Salesforce

“The hardware, software, data and cloud computing platforms that we rely on, including, for example, the large language models leveraged in our AI offerings, may not continue to be available at reasonable prices, on commercially reasonable terms or at all.”

“Cost of subscription and support revenues primarily consists of expenses related to delivering our service and providing support, including the costs of data center capacity, certain fees paid to various third parties for the use of their technology, services and data, employee-related costs such as salaries and benefits, and allocated overhead.”

“Customers can connect to multiple large language models, including from partners like OpenAI, Anthropic, and others.”

“The way we'll run is, we'll run like a model tournament, because one of the things everybody has to watch out is, it's great, but what about the cost to serve?”

“Cost of revenues increased in absolute dollars, and by one percent as a percentage of total revenues, for the three and six months ended July 31, 2026 compared to the same period a year ago, primarily as a result of an increase in service delivery expenses, including spend on hosting services and generative AI technologies, as well as amortization of intangible assets acquired through business combinations.”

“We intend to continue to invest additional resources in our AI, agentic and cloud services to allow us to scale with our customers and continue to evolve our security measures.”

“Our platform runs on our own custom models. We've been writing models since 2015, and you can find them all on Hugging Face.”

“We are combining Claude's extraordinary intelligence and reasoning with Salesforce's trusted data and applications and workflows and business rules and governance.”

“In Q2 alone, customers drove 3.2 billion AWUs, up 97% quarter-over-quarter.”

“But the other use cases which we are going to see, and in fact, I've rolled out our own code LLMs in our engineering org, and we are already seeing minimum 20% productivity.”

“Research and development expenses as a percentage of total revenues during the three months ended July 31, 2026 increased by approximately one percent compared to the same period a year ago due to increased employee-related costs, as well as spend on hosting services and generative AI technologies.”

“However, at the end of fiscal 2024, we began to invest in incremental AI resources to accelerate further growth and as a result our research and development headcount increased by five percent during fiscal 2024.”

“This guidance increase is driven by the acceleration of our restructuring efforts and also includes reinvestment in targeted areas, mainly in R&D.”

“Research and development expenses as a percentage of total revenues during the three months ended July 31, 2026 increased by approximately one percent compared to the same period a year ago due to increased employee-related costs, as well as spend on hosting services and generative AI technologies.”

“We plan to reinvest savings from efficiencies realized from the rapid deployment of generative AI technologies to accelerate our product roadmap.”

“In June 2026, the Company entered into an agreement to acquire Intercom, Inc. (“Fin”), a customer agent platform providing autonomous, end-to-end AI service agents, for approximately $3.6 billion in cash, and subject to customary purchase price adjustments.”

“It's a great experience as a software executive to see the customer's reaction, and this is what we're building with our new enterprise harness.”

“you do not need a bunch of FDEs and engineers and all that to do that, because that is what the AI is really good for up here at this top level.”

“Cost of subscription and support revenues primarily consists of expenses related to delivering our service and providing support, including the costs of data center capacity, certain fees paid to various third parties for the use of their technology, services and data, employee-related costs such as salaries and benefits, and allocated overhead.”

“Our global customer support group responds to both business and technical inquiries about the use of our products via the web, telephone, email, social networks and other channels.”

“Salesforce's help agent has surpassed 5 million customer conversations with 64% resolved autonomously.”

“As customer zero, we are putting Agentforce to work across our own business.”

“However, at the end of fiscal 2024, we began to invest in incremental AI resources to accelerate further growth and as a result our research and development headcount increased by five percent during fiscal 2024.”

“But the other use cases which we are going to see, and in fact, I've rolled out our own code LLMs in our engineering org, and we are already seeing minimum 20% productivity.”

“We plan to reinvest savings from efficiencies realized from the rapid deployment of generative AI technologies to accelerate our product roadmap.”

“Research and development expenses as a percentage of total revenues during the three months ended July 31, 2026 increased by approximately one percent compared to the same period a year ago due to increased employee-related costs, as well as spend on hosting services and generative AI technologies.”

“Our general and administrative headcount decreased by 20 percent during fiscal 2024 driven by the Restructuring Plan and our hiring pause that was in effect during fiscal year 2024.”

“I think the fully autonomous cases, for example, in our own internal use cases with our models, we are able to detect 60% of instance and auto-remediate.”

“We continue to view sales and marketing and G&A as the primary drivers of leverage, while R&D remains an important investment area.”

“Slackbot is driving 8.1 million hours of annualized productivity gains for our employees. That's more than double quarter-over-quarter.”

“As customer zero, we are putting Agentforce to work across our own business.”

“We expect that general and administrative expenses may decrease as a percentage of revenues over time as we continue to invest in process efficiency initiatives, which includes the use of AI and agents.”

“For the three and six months ended July 31, 2026, general and administrative expenses were relatively flat in absolute dollars compared to the same period a year ago.”

“In the three and six months ended July 31, 2026, we incurred approximately $94 million and $174 million, respectively, of costs related to our restructuring initiatives, which were primarily related to employee transitions, severance payments and employee benefits.”

“the head of all of our operating units have been using Claudeforce to run their businesses inside Salesforce this quarter. It is one of the reasons why we are getting such great performance.”

“Einstein, our AI productivity and development platform, brings AI into Salesforce apps and workflows and offers the ability to deploy conversational, generative AI assistants that empower teams to get work done without compromising data security and privacy.”

“Last quarter, I told you how our AI team is getting ready to launch Einstein GPT, the world's first generative AI for CRM.”

“Of course, we have been a leader in this area with Einstein, more than a trillion transactions delivered this week. These are primarily predictive transactions built on machine intelligence, machine learning, and deep learning.”

“I think the way I see it is this AI technologies are on a continuum. There is predictive, then there's generative, and the real long-term goal is autonomous.”

“Can you just distill for us, if you don't mind, what is new about generative AI as far as Salesforce's opportunity is concerned, netting out against what Einstein has been able to accomplish for you, for the company?”

“Agentforce ARR, it hit $1.5 billion. Our ARR for AI and data is about to cross $4 billion.”

“Agentforce ARR reached $1.5 billion, as you heard, driven by Slackbot and headless launches and continued AI momentum.”

“Agentforce and Data 360 annual recurring revenue ("ARR") reached nearly $3.9 billion, up over 210% Y/Y”

“Agentforce ARR exceeded $1.5 billion, up over 240% Y/Y. Effective Q2 FY27, Agentforce ARR includes our AI offerings, Slackbot and Headless 360”

“From time to time, we may update this metric to incorporate new products, feature offerings, or acquired technologies that meet its definition. Beginning in Q2 FY27, Agentforce ARR includes our AI offerings Slackbot and Headless 360.”

“The Company defines Agentforce and Data 360 annual recurring revenue ("ARR") as the annualized recurring value of active Data 360 and certain generative artificial intelligence ("AI") subscription agreements, including those for Agentforce, generative AI products and features, and Headless 360, that were executed at the end of the reporting period.”

“In Q2 alone, customers drove 3.2 billion AWUs, up 97% quarter-over-quarter.”

“The number of accounts with agents in production grew 70% over last quarter.”

“We added 2,000 paying customers into production. That is 70% more quarter on quarter.”

“When you look just at bookings, not just the cumulative ARR, our bookings, Elizabeth, grew triple digit, so we doubled year on year.”

“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”

“Einstein, our AI productivity and development platform, brings AI into Salesforce apps and workflows and offers the ability to deploy conversational, generative AI assistants that empower teams to get work done without compromising data security and privacy.”

“Our future success also depends in part on our ability to sell additional features and services, more subscriptions or enhanced editions of our services to our current customers.”

“The increase in subscription and support revenues for fiscal 2024 was primarily caused by volume-driven increases from new business, which includes new customers, upgrades and additional subscriptions from existing customers. Pricing was not a significant driver of the increase in revenues for either period.”

“Pricing and packaging strategies for enterprise and other customers for subscriptions to our existing and future service offerings, including for our AI offerings, may not be widely accepted by new or existing customers.”

“Not only do you have the free version of Slack, not only do you have the per-user version of Slack, but then you have the additional LLM version of Slack. For each one of our products, in every single one of our categories, there's that opportunity to upsell and cross-sell into the next version of generative AI.”

“Skeptics said pricing power would erode, and A1E and A4X bookings more than doubled quarter-over-quarter.”

“Bookings from Agentforce 1 Edition and Agentforce for apps more than doubled quarter-over-quarter.”

“Only 5% of the knowledge workers that use sales and service have upgraded to the higher-end editions. We get a 60% to 80% premium.”

“Every customer will be able to buy it. They will have to upgrade to our premium editions, and it is going to be a new wave of demand.”

“If you want Claudeforce, if you want headless, if you want all these value-added agentic additions and capabilities, you need to move to our premium edition”

“The increase in subscription and support revenues for the three and six months ended July 31, 2026 was primarily caused by volume-driven increases from new business, which includes new customers, upgrades, and additional subscriptions from existing customers. Pricing was not a significant driver of the increase in revenues for either period.”

“We are combining Claude's extraordinary intelligence and reasoning with Salesforce's trusted data and applications and workflows and business rules and governance.”

“Pricing and packaging strategies for enterprise and other customers for subscriptions to our existing and future service offerings, including for our AI offerings, may not be widely accepted by new or existing customers.”

“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”

“Some of them want it by consumption, and that is important to them. Some of them are just basic usage customers, and they want to pay that way. Some of them even want to pay by outcome, and that outcome could be by a transaction outcome or a business outcome.”

“That we monetize with ILAs, with 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 overages, and many times they buy up front a bunch of credits.”

“Have we fully optimized that yet? No way. We're still trapped in some ways in old per user pricing models.”

“Additionally, our transition toward more complex pricing structures, including AI-driven consumption models, may make it more difficult to optimize our pricing, predict attrition rates, and accurately forecast revenue.”

“In Q2 alone, customers drove 3.2 billion AWUs, up 97% quarter-over-quarter.”

“Data Cloud is our hyperscale, trusted data engine native to Salesforce. It brings a company's disconnected, enterprise data into Salesforce to deliver an actionable, comprehensive, 360-degree view of a customer.”

“By bringing together structured and unstructured data, Data Cloud offers fast and secure entry into AI for outcomes that are accurate, relevant and grounded with a company's data.”

“Data Cloud is the heart of Customer 360, and now our fastest-growing cloud ever. Data Cloud creates a real-time intelligent data lake that brings together and harmonizes all of our customers' data in one place.”

“Armani uses Data Cloud to deliver hyper-personalized online and in-store experiences, real-time engagement, and curated shopping recommendations.”

“Agentforce ARR, it hit $1.5 billion. Our ARR for AI and data is about to cross $4 billion.”

“Agentforce and Data 360 annual recurring revenue ("ARR") reached nearly $3.9 billion, up over 210% Y/Y”

“The Company defines Agentforce and Data 360 annual recurring revenue ("ARR") as the annualized recurring value of active Data 360 and certain generative artificial intelligence ("AI") subscription agreements, including those for Agentforce, generative AI products and features, and Headless 360, that were executed at the end of the reporting period.”

“Headless platform, Data 360, and other growth was fueled by continued momentum in Informatica and Data 360, partially offset by license revenue headwinds and volatility in integration and analytics.”

“With MuleSoft, customers connect any data, or AI model securely and automate tasks and processes, using discoverable and reusable APIs and integrations, to transform businesses and drive faster time to value.”

“Agentforce and Data 360 annual recurring revenue ("ARR") reached nearly $3.9 billion, up over 210% Y/Y”

“We continue to accelerate Informatica's business.”

“The acquisition of Informatica in November 2025 contributed approximately $456 million and $900 million of total revenues for the three and six months ended July 31, 2026, respectively.”

“Headless platform, Data 360, and other growth was fueled by continued momentum in Informatica and Data 360, partially offset by license revenue headwinds and volatility in integration and analytics.”

“Our future success also depends in part on our ability to sell additional features and services, more subscriptions or enhanced editions of our services to our current customers.”

“The increase in subscription and support revenues for fiscal 2024 was primarily caused by volume-driven increases from new business, which includes new customers, upgrades and additional subscriptions from existing customers. Pricing was not a significant driver of the increase in revenues for either period.”

“Our seats were supposed to decline. Instead, Agentforce sales, service, and Slack all saw year-over-year growth, and we were told customers would abandon us, but attrition is near its lowest level ever.”

“if you take a look particularly at sales and service, we are seeing durable growth in seats.”

“Customers that start the agentic journey with Salesforce, on average, they are already at double the AOV with a perspective of nearly quadrupling, 3 x - 4 x the AOV.”

“The increase in subscription and support revenues for the three and six months ended July 31, 2026 was primarily caused by volume-driven increases from new business, which includes new customers, upgrades, and additional subscriptions from existing customers. Pricing was not a significant driver of the increase in revenues for either period.”

“The powerful part about that was I realized that everything from day one at OpenAI had been in Slack.”

“In Q1, we saw amazing momentum with customers like the California Office of Systems Integration, Paramount Global, Revel, and OpenAI, and rolled out an AI-ready platform, Slack Canvas, and app integrations with ChatGPT and Anthropic's Claude.”

“Nine of the 10 AI companies, like you just heard from Anthropic, that standardized on Salesforce, use Salesforce and Slack. Their spend is up 435% year over year.”

“Companies like Anthropic, OpenAI, Lovable, Replit, on and on and on, I think there is more than 1 million companies on Slack now, are all building their agentic products directly into Slack because Slack is where their customers want them.”

“They've tripled the number of Agentforce sales seats.”

“Our future success also depends in part on our ability to sell additional features and services, more subscriptions or enhanced editions of our services to our current customers.”

“Also included in the cost of subscription and support revenues are expenses incurred supporting the free user base of Slack, including third-party hosting costs and employee-related costs, including stock-based compensation expense, specific to customer experience and technical operations.”

“Not only do you have the free version of Slack, not only do you have the per-user version of Slack, but then you have the additional LLM version of Slack. For each one of our products, in every single one of our categories, there's that opportunity to upsell and cross-sell into the next version of generative AI.”

“Slackbot is our fastest adopted AI product ever. Five months after launch, it has 1 million active users, up 150% quarter-over-quarter.”

“Upgrades to our premium Slack editions have tripled since we launched Slackbot.”

“Q2 Slack net new AOV was the fastest quarterly growth since acquisition.”

“Agentforce ARR reached $1.5 billion, as you heard, driven by Slackbot and headless launches and continued AI momentum.”

“Agentforce ARR exceeded $1.5 billion, up over 240% Y/Y. Effective Q2 FY27, Agentforce ARR includes our AI offerings, Slackbot and Headless 360”

“From time to time, we may update this metric to incorporate new products, feature offerings, or acquired technologies that meet its definition. Beginning in Q2 FY27, Agentforce ARR includes our AI offerings Slackbot and Headless 360.”

“Companies like Anthropic, OpenAI, Lovable, Replit, on and on and on, I think there is more than 1 million companies on Slack now, are all building their agentic products directly into Slack because Slack is where their customers want them.”

“With MuleSoft, customers connect any data, or AI model securely and automate tasks and processes, using discoverable and reusable APIs and integrations, to transform businesses and drive faster time to value.”

“We also enable third parties to use our platform and developer tools to create additional functionality and new applications that run on our platform, which are sold separately from, or in conjunction with, our service offerings.”

“We feel really comfortable with, like you said, we're working through headless monetization”

“Agentic use of our apps through Model Context Protocol calls and CLI calls also surged sixfold, 6x.”

“MCP and API usage grew significantly in the quarter as customers embed Salesforce intelligence, the data, metadata, and semantics directly into their workflows.”

“Agentforce ARR exceeded $1.5 billion, up over 240% Y/Y. Effective Q2 FY27, Agentforce ARR includes our AI offerings, Slackbot and Headless 360”

“From time to time, we may update this metric to incorporate new products, feature offerings, or acquired technologies that meet its definition. Beginning in Q2 FY27, Agentforce ARR includes our AI offerings Slackbot and Headless 360.”

“Agentforce ARR reached $1.5 billion, as you heard, driven by Slackbot and headless launches and continued AI momentum.”

“If you want Claudeforce, if you want headless, if you want all these value-added agentic additions and capabilities, you need to move to our premium edition”

“The Company defines Agentforce and Data 360 annual recurring revenue ("ARR") as the annualized recurring value of active Data 360 and certain generative artificial intelligence ("AI") subscription agreements, including those for Agentforce, generative AI products and features, and Headless 360, that were executed at the end of the reporting period.”

“We sell our services primarily through our direct sales force, which comprises telephone sales personnel based in regional hubs, field sales personnel based in territories close to their customers and self-service offerings.”

“How do we drive a self-serve motion, an automated motion at the low end of our market to bring our account executives upmarket to drive higher productivity in the sales organization?”

“We continue to view sales and marketing and G&A as the primary drivers of leverage, while R&D remains an important investment area.”

“So we build our own agents based on Claude, and that agent inspects, they are our deputy CROs for all our businesses, and they inspect the business, the pipeline.”

“the head of all of our operating units have been using Claudeforce to run their businesses inside Salesforce this quarter. It is one of the reasons why we are getting such great performance.”

“We still have to hire 1,200 more AEs before the end of the year. We are now hitting 15,000 AEs.”

“We expect that sales and marketing expenses may decrease as a percentage of revenues over time as we continue to focus on leveraging our self-serve and partner-led channels and increasing our sales productivity, which includes the use of AI and agents.”

“We invest in companies that we believe are digitally transforming their industries, improving customer experiences, helping us expand our solution ecosystem or supporting other corporate initiatives, including AI.”

“Of course, we have a tremendous relationship with OpenAI. We also just invested in Anthropic, Cohere, many of these companies.”

“The unrealized gains for the three and six months ended July 31, 2026 include gains of $2.7 billion and $3.0 billion, respectively, related to the Company’s investment in Anthropic.”

“As of July 31, 2026, our strategic investment portfolio consisted of investments in over 450 companies with a combined carrying value of $11.3 billion, including the Company’s investment in Anthropic PBC (“Anthropic”) which represented approximately $5.1 billion of the total strategic investments portfolio.”

“As of July 31, 2026 and January 31, 2026, the Company’s privately held investment in Anthropic PBC (“Anthropic”) had a carrying value that represented approximately 45 percent and 22 percent, respectively, of the Company’s total strategic investments portfolio.”

“Then take the value of our Anthropic stock. That has been like half our value.”

“As of January 31, 2024, our attrition rate, excluding Slack, was approximately eight percent.”

“traditional platform development environment companies and cloud computing development platform companies who may develop toolsets and products that allow customers to build new apps that run on the customers' current infrastructure or as hosted services, as well as would-be customers who may develop enterprise applications for internal use.”

“Q1 revenue attrition ended the quarter at approximately 8%.”

“This is not the SaaSpocalypse. As I said earlier, we have been hearing about this for the last two quarters, these dire predictions about the end of software and how the models eat everything.”

“We are told the frontier models would eliminate the need for CRM. Instead, they depend on it”

“Exceptional Q2 bookings, along with near-record-low attrition, drove our Q2 CRPO beat.”

“As of July 31, 2026, our attrition rate, excluding Slack self-service, Informatica, and current year acquisitions, was approximately eight percent.”

“traditional platform development environment companies and cloud computing development platform companies who may develop toolsets and products that allow customers to build new applications, including AI-augmented applications, that run on the customers’ current infrastructure or as hosted services, as well as would-be customers who may develop enterprise applications for internal use.”

“Our seats were supposed to decline. Instead, Agentforce sales, service, and Slack all saw year-over-year growth, and we were told customers would abandon us, but attrition is near its lowest level ever.”

“if you take a look particularly at sales and service, we are seeing durable growth in seats.”

“I think that has been the huge shock for us, that these new next-gen tools, the Cursors, the Replit, the Claudes of the world, make our product better.”

“Additionally, our transition toward more complex pricing structures, including AI-driven consumption models, may make it more difficult to optimize our pricing, predict attrition rates, and accurately forecast revenue.”

“The decrease in professional services and other revenues was due primarily to less demand for larger, multi-year transformation engagements and, in some cases, delayed projects.”

“We are going to roll Einstein GPT for our developers in the ecosystem, which will not only help the low-code developers bridge the gaps, where there's a talent gap, but also it reduces the cost of implementations for a lot of people, so there's a lot of value.”

“Also, in Q1, our professional service business started to see less demand for multi-year transformations, and in some cases, delayed projects as customers focus on quick wins and fast time to value.”

“That all of a sudden it can customize the data, the metadata, set up the preferences, do the administration, do things that maybe you needed a bunch of service folks to do. Now all of a sudden, you're getting going in a month.”

“I think that has been the huge shock for us, that these new next-gen tools, the Cursors, the Replit, the Claudes of the world, make our product better.”

“you do not need a bunch of FDEs and engineers and all that to do that, because that is what the AI is really good for up here at this top level.”

“The decrease in professional services and other revenues for the three and six months ended July 31, 2026 was primarily due to less demand for larger, multi-year transformation engagements, which may continue in the near term.”