The operator welcomes listeners to the Salesforce Fiscal 2024 fourth quarter and full year results conference call. The call is being recorded and all lines are muted. After the speakers' remarks, there will be a Q&A session. Executive Vice President Mike Spencer introduces the speakers, including CEO Marc Benioff, and reminds listeners that the commentary will include non-GAAP measures. Benioff mentions the possibility of forward-looking statements and the potential for risks and uncertainties. He thanks everyone for being on the call.

Salesforce has had an incredible year with strong performance across all key metrics, thanks to the support of shareholders and stakeholders. The company has undergone a transformation, focusing on restructuring, productivity, operational excellence, and innovation, including the development of next generation artificial intelligence and the data cloud. This has strengthened relationships with investors.

The speaker expresses gratitude to the investor community for their support and highlights the company's successful transformation and strong financial performance. They announce the introduction of a dividend for the first time in the company's history and emphasize their commitment to serving all stakeholders. The company's revenue for the fourth quarter has increased by 11% year-over-year, with eight of the top 10 deals including multiple product offerings.

Salesforce had a successful year in fiscal year '24, with top 10 wins including sales, service, and platform. Deals over $10 million grew by 80%, and customers get more value from the full advantage of the Einstein 1 platform. The rich data and metadata in one place is crucial for driving artificial intelligence. This will be showcased at Trailhead DX next week. The company had a revenue of $34.9 billion, up 11% year-over-year, and a non-GAAP operating margin of 30.5%, up 800 basis points. Operating cash flow also reached a record high of $10.2 billion, a 44% increase from the previous year.

The article discusses the financial performance of Salesforce, highlighting the company's remaining performance obligation of $27.6 billion, which is a 12% increase from the previous year. The total remaining performance obligation for the fourth quarter was $56.9 billion, a 17% increase from the previous year. The company expects free cash flow to grow between 23% to 26% in fiscal year '25 and revenue to reach $38 billion, with a focus on subscription and support revenue growth. The CEO expresses amazement at the company's transformation and growth, becoming the world's number one AI CRM and the largest enterprise applications company.

The speaker expresses gratitude to the Japanese market and his team for their hard work in making Salesforce successful. He is excited about the future of the company, especially with the advancements in artificial intelligence and the transformation of the technology platform. He mentions that CEOs around the world are looking for increased productivity, higher value customer relationships, and higher margins, all of which can be achieved through AI.

The CEO believes that investing in AI is crucial for companies and that it is a pivotal moment in the technology industry. He mentions his company's platform, Einstein 1, and how it is helping customers prepare for the AI future. He also acknowledges the impressive capabilities of AI models like GPT-4, cohere, anthropic, and inflection, but points out that they are trained on amalgamated public data, which some consider to be stolen. He also raises concerns about the potential for AI models to produce misinformation and hallucinations.

The paragraph discusses the potential danger for companies and their customers when using untrusted AI solutions. This is especially important for companies in regulated markets, as these models may not accurately reflect their customer relationships. The example of an airline chat-bot hallucinating an option and the company being held liable for it is given to illustrate this point. To deliver trusted AI experiences, companies need three essential components: a compelling user interface, trust, and security.

At Salesforce, we have intuitive user interfaces that provide insights across various industries. We also recognize the importance of AI models and have partnerships with companies such as Hugging Face, OpenAI, and Anthropic. Additionally, we understand the need for deep integration of data and metadata for AI to provide valuable insights in the enterprise.

Salesforce is known for its deep integration of data and metadata, making it a valuable resource for enterprise customers looking to harness the power of AI. While other companies may offer AI tools, Salesforce stands out because it not only has access to vast amounts of data, but also the ability to accurately describe and interpret that data through its metadata layer. This is why many companies are turning to Salesforce for their AI transformation needs. Additionally, Salesforce has a long history of handling customer data and is trusted by many companies. However, many companies still struggle with "trap data," which is scattered throughout their various systems.

The author discusses the importance of integrating data from various systems, such as Snowflake, Databricks, and Salesforce, into one central location for effective AI. This is where Salesforce's Data Cloud comes in, allowing customers to easily access and use their trapped data for AI purposes. The Data Cloud is deeply integrated into Salesforce's platform and is the company's fastest-growing product. It is also a major focus for the upcoming fiscal year. Salesforce's Copilot is also powered by the Data Cloud, making it more intelligent compared to other copilots that struggle to understand data. This is the core of Salesforce's Einstein 1 platform.

Salesforce's Data Cloud platform has seen incredible demand and success, with over 1,000 new customers added and 25% of deals over $1 million including Data Cloud. It is the fastest-growing organic product in the company's history, with over 7 trillion records ingested and 1 trillion activations driving customer engagement. Data Cloud is integrated with all of Salesforce's apps and AI capabilities, providing less complexity, more flexibility, and faster innovation. This eliminates the issues caused by bots with limited data and metadata, making Salesforce the only company able to provide this level of integration and understanding.

Salesforce is the only company with a long-term vision for a comprehensive platform and has been working on it for 25 years. An example of this is their partnership with ADP, a long-time customer, to transform their customer service using AI. Initially, Salesforce was not the top choice for ADP, but after evaluating various solutions, they realized that only Salesforce could provide a deeply integrated platform for data and metadata, leading to better customer service results. This integration with sales, marketing, and custom applications is something that only Salesforce can offer.

The speaker discusses how they were able to use Data Cloud and Einstein to improve efficiency for ADP's sales team. They introduce a new AI assistant called Einstein Copilot, which can answer questions, summarize, and automate tasks for users. The most important aspect of this assistant is its ability to read across all data and metadata in the platform, providing valuable insights and recommendations for users. This is something individual users cannot do, making the copilot a valuable tool for improving sales and conversions.

The paragraph discusses the capabilities of the Einstein Copilot, an AI assistant that can generate an action plan to close a deal and make suggestions based on lead contacts and preferences. The speaker encourages the audience to try the demos and compares the Copilot to those of other companies, stating that the deep integration of data and metadata is critical for its success. The speaker claims that other Copilots from competitors do not have access to the necessary data and have limited capabilities, often resulting in spinning or not working at all. The Einstein Copilot is touted as the most advanced and efficient enterprise AI capability.

Salesforce has released a new AI called Einstein, which is different from previous AIs and has the ability to understand customer relationships. It is one integrated system for all customers and industries, and will be showcased at the Trailhead DX conference. The company is grateful for its employees, management team, Ohana, and customers as they look forward to their 25th anniversary and the transformation of their products with AI. The Chief Operating Officer, Brian, has done a great job this year.

Brian Millham, part of Salesforce for 25 years, expresses his pride in the company's success and thanks everyone who has contributed to it. He highlights the company's focus on operational excellence and new growth initiatives, which have led to strong results. The company has implemented strategic restructuring, streamlined its go-to-market approach, and introduced new product bundles to drive customer spending and increase sea level relevance. These efforts have resulted in a significant increase in deals over $10 million and the addition of 86,000 multi-cloud deals. The company's pricing and packaging strategy has also been successful in attracting new customers, with 3,000 new logos added through self-service. The UE plus bundle, now called Einstein 1 edition, is also gaining momentum and providing substantial returns for customers.

Salesforce is seeing a significant increase in average sales price from existing customers who upgrade to Einstein 1 edition, and it is also attracting new customers. Their Data Cloud platform, which helps organizations unlock their data, is experiencing strong momentum and was recently named the leader in the Gartner Magic Quadrant for customer data platforms. Many companies, such as ADP and Intel, are investing in Einstein 1 to become AI first organizations. In FY24, they closed 1,300 Einstein deals and more customers are using their AI capabilities.

Salesforce implemented Einstein, an AI technology, to standardize and simplify customer care for their 3000 support agents speaking 15 different languages. This has resulted in a 15% increase in case efficiencies for their service agents and has also benefited their sales teams. The company is also seeing strong demand for their data products, such as Mulesoft and Tableau, which are helping customers prepare for AI. Tableau Pulse, a new product that delivers personalized AI insights, already has 2,000 customers. Slack, which was recently acquired by Salesforce, was included in almost half of their top 50 deals in the quarter.

Slack has recently launched Slack AI with features such as AI search and channel recaps to meet the growing demand for embedded AI in the work flow. The company's specialized industry products have contributed to its growth, with a 20% increase in ARR. There has also been strong growth internationally, particularly in India. Bajaj finance, one of Salesforce's customers, has become the second largest Data Cloud customer globally. The success of Salesforce is attributed to its employees, partners, shareholders, and customers. The company's focus for the upcoming year is on profitable growth.

In the fourth quarter of fiscal 2024, the company saw strong growth in revenue, profitability, productivity, and operational excellence. Revenue increased by 11% to 9.3 billion, driven by strong sales and service performance, as well as growth in Yolsoft and Tableau. The Americas, EMEA, and APAC all saw growth in revenue, with strong new business growth in LatAm, India, and Canada. The company also saw success in the multicloud and Data Cloud sectors. The non-GAAP operating margin increased by 220 basis points year-over-year, and for the full year, the company delivered a non-GAAP operating margin of 30.5%, up 800 basis points from the previous year. Operating cash flow and free cash flow also saw significant increases year-over-year.

In the fourth quarter, the company's free cash flow increased by 50% and their remaining performance obligation grew by 17%. This was driven by strong execution on early renewals and new business performance, but was partially offset by a decline in professional services. For the full fiscal year 2025, the company expects 8-9% revenue growth, with a $100 million FX headwind and a potential decline in professional services revenue. They also expect attrition to remain consistent at slightly above 8%, despite the inclusion of Slack invoice in the metric. The company is well-positioned to succeed in the measured buying environment and is focused on bringing customers into the new AI era.

In fiscal year '25, the company expects to see improvements in margins, with a non-GAAP operating margin of 32.5% and a GAAP operating margin of 20.4%. They also anticipate growth in operating cash flow and free cash flow. For Q1, they expect revenue growth of 11% year-over-year, with a one point benefit from an extra day of revenue recognition. They also plan to continue investing in growth opportunities while returning capital to shareholders.

In the fourth quarter, the company returned $1.7 billion through share repurchases, bringing the total returns for the fiscal year to $7.7 billion. This offset dilution from stock-based compensation. The company has returned a total of $11.7 billion to shareholders since the inception of their repurchase program. They have also announced their first ever dividend and a $10 billion increase to their share repurchase plan. The company is proud of their progress and thanks employees and shareholders for their support. The CEO mentions seeing green shoots last quarter and provides an update on customer behavior and how it may impact the company's performance in the future.

Marc Benioff discusses the recent increase in investment in technology by companies, which he believes is driven by the need for productivity and competitiveness. He also mentions the impact of the pandemic and the current state of the equity markets. He believes that this shift is a positive one and that his company is prepared to deliver results.

The speaker is looking forward to receiving feedback from attendees at Trailhead DX about the company's ability to deliver on the promise of enterprise AI. They are seeing green shoots and positive performance in various regions and industries, but are still operating in a measured environment and managing the business tightly. The speaker invites others to discuss the transformation of the business and the 180s they have seen.

The speaker discusses the shift in their ability to execute in buying behavior over the last few years, with a particular focus on AI and data. They mention that customers are excited about these capabilities and are using them to drive efficiency and higher margins. The buying cycle typically starts with Data Cloud and then moves into application functionality. The speaker also notes that the company has seen an additional 200 basis points of operating margin expansion, and attributes this to leverage in the business.

The demand for companies to prepare for the AI transformation is high, and Salesforce is seeing great performance with its Data Cloud products. The company has also launched a new product called Copilot, which has received enormous demand. However, the company is not factoring in significant revenue from these new products into its FY25 guidance. Salesforce has also seen a 200 basis point increase in operating margin due to past decisions and disciplined headcount growth. The company is now investing in productive areas such as AI and data.

The company is focused on leveraging areas with high talent pools and low costs, and making changes to drive productivity. The CEO believes that Data Cloud, a new cloud offering, will be a "killer app" that can help accelerate revenue growth. The company has been successful in the past with organic innovation, and the CEO sees Data Cloud as a key factor in the company's future success.

Salesforce's new Data Cloud is a game-changing addition to their Sales Cloud and Service Cloud products, making them even more valuable to their customers. The integration of Data Cloud with AI is crucial for businesses to achieve success and Salesforce is urging their salespeople and partners to execute flawlessly in order to take advantage of this opportunity.

Salesforce is excited about their upcoming fiscal year, which they believe will be the year of Data Cloud. Amy Weaver addresses a question about leading indicators, stating that they are seeing positive signs in areas such as AE productivity and pipeline. Brian, who is responsible for pricing and bundling, mentions the upcoming launch of Einstein 1 and its potential impact on revenue. He also addresses the decline in pro services, which he believes is due to a measured buying environment but sees positive indicators for the future.

Marc Benioff and Brian Millham discuss the importance of AI and Data Cloud in achieving their ACV goals. They also mention the success of their UE plus pricing and bundling strategy and a price increase from last year.

The company has simplified its quoting process and reduced the number of SKUs, which will have a positive impact in the long term but may not be significant in the short term. There has been a decrease in demand for large transformation projects in professional services, but smaller transactions are still taking place. The company's gross margin and sales efficiency metrics are strong.

Salesforce is deploying its own AI technology internally and has seen benefits in its support operation with case summaries. The company is a big believer in using its own technology and sees it as part of its margin expansion strategy. The AI is being used by the sales teams and is also being leveraged in other areas of the business, such as service, marketing, and commerce. The company's leadership, Brian and Amy, are excited about the future opportunities for AI in their business. The question is posed about the applicability of AI to different industries.

Marc Benioff is uncertain about which industries are leading the way in utilizing AI and how it will affect competition. He references movies like Minority Report and Terminator as potential glimpses into the future, but acknowledges that the transformation of AI in daily life has not yet reached the level depicted in those films. He believes that AI will have a significant impact on businesses and that it is important to have the right values guiding its development.

Salesforce CEO Marc Benioff discusses the importance of trust in the use of AI technology and how his company is leading the way in providing a trust-based AI for enterprises. He also mentions the success of the Data Cloud and its differentiation from general purpose data platforms. He is asked about the potential for Data Cloud to go beyond customer data and how many customers are able to adopt the higher-priced Einstein 1 and UE plus products.

The speaker discusses the potential for upselling and cross-selling their existing cloud services to customers. They mention the need to integrate their platforms and focus on data, as they see themselves as a data company. They emphasize the importance of data for AI and customer success.

The speaker explains that AI companies stole consumer data to perform party tricks, but for enterprise use, comprehensive data sets informed by metadata are necessary. Another speaker discusses the price uplift for Einstein 1 edition, which is based on the value provided to customers. The company aims to make AI and data cloud capabilities accessible to all segments of its customer base. The call is now concluding.

This summary was generated with AI and may contain some inaccuracies.