Salesforce FY27 Q1 Financial Results

and save on average 3 minutes for every conversation. Roughly 30,000 minutes in savings per day.

We believe in the power of agentic AI and that is the reason we partnered with Salesforce.

If you take away health, then it's done. There's nothing else. Healthcare is very fragmented.

Patients are frustrated from the beginning because it's not centered on them. How can I fix this? Then I found Salesforce. I deliver care personalized to the patient and I do that all on the Salesforce platform. Data 360 becomes the activation layer back into Agentforce, back into Slack using Agentforce. Pre-procedure prep for doctors went from 90 minutes to 90 seconds. My purpose is to help people live their best lives. Couldn't do that without the Agentic Enterprise.

If you read any industry news, you might have heard about the SaaS apocalypse.

AI disruption fear getting slim.

It's not the end of software. It's the end of software that makes humans do all the work. So what's replacing it? Software that listens. Software that understands. Software that can actually do. And once you see it, there's no going back.

We're going to this incredible new world. The Agentic Enterprise.

Salesforce reports.

I'm seeing accelerated revenue, robust top and bottom line beat.

We're doing more cash flow than Walmart. It's all about the Agentic Enterprise. The best companies in the world are doing this right now.

Data is everything for an Agentic Enterprise.

The foundation layout is always data. We have to get the data right. Data 360 is at the heart of our infrastructure.

We can activate that data to make sure that they're getting the care that they need.

Sales, service, the marketing engine. Salesforce was the one company that had all the tools in the toolbox. And with Agentforce, it takes us to that next level.

Our agents now have encyclopedic knowledge.

It was in that moment that we knew Agentforce was the answer.

And all of this is being front-ended by Slack.

Having Agentforce, Data 360, Tableau integrated in Slack. All of a sudden, you have a supercharged business.

It's the power of all of the technologies working together.

This is the Agentic Enterprise.

Big companies are using Agentforce. Agentforce is now an $800 million business. Customers aren't going to deploy just one agent. There's going to be many agents. Salesforce Headless 360 changes the way that your company works.

Everything in Salesforce is now exposed as an API, MCP, or CLI command.

Headless 360 is the biggest growth opportunity that any of us will see in our lifetime.

You just see the velocity. Agents have participated in a quarter of a million consumer engagements.

Agentforce Voice will be a game changer.

Agentforce, give me more information about the job.

The subject of this photo and the cost savings is just unbelievable.

12 days we launched our first agent. Saved us $2 million since we launched it.

PenFed was able to save 30,000 minutes per day. By being able to bring our Salesforce data into Slack, I've seen our time in the Deal Deck stages go down by up to 60%.

Slackbot truly is the ultimate teammate. We've saved and made at least $4.5 million just because of how we're using Slack.

Slack is our operating system. We run our full business in Slack.

The Salesforce platform has allowed our providers to see 40% more patients every day. Couldn't do that without the Agentic Enterprise.

We're about $30 billion today. We can be a $60 billion firm on the Salesforce platform.

It's driving down cost and in the end just having a better service experience.

Sees goes up, costs to deliver go down, customers are happier, we're getting them answers faster. There's just incredible opportunity for all these businesses run on Salesforce today. You're nuts if you don't.

I think we're in a new era of agents enabling you. That's really where the magic is. Human being, agent doing. This is the Agentic Enterprise.

At this time, I would like to welcome you to the Salesforce first quarter fiscal 2027 conference call. This conference is being recorded and all lines have been placed on mute to prevent any background noise. After the speaker's prepared remarks, there will be a question and answer session. At this time, I would like to turn the call over to Mike Spencer, executive vice president of finance. Sir, you may begin.

Good afternoon and thanks for joining us today on our fiscal 2027 first quarter results conference call. Our press release, SEC filings, and a replay of today's call can be found on our website. Joining me on the call today is Marc Benioff, chair and CEO; Robin Washington, chief operating and finance officer. We also have Patrick Stokes, president and chief marketing officer; Miguel Milano, president and chief revenue officer; and Sinead Talbott, president and chief engineering and success officer, joining us for the Q&A portion of the call. Some of our comments today may contain forward-looking statements that are subject to risks, uncertainties, and assumptions, which could change should any of these risks materialize or should our assumptions prove to be incorrect. Actual company results or outcomes could differ materially from these forward-looking statements. A description of these risks, uncertainties, and assumptions, or other factors that could affect our financial results or outcomes, is included in our SEC filings, including our most recent report on forms 10-K, 10-Q, and any other SEC filings. Except as required by law, we do not undertake any responsibility to update these forward-looking statements. As a reminder, our commentary today will include non-GAAP measures. Reconciliations between our GAAP and non-GAAP results, and guidance can be found in our earnings materials and press release. And with that, let me hand the call over to Marc.

All right. Fantastic. Thanks so much, Mike. I'm so excited to be here with everybody and great to do our second video earnings call with you and it's really great. It's a gorgeous day in San Francisco and we're going to have a great time here with you. We've even got a couple customers joining us which we're really excited about. Well, I think as everybody can see, this was really an outstanding quarter for Salesforce. We have delivered record revenue, record deals, and just incredible cash flow. And of course, I think, you know, we've also returned record levels to our investors. We're going to talk about that and how important that is, especially during this unusual time. So, we're going to come into that. And also, by the way, we also mentioned we have some record token counts. I think we're going to talk about how we processed 28.6 trillion tokens up 152% quarter over quarter. No greater example of the tremendous adoption of these new Agentic products by our customers and how we've converted those into 3.8 billion Agentic work units. Agentic AI, well it's the biggest growth opportunity for our customers, for us at Salesforce. And since we brought CRM into the cloud we're just seeing tremendous new innovation every single day. And you can see it in our products. You can see it in our customer momentum. You can see it in our results. Salesforce has never been more essential to our customers. We're going to hear from them in just a second. And we're the number one Agentic CRM transforming every company into an Agentic enterprise. Now, let me tell you about these amazing Q1 numbers. Revenue was 11.13 billion, up 13% year-over-year nominal and 12% in constant currency. CRPO 33.66 billion up approximately 14% nominal and 13% in constant currency. And Q1 non-GAAP operating margin of 34.8% up 250 basis points again hitting some record levels. GAAP operating margin of 21.1% up 130 basis points. Pretty awesome. And we delivered 6.7 billion in operating cash flow. Tens of thousands of businesses across every industry are building their Agentic enterprises with Salesforce. We're going to talk about that today. And OpenAI, Anthropic, Google, companies building the future of AI. All of them Salesforce customers, all of them Slack customers building these incredible new capabilities with Agentforce. We secured a record 98 Q1 deals with over $1 million in new ACV in the quarter. 98 Q1 deals with over a million dollars. Miguel is going to talk about that today. Organizations like LVMH, Chobani, the US Air Force, which by the way just signed a new $72 million ELA with us during the quarter. Awesome. And we're seeing incredible demand for Agentforce with ARR, now greater than a billion dollars. And combined with Data 360 and Informatica Cloud, we've delivered 3.4 billion in AI and data ARR. 50% of Agentforce and Data 360 bookings were from existing customers expanding their commitment and to date we processed 28.6 trillion tokens up 152% quarter over quarter and converted them into 3.8 billion as I mentioned already Agentic work units for our customers up 111% quarter over quarter. Agentforce now powering every customer 360 application and it's changing how organizations operate across service, sales, marketing, commerce, and so much more. Nowhere is this more evident than in customer service. Let's just start right there with Agentforce Service. Humans and agents collaborate across every channel from first contact to resolution across the Trinity of channels, voice, website, apps. A great example you're going to hear in a moment, UCLA Health. If you go to uclahealth.org, you'll see right away Agentforce is there to help you get your questions answered, to connect with their physicians, to connect with their technology at UCLA. It's a great example using our current most current version of Agentforce and since we deployed Agentforce on help.salesforce.com at salesforce.com and on 1-800-NO-SOFTWARE, well, only 15 months ago, it's autonomously handled now 4 million inquiries. It's now double what human agents are handling. Every customer can turn this on now. So many customers are seeing incredible results with Agentforce Service. Vino, the world's largest wine company, supporting 74 million users with only 37 reps. Kind of hard to believe, but it's possible because its agent Vina autonomously handles order status lookups, account questions more autonomously, slashing resolution time by 70%. McAfee has selected our new Agentforce ITSM product or what we call Agentforce IT Service to replace ServiceNow. They are using it for everything. Ticket deflection, hardware provisioning, incident management. Really cool. And Florida Prepaid, a college savings plan provider with more than 200,000 accounts, is using Agentforce Voice to autonomously handle 75% of business hour calls and 100% of after-hour calls. And with Agentforce Sales, we're powering the entire revenue life cycle from first lead to closed deal. And as I said before, over 25 years, Salesforce has generated tens of millions of leads. We never called back. In Q1 alone, Agentforce Sales worked 220,000 leads autonomously generating $42 million in pipeline. Awesome. So I'm more excited about what our customers are doing in service, in sales, in marketing, in Slack, and all of these things. Another great example, cybersecurity leader Foret using Agentforce Sales to power predictive lead scoring. Financial leader Agribank now built an SDR agent that instantly qualifies leads on WhatsApp. You can go to salesforce.com and even see our own qualification system running right on our homepage as well. Okay. In Q1, we completed the acquisition of Qualified and integrated Piper, their SDR agent into Salesforce, brought all those great Salesforce alumni back home. More than 700 customers are already using Piper. It's an incredible success. And we deployed Piper on Salesforce.com as I mentioned. So, you're going to be able to use it firsthand. I think that's so great. It's engaging 50% of our traffic and qualifying thousands of leads and delivering 45% more pipeline than traditional web agents. Also very excited about our new Agentforce Co-Worker which we announced last week. If you haven't heard about that, every single one of our Salesforce applications now comes with a built-in autonomous agent. No complex configuration. You just turn it on. It becomes your coworker finding answers, taking action, getting work done fast. To give you an idea of the impact that Co-Worker will have, people search for information inside Salesforce one billion times a month. Co-Worker turns search into answers and answers into action. And one of our trailblazers, Andrew Russo, you probably saw him respond directly to me on X kind of was a surprise, but he said, 'There's no way this is real life right now. Agentforce Co-Worker was able to pull together and navigate our complex sales and ERP data to answer questions that just yesterday would have been 60 minutes of swivel chairing between screens and systems.' It was pretty cool to see that. And I'll tell you this quarter we also announced Headless 360 again making all of Salesforce accessible through our MCP clients, API, CLI prompts. Headless 360 bringing together the humans, agents, and headless platforms so you can use Salesforce with any coding agent across any surface. It's going to speed implementations, drive consumption, more actions, more workflow, more data, more intelligence all compounding across Salesforce. We're meeting our customers where they are. Since launch in April, we've already processed four and a half million MCP calls into our platform. Q1 alone, we processed nearly a trillion API calls. Incredible. And with Headless 360, Indeed is building and deploying Agentforce agents right from Cursor. And Just Eat Takeaway, one of the leading online food delivery platforms in Europe. We just had them speak to our entire management team. It's such an amazing story. is using Headless 360 already to bring agents into WhatsApp and other channels engaging with 350,000 partners across 15 countries. So now let's talk about our favorite Slack which every AI company in the Bay Area here is using to run their business including OpenAI and Anthropic transforming our customers into an Agentic Enterprise. Slack was nearly half of our million plus wins this quarter up 80% year-over-year. It is a rocket ship to the moon. All of the AI companies run on Slack. As I mentioned, I don't think there's a startup or next-gen AI company that doesn't run on Slack. Anthropic calls Slack its core operating system. And that's what Slack is becoming for every enterprise. All of our apps are Slack first. So now a service agent can summarize a case, update the record, escalate to a human right in Slack. And Slackbot is also an MCP client. So you can tell it to create a purchase order in NetSuite or update a project in Jira. And it happens. No switching tools. We've seen 1 million users of Slack MCP in the first six weeks. And Slack AWUs grew nearly 350% quarter over quarter. In two years, there'll be more agents using Slack than people. Every one of those agents needs the context and the data and the insights directly from Slack. Every workflow needs the data. Every action needs the integration. And every customer needs to see what's happening across the entire business. We have the largest collection of trusted CRM context ever assembled between Data 360, Informatica, MuleSoft, Tableau. Manage and deliver all that context so that any agent can reason, act, and deliver real outcomes. Informatica has an amazing acquisition. It performed incredibly well this quarter. It's doing the heavy lifting in data management that every customer needs to move from pilot to production. All of this is why we're the number one Agentic CRM and we provide what every company needs to become an Agentic enterprise. Okay, so now let's keep going and with Slack, Headless 360, the entire platform is accessible. We have some new people joining us at the table. So it's very exciting. Great to see you buddy and we're transforming and more importantly our customers are transforming too. Okay. All right. Anyway, here we are. Let's move on to what's really important. So, welcome. Thank you for being here.

Thanks for having me.

We're thrilled that you're here. And would you just introduce yourself to everybody because I don't think they know you.

I'm James Ganka, president and CEO of PenFed Credit Union, headquartered in Tyson, Virginia.

And is this your first time in San Francisco?

Been here a few times, meeting with Salesforce.

Usually I see you in DC. So, so happy that you're here with us and grateful that you're here. So, why don't you tell us a little about, you know, you've been using Salesforce a while at PenFed. You've had this vision of becoming an Agentic Enterprise. Why don't you tell us, you know, what's happening? We heard you a little bit on your earnings call. I think everyone should hear you on our earnings call, too.

Let me just tell you the why. So, I started in financial services 25 years ago. There was 18,400 banks and credit unions. There's 8,000 today. Think about that. 500 credit unions and banks are either merged or beaten out of existence every year. And so, we knew we had to change. We've been around for 91 years and to remain relevant, we realized we needed to partner with somebody that can sort of rebuild our tech deck to take us to a new level.

So you were motivated.

Super motivated. You got to be hungry every day. I was 6'5 like you when I started. I'm 5'6 today.

All right. So now tell us a little more about what have you done? What's the vision?

So about two years ago, I was actually at your World Tour in New York City and I saw some other partners their vision of what they thought it can do for the member experience. When we're competing against 8,000 other firms, we got to deliver hyper-personalization and every transaction. We do about 500 transactions a second, 160 million member transactions a year. They have to be right anywhere in the world, real time. So we built our entire platform over the last few years. We went from about 400 platforms down to literally 12 strategic partners. Our call center, our mobile, our web, and our branches all run on Salesforce. Every additional partner or tech siloed capability is a tax on innovation. It's a tax on speed and it's a tax on security. So by building it around Salesforce, I really think it's taken me 25 years to realize Jim Collins's flywheel effect. We have 76 agents now running across operations, mortgages, IT, HR. All of our areas are adopting it to make our employees be more productive. We like to say they're bionic employees now. We're not losing employees. We're able to add more volume at scale, industrialized scale with the same number of people. We're very proud of that.

Well, you know, you've heard the narrative on the SaaS apocalypse. You know, everybody's heard of this crazy thing that these AI apps are transforming, you know, software, which it definitely is true. You know, all of our products are just so much better because of it. But, you know, how is it impacting how you're using Salesforce?

Let me just talk about how people make a buying decision because I hear some of these stories. Somebody knocks on your door, are you going to open the door and give them the keys to your safe or the code to your safe to your family's jewels? So, every day a CEO of any firm is going to get 50 cold calls. Somebody can do it different or better. How is a decision really made? First of all, does the firm in this case Salesforce have the product and service that we need? Second, do you have the engineers, the architects, the professionals to work with my team in order to bring that vision to reality? And then lastly, even if another firm had those first two, who is the firm standing behind it that can be there through good times and bad times that's going to stand behind that product or service? When you line up all three, that's where a good trusted partnership exists. That's why we went with Salesforce. So we worked with your team literally hand in hand. We said we want to streamline processes. We want to take out latency in the code. We want to do X, Y, or Z. Your team was there in the trenches at every level. Engineers, architects building out the vision. But then it's not just pie in the sky on the white sheet of paper, it's implementable. We have 76 agents running side by side with our employees. A good example is in our call centers. We have Agent Wingman. I'm an aviator so I think they named it because I like wingman. Agent Wingman is going to save me nearly 1.6 million this year. It's decreased our call handle time 10% this year. 50% reduction in after call work times and 40% reduction in held calls. So better experience for the member. Remember they can go to 8,000 other institutions. I want them to have a great experience each and every time with PenFed. It's got to be right each and every time. Yet I want my employees to do the knowledge work building trust in the relationship, not entering what just happened on a phone call. We have agents that listen to the phone call, transcribe it, the human still in the loop. They approve what was just talked about, but then it's 360. If the transaction occurred in the branch, web, mobile, so the next person that deals with that consumer, that member, they know exactly the relationship. They know what we might want to sell them next or what they need next for their daughter, their graduation. So, it's creating a hyper-personalized omni-channel experience without having 400 people I need to meet with. I have 12 strategic partners that are allowing us to power the business.

And you've kind of alluded to this, but obviously thank you for your service as well. And just tell us about your members and how important they are to our country.

We've been serving those we started out as the War Department Credit Union in 1935. We support the men and women who serve our nation across the national security community and all Americans who support them anywhere in the world. That's why it has to be right, correct, real time, industrial strength, and we're very proud of that.

Well, we're very proud to have you as a Salesforce customer. Before we wrap it up today, is there anything that you think other financial service leaders like yourself or other folks who are thinking about implementing agent technology should know?

It occurs faster than you think. So, literally, we had the vision where we saw what was possible two years ago. You can build it quickly. The most important thing is having the right partner and not to have too many partners. Too many partners slow things down.

Fantastic, James. We couldn't be more thrilled to have you here today and it's great to have you in San Francisco and thanks for everything you're doing for the whole country and for everyone. Thank you so much. Great to be with you.

Thank you.

All right. Well, we're so happy to have James here and thank you for coming to San Francisco. Unbelievable to have him here is so great and I think that that's such a critical message. And then we have another customer with us as well, UCLA Health. Another great customer. They're using Agentforce to support 450 patients a day. If I I'm not going to go through all the details. Please welcome our good friends here, Palavi and also Michael. So guys, welcome and thanks for coming on the show here with us.

Thanks, Mark.

Thanks for having us.

Well, why don't you tell us your story? You just heard James' story. Why don't we hear your story down at UCLA Health. I already told everyone to go to uclahealth.org and look at Agentforce, but can you tell us a little about what you're doing?

Sure. So we've been working with Salesforce for quite a few years but most recently we've consolidated into one single instance of HealthCloud and we've built on top of that with Marketing Cloud, Data 360 and most recently launched our first experiment with Agentforce and that's a customer-facing chatbot that just it's right now it's only scraping our website to act as a little bit of a virtual concierge to direct patients to where they need to go. It's helping with find a provider. It's helping with general inquiries. It's helping with clinical trials. And the way I like to think about it is each of those topics may have been a phone call. They may have been an email. They may have been an onus put upon the patient, but now it's really it's a one-stop shop for the patient as opposed to, you know, them in a time of need. It's getting them their answers faster.

Well, I'll tell you, it's so exciting to have you with us and you know, there's so many healthcare institutions doing so much for you. I actually have a press release here about CVS Health is going to, you know, launching something tomorrow with us and I just want to just say you guys are way ahead of everyone else. There's so many people with a lot of conservatism in the healthcare industry and deploying agents. What's your message to them in regards to, you know, I already said you can go right to your website and see it, but what is your message to your peers or to others who are considering deploying Agentic technology?

I would say, you know, it took a while for us to sort of dip our toe in the water in the customer-facing space. We're doing a lot on the back end when it comes to research but this really has an impact on our operations and we took a lot of precautions. This particular product really helped us from a testing perspective. There were a lot of protocols in place that allowed us to validate every step that we were taking and that offered a lot of certainty for senior leadership to kind of sign off on the first experiment that we took here.

Outstanding. Palavi, give us the technical know-how, the detail here. You know, it's we're in the SaaS apocalypse as you know. So, you know, how do you look at the SaaS apocalypse? You're an expert in this area. You're deploying the technology. Give us your insight.

Yeah, absolutely. I think fundamentally we're looking at this technology with our business problem in mind of healthcare systems are stretched so thin. How do we help and support our healthcare workers and how do we help and support our patients get access to care faster? So for us, this is a technology as is anything. How do we best utilize this technology to service and address those pain points operationally, make our staff faster, and help our patients? That's really what's driving us and really how we approach this. As Mike mentioned, we're using the same oversight, same policies and procedures that we need to deploy these types of technologies.

Well, Paul, you deployed our most current version of Agentforce. Incredible what you've done with it and the whole multimedia experience, the integration with the call center, the every capability you're connecting your physicians, you know, delivering the technical know-how of UCLA right to your clients, you know, just give us your just biggest surprise, you know, deploying this technology. What was it that you just really just hit you with that was like, wow, this is what everybody should know.

I think with any technology implementation, the biggest thing that we take away is how much debt we've built up from a workflow standpoint. How much, you know, technical or people debt that we create and then we get mired in this. This is the way that things have to be. So, this is really an opportunity for us to open the door and say there's a way we can do things differently. Can we solve the problems of yesterday and start to make a new enterprise for tomorrow? So that's really how we've been approaching it. We were excited that we were able to stand up our first agent use case that Mike led within eight months. So we're really looking forward to what's next and how can we scale and capitalize on this technology next.

All right, Mike, there's the question. You know, what's next and how are you going to capitalize on this technology as a next step.

That's actually the other great thing about this is there's been a lot of insights that our own patients have led us down and Agentforce has actually been great about sort of consolidating and chunking each of those. So whether it's what systems do we give Agentforce access to? What capabilities do we ask it to do for us? So next we're looking at potential integrations with MyChart. I think that's probably one that's relatively high on the list. But you know, we also want to start having some assistance with our back office functions as well. So, there's a couple different things.

Well, I want to just thank both of you for being on the call. We're so thrilled to have you. We're thrilled to have you as a customer, and I hope you'll not only continue to drive us forward, but also inspire our other customers as well. And with that, I'm going to turn over to Robin Washington.

Thank you, Robin. Operator, we'd like to move to questions now. I'll ask each participant to limit to one question in respect for others on the call. With that, operator will take the first question.

We will now begin Q&A. For today's session, we'll be utilizing the raise hand feature. If you'd like to ask a question, simply click on the raise hand button at the bottom of your screen. Once you've been called on, please unmute yourself and begin to ask your question. Please limit to one question. Thank you. We will now pause a moment to assemble the queue. Your first question will come from Brent Thill with Jefferies. Please go ahead.

Good afternoon, Marc. I'm curious to get your thoughts on just the transformation to an AI story. The Agentforce numbers are great to see. But what else in terms of what you're most excited about? What are you seeing in the signals from the customer pipeline and any other metrics that you're excited about that you can share with us that perhaps we can't see? Thank you.

Well, that's why I thought it's so important that we move to this video concept for the earnings call and also that you get to hear directly from the customers. And I think we're trying to pick out a couple customers every

Quarter that can kind of, you know, I would say that they are kind of represent all of our customers in transformation. And I think that what's exciting is that the technology is really dramatically impacting how these customers are able to deliver their own results, which is why we even saw James, you know, bring this to his earnings call. So, I'm going to say that what we're going to do is we're going to continue to make that happen. Now, let me just give you my personal perspective. We're using it ourselves more than ever before. I kind of mentioned in the quarter, you know, you see the service numbers. If you go to help.salesforce.com that we've delivered more than 4 million autonomous service transactions, you know, in a relatively short order, it's kind of hard to believe. Even if you go to 1800 no software and you press two and you get into the service queue and you bypass our sales organization, you'll notice it's all autonomous. You even kind of authenticate in autonomously that Agentforce will work with you and then if at some point Agentforce kind of says it can't answer your question it goes and then brings a human in directly into help work with it in resolving your problem. Also in the quarter you saw like we qualified huge numbers of leads autonomously. We've just really never been able to do that before. I think every customer is going to be doing that. You saw we also bought Qualified and we have this kind of SDR sales agent kind of going outbound as well helping you know to kind of understand our own business. We're modeling this for all of our customers so that they can do this as well. Or even in how I'm using Slack every day. I use Slackbot to kind of give me insights into my business to really look at everything that's happening with my core business. I can then get that insight. In every aspect of my business, agents are transforming how I operate my business. As you heard in UCLA Health or in Pedf, it's transforming their business from a technology perspective. The biggest thing that happened in the quarter from my perspective was that Agentforce is now available and replaces essentially Salesforce search. So for those of you who are Salesforce users, the millions of people who use Salesforce every day, the search bar is a critical part of how the application operates. Now, Agentforce is that search bar. So, you can not only search and aggregate and get insights into information throughout every single app we have, but also create agents and those agents can appear in Slack, in Microsoft Teams, in other applications, even in an app that's going to run directly on your phone called Salesforce Coworker. That is the biggest exciting technology because that is going to be technology that you're not going to have to implement. You're not going to have to rebuild things. All of a sudden, this agentic technology is directly enhancing every single one of our applications from our financial services cloud to our healthcare cloud, every app we have. So, that's what's really exciting and I just think that the speed of innovation and the speed of change is what's awesome. And then the rate of innovation, you know, it far exceeds the ability for customer adoption. And that's why bringing these customers in to help model for other customers what they can do is really mission critical right now.

With that, looks like we have Keith up for the next question. Keith,

Excellent. Thank you guys for having me on the call and congratulations with all the momentum behind Agentforce and those AWUs accelerating in the quarter. I think the investor debate right now is about the timing and how that translates into strength for the broader business and the question I wanted to ask was where you guys garner your confidence of a back half organic subscription revenue acceleration because we haven't seen outperformance in CRPO over the last two quarters. This quarter was spot in line with your guidance. Last quarter was as well and it feels like the bookings trends are lagging a little bit. Feels like Tableau is dragging on the business a little bit, the commerce cloud dragging on the business. So, can you help us put those two sides of the debate like really strong KPIs from Agentforce but the bookings not really looking to come through over the past two quarters and how you sustain confidence in that back half acceleration.

Yeah. Maybe, thank you, Robin. Maybe to add a few other metrics under the hood a little bit. We feel very comfortable. We obviously we like the headline numbers but I also like in particular the strength of our core business. You alluded to the NUB acceleration. We're confident on the reacceleration of our subscription and support business in constant currency organically. But by the way in the H2 we also have another business we acquired which is Informatica. Informatica was a business that was growing single digit both on bookings and revenue. In just two quarters, we have significantly reaccelerated that bookings off the chart beyond anybody's expectation because data is king. Well, my daughters told me that data is queen because I have three daughters. But on the booking front, but on the revenue front, we've seen a huge acceleration. Now we are in last quarter and this quarter we are obviously it's subject to the timing of some of the on-prem renewals, but we are in double digit growth. So I like a lot of things about our core business which is very important. You alluded to big deals. Oh my god Mark, 98 deals above a million dollars of net new ARR. In combination the top 10 deals focus on the top 10 deals. In combination the whole booking the annual incremental booking grew 60%. When you look at the TCV which goes in the RPO, we added approximately $800 million. That's two and a half times the same 10 deals last year. the top 10 deals. Seven, this is a beautiful statistic. Seven of the top 10 deals added seats. New seats. This is the new way that we have to monetize AI. We have three new ways. And then one more way that's coming up as you alluded to. The first one is we are upgrading the existing seats of our customers so that the same users human users can use unlimitedly AI. And this is the AIE that increased 60% in the quarter because there is a big uplift on those seats. Second, we are finding new pockets of seats that now with our transformed clouds, our clouds are not the same. We transform individually every one of our clouds. Our sales cloud, I've been using sales cloud for 15 years. It's totally different, right? Now we have an agent. I can talk to my sales cloud. I mean I don't want to say this because Parker already said it. I log into my sales cloud less because I have access to so many ways to integrate my sales cloud, commerce cloud, marketing cloud, everything has been transformed. There is a big growth so now the ROI of those clouds are higher so there are pockets of users that before they couldn't afford buying us now they're buying. Seven of the top 10 deals included. And then the biggest way that we have to monetize AI is with customer facing use cases. Yes. By selling flex credits putting fuel in the tank. Six of the top 10 deals, six of the top 10 deals were as a unlimited enterprise license agreement where we threw in a bunch of flex credits and customers are deploying use case after use case, channel after channel. They're going deterministic, they're going to voice, right? So, I'm very confident on the reacceleration in H2. That's right. And we're very optimistic on the whole overall business. And maybe the last thing I'd ask on CRPO, Keith, is remember it's also subject to renewal timing. And the more we get this flywheel growing and think about consumption, it's viewed as a leading indicator and how it's going to change relative to our revenue is something that's developing over time. So necessarily it just comes shorter sales cycles. And by the way, the last huge and you put it like a and there is one more thing to come. There is one more thing to come which is the headless 360. We're going to bring our agentic number one agentic CRM to every surface meeting customers where they are. And we're going to work together with our customers and with our partners to find the right ways to in a fair way to monetize those new interactions and those new users are accessing our platform. So you've heard it straight from our CRO. We're very confident, right, relative to reacceleration of our bookings and as well as our revenue for the second half of FY27.

Well, thank you, Keith. Gabrielle, welcome. We'll take your question now.

Good afternoon. Thanks so much, Miguel. You teed me up perfectly on headless here. Mark and team, I would love to spend a little bit of time on your headless strategy and more specifically how it intersects with the build versus buy debate. You know, on the one hand, Robin was talking about how it expands the opportunity and the surface area for Salesforce. On the other hand, talk to us about how you protect your downside from potentially enabling value abstraction out of Salesforce. Perhaps customers want to build things more in house or perhaps it enables competitors or value abstractions. So, talk to us a little bit about your monetization strategy and how do you protect yourself to the downside? Thank you.

Well, you're right. Headless is probably the most exciting announcement of the quarter and I'd love for Patrick to come in and Patrick is our chief marketing officer. Patrick Stokes is here and Patrick do you want to give us a little bit of an insight into our headless strategy?

Yeah, I'd love to. You know, we were just backstage prepping for this and we said what did we say about headless at the last earnings call and I realized we didn't, you know, we were still getting ready to launch it at TDX, right? Yeah. I mean, we hadn't even used the word yet and now it's become such a key part of our strategy and our customer strategy and how we're going to grow. You know, it was just at TDX in March when we launched this. And I think what's so exciting about headless is two things. One, it's having a real impact on making it easier to implement with Salesforce. So, building out with Salesforce has now become easier than ever because we've seen these coding agents from OpenAI. As you use these things, what you realize is you need to be able to connect the underlying APIs, which you do through this layer that's called MCP. And if you can connect those into the coding agents, it makes it faster than ever to implement and deploy Salesforce. And I think we're seeing that show up in the numbers. Just this quarter alone, Agentforce customers in production grew by 50%. So I think we're starting to see a little bit of that impact as not just our customers, but also our global SI across the entire platform. Absolutely. Implementing Data Cloud, implementing Agentforce, implementing a service, life sciences, all of this now becomes really just a conversation. So that's one end, but the other end is really what we heard from Miguel, which is this is really changing how people get value and consume Salesforce. In my experience, we're not seeing people take this capability and the coding agents, for example, and try to build all of this stuff themselves. What they want to do is they want to take this capability and they want to use Salesforce in different ways and get more value out of it. So rather than logging into this discrete application and this application and this application to get an answer to one question that might span multiple applications or multiple sources of information. You can now just take these MCP servers and plug them into any tool that you want. They are inside our application of course with Agentforce Coworker as Mark described right up at that search bar if you're a Slack customer you can get to it right with Slackbot that's really a headless experience as well but if you want to plug these into ChatGPT and Claude you can do that as well and all of this just results in more and more value being delivered to our customers from the Salesforce platform.

I would just add to that I think even though we just announced it's been less than a month. Correct. I think Salesforce historically has been very open And we got more than a trillion API calls on our core platform just in this quarter. What we have seen is on a headless MCP tool calls have been more than 1.5 million. So what people are using is they're using it not only in Salesforce where they do with Coworker and our regular sites they're also able to use it in their flow of work. Similarly on we announced the headless MCP server for Slack and Slack has done 30 million 50 million tool calls. So what we are finding is there is a latent demand where people want to take use Salesforce in their flow of work but they need the trusted infrastructure. They need an operational infrastructure to run it at scale with all the compliance with all the sharing and security models with all the permissioning with all the compliance. So they will continue to use that while getting value and like as Miguel said what we want to do is it's a new way we want to capture value wherever the work is happening and that's a conversation we are having with our customers and as we talk to our customers ISV partners and all we'll figure out the right value. So I think this is a new monetization area for us. Absolutely. All right. Well let's get down to one more level of detail. You know, this was the quarter where as we used the word headless for the first time. We used it in a we talked about it at TrailheadDX. I used it in a tweet. The tweet went really viral. You know it was a surprise to me. I'll be honest because you know of course we had always been first on APIs and XML, you know, in SOAP, you know, in REST, you know, and now in CLI and MCP but you know the system was always built to be API first it has always done massive amounts of transactions and complex transactions we've always reported those API figures and now we even have a new API which is our whole user interface basically spinning out of the platform as an API with you know so we have that incredible capability so in all cases the platform has always been API first all the applications have been API first but when we announced headless you know everybody's like oh they've lobbed the top off of it or they've cut the applications off they kind of got confused in my opinion they don't understand that all of our apps are rendered dynamically with metadata that they're driven and it's a metadata driven platform. So Patrick, you're the marketing officer. Why where did that confusion come from for people? Why do they think headless means that there's no more application or Salesforce app?

Well, probably from the name Headless, which does seem to imply that. I can understand. But that term obviously if you're in the technology world that comes from a it's been a term that's been used in technology for quite some time to imply that the UI is not directly linked to the underlying capabilities or services that are underneath it. In this case APIs and yeah Salesforce has always been open. I think what people got so excited about here is this idea that Salesforce was endorsing this way of working. We were basically saying, 'Hey, we want you to take the value of Salesforce and the value that you get from our apps, from sales, from service, from commerce and marketing. And we want you to be able to work however you want to work, whether that's in Slack or whether that's in Claude or whether that's directly in the app.' That's what this capability really enables. And I think people were really excited about that. And maybe a little inappropriately skeptical that we would have just locked it all down and said, 'No, it has to be in our app.' And that's never been the case for Salesforce. We've always been I think year after year Postman says that Salesforce is the most used set of APIs on the planet. And if you're building today,

People don't know what that means on this call. So will you just explain it? You got it down into the inside baseball.

Sure. So what that means is when you're a builder, when you're out there building something, and this is especially true today because there's now an ocean of builders that have been created as a result of this coding agent boom. When you go to build something for your business, you are at some point are likely going to want to connect to Salesforce. That is what we see. And it doesn't matter what platform you're doing it on. You can be building something on a competitive platform to Salesforce or on Google or AWS or one of our partners, but at some point you're going to want to connect into Salesforce. And that's why those APIs have always been hugely hugely used. But when you are building with an agent, you need a slightly different type of API. That's what we call MCP. And so by really putting those MCP servers out and saying yes this is how we want people to build I think it was a big surprise and a big move in the right direction and it also creates I think a real monetizable opportunity for us.

So if I could add one thing because the fact that we announced headless at TDX, it made people think that this was just for builders and that now they can take our CRM apart and which they can now also by the way. But I think the big breakthrough was not with the builder workers but with the knowledge workers. It's more about how you work. Let me give you two concrete examples. I've met 100 customers basically face to face one on one since the beginning of the year and let me give you two examples. Adeo, great customer across the board they used pretty much every cloud they went into Data Cloud and Agentforce last year they did a big commitment in Q1 at the beginning of Q1 they are basically signing wall to wall they have amazing recruiter agents going there millions of transactions they're moving into voice. When we announced headless they called us and they are like wait a minute let me try to understand what you're doing so now because they are also using other platforms to develop other agents so they have agents with some of the AI labs that they're also trying to access our data are you saying that now these agents that we are building outside Agentforce can also leverage Salesforce and we said exactly we did it for that so now there's going to be a lot of new agents that are going to be accessing our platform that's example number one. Example number two is Anthropic. Anthropic is one of our biggest users of CRM of Sales Cloud and obviously Slack. Their usage through Q1 has exploded fivefold because now they're using Sales Cloud from a headless perspective and they are approaching this from Coworker from other applications from Slack they're hitting Sales Cloud so Sales Cloud has become more prominent and more strategic for them than ever because of headless. These are two extreme examples but this is every single conversation that I have with a customer. Their smiles are big because of headless.

Oh, thank you Gabrielle. I hope you felt the energy on that question. Operator, we'll go to the next question, please.

Your next question will come from Brad Zelnik with Deutsche Bank.

Great. Thanks so much for having me and nice to see everybody. Mark, the AWU and token consumption metrics are some of the biggest and fastest growing in software and seems to validate that customers are using and deriving value from the product. Can you help us translate the usage metrics to revenue? Like the Agentforce ARR is impressive, but the usage suggests much faster adoption. And just as a related follow up, the gross margins show no degradation despite surging token demand. So, can you just help us understand how you're able to do that? Thanks.

Yeah. Well, there's a lot of different points there. I'm not sure exactly where I want to go, but I mean, you know, when we talk about the Agentic Enterprise, first and foremost, obviously Salesforce is a large scale company in software, one of the largest, 83,000 employees. For the last couple years, we have not been loading up a lot more engineers. So Shini is here at the table. He's got what about 15,000 engineers and you've had the 15,000 engineers for about two years. It's been mostly flat, right? And I would say that the reason it's been mostly flat is because we have been using AI to create more efficiency for our engineers. And especially this year now with these new coding agents, we're seeing even more dramatic capabilities. So that's a key part of our margin story is that we're not hiring more engineers. We're not hiring more G&A. We're mostly expanding only in one area. You can see headcount has grown, but it's mostly growing in Miguel's area in sales because I think we all realize the one thing that we're doing here with you selling and communicating that agents are not exactly doing that. They can qualify, okay, they can provide service, but in sales, we still scale because there's so many different parts of the market that we have to get to. So that will be a critical part of expanding our company but at the same time expanding our margins. I think on the other part of that that's really key is you're right we're trying to really communicate that level of token usage. Maybe we're one of the first to really get out and talk about hey not only do we have agents but we've delivered 28.6 trillion tokens. I listened to some of the other earnings calls and I don't think that they're at that level of detail. We've even gone down into this $3.8 billion Agentic Work Units where Patrick has really pioneered this idea to how to be able to communicate more effectively the level of depth that's really going on with our customers actually implementing this technology and that I think is also a critical thing that we're only a couple years into this agentic revolution but we see all this adoption and usage in every other product that we've rolled out. You know, you've never seen the level of scale and growth of a new product like we've seen with Agentforce. And you're going to see that in my opinion. I don't know, but I'm going to give you a vision. I think as we get Agentforce Coworker live for all of our customers and it's just the ability for the administrator to say now that it's available to these users like that experience that we had with Andrew Russo. This idea that all of a sudden we're about to add a massive amount of new functionality and capability into all of our apps overnight you're going to see these token numbers continue to expand and grow. Are we using more tokens internally? We are for our own operations like in engineering. Are we using them for our customers? We are. And then we're absorbing that into our margin structure. It's not that we're not spending a lot with OpenAI. We are we're using their platform. We're using Codex, you know, their coding tool. We're using Anthropic. We're using their platform and their coding tool, Coworker. We're using both of these platforms. Both of these companies are our customers. We're very excited about how they're using it. We use their products as well. They use our products very aggressively, both of them, in Slack, and Sales Cloud, and Service Cloud across the board. So, that is really what's happening. Which part did I not directly address?

I mean, our focus has been net new ARR. We did a lot of work to be honest with you to focus align everyone in the organization from product to back office to front office to professional services everybody is aligned on one metric which is NUV which is the difference between the new bookings and then the leakage the attrition and we managed to redirect and we showed at the investors day how the curve was negative at some point the negative growth. Q1 was a very strong net new ARR quarter for you as well Right. So what is that tell us why is that transformation happening? The important thing is we're focusing on customer success which has been always a focus but some of the incentives were not aligned internally. They've been aligned now pretty much from the second half of the year we saw net new at pace in ARR growth. We are very confident that in H1 we're going to see continued NUB growth at pace in ARR growth. Obviously that's both levers. We are obviously increasing the new bookings and we are minimizing the pain of attrition. In some cases account execs they swap products to make sure that customers are happy using the product. So we are very confident on the NUV in H1 also being growing more than ARR and the reacceleration that we committed and listen when you commit something 12 to 18 months in advance. I mean we're good professionals but we're not magicians.

Yes. And we don't I mean there was a probability that it could not have happened but we were very firm and it's I mean I'm very happy that we're executing as per plan. In fact a little bit better than planned because you raised the guidance. So thank you so much.

Excellent. Okay, great. Let's move on to the next question.

Okay, with that operator, we'll take our last question now, please. Your last question will come from Kirk Materne with Evercore Partners.

Well, thanks very much for squeezing me in. I want to follow up on Miguel. You had made a comment on one of your customers using Sales Cloud through Slack and I want to dive in on Slack a little bit just as part of the broader headless strategy. Can you talk about Slack being potentially sort of a gateway for broader agentic adoption in your customer base, what you're seeing now, how that's sort of stacking up in your pipeline opportunities. It just seems like it's an unbelievable network effect product and I was curious how that's having an impact if at all right now or if you expect it to on sort of broader agentic bookings as we go into the back half of the year.

That's such a good question. I think each of these folks should address it but Miguel why don't you start.

So first of all from a topline perspective and we'll talk about how strategic Slack has become. Slack has become one of the favorite platforms and surfaces for in this case very specific both the builders and the knowledge workers found in Slack the way to is a multiplayer collaborative platform to access your applications to is your work operating system it's incredible what has happened on Slack how we are leveraging by the way great partnership with one of the labs with Anthropic to launch Slackbot. Slackbot is our personal assistant. It has increased the productivity of the whole company around 3% more or less. So now I do everything I ask everything to an agent that agent has access to all my applications, all my approvals, all my sharing models, all my conversations and the business is booming by the way. The bookings are booming but also the net of that business is very impressive. And the key characteristic is when we talk about the MCP server to tools calls on Slack most of them were done by the builders building applications that needed that rich context that Slack provides. So huge growth ARR topline growth bookings growth NUV attrition. So also on the Slack I think is the best man when we say agents and humans work together. You experience it in Slack. You know when you're in a channel and suddenly in a lot of these especially I see it now in my engineering channels like half the time somebody puts a question or a request on a Slack channel and the agent is listening and answering it. Developers do a PR request in Slack and then suddenly the agent is picking up and trying to do it. They want status reports. So I think Slack is where people can really understand the manifestation and they're all asking questions as a human and Slackbot is even a better way of articulating that in a packaged way. So that's what is driving and the advanced use cases because the developer community tends to try these tools. It's very embedded. They see this manifestation a lot more and which is also the reason why some of our most advanced customers and labs and engineering organizations are using Slack MCP even more than we thought and I think that's a key interest and I feel as it goes to the general population in the knowledge worker Slack will become even more prominent because people will say this is the way to work and we always said Slack is the operating system of work and I think now people can really see it and once they start using it once it looks like magic and that's why they say this oh this is how I always meant to be.

Yeah Patrick we're going to give you the last word here.

Great. Yeah I mean I think it's all about the experience that Slack delivers. I mean when you get in and you use a product and it just works that is a moment for you and you're going to go back to that product and I think that's exactly what Slack is and it's more sophisticated really than it's ever been. You know, we started as this collaboration tool, but it's become so much more than that. It's not just a place where all of your institutional knowledge is. It now can make calls out to other tools. You can have agents working right in there side by side with humans. You know, you look at these coding projects and the incredible coding agents that have surfaced in the last two years. But the thing about coding is like that's not a single player job, right? When you code, you're working with a team. And Slack is the only place where you can have that coding agent and the full team of all of your engineers and your developers all working towards that.

Deals or support channels. It's there and with Slack CRM this is all we brought back. So I think it's a natural place to work. So I really see that's what is driving.

I mean I think number one is this you know which is that when we bought this company it was doing less than a billion in revenue and it was struggling. It was having problems. The management team was really not clear how they were competing against Microsoft. But I think coupling with our distribution capability now adding the value of our core applications and I think this key point that it drove nearly half of our million-dollar wins this quarter, you know, up 80%, you know, year-over-year. That means that Slack is really having its absolute moment. And I think the second thing that's really important is here's these Slack AWUs that have grown 350% quarter over quarter. That is amazing. 350% quarter over quarter AWUs. In two years, there's going to be more agents using Slack than people. I mean, this is an incredible example of the future. And also how this product is more valuable, being used more, has more data, more capability, and therefore it's going to have more intelligence and more value back to all of these customers as well. Plus, all of these companies can create Slack communication between each other. That's right. As well. You know, if you're a Slack customer, you can easily have a secure communication with another customer as well. Miguel, do you want to add?

Because that work graph that will become one of the richest work context in the enterprise is getting richer and richer. So, we built I mean the community built three million custom apps on Slack in Q1. That's eight times quarter on quarter. I mean there is a huge boom out of those custom apps. There were 250,000 that were AI agents that were built third party AI agents and that grew that more than double in quarter on quarter grew eightfold year on year. So everybody is working on Slack.

Well I think that it's safe to say and I'm not giving guidance by through what I'm saying but Sales is a $10 billion cloud already. Service is a $10 billion cloud already. Data is already a $10 billion cloud. I think when we see the growth rate that's happening inside Slack, you saw the ACV was incredible in the first quarter. You know, this is going to be fast tracked from something we bought with less than a billion dollars that I'm sure we'll be talking in short order about Slack being a $10 billion cloud as well. All right, with that, I'm going to turn it back over to you, Michael.

Yeah, thank you and thank you everyone for joining us on the call. Just a quick reminder, we have our quarterly webinar on Friday. And very timely given the questions today. We're going to talk about Slackbot and our headless strategy in a deeper way with our product leadership. So, please join us for that on Friday. You can find the information on our website. And with that, we'd like to thank everyone for joining us and we'll be seeing everyone in the coming weeks.

Thank you for joining. This concludes today's call and you may now disconnect.