salesforce in a number of ways. We're big users of Salesforce. Salesforce is big users of Claude code, of co work, of other tools. We put products like Claude tag in Slack already, which is which is a part of Salesforce, and now this combination is a way to 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 was just demoing this for me with some of the internal stuff we do within Anthropic. Just just just half an hour ago where he asked, you know, what are the biggest accounts that Anthropic is trying to close now? Like, give me a list of the biggest accounts. Talk me through the risks of each one.

33:26 All the data, all the information comes from being managed in Salesforce. But the the conversation, the interaction, that comes through Quad. And so you can see how these two things can be more than the sum of their parts. Why this is exciting is it's a perfect complement. You know, Anthropic builds this amazing model, and now the model has this incredible user interface co work. And when you take co work and then you're able to put it right on top of Salesforce, it's able to bring the data, the applications, the semantics, 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.

34:14 You know, there's a huge amount of value that can be unleashed through this combination. And with that, let me hand the call to Mark. Well, thanks so much. I'm really excited to have the call, and it was great to be on CNBC with Dario announcing Claude Force. We're gonna get into that in more details as well. And before I get into all of that, though, I wanna really wanna start here at the beginning and talk about this sasbocalypse. You know, I think you could see it from the results. Net new AOV growth, it's the strongest in four years. You know, skeptics really said that seats would decline, and also that agent for sales and service in Slack, all seats grew year over year. Skeptics said customers would leave, but attrition was near its lowest level ever.

35:01 Skeptics said pricing power would erode, and a one e and a four x bookings more than doubled quarter over quarter, and contract length terms improved across all segments and new business and renewals. And agent agentic use, well, use of the platform, it surged six x, 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. They spend up their spend is up 435% year over year. Frontier models depend on CRM.

35:47 They they make sure that it works, that it all comes together, they not replace them. Let's now 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. Wanna welcome all of you, and I'm thrilled to share the tremendous progress we've made and 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 SaaS apocalypse, I think it's time for it to stop.

36:36 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 Cloud's extraordinary intelligence and reasoning with Salesforce's trusted data and applications and workflows and business rules and governance. And while Cloud Forts, Cloud might have been, for example, you know, 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, and I'm gonna 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. And I was with one of our very largest, probably our largest customer in Switzerland, and I was sitting there with them, and we went through and they spent maybe, I don't know, they, you know, they spent more than a billion dollars for sure with Salesforce.

37:48 Yeah. They spent about 100,000,000 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. Wanna 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 the customer's mouth just dropped open because it was astonishing. They were seeing that we were able to reveal this value that had been trapped in their systems, okay, right into this dynamic user interface. And they weren't having to hire all these FTEs and all this stuff to get it going. It was building these apps on the fly for them using the foundation that they had spent two decades building with Salesforce.

38:39 Now I wanna get back to the quarter. We had record revenue and EPS, strong margin performance, CRPO accelerated. It was up about 14%. Look. We generated 1,100,000,000 in free cash flow. That was up 81% year over year. I'm gonna come back to that in just one second. And our AI business, just incredible momentum. Agent Force ARR, it hit 1,500,000,000. Our ARR for AI and data is about to cross 4,000,000,000. Really helps, I guess, that we have 15,000 pure account executives. Hi, Miguel. And the number of accounts with agents in production grew 70% over last quarter. We had great wins with Deutsche Telecom. Met with them when I was in Europe. FIFA, met with them.

39:25 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 gonna do with their company using this new technology. And we also completed a multibillion dollar agreement contract expansion with the US army. The army human resource command expects to drive up to 55,000,000 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.

40:11 And I'll tell you, we're expanding in the markets and seeing an incredible success. We launched agent force IT service in November, and it already has more than 450 customers, including NYU Lagone hospitals and McAfee, you know, conversions from ServiceNow. I think that's very exciting, you know, that we can see that more companies coming into our platform, and as they come into our platform where we expand it to be not just sales, not just service, 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 gonna be able to, deliver for it.

40:59 Now Agent Force Life Sciences is more than a 140 customers, including all top five pharmaceutical companies, and Agent Force Ops is helping companies like Kellogg's and Dell turn manual back office work and supply chains into agentic workflows. That's the Regrelo platform we bought now more than a year ago. It has the ability to deliver and render for a company red, yellow, green on their supply chain every single day. For Dell, they have 20,000 suppliers. And why that's important is we see supply chain as one of the very first applications. So many companies are actually 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.

41:47 With this strong performance and momentum and the strategic acquisitions, especially Contentful and Fin, we're expected to close in the coming weeks, and we're raising our fiscal year twenty seven revenue guidance by about $300,000,000 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 this 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 wanna 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.

42:52 We're gonna see AI transformation, and you're really gonna see AI transformation when you start using CloudForm. 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 CloudForms, 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 gonna just rip out how their company just runs to 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 gonna do. So I show them CloudForce. I show them reasoning across their Salesforce data and workflows.

43:39 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 customers, you know, reaction. And this is what we're building with our new enterprise harness. So this new enterprise harness AI force, you're gonna hear a lot about this at Dreamforce. First, you're gonna hear a lot about our data layer. You're gonna hear a lot about how we've invested in the federation and integration and harmonization of data. You know that's why we bought MuleSoft. It's why we bought Informatica. It's why we built Data three sixty. You're gonna hear about our application layer. Of course, sales, service, marketing, commerce, you know, analytics.

44:27 As I just said, supply chain or ITSM, all the different components, field service, all in the application layer. In that application layer, then the agentic layer on top of that, and then finally, the interface layer. These four layers, data, apps and semantics, 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 gonna see how you are gonna 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.

45:15 So they use data three sixty 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 that already lived in Salesforce. Now employees across every level can get instant answers from real Salesforce data, from real Salesforce metadata, and all of the sharing models and security models. And all of this, all of this is done with zero data retention. That means no data goes to any model. It all stays in your company. We started engineering that in 2023.

46:01 We have been perfecting it over the last three years, and we audit it, and we are sure that that data is staying with you without ever opening a browser. The usage and the value they're getting with Salesforce is going way up. This is the future of enterprise software, and I'll tell you what it's not. This is not the SaaS apocalypse. This is not the SaaS apocalypse. As I said earlier, you know, we've been hearing about this for the last two quarters. These dire predictions about the end of software and how about the models eat everything, but none of them have come true for us, and I don't think I don't even understand how they could possibly come true. Look, models, you have to remember. Models are probabilistic systems. They're non deterministic systems, But our system our system, those four layers that we talked about with data and apps and semantics and agents, those are deterministic systems.

46:55 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, you know, 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 to actually look and compare our business metrics against those others so you can really see what we do and how we're doing. Our seats were supposed to decline. Instead, agent for sales, service, Slack all saw year over year growth, and we were told customers would abandon us, but attrition is near its lowest level ever. I know that you know that cause you're calling all of our customers asking them. So we're told customers would pay less for our products, but what Miguel was about to tell you is they're upgrading. In a one e and a four x bookings, they more than doubled quarter over quarter. We're told contract lanes would shrink. Well, they improved

48:25 across all segments, and we're told agents accessing our system would kill apps. Well, actually, usage is exploding. Agenic use of our apps through model context protocol calls and CLI calls also surged six fold, six x, and we're told the frontier models would eliminate the need for CRM. Instead, they depend on it, and we're showing how one plus one can equal three. Nine out of the top 10 AI companies in the world use Salesforce and Slack. You know that. You're talking to them companies like Anthropic, for example. Well, these companies, these nine out of 10 top 10 AI companies, they've increased their spend with us by 435% year over year. Look at that great company, Repli. You saw them in the preshow.

49:10 It's an amazing company. Their sales team lives here in Slack with Salesforce as their source of source of truth. They've tripled the number of agent for sales seats. 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 raised 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, the agent layer, and the interfaces. Now we all know that if your data is not right, your AI is not right. I've seen that over and over again in customers where all of a sudden, we'll go in and try to show them some magic and all of a sudden go, well, are you really paying attention to your AI because your data quality doesn't seem to be exactly right?

50:01 Well, all that data inside Salesforce now provides hundreds of petabytes of critical context so day 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 it's 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. Think about it. There's more data inside Salesforce than any human can comprehend. A human works one record at a time. An agent works around the cross a clock. It it sees everything, not one thing. It reads across millions of records to find the perfect opportunity, forecast the quarter, and close cases. We know we've been using these models now for almost a decade. For a a decade ago, I would sit in my staff meeting, and I would ask Einstein, tell me how is the forecast gonna turn out? And in many cases, it do more than our folks. Why? Because it is able to see everything.

51:05 So here's another great example, Uber for business. They've got 30 onboarding specialists and a mountain of inbound leads nobody was ever gonna 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 paint 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.

51:51 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 wanna work. And it's a shift from software as the interface to software powering every interface. 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 work and can do things. And not only does it where human work happens, now it's where you can build together too with Slack codes.

52:43 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, on the flow 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 1,000,000 active users, up a 150% quarter to quarter. If you don't have Slackbot turned on in your Slack instance and you're not using it every day, you are really missing out. It has the ability to read across all of your Slack data and you are gonna have insights into your business you just were not able to have before. It just makes you a better executive.

53:41 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 space for teams of agents and humans to build together right where they already work. So when you combine Slack code with Slackbot, it becomes an incredibly powerful multiplayer IDE. Okay. Well, as you can see across our whole platform, we're redefining how our customers build, deploy, and scale AI.

54:30 And we have a very special guest today on our earnings call. And our friend David Friedberg is here. He's got this great next generation bioengineering company, Alhalo. Welcome, David. Fantastic. Hey. Welcome to the earnings call. Great to have you. Alright. And they're changing how we feed the planet with a breeding technology that boosts crop yields by 50, maybe a 100%. Scott already I 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, Oholo, how does it pronounce? Oholo? Oholo? Mahalo? Oholo? I should ask you. It sounds like a Hawaiian But it's not. It's based on an important, actually, part of bio bioengineering history. Right? Yeah. Well, there was a agricultural find in the Sea Of Galilee where they found this old pot of seeds 20,000 years.

55:24 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 a another CRM product we won't talk about, which what it is and 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 a few months later, it turns out you're Well, we did become a Yeah. We did a little vibe coding. Yeah. I did a vibe code make a CRM product over the weekend, and you quickly realize just how much it takes to do maintenance, to do accounts, to do security. There's just much more to it. And we realized pretty quickly there are certain, I would say, software applications that are maybe verticalized where you have to build custom workflows that make sense for your particular business.

56:18 But then there's platform software. And platform software, we realized pretty quickly is really what we need to build our entire company around. And Salesforce is what we kind of decided to go with on, CRM. We're already on Slack. We're not gonna go vibe code Slack. We're not gonna 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 that integrates with Salesforce. They can then go run the standard workflows that are a little bit more standardized across verticals.

57:07 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 I'll tell you, I'm thrilled to have you as now a large Salesforce customer and One of your smarts, but yeah. I wanna 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. Yeah. The number one podcast in the world is what I heard. In San Francisco. What I For now. That's right. But what I wanna know is this. So when you do think about the future and you think about your company and, you know, come by bringing the best of AI and the best of, you know, CRM together, you know, how do you plan to do that? Again, I think it goes back to this point about where do we create value.

57:53 I'm not gonna create value as a 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 gonna build custom interfaces for doing plant breeding. We're gonna build custom interfaces for prospecting customers. We're gonna 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 gonna 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 gonna 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, you know, platforms that we can work with, that integrate, that have the integration capabilities, that have the ability to service and support.

59:10 I'll give you another example. Just internally, we use Slack, right? 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. AskHR 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 could just answer all your questions for you through ask HR. I don't need to go build a communications tool to do that. I can leverage Slack and I can leverage Claude to deliver that internally. It's another good example of kind of the sort of thing where we can build something custom using our internal benefits, our internal HR policies, but then we can leverage the platforms and Claude to deliver that. 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, their personal friends, and all of a sudden, he said to me, yeah, I'm using the CRM product, and I'm turning it off completely.

1:00:16 I'm not gonna use this product anymore. Yeah. And then I was like, well, why? You know, so can you just tell us the story? You had already invested in the CRM platform. You know, this is one of our competitors, and then but you decided not. Now, you don't have to tell us who it was, but what are some of the features and functions that you saw in Salesforce that then gave you this ability to achieve all this productivity that you so badly desired? I wasn't sold. As great a sales guy as you are, I wasn't sold in our first conversation. I was still pretty reticent. I'm like, Mark wants me to do this. I'm gonna do it for Mark, but I'm not sure. K? This is what I told my team. And there's a guy, a 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, 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.

1:01:24 I'll give Mark credit at this point. And maybe we should, you know, send them 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 you're you're a great marketing guy, but with the product and the capabilities Thank you. I appreciate that. That sold itself, actually. Yeah. 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 he ran the whole thing. And and I think that has been the huge shock for us that, you know, 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, can customize the data, the metadata, set up the preferences, do the administration, do things that maybe needed, you know, a bunch of service folks to kind of to 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 term deterministic platform. Totally. And while Cursor is more, you know, nondeterministic or more probabilistic on the front end, it's helping you to administer it. Maybe Bill starting to build new screens for you, analytics, but nothing is gonna be better than having this solid foundation.

1:02:34 I was probably early on the SaaS apocalypse train, as you know, because I I know you listen to my show, and I I always said, like, think SaaS was this temporary phenomenon between the founding of the Internet and the start of AI. 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 vertical software 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 not that's actually gonna get bolstered and it's more valuable with all the other capabilities we can now build around it. So, you know, I'm definitely sold in that sense. I don't think I think there's still a SaaS pocalypse but with a lower case s rather than the upper case s for verticalized tools where I think AI really allows you to rebuild something that's that's unique, creates value for your business in a vertical. Rebuild it on Salesforce.

1:03:32 Yeah. Yeah. That's right. Great. Thanks so much, David, being with us. We really appreciate you coming in today. Thank you. Thank you very much. Thanks. Alright. 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, you know, how he'll use enterprise software in 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 gonna see it at Dreamforce. Not only we're gonna have great entertainment, probably the better best entertainment we've ever had, so we can't wait to announce that. But also, we've got probably the best products we've ever had. And, you're gonna see it in just a couple weeks. It's gonna be a huge accelerator for Salesforce for all of our customers.

1:04:18 We're gonna bring 50,000 people here to San Francisco and show them some unbelievable capabilities, and we're gonna show you some of the most exciting transform 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. You know, you you're gonna see not only meet all of them, but you're gonna see an incredible lineup of speakers at Dreamforce. And you yes. Dario is gonna come there. He's gonna be in my keynote. You're also gonna see Sam there. Jensen's gonna be there. Actually, all the major AI leaders can be there. David is coming if he's bring bringing all of his friends.

1:05:03 And you're gonna see how great companies like Amazon, NVIDIA, f one, L'Oreal are bringing humans, agents, platforms together to connect with customers in new ways that were never possible before. We're looking forward to seeing you all there. And before that, we've got you, Robin. Thanks, Mark. Appreciate it. Your enthusiasm is infectious. So I'm gonna go with a bit speedy here because we wanna be sure that we value all of your questions and wanna be sure that we can tell you everything we can about the quarter. First and foremost, we delivered a record second quarter. AI is amplifying the value of our platform. This isn't just a technology shift as you've heard, it's a reinvention of our customers work, and it is fueling our growth.

1:05:50 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. Q two Slack net new AOV was the fastest quarterly growth since acquisition. AI innovation across our platform is delivering measurable value.

1:06:40 Agent force ARR reached 1,500,000,000, 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 q two alone, customers drove 3,200,000,000 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.

1:07:26 Our premium bundles give our customers access to our innovation in real time. Bookings from agent force one edition and agent force for apps more than doubled quarter over quarter. Headless takes this even further. Bringing Salesforce to the surfaces where teams already work. Say Slack, Cloud Force, 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. Q two revenue came in at 11,350,000,000.

1:08:14 Up 11% year over year, above the high end of our guidance in constant currency, driven by continued momentum in Slack and Agent Force. And we continue to accelerate Informatica's business. Subscription and support revenue was $10,820,000,000 up 12% year over year in nominal and 11% in constant currency. Our top line performance reflects the breadth and resilience of our portfolio. Agent Force 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.

1:09:07 Headless platform, Data three sixty and other growth was fueled by continued momentum in Informatica and Data three sixty, partially offset by license revenue headwinds and volatility in integration and analytics. CRPL accelerated quarter over quarter with 33,500,000,000, up 14% in constant currency. That's one point ahead of our guide. Driven by strength in Slack, Agent Force and Data three sixty. Our continued focus on operational discipline is evident in our profitability. Q two 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.

1:09:58 Salesforce's help agent has surpassed 5,000,000 customer conversations with 64% resolved autonomously. Slackbot is driving 8,100,000 of annualized productivity gains for our employees. That's more than double quarter over quarter. We generated 1,100,000,000 in free cash flow. That's up 81% year over year. Execution of our 25,000,000,000 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.

1:10:49 So turning to our outlook for the year, I want to walk you through the components of the $300,000,000 constant currency raise to our revenue guide. We are raising our FY 'twenty seven revenue guide for organic performance by 100,000,000. This is driven by the continued momentum in agent force, data three sixty, and Slack. These areas of strength offset the continued volatility in overall license revenue. Alongside this organic growth, our raise incorporates a 200,000,000 expected contribution from the anticipated closings of Contentful and FEN in the coming weeks. Of note, our FY twenty seven revenue now incorporates a 100,000,000 FX headwind compared to our prior guidance.

1:11:42 This brings our updated FY twenty seven guidance for revenue to $46,100,000,000 to $46,400,000,000 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 four to 5% year over year. So moving to our Q3 guidance, we expect Q3 revenue of $11,420,000,000 to $11,500,000,000 growth of approximately 11% to 12% in constant currency.

1:12:36 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 Fin. 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 car the call back over, I want to thank Mike Spencer for his incredible leadership of investor relations.

1:13:26 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 organization. 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 sell side 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 and A. For today's session we'll be utilising the raise hand feature.

1:14:18 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 9 to raise your hand. Once you have been called on, please unmute yourself and begin to ask a question. Please limit to one question. Thank you. We will now pause a moment to assemble the queue. We will take our first question from Kirk Materne from Evercore 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 Claude Force. Mark, I think specifically I'd love to understand how you and Miguel are going to be taking this product to the field. 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?

1:15:09 I assume 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 gonna see at Dreamforce AI Force, and that harness is able to power not only Cloudforce, but a new version of Slack that you're gonna 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 in semantic layer, our age 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 becomes untrapped.

1:16:17 But you also saw it here at Salesforce. This quarter, we actually released it to many of our executives all over the world, and many of those executives were the ones who are actually demoing it directly to those customers. That it was sales executives or my most senior sales executives, my operating unit leaders, were showing Claude Force to our top customers already. 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 gonna 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, you know, the capabilities of both companies. Yes. Thank you, Mark.

1:17:08 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 program available. We are rolling it out to the whole enterprise, to the whole company. And then we're to make it Patrick, we're going make it available to GA in September to everyone. 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 CloudForms or Salesforce before Cloud. We are simply going deep and researching, understanding your business. By the way, you're able to engage also through Slack, through e mail with your team members. Is going to be very powerful.

1:18:07 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 of anecdotes because 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? 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 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? Sometimes we can, if they let us. So we build our own agents based on Claude.

1:19:08 And that agent inspect they are our deputy CROs for all our businesses. And they inspect the business, the pipeline. They tell us if there is risk in the month or in the quarter. And I do one thing that is Marc, you would love this. I talk by the way, I do this on Slack. This is one of the surfaces. I do this in I mean, at the time, our co work now is CloudForms. But I also do it in an app that I build with Cloud Code. So I depending on the moment, I use one of the surfaces. 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 Fortesa. She's a Forza de la Natura.

1:19:53 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 e mails, all the Slacks before they go. And it 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 is mobilized. Everybody has been working over the weekend. Vanessa is crazy running around and we close deals faster. Yes.

1:20:38 Very exciting. Thanks, Kirk. Sophie, we will take our next question. Our next question comes from Alex Zukin with Wolfe Research. You may now unmute and ask your question. Guys, thanks for taking the question and congratulations on fantastic quarter. Mark, 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 Clogforce and AI force slash headless. So maybe talk about how you see this debate settling and about the monetization opportunity for both Clogforce and headless and kind of when we should start thinking and seeing it in revenue growth.

1:21:25 Yeah. I think a lot of customers are asked these questions, and, you know, there a lot of us, I'm sure you can relate, live in this podcast universe. We just were with David Friedman. He's some other well, I think we all love listening to his podcast. Right? And, you know, we like listening to a lot of these podcasts. And we're in this podcast world, but I think sometime and I you know, please don't quote me on this, but podcasts do not always meet reality. And it's very interesting. It can be very, you know, aggressive. It can be very stimulating, but it might not be exactly true. And I think that that is just the world that we live in. We world we live in a world of misinformation where everybody has a agenda, financial agenda.

1:22:13 You know, 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 think of 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. You know, 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.

1:23:08 And I think when we look across those six things, they do not wanna also then say, I'm have all these models, okay, which kinda gets to your question, which is like, you think that these customers then are gonna all of a sudden set up all and maintain and build the to the the human expertise to be able to build and maintain and train models? No. I believe what they're gonna 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 co work, you're consuming AI through package software.

1:23:56 And when you're using Claude 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? You know? 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 will get abstracted back to kinda 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. So, I I couldn't tell you from my phone all the way through Salesforce and Slack all the way down to what, you know, what the hardware infrastructure is.

1:24:41 And I shouldn't have to worry about that. But I do understand this layer up here. And those top four layers that I've articulated several different times on the call, that's where I live with the customers. I did not have one customer really say to me, tell me, you know, are you gonna be on open source? Are you gonna be on frontier? And I think, like, one way to think about this is, yes, this is a highly dynamic market. And there will be frontier models. There's gonna be open source models, and there's gonna be room for all of the above. And I think it's very exciting if you're not tracking what NVIDIA is doing with Nemotron one three and the ability to fine tune it, it's a very exciting moment for models. But Salesforce also makes a lot of models too, by the way. We have a lot of our own models that run-in our platform.

1:25:30 Our platform runs on our own custom models. We've been writing models since, like, 2015, and you can find them all on Hugging Face. If you go, you'll see all the models. If you're a if you're really into models, you can go and see that. So I just think we're at a moment where be careful. 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.

1:26:23 Hi. Thank you so much for the question. I wanted to circle back on the 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 lengthening as customers are evaluating a broader set of solutions, or is Salesforce's increasingly open and headless posture helping derisk some of these decisions to potentially accelerate engagement with the Salesforce platform? Thanks. Can I take that? Yeah. I'm gonna have it turn over to Miguel, but the first thing I'll tell you is, you know, we offer our customers a wide variety of of capabilities, products, and functionality.

1:27:11 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. Right? 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 for heard about, And these new bundles let customers do that. See, customers wanna buy and wanna 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.

1:27:59 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? Yes. 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 double triple digit, so we doubled year on year. That was pretty fantastic.

1:28:44 50% 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 productivity because these sales 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 funnel. We want to bring them down. The first thing is to get into production. We added 2,000 paying customers into production. That's 70% mark quarter on quarter. We are not happy with production only. We want them to really be ready to do the work. We are taking them to the enterprise. We show them everything how to work and then we leave. We call those agents consistently consuming. We added hundreds of consistently consuming agents down there. You've seen the down the funnel. You've seen the consumption number, the AWs exploded.

1:29:40 It's but for me, the most important thing is to see the live customers. I want to tell you one story, if I have time, on one customer. But if you want to write down names of websites that you can go right now and see the agents or call them, bodewellgeappliance.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 call you want to call Amazon Blink. I mean, you want to call Biberg? Amazon Blink is such a great example, Miguel. Will you just talk tell the story just I actually have the phone number. Yes. Amazon Blink, basically, if you have anything going on in your in every day in your Amazon devices at home, you can call, voice call. But I'm actually giving you one because since everybody here is a business, I want to if you need business insurance, commercial insurance, you can call one of the Berkshire Hathaway companies, BBIRC.

1:30:34 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, etcetera. But let me tell you one story of some of the agents that are working in enterprise that people don't see, big digital platform company here in The U. S, 45,000,000, 45,000,000 AWUs is one of our largest, grew 14 times. We started this six months ago. In Q2, the AWU's consumption grew 14 times, 14 fold. And what it does is they call it the activation agent.

1:31:24 They go to all the merchant 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 upfront and do a big thing. They just wanted to try and see the value. So now, Mark, we're negotiating either we're giving two options, either outcome based deal. I mean, we're talking I mean, this is a $40,000,000 customer for us. So it would be a monster deal on outcome based or it could be simply an ELA unlimited agreement with millions I think of 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.

1:32:17 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. Thank you. Thanks, Elizabeth. Sophie, we will take our next question. Our next question comes from Gabriela 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.

1:33:02 If I listen to what Xero and Regora and Replot is saying, you've got some customers that are using the agent for a stack. You've got some customers that are going headless. And now you've got the core force 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, Gabrielle. 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 Mark's point, what we ultimately think is predictability and flexibility is what's important to customers.

1:33:59 And as Mark 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 gonna get innovation in the moment. That is a, early stage for us relative 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, most importantly, the flexibility that we're giving our customers that allows us to capture that. Good thing.

1:34:51 The AI opportunity, you can see it first, augmenting employees. That's where our premium editions come very handy because when you have when you are on one of those premium additions, 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 ILS, 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 averages. And many times, they buy upfront a bunch of credits. I think AI services is going to increase the demand across the board. What I can tell you is every and we're measuring this, we're going to give you an update in Dreamforce, but we started last year.

1:35:38 Customers that start the agentic journey with Salesforce, on average, they are already at double the AOV with a perspective of nearly quadrupling, 3x to 4x 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 That's right. Double, triple, quadruple the AOV with us. Yeah. And I think that that's what's really key. I I think your question is so good, Gabriela. I I'll tell you why it's so good. Because I think that if you would ask us a year ago, we'd be like, well, we don't really know. But I think now what we see is, 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.

1:36:45 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 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 their higher end editions. We we get a 60% to 80% premium, so imagine. Yes. And I think that's a major so if you want Claude 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 gonna 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.

1:37:46 Good numbers there. Thank you. Thank you. Thanks, Gabriela. Sophie, we will take our last question. Our last question comes from John DiFucci with Guggenheim Securities. Please unmute your line and ask your question. Thanks for taking my question. Miguel, I know you have 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. Can you better I guess help us better understand what's happening underneath those statements? How stable or sticky is that foundation of your recurring revenue? And more importantly, how should we think about that going forward?

1:38:37 Because Mark's talked a lot about the so called SaaSpocalypse, and he's and and I I appreciate that. That was that was actually I don't know. Probably not fun, but it was always, interesting. Thank you. But if you follow through on most 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, Mark. You you missed the third leg of the stool, though, John. You didn't say a new value added for customers. I I think that the key is is is three things. Yes. It has to be about low attrition. Okay? 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 gonna bam, bam, bam, offer all these new capabilities.

1:39:28 And I'll just come back to what we said. Whether you're using CloudForce or you're gonna see the new version of Slack, I'll just go into a second, also has a 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 gonna work with it, and you're gonna 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 in a in a map, you know, this, know, 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 don't I'm not gonna get too geeky on you, but, like, React, you know, like a very complex user interface.

1:40:16 All of a sudden, that is what the what the AI is really good at. And, you know, we're doing the heavy lifting down below, the sharing models, the business models, the security models, keeping it safe, keeping it controlled, you know, keeping the data where it needs to be, making sure the wrong person doesn't see the the wrong data, that kind of thing. But then that idea that we can offer a lot more value. So it's those three things all coming at once. And that is what our that's what our hope is, is that we will offer more value for our customers and unleash trap value, and that that's gonna give us this huge leg up. And that last thing that Miguel said that we're moving to not just kind of outcome based pricing, which is we completed this many phone calls, therefore, give us a dollar. You know, we wanna 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.

1:41:13 And I think that that's like the next generation of enterprise software that is more than outcome based pricing. And there's others 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 to write an outcome deal. Like, if I can generate this much more revenue for you, you have to give me a percentage of it. Woah. You could do that at scale now that you have this kind of thing, and you don't need a bunch of FTEs 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, Mark? It makes absolute sense, but I 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're they were just afraid things were gonna deteriorate into into They're not looking at right. Well, yeah, take the value of Slack.

1:42:12 You know, obviously, I get a call every day from somebody who wants to buy Slack. Hey. Take the value of Slack. Then take the value of our Anthropic stock. That's been, like, half our value of our forget our cash flow or our customer base. That's why I said, Robin, go try to buy as much back as much Salesforce stock as you can. You know? And, you know, I think we got a lot of stock at a good price. So dangerous Well, you're on your way. This tonight Confidence made a big statement. Thank you. You. Keep guiding us, John. On the confidence about the future, I mean H1, H2 last year was our great net newbie growth semester. We knew Robin and I, we partnered together.

1:42:57 We knew that for organic revenue to reaccelerate as we committed to happening now in H2, we had to continue with net AUV growth outpacing AOB growth. That was our obsession. We aligned the whole company this fiscal year, compensation plans, every role. H1 net newbie significantly growth outpaced AOB growth. We've already raised the guidance. We've already committed to the revenue acceleration inorganically in Q3. The momentum is there. We feel very, very strong. The demand environment is very, very good, very strong. Our pipeline are at record levels. We have more opportunities to monetize that we are not even putting in the pipeline. We have the capacity. Thank you, Marc. You pushed us to hire a lot of these when things were a little bit risky. Well, somebody has got to call these customers besides me, Miguel. Because I know, I know. I do some calls also. Thank you for We helping have the capacity and we have the innovation.

1:43:50 We have the product. So if you think the demand is there and it's going 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 tuck in acquisitions to enlarge our TAMs. We are very confident. Definitely, 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 we are going to hear more at Dreamforce about fiscal year twenty twenty eight. 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? That's fundamental proof point is that everything we're doing is amplifying our entire platform.

1:44:43 AI is amazing progress. It's amplifying the need for trusted context and deterministic execution. Very clear. Perfect note to end on. Thank you, John, and thank you to everyone for joining the call. We will be hosting a webinar on Tuesday to deep dive on our customer motion and adoption of AI with Bill Patterson and Conor Marsden. We look forward to seeing you all over the coming weeks and at Investor Day at Dreamforce. Thank you for joining. This concludes today's call. You may now disconnect.