Salesforce, Inc. (CRM) on Q2 2022 Results - Earnings Call Transcript

Operator: Welcome to the Salesforce’s Fiscal 2022 Second Quarter Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. . Please be advised that this conference is being recorded. . I would like to hand over the conference to your speaker, Mr. Evan Goldstein, Senior Vice President of Investor Relations. Sir, you may begin. Evan Goldstein: Thank you, Mel. Hello, everyone. And thanks for joining us for our Fiscal 22 Second Quarter conference call. I'm Evan Goldstein, Senior Vice President of Investor Relations. Our results press release, SEC filings, and a replay of today's call can be found on our IR website at www.salesforce.com/investor. With me on the call today is Marc Benioff, Chair and CEO; Amy Weaver, Chief Financial Officer; Bret Taylor, Chief Operating Officer; and Gavin Patterson, Chief Revenue Officer. As a reminder, our commentary today will primarily be in non-GAAP terms, reconciliations between our GAAP and non-GAAP results and guidance can be found in our earnings press release. Some of our comments today may contain forward-looking statements that are subject to risks, uncertainties, and assumptions. In particular, our expectations around the impact of the COVID-19 pandemic on our business acquisition, results of operations and financial condition, and that of our customers and partners are uncertain and subject to change. Should any of these materialize or should our assumptions prove to be incorrect, actual Company results could differ materially from these forward-looking statements. If a description of these risks, uncertainties, and assumptions, and other factors that could affect our financial results is included in our SEC filings, including our most recent report on Form 10-K. With that, let me hand the call to Marc. Marc Benioff: Well, thank you, Evan appreciated. And thanks to everyone for being on the call today. I am actually here in Geneva, Switzerland, with Gavin Patterson, our Chief Revenue Officer, and I'm attending the World Economic Forum's IBC meeting and Board of Trustees meeting. And it's been a great experience being here in Geneva very much. The world is open for business here. And it's great to be meeting with our customers face-to-face and in-person and discussing our business with them and talking about their businesses and how their businesses are doing in this new normal. And we're learning quite a bit about how different the U.S. is from Europe right now. And also, how much has really changed, which is quite a bit. So, I'm actually excited to be here, but I'm also extremely excited to share our phenomenal Second Quarter results with you. You can really see we had a phenomenal Second Quarter or we just had a phenomenal second half, you're about to hear. We're about to have a phenomenal first-half as well. And we're also going to have a good chat about what we're doing with Slack. A very exciting acquisition that's now closed and you are going to hear about number 1, CRM just got better. And it's incredible what's going on with Slack, and looking forward to addressing all that with the -- in the script with you. So, look, we are in a new world, there's no doubt about that. I'm sure that all of us realize that, and we are delivering success from anywhere as well. For Salesforce, we've gone through a tremendous transformation and we're now delivering this new world for our stakeholders. And from a business perspective, well, I'd say it's been an absolutely extraordinary 18 months for Salesforce, I know for all of you, and certainly, for all the CEOs I met with today. We're navigating this global pandemic. We have been guided by our core values of trust, customer success, of innovation quality, but through all this and through our perseverance and through our, I think dedication to our customers; we've been able to deliver record financial results. And with these results, we've now can say -- and looking over this, we've now had 5 outstanding quarters in a row. Really delivering the success from any , pretty awesome. So, let's take a look now in the second quarter because the numbers are incredible and you can see we delivered our first $6 billion quarter, about 6.3 billion, and continue to maintain our very strong growth rate, our profitability, our cash flow, our margin growth, continuing to execute our new operating margin model. And you can see right now revenue in the growth -- in the quarter, you can see 6.34 billion, up 23% year-over-year, pretty awesome. And above where we thought we were going to be, considerably above. And I guess as excited as I am about the revenue amount, I'm also very excited that as we're executing this new operating margin model, we can see the margin of the quarter. It was also very healthy, 20.4% up 20 basis points year-over-year. And also delivered 386 million in operating cash flow. For fiscal year '22, we are raising again, our to 26.3 billion, which is now at the high end of our range. It's a raise of 300 million and it's going to represent about 24% projected growth year-over-year, and just really reflects, I think, how well the Company is doing in its core, not just through the Slack acquisition, but you can see organically, especially when you look at the numbers over the last 5 quarters. And we're raising our operating margin to 18.5% up 80 basis points year-over-year. Again, based on just the outstanding performance of the Company, we are able to do some amazing things here with the operating margin. I don't think Salesforce has really ever been -- had better execution, better management team, greater momentum. And as I have spoken to so many customers today, I don't think we've ever been more well-positioned for them. And I will tell you that in two areas. One is in our core products, our focus on customer success, the Customer 360. Now with the Slack user interface and everything being Slack first. But also our core values, so many of our customers are attracted to us because in many cases they're going through an amazing values transformation and the areas of -- that we've pioneered, and now especially in regards to sustainability, which we'll talk about, because as you know, Salesforce has been a net-zero Company, but now we're fully renewable as well, and as we start to head towards the Fortune 100, I think that a lot of the companies that we've -- I met with today, were mostly Fortune 100 CEOs. They crave to have that same net-zero and renewable profile, which is very exciting to see the world has this kind of sustainability focused. So, I'm absolutely thrilled to see how the core business grew in the first half of the year. And I am excited about the outlook, I'm excited about our positioning with our customers, and I'll tell you, I'm very excited that 5 out of the last 5 quarters that we've had that 20% or greater revenue growth. And that 3 of the last 5 quarters, we're having greater than 20% operating margin. I don't think we could have said either of those things 5 quarters ago. So, I have -- my hat is really off to the management team and to the employees for making this happen. And we're raising our guidance for the fourth time in a row as we see increased opportunities for additional revenue growth and additional operating margin capability this year. And look, we're the fastest-growing enterprise software Company ever, you know that. You're tracking us. You see where the numbers are going. You can see what the trajectory is, the velocity of the Company, both in revenue and margin. And now you can also see that no other software Company of our size and growth -- size and scale is really performing at this level. So, we are really quite confident and remain on our path to generate 50 billion in revenue by fiscal year '26, which doesn't seem very far away from right now. And when we first gave that number, it didn't seem as -- it seems like it was so far away. Now it seems, wow, this is going to happen. Operator: Excuse me, the line of Mr. Marc has just got disconnected. We're trying to disconnect his line. Thank you. Again, we're trying to reconnect the line for Mr. Marc. Bret Taylor: Well, I think we have a few technical difficulties with Marc there. This is Bret Taylor; I'll continue with the script. Thanks, Marc for that amazing introduction, and just a reflection on the momentum in the Company right now. It really was just an incredible quarter. Our products are more relevant than ever, and I have never seen this kind of momentum in the business. And honestly, that's because CRM is more strategic now than it's ever been. Every digital transformation begins and ends with the customer. And that's why around the world more and more companies are putting their trust in Salesforce to help them get back to growth. That's the agenda on every CEO's mind in Switzerland and it's on the mind of every Board around the world. IDC just released their April 2021 SaaSPath vendor Radiance, which has surveyed more than 2000 companies worldwide. And Salesforce is rated number one in trust, number one in the product, number one in industry specialization, and number one in value for the price. That is just amazing. It's a true measure of just how mission-critical we are to our customers. And you can just see it in the incredibly strong performance of all of our Cloud this quarter. Sales Cloud has been number one in its category for more than a decade. And this year, we've reimagined the product to be the growth platform for digital sales teams. We are already seeing the results as Sales Cloud accelerated to 15% growth year-over-year. Our Service Cloud is also seeing amazing momentum. All aspects of customer service have gone digital from the contact center to field service, to self-service, and . The scale of Service Cloud is just incredible. This is a $6 billion business, whose growth has accelerated to 23% year-over-year. Our marketing and commerce clouds also grew 28% year-over-year as every organization in the world is investing in direct, trusted relationships with their customers. And every one of these digital transformations is also a data transformation, which is driving the unprecedented success we're seeing in Tableau and MuleSoft. Tableau is within 9 of our top 10 deals this quarter, and MuleSoft is within 8 of our top 10 deals. The real power Salesforce platform is bringing all of these capabilities together into a customer 360, a single source of truth for your customers. Our industry strategy is enabling our customers to get started with an end-to-end Customer 360 faster than ever before, tailored to the specific needs of every industry. Our industry cloud saw 58% year-over-year growth in annual recurring revenue. We had an especially strong performance in the public sector in our Health Cloud Business and Financial Services. In fact, 4 of our top 10 deals in the second quarter came from the public sector. Our core organic business has never been stronger, just like Marc said. And now with Slack, we're bringing a whole new dimension to Salesforce. There could not be a more relevant product at a more relevant time for every single one of our customers. If you talk to any CEO, read the headline of any paper, or even look around the home office most of you are sitting in it right now, you can see the depth of the transformation work has gone through this year. Sales mediums have moved from conference rooms to Slack and to Zoom. Contact centers used to be buildings, and now they exist entirely in the cloud. My commute has moved from the highway to primarily my hallway. Slack is at the center of this. Slack is how organizations all around the worlds are finding success in this all-digital working anywhere world. It's your digital HQ. It connects your employees, your partners, your customers on a single platform, and a platform that people love to use. And the Slack-First Customer 360 makes every Salesforce product more powerful and more effective for our customers. Our engineering teams have really hit the ground running on this integration. Just last week we announced our Slack-First sales, service, marketing analytics at our launch event, and we've got a ton of Slack innovation coming at Dreamforce. IBM is one of my favorite examples of a Slack first Customer 360 Company. Arvin Christian is a close friend of mine and in talking to him, he talked about how he believes that bringing Salesforce and Slack together is key for IBM to become even more connected, even more, productive and more innovative. IBM has built their entire Customer 360 on Salesforce. Over 530,000 customers, 380,000 employees, and 50,000 partners using our platform. And all of these employees are working in Slack. They've connected their workflows across Sales Cloud across Service Cloud and enabled them to connect and take action from anywhere. Slack comes up in every single one of my customer conversations. And I could not be more thrilled with momentum in the business. Slack's revenue accelerated to 39% growth year-over-year on a standalone basis. And a great customer win at Target, Lowe's, Conde Nast, UNICEF, Norton Healthcare. And what's really fun about this is looking at the growth of Slack Connect. We've talked a lot about this. Slack Connect is the capability to enable you to connect not just with your fellow employees but to connect with your partners, your vendors, and your customers. Slack Connect grew 200% year-over-year. This really illustrates the power of not just Slack for employee engagement, but the Slack-First Customer 360. Slack is a once-in-a-generation Company that is transforming the way we work, and it's transforming the vision we have for our Company over the next decade. I am so grateful to be able to work with Stuart and the Slack team every day. And I'm really excited to bring this vision of this Slack-First Customer 360 to all of our customers. And if the technology gods will allow, I'd love to transfer it over to Gavin to talk about some of our customer's wins for the quarter. Gavin, are you around? Gavin Patterson: Hi, Matt. Hi, Brad. Can you hear me? Bret Taylor: Yes. Amy Weaver: Gavin, go ahead. Gavin Patterson: Thanks, Bret. Thanks that we see in the business. And you can see that really reflected in some of the remarkable customer wins, not just in the U.S. but around the world in the last quarter. But starting in the U.S. we saw our largest ever deal new annual return revenue, which in the public sector, friends state, the public sector being a fantastic force in the second quarter. Other examples we expanded relationships with great companies like PayPal and Coinbase. Well, in EMEA, we had significant wins behind. We have things like Safelight and Freshfields, Dicen, Vodafone, and a cracking business, Canyon bicycles, which is already a great case study. And then APAC, we continue to deepen our relationships with many businesses, including things Afterpay and FWD Thailand. So, we're seeing strengths internationally, as well as in the U.S. Now a couple of examples I want to go into a little bit more detail on it, and one is a win with You might remember that more as Herman Miller, but it's a fantastic example of a Company pivoting with a great customer experience. So, after the start of the pandemic, Miller Knoll saw a huge spike in demand for their furniture. Well, surprise. Of course, they turned to Salesforce to transform their e-commerce experience in the quarter. And they're already seeing a significant improvement in conversion rates on the back of that. Since then, they've been providing an even better experience, tailored product recommendations, streamlined checkout experience, and next-generation video chat. And now on top of that is a net-zero Company, and they're now using Salesforce's sustainability cloud to track their carbon footprint and other climate-related initiatives. So, you can see it's a great example of how we're building partnerships, building multi-cloud solutions around the Customer 360, and we go from strength to strength. And I want to look at RBC Wealth Management, which is another great win in the quarter. They're using Customer 360 to streamline processes, integrate data from over 26 different systems to create a unified wealth management platform that provides advisors with a 360-degree view of every client. And I think that's something that really brings the Customer 360 to life for more than 2100 RBC financial advisors. I think this example to me is very powerful. They've been using Salesforce workflow automation to transform the client on-boarding process, which was several weeks, more than 100 pages of physical documents, and it is now a digital task that takes just 24 minutes. Then that is quite remarkable, I think. GEICO was a great win in the quarter, needs no introduction, of course. But in case you don't know GEICO, it is the second-largest auto insurer in the U.S. And they're really leaning into the power of the 360 -- the Customer 360 to create a single view of their customers across the heart of the entire business. And is now moving to 25,000 agents are going to be putting that trust in that Customer 360, which is now providing AI-powered analytics to improve those customer relationships. And 3M, now this is one we've talked about in the past. You had Marc talked about they've been using Customer 360 across 83 countries. And for that relationship continues to expand. Now 3M are using Trailhead to train thousands of customer-facing employees as they join the Company. Salesforce Maps is now being used as part of that proposition. Tableau CRM is giving actual intelligence to better manage operations, engage with customers, boost productivity. And then in Q2, 3M selected a philanthropy crowd to help empower nearly 100,000 employees to give back to their communities with the goal of achieving 2 million employee volunteer hours over the next 5 years. I think a really, really powerful example. And then one more, just before I hand it over to Amy, and it's IKEA. So, IKEA, fantastic business over here in Europe. Another great example the Customer 360. We've already been helping them with marketing to be getting a great with Marketing Cloud across over 30 markets. Now, as home improvements were soaring in the pandemic, they turned to us to use field service, to help planning visits, installations, after-service support across the U.S. So, another example of how we're building our relationships, adding Clouds to existing customers during increasingly into partnership type relationships. So, I think these are a few examples. There are many more, but they're all, I think examples of how we're helping customers deliver success from wherever they are from anywhere. So, net-net, my conversations with customers, I think it gives me great confidence, not just in the demands for our products and services, but I think in our ability to execute in the second half of the year. So, it's both demand and execution. So, I continue to see this being maintained during really strong demand environment across Salesforce in the second half. And I think Slack is really going to enhance that. So just before I hand it over to Amy, I'd just like to say a quick thank you to the amazing effort of the sales teams around the world. They've been able to adapt to a different way of work, a new normal. And in doing so, we've been able to continue to support our customers. And I'd like to thank them for that. Amy, over to you. Amy Weaver: Great. Thank you, Gavin. And good afternoon, everyone. Q2 was another quarter of remarkable top and bottom-line performance. We exceeded our top-line expectations, achieving record levels of Q2 new business. We saw strong demand across all of our product’s regions and customer sizes. And we were able to execute with discipline to drive higher operating income. We also completed the acquisition of Slack technologies on July 21st, bringing yet another best-in-class asset into our customer 360. We believe that Slack will play a critical role in the digital transformation of our customers, as they re-imagine the future of work in a digital-first work-from-anywhere environment. And that process is already underway with Slack business accelerating into the close of the acquisition. In Q2, the last revenue grew 39% year-over-year on a standalone basis, which excludes any impact of purchase accounting. Slack also saw strong performance and customer acquisition, especially in the enterprise. The number of paid customers spending greater than $100 thousand annually accelerated during the quarter, up 41%. For the short period between the closing and the deal and the end of our fiscal Q2, Slack's operating results were immaterial to our non-GAAP results, and they are included below the line in OIE. Slack is consequently excluded from our reported revenue and non-GAAP operating income. Where appropriate, we will call out Slack-specific impact on our Q2 results and our guidance. As part of the acquisition, this quarter, we issued $8 billion of senior notes with a weighted average interest rate of 2.25% and weighted average maturity of 20 years. We were very pleased by the terms we received on what we view as an inexpensive source of capital. In particular, I'd like to call attention to the strong reception of our $1 billion sustainability bond, which was our most oversubscribed note in the offering. And not only did we raise funds on favorable terms, the concurrent with our debt raise, S&P, upgraded our credit rating to A+. Now, let me walk you through some of the results for Q2 fiscal '22, starting with top-line commentary. Total revenue for the second quarter was 6.34 billion, up 23% year-over-year, or 21% in constant currency. The strong new business pipeline that we've discussed the last few quarters, enabled us to deliver these results as new business momentum continued to exceed our expectations. Achieved key highlights. We saw an acceleration in Sales Cloud with Q2 revenue of 1.5 billion or 15% year-over-year growth. Tableau and MuleSoft continued their momentum in enterprise deals, as both saw their share of the Company's top 10 deals increase. As Bret noted, Tableau was in 9 of the top 10, and MuleSoft in 8 of the top 10 deals this quarter. This is an incredible accomplishment, and evidence of how strategic these acquisitions have become for our customers. The public sector continues to be an area of strength, accounting for 4 of the top 10 deals this quarter. And again, this quarter, our seven-figure deals on average, included more than 4.5 clouds. The number of seven-figure deals, including 5 or more clouds, grew by 29% year-over-year, showing continued momentum in our enterprise deals. And we continue to see strength in our international businesses, which accelerated sequentially. Although we will note that EMEA and APAC growth benefited modestly from the integration of acquisitions into our billing practices. We remain pleased with the progress on attrition, with revenue attrition in Q2 between 8 and 8.5 8%. An improvement from last quarter's 9 to 9.5%. Attrition has continued to perform better than anticipated. As a reminder, our attrition rate is calculated based on trailing 12 months' performance. And we have now lapped the second quarter of Fiscal 21, which was impacted by the early days of the pandemic. Our remaining performance obligation representing all future revenue under contract ended Q2 at approximately $36.2 billion, up 18% year-over-year. The current remaining performance obligation or CRPO, which represents all future revenue under a contract that is expected to be recognized as revenue in the next 12 months, was approximately $18.7 billion, up 23% both year-over-year and in constant currency. Slack represents 4 points of growth ahead of the 3 points we got into last quarter due primarily to changes in our assumptions around purchase accounting. Turning to operate margin. Q2 non-GAAP operating margin was 20.4%, benefiting from revenue outperformance, efficiencies from work from anywhere in the world, and a focus on disciplined spending. Salesforce recorded $45 million of transaction-related costs due to closing the Slack acquisition during the quarter. Q2 GAAP EPS was $0.56 and non-GAAP EPS was $1.48. The outperformance in the quarter was primarily due to higher revenue and expense efficiencies, as well as realized and unrealized gains on our strategic investment’s portfolio. These mark-to-market adjustments benefited GAAP EPS by approximately $0.42 and non-GAAP EPS by approximately $0.43. Turning to cash flow. Operating cash flow in the second quarter was 386 million, down 10% year-over-year. On a cash basis, Salesforce paid 43 million in transaction fees related to the Slack acquisition. CapEx for the quarter was $213 million, leading to a free cash flow of $173 million, down 45% year-over-year. And as a reminder, we continue to expect cash flow seasonality to skew higher in Q1 and Q4. Slack's operating results had no impact on Q2 operating cash flow or CapEx. Now, turning to guidance. We expect Q3 revenue of 6.78 to $6.79 billion, or approximately 25% growth year-over-year. This guidance assumes a $250 million contribution from Slack. For Q3, we expect to deliver CRPO growth of approximately 22%. This includes 4 points of growth from Slack. We expect Q3 GAAP, EPS of negative 0.06 to negative $0.05, and non-GAAP EPS of 0.91 to $0.92. Now, moving to fiscal 22 guidance updates. As a result of our year-to-date performance and strong execution in the current demand environment, we are raising our fiscal 22 revenue guidance by $300 million to $26.2 billion to $26.3 billion, or approximately 24% growth year-over-year. This guidance incorporates an expected revenue contribution of $530 million from Slack in the second half of fiscal 22, an increase of $30 million over our previous guide. This guidance also includes $200 million from Acumen, an increase of $10 million from our previous guide. Net of the revised Slack and Acumen contributions, this represents a $260 million raise on our core business. Our ability to execute and the demand environment both remain strong. We are also raising our fiscal 22 non-GAAP operating margins to 18.5%, representing an expansion of 80 basis points year-over-year. This now includes an expected 150 basis point headwind from Slack and Acumen, or 10 basis points less headwind compared to our previous guidance. Excluding this 10-basis point adjustment, our operating margin guidance represents a 40-basis point rise compared to our previous guidance. We're also raising fiscal '22 GAAP diluted EPS to $0.81 to $0.83, and raising our non-GAAP diluted EPS to $4.36 to $4.38. We expect recent M&A will be approximately $0.51 headwinds to non-GAAP diluted EPS. Please recall that our OIE and EPS guidance assumes no further contribution from mark-to-market accounting as required by ASU 2016-01. We are raising our fiscal '22 operating cash flow guidance by 2 points. Now expecting 14% to 15% growth year-over-year. The increase from our previous guide is primarily driven by revenue performance and lower headwinds from M&A. The diluted cash flow impact of Slack and Acumen now represents a headwind to our year-over-year growth of approximately 7 points. Excluding the anticipated impact of M&A, operating cash flow growth would be 21% to 22%. We continue to expect CapEx to be approximately 3% of revenue in fiscal 22, resulting in a free cash flow growth rate of approximately 15% to 16% for the fiscal year, excluding the anticipated impact of M&A, as previously noted, this rate would be 22% to 23%. To close, we remain excited by the strengths we see in the demand environment and we're seeing record levels of revenue and operating margin. Our flagship products in Sales Cloud saw acceleration this quarter. We closed our largest deal in customer history. We had an impressive first half of fiscal 22, and we're excited to continue Slack's momentum with the power of our two companies now together. And the increased revenue guidance reflects the confidence we have in the fundamentals of our business, and we remain well on our way to achieving our goal of 50 billion in fiscal 26. We are committed to being disciplined along the way while challenging ourselves to find additional areas of operational improvement. I want to say thank you to all of our employees for being able to focus on disciplined, efficient growth during the quarter, and we're looking forward to further strengthening the durability of our operating model going forward. And finally, I look forward to engaging with many of you at our upcoming Investor Day on September 23. Now I'll turn the call back to Marc for some final comments. Marc Benioff: Well, thanks, Amy. Hopefully, I'm back here. Amy Weaver: You are. Marc Benioff: And I'm actually now talking through Amy's cellphone connected to our speakerphone at our conference in San Francisco. So, turns out the cell phone technology is a big winner so anyway, thanks, Amy. That was a great job on earnings and congratulations on another great quarter of your organization, everything you're doing. I couldn't be more excited about the strength of our core business, our revenue growth, our margin growth, our cash flow growth, as well as the addition of Slack. Now to our team of unicorns, if you will, it's absolutely true the best CRM just got better with Slack and I -- if you listen to what Bret has to say about the integration of incredible things like Slack Connect, these are becoming extensions to our CRM capabilities, so it’s a very exciting moment for our entire product line and our technology team. And I think, with that our leadership team has really shown through this amazing perseverance and execution over the last several quarters these amazing results. Now we're going to have our digital Dreamforce coming out from San Francisco in less than a month, from September 21 through September 23rd. We'll have tens of millions of customers from all over the world tuning in with us, and we'll have hundreds of customers with us live in San Francisco as well. So, it's going to be extremely exciting. We want you to all have a front-row seat, and please talk to Evan so you're all connected to this program. And we will also be redeploying our Dreamforce 2 U program as well, delivering custom Dreamforce capability for all of our customers. So, I hope that you're all going to join us. Okay. So as Amy mentioned, we're also looking forward to having you then at Investor Day, that will also be amazing. And we're expecting some awesome conversations with all of you. So that, I'll open it up to questions. So, everybody is online right now and we can take all your questions. So go ahead, Evan. Evan Goldstein: Operator, you go ahead and open the call for questions. Operator: Thank you. Please stand by while we compile the Q&A roster. The first question comes from the line of Kirk Materne of Evercore. Your line is now open. You may ask a question. Kirk Materne: Yes. Thanks very much. Bret, maybe I wanted to ask you one about Slack in particular. Now that the deal is closed, and I know you're very excited about the whole team is, what are you measuring to judge success with Slack, maybe beyond just revenue growth in terms of a number of customers that -- the number of multi-cloud deals that include Slack, I guess, what should we be looking for to see that the deal is progressing as planned and it is that sort of 1 plus 1 equal 7 combinations that you guys are betting on? Bret Taylor: Thanks, Kirk. I think, first and foremost, we're excited about this vision for the Slack-First Customer 360, and that's really building not only an integrated division between Slack and our Customer 360 platform but also integrating our products. And actually, I think we've made a faster start integrating our technologies than any acquisition in our history. We did an event last week on this idea of a digital HQ, where we announced Slack-First sales, things like deal rooms inside of Slack Connect integrated with Sales Cloud, Slack-First Service, which are things like Case Swarming for digital customer service teams. Slack-First marketing Slack-First analytics. So those capabilities are going to be in the hands of our customers soon and we have a lot more innovation coming at Dreamforce as well. And with that what we're measuring it's, as you said, it's going to show up in things like multi-cloud deals that include Slack. It's also going to show up in a lot more departments, at a lot more companies who are perhaps using these new digital collaboration technologies for the first time. In the context of doing their job, in the context of customer service, in the context of sales, in the context of marketing, and really realizing this vision of the digital HQ. I think Marc has talked a lot about how we're in this new pandemic world, that this isn't going away. We've opened half of our offices. But as you can imagine, not as many people are signing up as we had hoped to at this point because of this pandemic. I've started two companies and it all started by planning my office space. And now if you're starting a Company, you start by planning your digital HQ. And that's really what we want to bring to every Company in the world. Help them build the digital infrastructure, help them succeed in this new normal. And one thing that I think we're really excited about that Marc also mentioned is Slack Connect, which is really bringing these digital tools outside of the walls of our customer's buildings and bringing them to partners and customers as well. And you're seeing that in a lot of the product integrations we announced. Operator: Thank you. The next question comes from the line of Mark Murphy of JPMorgan. Your line is now open. You may ask your question. Mark Murphy: Yes. Thank you very much. Congrats on a fantastic quarter. Gavin, we have heard that you're selling Slack by actually using it with customers in the selling process itself. Was wondering if you could help us visualize that. And is that something that's transforming the buying experience in a pretty profound way? And then -- just a quick one for Amy. It's fantastic to see the operating margins, 20% plus again, consecutive quarters. Where are you identifying new efficiencies to try to create this trajectory on margins? Because it seems like it goes beyond the temporary COVID savings. Gavin Patterson: Well, great question and I just like I share Bret and Amy's excitement about the potential that Slack is going to bring to Customer 360. Since we announced the deal 6 months ago, 9 months ago. Obviously, we've been having conversations with customers about what we're planning to do. Recognize the meeting to go to the DOJ furnaces. And I have to say, come across the product that has the crowds, the excitement, the customer advocacy that Slack does. It really is quite remarkable. So, there's I think huge interest out there amongst customers. Many of our customers are both Salesforce customers and now Slack customers. There's good overlap between the two and they can see that -- they can see the synergy that we're going to have from a product perspective. We are beginning to sell through Slack. The most powerful presentations sales teams give are often Salesforce on Salesforce. And so Slack on Slack is a very compelling way to explain how we use the product, and so we're beginning to see more and more of that. And where we are closing deals, we're leaning in to close deals through, you closing the deal itself, on Slack creating channels between us and the customer, and ensuring that everybody who's working on the deal can have real-time access to those channels, and it is leading it -- it means that deals close much more quickly. So, in fact, the Slack deal itself was closed on Slack. So that is the perfect example of Slack on Slack, I think. Amy? Amy Weaver: Great, thanks, Gavin. And you're right, we use Slack to negotiate to do -- we conducted our due diligence, our negotiation, and integration for Slack. So, I do think that that's the ultimate example of a terrific sale, all conducted with Slack and Slack Connect. Marc, turning to your other question about operating margin, where we've really seen this growth this year. First, we are getting the benefit of very strong business performance in Q1 and Q2. And that does it while it's brewing to provide profitability and that's while still investing in growth and absorbing the impact of M&A. Second, we are continuing to build on what we learned during the pandemic, about how we can work effectively in a digital-first to a hybrid environment. Some examples of that, virtual go-to-market motions, sales enablement, which is largely virtual at this were digital. And also, a renewed emphasis on financial automation, which I believe will pay off in the long run. And then finally, it's simply an approach of disciplined decision-making. And when we're seeing those investment opportunities, we're taking a very hard look. We are challenging ourselves and we're finding ways to shift our operating model where necessary. Operator: Thank you. We have the next question that comes from the line of Brad Sills of Bank of America Securities. Your line is now open. You may ask your question. Brad Sills: Great. Thanks for taking my question and congratulations on a real nice Q2 result here. I wanted to ask another one on Slack, but more focused on Slack plus Tableau. With the combined offerings, you really have a powerful solution to not only see the data but act on the data. You highlighted this last week at the marketing event where you launched a number of these scenarios and activated notifications and watch lists were included. I'm just curious about that concept of Slack plus Tableau combined. What are you hearing from customers and the reception there, and could that actually accelerate these cross-cloud Customer 360 deals? Thank you. Bret Taylor: Yeah, thanks for the question. We're really excited about the combination of Slack and Tableau. And it sounds like you watch the event, but for other folks on the call who didn't, we showed, I think, a really wonderful integration between Tableau and Slack. So, your data can talk to you. Automated notifications so that when you need to take action on data, you're getting notified in Slack, you can collaborate with their colleagues to diagnose a business issue. Just an incredible combination. But I think it really shows just our philosophy on our M&A and why I think we've had really unprecedented success in the marketplace and integrating our acquisition successfully. We really tried to integrate our platform, and with Tableau, with MuleSoft, with Slack, this all amplifies our vision for Customer 360. I mean at the center of all these digital transformations our customers are going through his data. You need to integrate that data with MuleSoft. You need to see an understanding with Tableau and you need to act on that. And that's all going to happen with Slack, which is the system of engagement for the Customer 360, but also the system of engagement for every application at your Company. So, I think it's an incredibly powerful combination and I actually think Slack has the potential to really accelerate every single product in the Customer 360 Tableau included and Tableau especially, but really, I think it has potential across the board. And then, it really goes to just this fundamental shift in the workplace we're all experiencing. All of you are probably working from home right now, or most of you are. This digital HQ is at the center of every single one of the transformations we're bringing to our customers. Operator: Thank you. The next question comes from the line of Kash Rangan of Goldman Sachs. Your line is now open. You may ask your question. Kash Rangan: Kash Rangan. Congratulations. My question is for Amy and maybe a little bit from Gavin. Amy, how are you able to fund growth initiatives at the same time drive operating efficiencies, and Gavin maybe you could shed some color on that as it pertains to the distribution side of the equation. How are you able to accomplish growth and efficiencies in terms of margin? Thank you so much and congratulations on a fantastic quarter. Amy Weaver: Great. Thanks, Kash. On the operating margin, as I said, I think we have to be able to drive growth and increasing profitability at the same time. As I mentioned, we've been doing that this year through terrific business performance, through efficiencies, through the work from anywhere, and as well as through discipline. And Marc talked about the new operating model. I actually like to think of it more as a new operating mindset. And it's a real focus on discipline, and looking at what is going to make us a Company that not just only gets us at 50 billion, but makes us a strong, durable Company when we get there and positions us to sales through that. So, these are multiple changes around the Company, but I've been really gratified to see everyone jumping in. This has been really an effort from the entire executive leadership team. Gavin Patterson: The second question Kash. So, we've just come off our half-year review in Laulima, in Hawaii where we got our top 100 executives together in person, and reviewed the last 6 months and looked ahead into the future, and I was really happy and I was able to share two fantastic quarters to start the year. And really strong demand, and really strong execution, and as I look into the second half of the year and I see that continuing, the pipeline's really strong, the conversations we're having with costumers are accelerating if anything. And so, we chose to make a decision 3 months ago because we could see this demand in the marketplace, we chose to increase our investments in a direct sales course, to get better coverage, with customers. And that is the sound of our confidence in the business. So, I feel very confident that we can continue to grow top-line while delivering on expectations around an operating margin. It is a trade-off. I think that the balance that we can get between the 2 is making sure we seize the opportunities in the marketplace. We're able to serve that demand. We can see from customers, there are multi-cloud deals that I was talking about earlier. While at the same time ensuring that we benefit from and we see that in the operating margin. Marc Benioff: And could you also add, what do you see on the selling motion versus the U.S versus hear in Europe? Gavin Patterson: Well, I think what's common, Marc, is there is -- this is a conversation that's happening with the CEO now. So digital customer transformation is no longer something that is going to get to down the organization. It's a conversation that's going on in the boardroom, CEO priority. And that means we're getting, I think bigger deals, more multi-track deals, multi-year deals, and it's increasing the conversation about the Customer 360. The real focus is on time-to-value, which is good for us. We want as much -- we want our customers to be on a standard product as much as possible. Configuring, yes. Customizing, not so much, because there's so much innovation coming through, and it's easier to do through staying on the standard path. So, it's -- be it in the U.S. or in Europe, we're seeing our business grow across the board both in terms of small customers on our end all the way up to multinationals. We're seeing increasingly bigger deals. And we highlighted our in terms of recurring revenue in this quarter. In the public to do, but we're seeing more and more, not just million dollars plus deals, but $10 million deals coming through the business. And that's a sign of, I think the increase in the Salesforce offers what it needs to businesses. Operator: From the line of Keith Weiss of Morgan Stanley. Keith Weiss: Excellent question and really nice quarter and really a nice first half of the year. And Amy, I don't recall seeing this type of in terms of top-line revenues definitely not this type of raise to the operating margin guide, especially in the first half of the year. Marc, you could talk too, what're you guys seeing in the pipeline that's giving you the confidence to increase guidance in the first half of the year. For the second half of the year already. And maybe to Amy. When we see this operating margin expansion, is this durable, if you will, on a go-forward basis? And then pick reflation of that OpEx line because of Delta variant or in future years or is this margin expansion going to be more durable? Thank you. Marc Benioff: Let me take a swing at that. They're having the -- let me -- Number one, because of the Greenland deal that's happening here in Europe, and they realize that for them to continue to be successful in this environment and this economy, they're having to make a net 0 transformation and that's been very important to us. We've merry made that transformation and now we're fully renewable as well as I mentioned. The second thing is, I think every CEO that I mentioned and talked to today and yesterday and probably in conversations that I've had in the last several months, I'm sure you're hearing that in your own sha -- with your , but that's been very surprising to me. And I would say that's the second CEO priority. And then I'd say that the third CEO priority is exactly what we've been talking about it here, which is size their employee is not coming back exactly as they wanted. I have some stories about when we first started talking about success from anywhere and those employees would have a choice between office, home, maybe working in an environment like we had last week in Hawaii with our leadman program. Or as you know, we're building this new ranch. CEOs would call me and say, Marc, you don't understand, and I think now those calls have stopped, and people realize things have really changed. This pandemic has changed things, and work has changed, and when we talk about digital HQ, we might've been talking about a digital HQ before the pandemic, but after the pandemic, it means something very different. And I think that what Bret said kind of on the fly there, which was very powerful, that he's obviously been an incredible entrepreneur as well as an operating executive in several companies, but because he was starting a new Company, he's not planning his physical office space, he's planning his digital office space. And we're running this call now on a cellphone and on Zoom. And it's very much an example of success from anywhere. But every Company estimates this transformation. And that is what is driving our success going forward. This is not -- that the world has changed. But the past has gone. That we are in a new world. And yet we made, I don't think the Delta variant will be material to our business. If anything one of these things that we're going to see, we see seeing a constant now a parade of these variants going by. So, we know that in fact here in Europe if you haven't you probably should. We're looking to life has to go on, and it is, and if you were here with me today, you'd say, well, there's probably some risk to what's going on. There probably is. But I'm vaccinated. Gavin is vaccinated. And we were running our business going on and I think that this is what we all have to kind of get our head around. And I think consumers how it is right here in Geneva, Switzerland, let me tell you. It's very, very different. Today, my -- there's nobody at my office building right now, and also people are not wearing masks and all in-office buildings here. Everybody is supposed to wear a mask legally in San Francisco right now. So, this is what is amplifying us. So, we're in a tremendous never been more positioned or well, I would say Salesforce has never been better positioned for an economy and for a world. The first thing that I'd heard from business and this is where we're Gavin Patterson: I want to talk a little bit about the pipe and margin of confidence excellence if you like it and grip on the operating metrics around the pipe going forward. I have great confidence in what I can see. We spent a lot of time in those organizations contributing through participation and through enablement, through productivity, and really driving performance across each of the OUs. We've flattened the structure so that we can move in a more agile manner and give more accountability to operating focus on -- in a metrics around the sales operation. That means that I can have confidence as I look forward to what we're going to deliver over the next fiscal as well. I think it's about the spike. So, the strength across the board the numbers that we've released today I see that going forwards, all Clouds are contributing. There isn't any weakness across. Marc Benioff: That's amazing, isn't it? Gavin Patterson: Yes. Marc Benioff: And I think it also speaks to what Bret said as well in terms of -- we've had a real focus with our acquisitions to make sure they are integrated, that we're selling a platform. We don't use the word suite that sells hard to say it hasn't been part of our nomenclature. But we have a very nice, integrated platform and we have a world. It's kind of amazing, isn't it? Gavin Patterson: Geographically, just to finish with, the gains trends across the board. You know the U.S. consistently growing 20% plus in revenue. A mere 32% this quarter. APAC 26%. So, we're growing across the board and growth internationally is not coming at expense of growth in the U.S. and that's why we're posting these really strong numbers. And that strength... cool cloud is something that we've really -- Marc Benioff: And you've been able to -- and I think you even hit this point Bret did as well, but this new operating margin model that we're executing, I think several of the -- several of our friends who have been asking questions I picked up that we are operating at a different type of model here. We've had now 3 out of the last 5 quarters greater than 20%, and we have a lot of swaggers when it comes to our operating margin. The pandemic let us re -- kind of have a beginner's mind in regards to our entire business. And we made decisions, but we also made decisions that are the core way that we're operating our business, and you can see that with these operating margin results. And also, I'm sure it was subtle to everybody, but after doing one of the biggest acquisitions in our history, we also just raised our operating margin again. Very exciting. Amy, do you want to just add to that? Amy Weaver: Yeah, sure. Keith, to follow up the end of your question, and you said very powerfully this is a new world. We are not going back to the pre-pandemic way of working and we learned a lot during this period. We learned how we can work effectively from anywhere, how we can sell virtually. And when you look at what is durable, I would say discipline is durable, and we need to forward, and just show you quarter-after-quarter that we can execute. Marc Benioff: Switched to several very powerful values, operating value. Since the pandemic started, the management team understands very well Salesforce, but we wanted to make sure that we're relevant to our customers, and that they understood our relevance. I don't think we've ever been more relevant. We also realized we had a lot of people who are really scared during the pandemic and we need to get down, to be confident, and that they could participate. And I think that's definitely an asset. We need to make sure that we were able to execute tactically and strategically and to fully enable what you can see as an extremely large workforce heading towards to make sure those people are enabled and rolling and focused. And we've done that. I think in all of those things that the management team has executed. I'm very grateful to the management team and how well they've done. We've also gone through a lot of management transformations. I'm sitting here looking also at Mark Pockets (ph.), who is our CFO in test. So, Mark, thank you for everything you've done for the Company as well. And he is on the call here helping us and coaching us through. And Evan and -- you need to know that I look out at all over Ohana and all of our employees for everything that everyone has been through. We have a lot of these amazing moments. And this is not our last amazing moment. There are some more amazing moments coming. I'm very excited about the future. So, with that, I will turn it back over to you Evan. Evan Goldstein: Thank you very much. We appreciate everyone joining the call today. With some technical . But thank you guys for joining the call today. If you have any questions, you can contact us on investor And we look forward to Dreamforce and Investor Day. Thank you very much. Operator: Thank you. That concludes today's conference call. Thank you all for participating. You may now disconnect.
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Salesforce (NYSE:CRM) Continues Strong Market Performance in Q3 Fiscal Year 2025

  • Earnings per Share (EPS) of $2.41, slightly below the estimated $2.44, indicating robust profitability.
  • Revenue of approximately $9.44 billion, surpassing the estimated $9.37 billion, showcasing strong market demand.
  • Low debt-to-equity ratio of 0.051, reflecting a conservative financial strategy and reduced financial risk.

Salesforce (NYSE:CRM) is a leading provider of customer relationship management (CRM) software, helping businesses manage customer interactions and data. The company competes with other tech giants like Microsoft and Oracle in the CRM space. Salesforce's recent financial results for the third quarter of fiscal year 2025 highlight its continued strong market performance.

In the third quarter, Salesforce reported earnings per share (EPS) of $2.41, slightly below the estimated $2.44. Despite this, the company generated revenue of approximately $9.44 billion, surpassing the estimated $9.37 billion. This revenue growth underscores Salesforce's ability to outperform market expectations and maintain its competitive edge.

Salesforce's financial metrics provide further insights into its market valuation. The company has a price-to-earnings (P/E) ratio of approximately 44.20, indicating how the market values its earnings. Additionally, its price-to-sales ratio stands at about 9.27, reflecting the market's valuation of its revenue. These ratios suggest that investors have high expectations for Salesforce's future growth.

The company's enterprise value to sales ratio is around 9.14, and its enterprise value to operating cash flow ratio is approximately 27.12. These figures highlight Salesforce's efficiency in generating revenue and cash flow relative to its market value. Moreover, the earnings yield of about 2.26% provides insight into the return on investment for shareholders.

Salesforce maintains a low debt-to-equity ratio of 0.051, indicating a conservative approach to leveraging. This low ratio suggests that the company relies more on equity than debt to finance its operations, reducing financial risk. Additionally, with a current ratio of approximately 1.11, Salesforce demonstrates its ability to cover short-term liabilities with its short-term assets, ensuring financial stability.

Salesforce Shares Surge 13% on Optimistic Annual Guidance and AI Innovation

Salesforce Inc. (NYSE:CRM) saw its shares climb over 13% in pre-market today after delivering strong annual guidance despite mixed third-quarter results. While earnings fell short of Wall Street estimates, the company’s commitment to driving growth through AI innovation garnered investor enthusiasm.

For the third quarter, Salesforce reported adjusted earnings per share of $2.41 on revenue of $9.44 billion. While EPS came in slightly below the $2.44 expected, revenue surpassed the $9.35 billion consensus.

Salesforce continued its push into AI, heavily investing in its Agentforce product. Designed to align with the broader AI trend seen across tech giants like Microsoft, Agentforce focuses on creating autonomous task-performing agents. The company announced plans to hire 1,400 additional employees in the fourth quarter to meet growing demand, with the product securing over 200 deals in a single week.

Looking ahead, Salesforce offered optimistic guidance. For the fourth quarter, the company projected adjusted EPS between $2.57 and $2.62 on revenue of $9.90 billion to $10.10 billion. For fiscal 2025, it raised the lower end of its revenue forecast to $37.8 billion to $38.0 billion and expects adjusted EPS between $9.98 and $10.03.

Salesforce.com, Inc. (CRM) Surpasses Earnings and Revenue Estimates

  • Salesforce.com, Inc. (NYSE:CRM) reported an impressive EPS of $3.54, significantly beating the estimated $2.44.
  • The company achieved a revenue of approximately $9.44 billion, surpassing the estimated $9.35 billion.
  • Salesforce's positive fiscal fourth-quarter guidance and an 8% year-over-year revenue growth have boosted investor confidence, leading to a 5% increase in stock price in extended trading.

Salesforce.com, Inc. (NYSE:CRM) is a leading cloud-based software company specializing in customer relationship management (CRM) solutions. It competes with other tech giants like Microsoft and Oracle in the CRM space. Salesforce's innovative platform helps businesses manage customer interactions, sales, and marketing efforts efficiently.

On December 3, 2024, Salesforce reported impressive earnings per share (EPS) of $3.54, significantly surpassing the estimated $2.44. This strong performance reflects the company's ability to exceed market expectations. Salesforce also achieved a revenue of approximately $9.44 billion, outpacing the estimated $9.35 billion, as highlighted by Zacks Investment Research.

The company's third-quarter results, ending in October 2024, showed an 8% year-over-year revenue growth. This growth, coupled with Salesforce's raised full-year sales and profit outlook, has positively impacted its stock price, which increased by 5% in extended trading, as reported by CNBC. The positive fiscal fourth-quarter guidance further boosted investor confidence.

Salesforce's financial metrics reveal a robust market valuation. The company has a price-to-earnings (P/E) ratio of approximately 40.62 and a price-to-sales ratio of about 8.52. These figures indicate the market's high valuation of Salesforce's earnings and sales. Additionally, the enterprise value to sales ratio is around 8.39, while the enterprise value to operating cash flow ratio is approximately 24.90.

The company's financial health is further supported by a low debt-to-equity ratio of 0.051, suggesting a conservative use of debt. Salesforce maintains a current ratio of 1.11, indicating its ability to cover short-term liabilities with short-term assets. The earnings yield of 2.46% reflects a solid return on investment for shareholders.

Salesforce Price Target Raised to $380 Ahead of Earnings Release

CFRA analysts raised their price target for Salesforce.com (NYSE:CRM) to $380 from $343 while maintaining a Strong Buy rating. The analysts highlighted the company’s potential for growth stabilization and margin expansion, supported by AI monetization.

The revised price target was based on a higher projected price-to-earnings ratio of 30x for 2026 EPS estimates, aligning with peers but remaining below historical averages. Earnings projections were maintained at $10.07 for fiscal 2025, $11.10 for 2026, and initiated at $12.68 for 2027.

Ahead of its October-quarter results, set to be released today, after the market close, Salesforce was expected to report revenue of $9.3 billion, reflecting a 7% year-over-year growth, and EPS of $2.45. Guidance was anticipated to align closely with market expectations of $10 billion in revenue and $2.65 in EPS for the next quarter.

Despite decelerating growth rates since the pandemic's peak, the analysts cited easier comparisons ahead and the stabilizing effect of incremental AI monetization as drivers for renewed momentum. Salesforce’s AI strategy, including the rollout of Agentforce, was expected to gain traction across enterprise markets by the second half of 2025. Additionally, the company’s usage-based pricing approach was seen as a factor in balancing subscription revenue pressure from do-it-yourself and productivity-related gains.

With net cash reserves of $9.2 billion and an anticipated free cash flow increase to over $13 billion by 2026, the analysts projected further upside for Salesforce as it capitalizes on its AI initiatives and broadens its enterprise appeal.

Salesforce Inc (NYSE:CRM) Price Target and Earnings Preview

  • Salesforce Inc (NYSE:CRM) has a new price target set by CFRA at $380, indicating a potential upside of 14.8%.
  • Wall Street analysts expect an EPS of $2.44 and revenues of $9.34 billion for the upcoming third-quarter earnings.
  • The stock has experienced significant volatility, with a yearly high of $348.86 and a low of $212.

Salesforce Inc (NYSE:CRM) is a leading cloud-based software company that provides customer relationship management services. It competes with other tech giants like Microsoft and Oracle in the CRM space. On December 2, 2024, Aaron Siegel from CFRA set a price target of $380 for CRM, suggesting a potential upside of 14.8% from its current trading price of $331.01.

Salesforce is preparing to announce its third-quarter earnings, with Wall Street analysts expecting an EPS of $2.44 and revenues of $9.34 billion. These figures will be released after market hours, and they are crucial for investors to assess the company's financial health and growth prospects. The current stock price of $331.01 reflects a modest increase of $1.02 or 0.31%.

The stock has shown some volatility, with a daily range between $330.42 and $334.49. Over the past year, CRM has experienced a high of $348.86 and a low of $212, indicating significant price movement. This volatility can be attributed to various market factors and investor sentiment towards the tech sector.

Salesforce's market capitalization is approximately $316.45 billion, highlighting its substantial presence in the tech industry. The trading volume of 4,545,198 shares on the NYSE suggests active investor interest. As the company prepares to release its earnings, these metrics will be closely watched by investors and analysts alike.

Wedbush Boosts Salesforce Price Target to $325, Citing Strong AI Demand and Customer Adoption of Full Product Suite

Wedbush analysts raised their price target on Salesforce (NYSE:CRM) to $325 from $315, maintaining an Outperform rating on the stock.

The analysts expressed growing optimism about Salesforce's future, citing positive customer feedback and an increasing number of use cases for the company's full product suite. They noted that Salesforce is well-positioned to capitalize on rising demand for AI-driven solutions, helping organizations enhance automation and efficiency.

The analysts highlighted the strong risk/reward profile of Salesforce at current levels, particularly as the company's Agentforce strategy unfolds over the coming years. The analysts believe the growth potential within Salesforce’s installed base remains underappreciated by the market, reinforcing Salesforce as one of their top tech picks for the next year.

Goldman Sachs Upgrades Salesforce to "Buy" Following Dreamforce Event

  • Goldman Sachs upgraded Salesforce (NYSE:CRM) to a "Buy" rating, indicating a positive outlook after the Dreamforce event.
  • Salesforce introduced new generative AI tools at Dreamforce, emphasizing innovation and competitive edge in the CRM software market.
  • The company's focus on data security and the strategic direction towards AI advancements has bolstered investor confidence, reflected in a 5.37% rise in stock price.

Goldman Sachs recently upgraded its rating on Salesforce (NYSE:CRM) to a "Buy" from a previous stance, following a comprehensive review after the company's Dreamforce event. This adjustment, announced on September 19, 2024, reflects an incrementally positive outlook on Salesforce, with the stock price at $265.99 at the time of the announcement. Despite this upgrade, the recommendation to investors remains a "hold," indicating a cautious optimism towards the company's future performance.

Salesforce, a leading player in the customer relationship management (CRM) software market, has been making significant strides in integrating artificial intelligence (AI) into its offerings. The company's co-founder and CEO, Marc Benioff, recently showcased new generative AI tools, termed "agents," at the annual Dreamforce event. These tools are designed to simplify the integration of AI into business operations, eliminating the need for companies to develop their own AI solutions from scratch. This development is a testament to Salesforce's commitment to innovation and its efforts to maintain a competitive edge in the tech industry.

Furthermore, Salesforce's emphasis on data security, particularly within its Slack platform, was highlighted by Benioff as "rock solid." This reassurance is crucial as businesses increasingly rely on digital communication tools and seek assurances regarding the safety of their data. The discussions at Dreamforce also touched on the broader implications of AI technology, including safety, regulation, and potential job impacts. These conversations underscore the importance of AI in the tech industry and the need for a balanced approach to its adoption and regulation.

The stock's performance, with a notable increase to $265.99, marking a 5.37% rise, reflects investor confidence in Salesforce's strategic direction and its ability to capitalize on AI advancements. With a market capitalization of about $254.29 billion and a trading volume of 9.98 million shares, Salesforce remains a formidable force in the tech sector. The company's efforts to enhance its AI offerings and address critical issues surrounding technology adoption and security are likely to continue driving its market position and appeal to investors.