Salesforce, Inc. Q3 FY2025 earnings call

• Agentforce is a revolutionary transformation, with over 200 deals closed in Q3 and live on help.salesforce.com. Big customers like FedEx, Adecco, Vivint are using Agentforce. - Data Cloud is the foundation for AI transformations, included in one-third of deals over $1 million. - Strong results in Q3 with revenue growth, margin improvement, and cRPO increase. - Multi-cloud strategy is core, with multi-cloud customers having higher spend, lower attrition, and driving ARR expansion. - Hiring 1,400 AEs globally in Q4 and using sales agents to augment sellers. - Ecosystem momentum with partners involved in 75% of Q3 Agentforce deals.

Salesforce reported Q3 revenue of $9.44 billion, up 8% year-over-year in nominal and constant currency. Subscription and support revenue grew 9% year-over-year. Geographically, Americas revenue grew 6% in nominal and constant currency, EMEA grew 12% (9% constant), and APAC grew 16% (14% constant). Industry-wise, health, life sciences, manufacturing, automotive, and energy performed well, while retail and consumer goods were more measured. Multi-cloud momentum continued with top-25 deals averaging over five clouds each. Data Cloud was included in one-third of deals over $1 million, and eight of the top 10 deals included both Data Cloud and AI (inclusive of Agentforce). Q3 non-GAAP operating margin was 33.1%, up 190 basis points year-over-year, and GAAP operating margin hit 20% for the first time. cRPO ended Q3 at $26.4 billion, up over 10% year-over-year in nominal currency (including a $100 million FX tailwind).

• Fiscal 2025 revenue guidance: raised low end to $37.8B, high end to $38B (8-9% growth). Subscription and support revenue expected to grow ~10% in constant currency. - Non-GAAP operating margin guidance raised to 32.9% (240 basis point improvement). GAAP operating margin guidance slightly below 20%. - Fiscal 2025 GAAP EPS guidance $6.15-$6.20, non-GAAP EPS $9.98-$10.03. - Q4 revenue guidance $9.9B-$10.1B (7-9% growth Y/Y). cRPO growth expected ~9% Y/Y in nominal, including $100 million FX headwind.

Q: Brent Thill asked about the halo effect of Agentforce across product lines.

A: Marc Benioff said top customers are using a complete agent-first cocktail with sales, service, marketing, analytics, data cloud, and Slack, and it's unique as Salesforce is the only one with a comprehensive platform.

Q: Keith Weiss asked about color on Agentforce deals.

A: Brian Millham said initial deals are largely in Service Cloud, but there's opportunity in Sales, Marketing, Commerce, and Data Cloud.

Q: Raimo Lenschow asked about pricing for Agentforce.

A: Marc Benioff compared costs to healthcare examples, and Brian Millham said customers understand labor costs and pricing conversations are easier with calculators.

Q: Brad Zelnick asked about the More Core initiative.

A: Marc Benioff said More Core is about integrating Sales, Service, Marketing, Analytics, Data Cloud, and Slack into one platform for better AI functionality.

Q: Brent Bracelin asked about Foundations offering.

A: Marc Benioff said Foundations is part of More Core, allowing customers to access all functionality, but there's still work to educate customers on siloed cloud usage.

Q: Kirk Materne asked about data readiness for Agentforce.

A: Brian Millham said it varies by customer, with some able to turn on Data Cloud and leverage Agentforce in weeks/months, while others with siloed data may take longer.