The call discusses Salesforce's fiscal 2026 first quarter results, featuring remarks from the company's leadership team. Key topics include financial performance, strategic updates, and future outlook, with insights provided by the CEO, CFO, and other executives. Participants are also informed about the process for asking questions and the availability of call recordings and relevant SEC filings on the company's website.

Salesforce announces an $8 billion agreement to acquire Informatica, aiming to unite the number 1 AI CRM with the number 1 AI MDM, emphasizing the critical role of data transformation in AI-driven growth. The acquisition is expected to accelerate Salesforce's growth strategy in data, AI, and apps, achieving accretion in non-GAAP operating margin, non-GAAP EPS, and free cash flow by year two post-close. The deal, financed through cash and new debt, is anticipated to close by early fiscal year 27 and marks a significant phase in Salesforce's AI-driven growth.

The company reported a significant Q1 revenue of $9.83 billion, marking an 8% year-over-year increase. Subscription and support revenue grew by 9% in constant currency, driven by strong double-digit new bookings growth in the small and medium market business. Non-GAAP margin reached 32.3%, and operating cash flow stood at $6.5 billion. RPO increased to $60.9 billion, up 13% year over year, with C RPO growing 11% in constant currency. Fiscal year 26 guidance was raised by $400 million to $41.3 billion. The launch of Agent Force has seen over 4,000 paid deals and 800 customers in production across various industries, showcasing the company's success in AI and enterprise software.

The company introduced a consumption-based pricing model and flex credits, leading to significant growth. Agent Force, particularly, has achieved over 100 million in Aov faster than any product in the company's history. The Data Cloud surpassed 22 trillion records, growing 175% year over year, with nearly 60% of top deals including investments in both Data Cloud and AI. Existing customers contributed to 50% of Data Cloud's Q1 new bookings, highlighting its adoption and usage. Agent Force, in its second quarter, saw 30% of its bookings from increased customer consumption. The AI and Data Cloud segment grew over 120% year over year, becoming a billion-dollar part of the business. The company's pivot around AI vision and the rapid innovation in technology were showcased at the New York World Tour, signaling a major transformation for enterprises.

The dialogue highlights the unique Atom framework by Salesforce, emphasizing the integration of agents, data, apps, and metadata to deliver advanced AI capabilities. Key examples include Tableau Next, showcasing deep integration with the Data Cloud and metadata platform, and Slack, serving as a conversational interface for managing work across various systems. Customer success stories from industries like airlines and retail, such as Thin Air and Fala Bella, demonstrate significant improvements in customer service and operational efficiency through the adoption of Agent Force.

The adoption of Agent Force has significantly boosted business performance across various sectors, notably increasing retention rates and revenue for companies in Latin America and Europe, including a Brazilian media conglomerate and a European energy marketplace leader. PepsiCo is also highlighted for its innovative use of multiple clouds to unify its beverage and snack businesses under a single vision.

The speaker outlines key priorities including delivering customer success through AI adoption, driving operational excellence for shareholder value, and responsible capital allocation. Significant progress is highlighted, including the core clouds' role in major wins, the integration of Data Cloud and Agent Force, and the growing importance of AI and data in customer deals. The speaker also emphasizes the role of the ecosystem and industry-specific solutions in driving growth, and showcases internal innovations that contribute to efficiency and profitability.

Salesforce reported a robust first quarter of fiscal year 2026, with revenues hitting $9.83 billion, marking an 8% year-over-year increase. Subscription and support revenues grew by 9%, driven by strategic pricing and packaging, particularly in sales and service. The company experienced strong new business growth in regions such as the UK, France, Canada, and Asia Pacific, with particularly notable performance in small and mid-market segments. Industries like communications and media, health and life sciences showed significant performance, while retail, consumer goods, and public sectors were more measured. Salesforce is focusing on investments in sales, marketing, and R&D to drive data and AI innovation, aiming to fuel Customer 360 and future top-line leverage. The company raised its fiscal year revenue guidance to $41 billion to $41.3 billion, projecting growth of approximately 8 to 9% year over year. Salesforce continues to prioritize operational excellence, reiterating non-GAAP operating margins of 34% and GAAP of 21.6% for the year.

Despite maintaining margin and cash flow frameworks, the focus shifts toward growth, particularly through the distribution of agentic AI solutions, as highlighted in the discussion around accelerating growth rates and customer interest in AI technology.

The company is experiencing significant growth in small and medium businesses, the mid-market, and specific geographic regions like Japan. To capitalize on this growth, plans include hiring an additional 1 to 2000 salespeople, focusing on core technologies such as Data Cloud and AI, and maintaining a disciplined margin framework. There's a strong emphasis on increasing productivity, pipeline momentum, and simplifying customer relationships through improved pricing and packaging. Partnerships, like the one with AWS Marketplace, are also contributing to substantial year-on-year growth.

The executive discusses their return to the company two years prior and highlights the significant momentum gained in the small, medium, and mid-market sectors during Q1. This success prompted a reevaluation of capacity allocation, leading to a decision to reallocate resources towards the lower end of the market. Additionally, the executive emphasizes the importance of improving participation across the organization in selling data cloud and agentic deals to accelerate company growth, aiming for high triple-digit growth rates. By the end of the fiscal year, the goal is to see substantial percentage growth in total distribution capability.

The company aims for a 22% overall capacity growth, focusing on the small medium business and mid-market segments, marking a significant increase from previous flat growth periods. Strong momentum is observed in Canada, South Asia, APAC, France, and the UK, with a diverse portfolio driving demand across various industries and geographies. The key focus areas are data activation and agentic ledger integration, leading to considerations on deploying touchpoints exclusively on Salesforce apps.

Despite macroeconomic uncertainties and tariff concerns, the company showcases strong momentum in data and AI, with a balanced portfolio and growing RPO backlog contributing to its confidence in delivering on guidance. Notable contributions from agent force and anticipated AE capacity ramp-up in the second half further bolster its growth prospects.

The integration of Tableau, MuleSoft, and Informatica into Salesforce's data cloud is transforming the company's approach to analytics and agent-based solutions, marking a significant shift in its product line and distribution strategy.

The company has experienced significant growth in its agent force cycle among channel partners, with notable momentum in data cloud deals and pilot projects. In a short period, they've acquired 8,000 customers, 4,000 of whom are paying, demonstrating rapid adoption of their products. This success is attributed to a major innovation transformation over the past two years, involving the rewriting of all apps, the creation of an agent layer, and the unification of their platform. The acquisition of Informatica is seen as a complementary move that will further enhance the platform's capabilities and customer experience.

The discussion highlights the significant growth in deals involving Agent Force and Data Cloud, with a particular emphasis on consumption as the new focus area. It details the success of integrating Data Cloud and Agent Force in major deals, the increased number of deals compared to the previous year, and the shift towards optimizing consumption. Additionally, it introduces the initiative of forward-deployed engineers to enhance customer success and product maturity, addressing customer needs for expansion and improved pricing strategies.

In May 2025, discussions revolve around enhancing data estates, the critical role of data in strategy, and addressing challenges like model unpredictability and latency. Enterprises emphasize the importance of trust, local residency, and auditability in data management systems. Forward deployment teams collaborate closely with partners and customers to rapidly iterate and mature products, focusing on customer success and learning at scale across industries and geographies.

The discussion highlights the transformative impact of AI and Agent Force technologies on corporate operations, with international examples demonstrating accelerated deployment and visionary applications. Notably, a major Japanese customer's ambitious plans to integrate AI across the entire company exemplify the growing global interest in building intelligent layers around businesses. The conversation also underscores the integration of these technologies with existing customer engagement, enterprise collaboration, and data management solutions, emphasizing the convergence of AI, data capabilities, and vertical-specific strategies to drive significant ROI and operational enhancements.

A significant transformation in cloud technology, exemplified by a cloud-based product similar to Excel with 13 million users, is discussed. The speaker highlights the rapid integration of digital labor and support functionalities within the product, noting the impressive pace of innovation outstripping customer adoption. Plans are outlined for aggressive investment in distribution capabilities and product development in rapidly growing markets and segments, including geographical areas and industries that have seen substantial growth since the pandemic. The strategy aims to simultaneously increase revenue, margin, and cash flow, leveraging successful acquisitions as part of the growth plan.

The discussion highlights the significant difference in adoption rates of generative AI technologies between consumers and enterprises. While consumer-facing AI tools like ChatGPT have seen rapid and widespread adoption, enterprises remain cautious due to concerns over data control, governance, and security. Enterprises possess highly sensitive datasets that require stringent management, which contrasts with the more open data environments that consumer AI models are trained on. This discrepancy underscores the unique challenges and considerations the enterprise sector faces in integrating AI technologies.

The discussion highlights the evolving landscape of enterprise data accessibility, emphasizing the importance of tightly controlled AI models within regulated environments like financial services. It underscores the significant strides made by a leading tech company in utilizing AI for customer support, achieving a million conversations quarterly and reducing human involvement. The narrative stresses the necessity of data harmonization and master data management, attributing the critical role of an Informatica-like acquisition in achieving this. Plans are outlined for integrating AI capabilities across various products and services, aiming for a transformative impact on businesses of all sizes. The timeline for closing the Informatica acquisition and achieving accretion within two years is also discussed, reflecting a strategic approach to accelerating integration and delivery.

The CEO addresses concerns about AI potentially eliminating 50% of entry-level white-collar jobs, emphasizing the division of digital labor and the repositioning of employees within the company. Despite AI advancements, the CEO highlights current hiring challenges and the vast opportunities for growth, suggesting a nuanced perspective on the integration of AI and human roles.

The discussion explores the current state of AI, emphasizing its capabilities and limitations. It highlights that while AI is advancing rapidly, it's not yet at a point where it possesses human consciousness or can replace all white-collar jobs. The conversation underscores the importance of understanding AI's inaccuracies due to its word model foundation and the need for more sophisticated models in the future. Despite AI's impressive applications in various fields, including healthcare and enterprise, it's noted that human input and oversight remain crucial. The dialogue also touches on the excitement around AI's potential, cautioning against overly optimistic or alarmist views, and stresses the need to focus on how AI can genuinely transform enterprises and improve productivity.