FinanceLooker

Excrept from filing document 2025-01-31

Based on the closing price of the Registrant s Common Stock on the last business day of the Registrant s most recently completed second fiscal quarter which was July 31 2024 the aggregate market value of its shares based on a closing price of 258 80 per share held by non affiliates was approximately 206 5 billion Shares of the Registrant s Common Stock held by each executive officer and director and by each entity or person that owned 5 percent or more of the Registrant s outstanding Common Stock were excluded as such persons may be deemed to be affiliates This determination of affiliate status is not necessarily a conclusive determination for other purposes
Portions of the Registrant s definitive proxy statement for its 2025 Annual Meeting of Stockholders the Proxy Statement to be filed within 120 days of the Registrant s fiscal year ended January 31 2025 are incorporated by reference in Part III of this Annual Report on Form 10 K Except with respect to information specifically incorporated by reference in this Form 10 K the Proxy Statement is not deemed to be filed as part of this Form 10 K
This Annual Report on Form 10 K contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 All statements other than statements of historical fact which may consist of among other things trend analyses and statements regarding future events future financial performance anticipated growth and industry prospects are forward looking Words such as aims anticipates assumes believes commitments could estimates expects forecasts foresees goals intends may plans predicts projects seeks should targets and would and variations of such words and similar expressions are intended to identify such forward looking statements These forward looking statements are inherently uncertain and based on management s current expectations and assumptions which are subject to risks and uncertainties that are difficult to predict including those described in Part I Item 1A Risk Factors Part II Item 7 Management s Discussion and Analysis of Financial Condition and Results of Operations Part II Item 7A Quantitative and Qualitative Disclosures About Market Risk and elsewhere in this Annual Report on Form 10 K Moreover we operate in a very competitive and rapidly changing environment and new risks emerge from time to time It is not possible for our management to predict all risks nor can we assess the impact of all factors on our business or the extent to which any factor or combination of factors may cause actual results or outcomes to differ materially from those contained in any forward looking statements
In light of these and other risks and uncertainties the future events and trends discussed in this Annual Report on Form 10 K may not occur as we expect or at all and our actual results or outcomes may differ materially and adversely from those expressed or implied in our forward looking statements Readers are cautioned not to place undue reliance on such forward looking statements Except as required by law we undertake no obligation to revise or update publicly any forward looking statements for any reason
Salesforce Inc Salesforce the Company we or our is a global leader in customer relationship management CRM technology enabling companies of every size and industry to connect with their customers through the power of data artificial intelligence AI CRM and trust Founded in 1999 we bring humans together with AI agents to drive customer success on one deeply unified platform
Our AI powered Salesforce Platform unites our offerings spanning sales service marketing commerce collaboration integration AI analytics automation industries and more by connecting customer data across systems applications and devices to create a complete view of customers With this single source of customer truth teams can be more responsive productive and efficient and deliver intelligent personalized and automated experiences across every channel With Agentforce the agentic layer of the Salesforce Platform our customers can build and augment their teams with an always on digital labor force deploying autonomous AI agents across business functions that aim to increase productivity lower costs and drive operational efficiencies
Our service offerings are designed to be flexible scalable and easy to use They can generally be configured easily deployed rapidly and integrated with other platforms and enterprise applications We sell to businesses worldwide primarily on a subscription basis through our direct sales efforts and also indirectly through partners In addition we 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
Salesforce is committed to a core set of values trust customer success innovation equality and sustainability all of which are grounded in legal and regulatory frameworks that guide and inform our business Foremost among these is trust which is paramount and the foundation for everything we do and is also firmly rooted in compliance with applicable laws governing security privacy data protection and operational integrity Our customers expect to trust and rely on our technology to meet the high enterprise grade standards of security privacy performance legal compliance and availability at scale Customer success is at the core of our business and we align the entire company around our customers needs promoting their success showing our value and upholding applicable laws contractual obligations and industry regulations and standards Innovation is fundamental to our mission empowering and enabling our customers to stay ahead in their industries and driving technological advancements in line with evolving laws standards and guidelines Equality is a legal and ethical mandate and a core tenet that informs how we operate Our commitment to equal opportunity is anchored in applicable laws statutes regulations and principles We value the equality of every individual at our company and in our communities and are dedicated to fostering a workplace that complies with these protections creating an inclusive culture where every individual feels seen heard and valued Finally we are committed to creating a more sustainable and nature positive future for all Our products and services help our customers meet their own sustainability and compliance priorities guided by applicable environmental and sustainability related laws corporate social responsibility frameworks and legal requirements By grounding our values in legal and regulatory principles we reinforce our opportunity and responsibility to uphold high integrity and robust ethical standards ensuring that trust fairness and compliance remain central to everything we seek to do
We believe that our values grounded in legal and regulatory frameworks create value and the business of business is to make the world a better place for all of our stakeholders including stockholders customers employees partners the planet and the communities in which we work and live Salesforce is committed to giving back to our communities helping businesses grow while protecting the environment for future generations and transparent environmental social and governance disclosures We believe we have a broad responsibility to society and we aspire to create a framework for the ethical and humane use of technology that not only drives the success of our customers but also upholds the basic human rights of every individual
We believe that every business in every industry has to optimize for an AI first experience for their customers employees and partners leveraging trusted AI data and CRM technology to increase efficiency boost productivity and drive growth Through Agentforce our suite of customizable AI agents and tools Salesforce brings autonomous AI unified data and applications together on one deeply unified platform that enables companies of any industry or size to deliver AI powered personalized engagement across every customer touchpoint with the ability to hyperscale data and automation
Our Sales offering is an integrated platform that brings together the power of humans with AI agents to help sales teams sell faster and smarter and to efficiently manage and automate entire sales processes It provides sales capabilities and tools built for an entire sales organization across prospecting sales engagement team collaboration sales analytics and AI sales programs sales performance partner management and revenue and orders With our Sales offering businesses can create
lifelong customers by connecting their entire organization and unifying all data sources on a single integrated platform Further with Agentforce for Sales customers can build a sales team augmented by a digital labor force and empower every seller with their own AI agent to help accelerate productivity and drive growth
Our Service offering enables companies in every industry to bring all of their customer service and field service needs onto one integrated AI powered platform to deliver trusted highly personalized customer support at scale It also helps our customers maximize productivity resolve cases faster and improve customer satisfaction by automating routine tasks With Agentforce for Service customers can tap the power of digital labor to handle low touch interactions and help their teams with high touch tasks unlocking new levels of efficiency Our AI technology enables service teams to automatically route cases to the best service agent for the job respond to customers with personalized relevant answers grounded in company data and perform tasks like auto summarizing support cases and field work orders Our service offering also provides a field service solution that enables companies to connect service agents dispatchers and mobile employees through one centralized platform on which they can intelligently schedule and dispatch work as well as track and manage jobs
The Salesforce Platform enables companies of all industries sizes and locations to build business workflows applications and AI agents on a single comprehensive platform to help boost efficiency increases productivity and automation and save on information technology costs It facilitates development with no code and low code tools that are easy to use and free to learn empowering anyone to build trusted applications AI agents models code prompts automations and much more Our Trust Layer is built into the Salesforce Platform to help customers safely use their data and set guardrails on what AI agents do with that data The Salesforce Platform is built on Hyperforce our infrastructure that helps customers manage data governance and compliance at a local level all over the world Our technology partners help customers to easily add the applications they need and utilize the data lakes and systems they have already invested in and because the platform is open source customers can integrate and build with any data or partner application they choose to make the platform work for their business
Our Slack offering is a workplace communication and productivity platform where work happens for millions of people every day It centralizes conversations and collaboration automates business processes makes search and knowledge sharing seamless and delivers trusted generative and agentic AI that augments employees so they can work smarter make decisions faster and drive real outcomes Slack is also deeply integrated with every Salesforce offering including Agentforce bringing a digital labor force into the messages and channels where work is happening With Agentforce in Slack employees across every department can collaborate with specialized AI agents and accelerate high impact work directly in the flow of work
Our Marketing offering is a complete marketing platform designed to help customers personalize engagement across the customer lifecycle By connecting departments through actionable data trusted AI and autonomous AI agents we empower teams to work together to build lasting customer relationships With Agentforce marketers can save time on every step of the campaign process by using prompts to generate briefs content and journeys as well as optimize performance and spend with actionable insights and predictive AI With operational customer profiles marketers and AI agents can easily take action on structured and unstructured data to build segments calculate insights analyze performance and power AI recommendations decisioning and automations Our Marketing offering is built on the Salesforce Platform so that marketing teams are able to seamlessly provide sales next best offer recommendations help service retain customers with proactive promotions and re engage inactive shoppers
Our Commerce offering helps connect every aspect of commerce from marketing and sales to service and fulfillment on a single connected AI powered platform enabling brands to deliver personalized seamless shopping experiences across every customer touchpoint With Agentforce for Commerce brands can autonomously manage a range of tasks with AI agents such as product recommendations and order lookup helping to boost capacity and productivity across marketing commerce merchandising and store operations With trusted AI and AI agents businesses can generate product descriptions and web pages and deliver personalized shopping assistance using natural language Native integrations between our Commerce Sales Service and Marketing offerings enable brands to tackle complex challenges and build cohesive digital experiences Additionally our Commerce offering delivers click to code tools which provide customers with the ability to quickly build and deploy our solutions around their customers as markets industries and customers evolve
Our unified Integration Automation and API Management offerings powered by MuleSoft provide the essential building blocks to deliver AI powered end to end connected experiences and innovate faster Customers use MuleSoft to connect data across any system take action on their data using no code or low code to automate tasks across any system and scale API governance to help secure and monitor all of their data in transit With MuleSoft customers can extend Agentforce to any system to take action outside of Salesforce
Our analytics offerings including Tableau provide advanced end to end solutions for a wide range of business use cases powered by agentic AI With Tableau customers can visualize analyze and act on business data from any source Tableau helps users work more efficiently spot trends predict outcomes receive timely recommendations and take action with autonomous AI agents Additionally Tableau enriches Agentforce with best in class data visualizations and business context lowering the barriers of data access for everyone
Agentforce is the agentic layer of the Salesforce Platform for deploying autonomous AI agents that can understand and respond to customer inquiries without human intervention across business functions Agentforce includes a set of tools to create and customize AI agents as well as a library of ready to use skills for most any use cases across sales service marketing and commerce Tableau Slack partners and more Agentforce is a complete AI system for building a digital labor force integrating data AI automation and humans to deploy trusted AI agents for concrete business outcomes It works by giving teams tools services and AI agents that can tap into the power of a large language model LLM and their connected business data to autonomously identify what work needs to be done build a plan to complete the work and then execute the plan
Data Cloud is our hyperscale trusted data engine native to Salesforce It brings a company s enterprise data into Salesforce to deliver an actionable comprehensive and robust view of a customer by connecting enterprise data from disparate sources and harmonizing it into a single trusted model that is easy to access and understand By leveraging Data Cloud s robust framework for data ingestion transformation and indexing integrations with retrieval augmented generation improve customer experiences by transforming unstructured text and data into searchable insights empowering companies to respond to customer queries with more context relevance knowledge and advanced reasoning Data Cloud leverages the power of Salesforce metadata to enable companies to ingest and federate data to power automation analytics and AI agents across Salesforce applications
Our industry vertical offerings meet the specific needs of our customers across different industries such as financial services healthcare and life sciences manufacturing automotive and government Each of our distinct industry offerings provide out of the box AI powered capabilities that make it easy for industry customers to leverage the full Salesforce Platform with purpose built tools that address industry specific needs and enable the speed and flexibility to keep up with changing times and customer demands Salesforce s industry offering also includes Industries AI a suite of more than 100 industries capabilities and a library with resources on how to get started for every industry offering Industries AI capabilities serve as the foundation for creating industry specific AI agents with Agentforce that can be set up in minutes work around the clock and autonomously perform industry specific business tasks and actions
We offer Starter Suite an all in one easy to use solution for small and medium size businesses that brings sales service marketing and commerce together Starter Suite helps businesses get set up with Salesforce quickly and easily so they can save time boost productivity and manage relationships with all of their customer operations in one centralized location Starter Suite allows businesses to build a trusted foundation of customer data for advanced AI technology to support efficient business growth
the ability to unlock companies customer data across their business see and understand their data with advanced analytics make predictions with pervasive AI automate tasks and personalize every interaction
modern low code and no code tools powered by leading edge AI which empowers developers and business users to create digital experiences and configure and automate business processes to fit the needs of any business accelerating time to value
an enterprise application marketplace and a community of tens of millions of Trailblazers passionate developers admins and experts who use Salesforce to innovate and extend the platform with thousands of partner applications
We continue to expand in the growing addressable markets across all of our service offerings We continue to focus on several key growth levers including driving multiple service offering adoption increasing our penetration with enterprise and international customers and our industry specific reach with more vertical software solutions We orient our business strategy and invest for future growth by focusing on the following key priorities
We see significant opportunities to deepen existing customer relationships through cross selling and upselling our service offerings For example we continue to focus on driving multiple service offering adoption which provides our customers with a one stop shop for their front office business technology needs As our customers realize the benefits of our entire suite of service offerings we aim to upgrade the customers experience with new products and features and gain additional subscriptions by targeting new functional areas and business units Finally we aim to expand our relationships with existing customers through our additional support offerings
By extending our go to market capabilities globally we aim to grow our business by selling to new customers in new regions We will continue to pursue businesses of all sizes in most major markets globally We also plan to continue to develop distribution channels through new and existing marketplaces and partners for our solutions around the globe and new go to market strategies We continue to invest in our domestic and international operations and infrastructure to deliver the highest quality service to our customers around the world
As part of our growth strategy we are delivering innovative and value driven solutions in new categories based on our existing and potential customers needs For example we provide out of the box solutions specifically built for customers in certain industries such as financial services healthcare and life sciences manufacturing and more In addition through direct discussions and strategic engagements with our customers we are able to deliver the innovations and enhancements that align with the needs of our customers In the third quarter of fiscal 2025 we introduced Agentforce the agentic layer of the Salesforce Platform for deploying autonomous AI agents across any business function Agentforce includes a set of tools to create and customize AI agents as well as a library of ready to use skills for any use case across sales service marketing and commerce Tableau Slack partners and more
The Salesforce Platform enables customers independent software vendors ISVs and third party developers to create test and deliver cloud based applications These applications can be marketed and sold on the AppExchange our enterprise cloud marketplace or sold directly by software vendors In addition we rely on our consulting partners to deliver technology solutions and expertise to customers from large scale implementations to more limited solutions that help businesses run more efficiently We continue to work with and invest in our partner ecosystem including these ISVs and system integrators SIs to accelerate our reach into new markets and industries
We believe that we have the people processes and proven innovation to help companies transform successfully Our customer success programs including success management resources advisory services technical architects and business strategists help enable and accelerate our customers digital transformations In addition we have free curated resources such as Trailhead to help companies learn our systems and a community of Trailblazers who drive innovation With these programs and resources we aim to reduce attrition and secure renewals of existing customer subscriptions
We evaluate opportunities to acquire or invest in complementary businesses services technologies and intellectual property to complement our organic innovation and advance the development of our Salesforce Platform Our evaluation seeks to confirm that any potential acquisition accelerates our strategy represents an attractive customer opportunity provides a pathway to effectively monetize the acquired products and drive significant operational efficiencies and presents a clear timeline for value accretion Our acquisitions can range in size and complexity from those that enhance or complement existing products and accelerate development of features to large scale acquisitions that result in new service offerings Our goal is to prioritize the use of our balance sheet through cash and debt to complete acquisitions
We also manage a portfolio of strategic investments in both privately held and publicly traded companies focused primarily on enterprise cloud companies technology startups and SIs Our investments range from early to late stage companies including investments made concurrent with a company s initial public offering 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 We plan to continue making these types of strategic investments as opportunities arise that we find attractive including investments in companies representing targeted businesses technological initiatives and geographies Our strategy includes growing our strategic investment portfolio in part by reinvesting proceeds from the sales of strategic investments
We primarily deliver our solutions as highly scalable cloud computing application and platform services on a multi tenant technology architecture Multi tenancy is an architectural approach that allows us to operate a single application instance for multiple organizations treating all customers as separate tenants who run in virtual isolation from each other This approach allows us to spread the cost of delivering our services across our user base and scale our business faster than traditional software vendors while focusing our resources on building new functionality and enhancing existing offerings
We provide our services through cloud computing platform partners who offer Infrastructure as a Service including servers storage databases and networking as well as through infrastructure designed and operated by us but secured within third party data center facilities We continue to invest and expand the deployment of Hyperforce which allows our platform and applications to be delivered rapidly and reliably to locations worldwide and provides our customers autonomy and control over data residency
Our technology and product efforts are focused on improving and enhancing the features functionality performance availability and security of our existing service offerings as well as developing new features functionality and services We also remain focused on integrating businesses services and technologies from acquisitions Performance functional depth security usability ease of integration and configuration and sustainability of our solutions influence our technology decisions and product direction
The market for our service offerings is highly competitive rapidly evolving and fragmented and subject to changing technology with low barriers to entry shifting customer needs and frequent introductions of new products and services
vendors of packaged business software as well as companies offering enterprise applications delivered through on premises offerings from enterprise software application vendors and cloud computing application service providers either individually or with others
software companies that provide their product or service free of charge as a single product or when bundled with other offerings or only charge a premium for advanced features and functionality as well as companies that offer solutions that are sold without a direct sales organization
vendors who offer software tailored to specific services industries or market segments as opposed to our full suite of service offerings including suppliers of traditional business intelligence and data preparation products integration software vendors marketing vendors e commerce solutions vendors or AI software and service vendors
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
We believe more companies may become competitive threats due to the attractiveness of the markets in which we operate We also expect our competition to change and evolve as we expand into more markets with new offerings
We sell to businesses of all sizes and in almost every industry worldwide The number of paying subscriptions at each of our customers ranges from one to hundreds of thousands None of our customers accounted for more than ten percent of our revenues in fiscal years 2025 2024 or 2023 In addition we do not have any material dependencies on any specific product service or particular group or groups
We offer professional services to help customers achieve business results faster with Salesforce solutions Our architects and innovation program teams act as advisors to plan and execute digital transformations for our customers This includes implementation services for multi offering and complex deployments We provide best practices and AI based recommendations and adoption programs globally In addition we provide advanced education including in person and online courses to certify our customers and partners on architecting administering deploying and developing our service offerings
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 We provide standard customer support during regular business hours to customers as part of our paying subscription editions We also offer premier customer support that is either included in a premium success offering or sold for an additional fee which can include services such as priority access to technical resources developer support and system administration In addition we offer a premier priority support add on that includes proactive monitoring rapid incident response and instruction from a dedicated support team knowledgeable about the customer s specific
enterprise architecture With the launch of Agentforce we ve made it easier for customers to find answers by providing an even more intuitive experience on our Salesforce Help page Agentforce can resolve customer issues swiftly and accurately because answers are grounded in our trusted unstructured content unified in Data Cloud By automating simple and repetitive tasks our support engineers will be able to augment and scale their time in a more valuable way
We sell our services primarily through our direct sales force which comprises sales personnel based in regional hubs field sales personnel based in territories close to their customers and self service offerings
To a lesser extent we also utilize a network of partners who refer sales leads to us and assist in selling to prospects This network includes global consulting firms SIs and other partners In return we typically pay these partners a fee based on the first year subscription revenue generated by the customers they refer We continue to invest in developing additional distribution channels for our subscription services
We use a variety of marketing programs across traditional and social channels to target our prospective and current customers partners and developers We focus our marketing activities in the cities and countries with the largest market opportunities Our primary marketing activities include
in person and virtual customer events of all sizes to create customer and prospect awareness including proprietary events such as Dreamforce and our virtual Dreamforce to You World Tours and other virtual events as well as participation in trade shows and industry events
live events and original programming on our Salesforce streaming service which includes discussions about the future of technology in the AI first work anywhere world and educational content to learn new skills and pursue new career opportunities
We rely on a combination of trademarks copyrights trade secrets patents and contractual provisions to protect our proprietary technology and our brands We also enter into confidentiality and proprietary rights agreements with our employees consultants and other third parties and control access to software services documentation and other proprietary information We believe the duration of our patents is adequate relative to the expected lives of our service offerings We also purchase or license technology that we incorporate into our products or services At times we make select intellectual property broadly available at no or low cost to achieve a strategic objective such as promoting industry standards advancing interoperability supporting open source software or attracting and enabling our external development community While it may be necessary in the future to seek or renew licenses relating to various aspects of our products and business methods we believe based upon past experience and industry practice such licenses generally should be obtainable on commercially reasonable terms
Salesforce is committed to a core set of values trust customer success innovation equality and sustainability These core values are the foundation of our company culture which we believe is fundamental to and a competitive advantage in our approach to managing our workforce We believe our company culture fosters open dialogue collaboration recognition and a sense of belonging all of which allow us to attract and retain the best talent which is critical for our continued success For example our sales engineering and customer success teams are critical to our ability to grow innovate and promote the trust and success of our customers
We believe our efforts in managing our workforce have been effective Our focus on our workplace environment and a strong company culture has led to recognition across the globe as evidenced by the following awards Ethisphere s World s Most Ethical Companies 2024 and for the 15th time One of America s Most JUST Companies from JUST Capital 2025 and for the eighth year in a row Fortune World s Most Admired Companies 2025 for the 11th year in a row Fortune 100 Best Companies to Work For 2024 and for the 16th year in a row Fortune World s Most Innovative Companies 2024 for the second year in a row a Top 100 Employer of Choice on the American Opportunity Index 2024 and for the third year in a row A Glassdoor Best Places to Work 2025 a 2024 Great Place to Work Best Workplace in Japan UK South Korea Argentina France Spain Denmark Canada United States Switzerland Mexico Ireland The Netherlands India Portugal
Brazil Singapore Australia and a Built In s 2025 Best Places to Work winner in Dallas Colorado Austin Seattle Atlanta Boston San Francisco and a 100 Best U S Large Companies to Work For in 2025 overall
As of January 31 2025 we had 76 453 employees None of our employees in the United States are represented by a labor union However employees of certain foreign subsidiaries are represented by works councils
We have continued to invest in development programs employee engagement and ongoing communications and feedback For additional information on our workforce refer to our annual Stakeholder Impact Report https salesforce com stakeholder impact report Some of our key human capital management initiatives are summarized below
Our approach to equality is firmly rooted in compliance with federal law as a U S company and other applicable laws and regulations in the regions in which we operate including statutes regulations and principles governing equal pay equal opportunity and anti discrimination protections These legal frameworks shape our long standing commitment to fostering a workplace where all individuals are treated equally have access to opportunities and are protected from discrimination By adhering to these laws we uphold a fair and inclusive environment where our employees can do the best work and teaming of their careers reinforcing principles of equality dignity and respect for all
We offer our employees various talent development programs to create a culture of continuous learning and new ways to grow their careers We provide learning and development opportunities through Career Connect our internal talent marketplace and Trailhead our learning platform available for all employees We encourage our employees to seek personal and professional development opportunities with external organizations and offer yearly education reimbursement to employees who wish to continue job related education from accredited institutions or organizations
We believe offering competitive compensation packages and robust benefits is an important factor in our ability to attract retain and motivate our employees and to help enhance their everyday wellbeing We use a combination of fixed and variable cash compensation for all employees and award equity compensation to certain employees in the form of restricted stock units and performance based restricted stock units and on a limited basis stock options Eligible employees are also able to participate in our Employee Stock Purchase Plan which allows employees to purchase our stock at a 15 percent discount up to U S Internal Revenue Code limits We also match up to 5 000 of donations per employee to eligible nonprofit organizations and effective February 1 2025 donations are matched up to 10 000 per employee We offer employees benefits that vary by country and are designed to meet or exceed local legal requirements and to be competitive in the marketplace
Alignment and consistent and clear communication are a key part of our employee engagement especially as we continue to grow Each year we complete a corporate V2MOM which is our business plan for the year used to align the Company on our vision values methods obstacles and measures for the upcoming year All employees are then expected to complete their own V2MOM that aligns with the corporate V2MOM In addition our Code of Conduct reflects our core values which remain the foundation of the Company and which directly impact our ability to deliver success We expect all of our employees to act with integrity including treating others with compassion and respect
Our leadership strives for active engagement with our employees through a variety of channels including all company meetings and our daily newsletter The Daily allowing employees to stay connected with the business and new developments Twice a year all employees have the opportunity to complete a confidential survey measuring employee engagement and experience the health of our culture and how we are living up to our values This survey is one of several ways we see to understand employee experience and drive real change across the Company
We operate globally and are subject to numerous U S federal state and foreign laws and regulations covering a wide variety of subject matters Additional information regarding governmental regulations relevant to our business is discussed in Part I Item 1A Risk Factors
Our Annual Reports on Form 10 K Quarterly Reports on Form 10 Q Current Reports on Form 8 K and other filings with the Securities and Exchange Commission SEC and all amendments to these filings can be obtained free of charge from our website at http investor salesforce com financials or by contacting our Investor Relations department at our office address listed above as soon as reasonably practicable following our filing of any of these reports with the SEC The SEC maintains an Internet site that contains reports proxy and information statements and other information regarding issuers that
file electronically with the SEC at www sec gov The contents of these and other websites referenced throughout the filing are not incorporated and do not constitute a part of this filing Further our references to the URLs for these websites are intended to be inactive textual references only
Our principal executive offices are located in San Francisco California Our principal address is Salesforce Tower 415 Mission St 3rd Floor San Francisco California 94105 and our primary website address is www salesforce com
In evaluating our business you should carefully consider the following discussion of material risks events and uncertainties that make an investment in us speculative or risky in addition to the other information included in this Annual Report A manifestation of any of the following risks and uncertainties could in circumstances we may or may not be able to accurately predict materially and adversely affect our business and operations growth reputation prospects operating and financial results financial condition cash flows liquidity and stock price Some of the factors events and contingencies discussed below may have occurred in the past but the disclosures below are not representations as to whether or not the factors events or contingencies have occurred in the past and instead reflect our beliefs and opinions as to the factors events or contingencies that could materially and adversely affect us in the future The risks and uncertainties described below are not the only ones we face Other events factors or uncertainties that we do not currently anticipate or that we currently deem immaterial also may affect our business financial condition results of operations cash flows other key metrics and the trading price of our common stock Therefore you should not consider the following risks to be a complete statement of all the potential risks or uncertainties that we face
Any breaches in our security measures or those of our third party data center hosting facilities cloud computing platform providers or third party service partners or the underlying infrastructure of the Internet that cause unauthorized access to a customer s data our data or our IT systems or the blockage or disablement of authorized access to our services
Any interruptions or delays in services from third parties including data center hosting facilities cloud computing platform providers and other hardware and software vendors as well as internet availability or from our inability to adequately plan for and manage service interruptions or infrastructure capacity requirements
Any discontinuance by third party developers and providers in embracing our technology delivery model and enterprise cloud computing services or customers asking us for warranties for third party applications integrations data and content
Downturns or upturns in new business which may not be immediately reflected in our operating results because we generally recognize revenue from subscriptions for our services over the term of the subscription
If our security measures or those of our third party data center hosting facilities cloud computing platform providers or third party service partners or the underlying infrastructure of the Internet are breached and unauthorized access is obtained to a customer s data our data or our IT systems or authorized access is blocked or disabled our services may be perceived as not being secure customers may curtail or stop using our services and we may incur significant reputational harm legal exposure and liabilities or a negative financial impact
Our services involve the storage and transmission of our customers and our customers customers proprietary and other sensitive data including financial health and other personal information Our services and underlying infrastructure may in the future be materially breached or compromised as a result of the following
efforts by hackers or sophisticated groups such as criminal organizations state sponsored organizations or nation states to launch coordinated cyberattacks on internally built infrastructure or on third party cloud computing platform providers including ransomware destructive malware and distributed denial of service attacks
third party attempts to abuse our marketing advertising messaging or social products and functionalities to impersonate persons or organizations and disseminate information that is false misleading or malicious
attacks on or vulnerabilities in the many different underlying networks and services that power the Internet that our products depend on most of which are not under our control or the control of our vendors partners or customers and
These risks are mitigated to the extent possible by our ability to maintain and improve business and data governance policies and enhance processes and internal security controls including our ability to escalate and respond to known and potential risks We can provide no assurances that our security measures including implemented systems and processes designed to protect our customers and our customers customers proprietary and other sensitive data will provide absolute security or otherwise be effective or that a material breach will not occur For example our ability to mitigate these risks may be impacted by the following
evolving techniques used to breach or sabotage IT systems and infrastructure including as a result of the increased use of AI technologies by bad actors which are generally not recognized until launched against a target and could result in our being unable to anticipate or implement adequate measures to prevent such techniques
our limited control over our customers or third party technology providers including those authorized by customers to access their data or the processing of data by third party technology providers which may not allow us to maintain the integrity or security of such transmissions or processing
In the normal course of business we are and have been the target of malicious cyberattacks and have experienced other security incidents Although to date such identified security events have not had a material financial impact there can be no assurance that future cyberattacks will not be material or significant Additionally as our market presence grows we may face increased risks of cyberattacks or security threats and as AI technologies including generative AI models develop rapidly threat actors are using these technologies to create new sophisticated attack methods that are increasingly automated targeted and coordinated and more difficult to defend against
A security breach or incident could result in unauthorized parties obtaining access to or the denial of authorized access to our IT systems or data or our customers systems or data including intellectual property and proprietary sensitive or other confidential information We have contractual and other legal obligations to notify relevant stakeholders of security breaches For example SEC rules require disclosure on Form 8 K of the nature scope and timing of any material cybersecurity incident and the reasonably likely impact of any such incident A security breach or resulting mandatory disclosure could result in a loss of confidence in the security of our services damage our reputation negatively impact our future sales disrupt our business and lead to increases in insurance premiums and legal regulatory and financial exposure and liability Further there can be no assurance that our insurance coverage will be sufficient to cover the financial legal business or reputational losses that may result from a cybersecurity incident or breach of our IT systems Finally the detection prevention and remediation of known or potential security vulnerabilities including determining whether a cybersecurity incident is notifiable or reportable may not be straightforward and may result in additional financial burdens due to additional direct and indirect costs to respond to or alleviate problems caused by the actual or perceived security breach such as additional infrastructure capacity spending to mitigate any system degradation and the reallocation of resources from development activities
We have in the past and may in the future find defects in or experience disruptions to our services Such issues may arise in a variety of circumstances including due to our customers using our services in unanticipated ways that may cause a disruption in services for other customers attempting to access their data as a result of employee contractor or other third party action or inaction or due to the complexity of our services which incorporate a variety of hardware proprietary software and third party and open source software Across the industry cloud services frequently contain undetected errors when first introduced or when new versions or enhancements are released We may also encounter difficulties integrating acquired or licensed technologies into our services and in augmenting the technologies we use to meet quality standards that are consistent with our brand and reputation which may result in our services containing errors or defects
We have experienced and may in the future experience defects in our products that create vulnerabilities that inadvertently permit access to protected customer data We can provide no assurance that such product defects or other vulnerabilities will not occur in the future have a material adverse effect on our business or subject us to substantial liability Vulnerabilities in open source or any proprietary or third party product can persist even after security patches have been issued if customers have not installed the most recent updates or if the attackers exploited the vulnerabilities before patching was complete In some cases vulnerabilities may not be immediately detected which may make it difficult to recover critical services and lead to damaged assets
Since our customers use our services for important aspects of their business errors defects disruptions in service or other performance problems have in the past adversely impacted our customers businesses and could do so in the future As a result customers could elect to not renew our services or delay or withhold payment to us We could also lose future sales or customers may make warranty or other claims against us which could result in an increase in our allowance for doubtful accounts an increase in collection cycles for accounts receivable or the expense and risk of litigation
Any interruptions or delays in services from third parties including data center hosting facilities cloud computing platform providers and other hardware and software vendors as well as internet availability or from our inability to adequately plan for and manage service interruptions or infrastructure capacity requirements could impair the delivery of our services and harm our business
We currently rely on third party data center hosting facilities and cloud computing platform providers located in the United States and other countries as well as the many different underlying networks and services that power the Internet to deliver our products services and business operations and to operate critical business systems We also rely on computer hardware purchased or leased from software licensed from and cloud computing platforms provided by third parties in order to offer our services including database software hardware and data from a variety of vendors Any disruption or damage to or failure of our systems generally including the systems of third party providers we rely on could result in service interruptions and harm our business We have from time to time experienced service interruptions and such interruptions may occur in the future As we increase our reliance on these third party systems particularly with respect to third party cloud computing platforms our exposure to damage from service interruptions or other performance or quality issues may increase Service interruptions or other performance or quality issues may cause us to issue credits or pay penalties cause customers to make warranty or other claims against us or to terminate their subscriptions and adversely affect our attrition rates and our ability to attract new customers all of which would reduce our revenue Our business and reputation would also be harmed if our customers and potential customers believe our services are unreliable
For many of our offerings our production environment and customers data are replicated in a separate facility located elsewhere Certain offerings including some offerings of companies added through acquisitions may be served through alternate facilities or arrangements We do not control the operation of any of these facilities and they may be vulnerable to damage or interruption from earthquakes floods fires power loss telecommunications failures and similar events They may also be subject to break ins sabotage intentional acts of destruction or vandalism or similar misconduct as well as local administrative actions changes to legal or permitting requirements and litigation to stop limit or delay operation In addition supply chain disruptions due to geopolitical developments in Europe may lead to power disruptions in regions where our facilities are located Despite precautions taken at these facilities such as disaster recovery and business continuity arrangements the occurrence of any of the foregoing events or risks or a natural disaster or public health emergency an act of terrorism a decision to close the facilities without adequate notice or other unanticipated problems or operational failures at these facilities could result in lengthy service interruptions and no assurance can be provided that any such interruptions would be remediated without significant cost or in a timely manner or at all
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 Any loss of the right to use any of these hardware software data or cloud computing platforms could significantly increase our expenses and disrupt or otherwise result in delays in the provisioning of our services until equivalent technology is either developed by us or if available is identified obtained through purchase or license and integrated into our services and no assurance can be provided that such equivalent technology would be developed or obtained in a timely manner or at all
As we scale our operations the amount and type of information transferred on our offerings continues to evolve including as a result of the deployment of AI technologies and our infrastructure capacity requirements including network capacity and computing power may increase as a result If we do not accurately plan for our infrastructure capacity requirements and we experience significant strains on our data center capacity our customers could experience performance degradation or service outages that may subject us to financial liabilities result in customer losses and harm our reputation and business As we add data centers and capacity and continue to move to cloud computing platform providers we move or transfer our data and our customers data from time to time Despite precautions taken during this process any unsuccessful data transfers may impair the delivery of our services which may damage our business
As we acquire companies or technologies we may not realize the expected business or financial benefits and the acquisitions could prove difficult to integrate disrupt our business dilute stockholder value and adversely affect our operating results and the market value of our common stock
As part of our business strategy we periodically acquire complementary businesses joint ventures services and technologies and intellectual property rights We continue to evaluate such opportunities and expect to make such acquisitions in the future
potential identified or unknown security vulnerabilities in acquired products that expose us to additional security risks or delay our ability to integrate the product into our service offerings as well as difficulties in increasing or maintaining the security standards for acquired technology
challenges converting the acquired company s revenue recognition policies and forecasting the related revenues including both consumption and subscription based revenues and term software license revenue as well as appropriate allocation of the customer consideration to the individual deliverables
regulatory challenges from antitrust or other regulatory authorities that may block delay or impose conditions such as divestitures ownership or operational restrictions or other structural or behavioral remedies on the completion of transactions or the integration of acquired operations
failure to fully assimilate integrate or retrain acquired employees which may lead to retention risk with respect to both key acquired employees and our existing key employees or disruption to existing teams or our workplace culture
Any of these risks could harm our business or negatively impact our results of operations In addition to facilitate acquisitions we may seek additional equity or debt financing which may not be available on terms favorable to us or at all which may affect our ability to complete subsequent acquisitions and which may affect the risks of owning our common stock For example if we finance acquisitions by issuing equity or convertible or other debt securities or loans our existing stockholders may be diluted or we could face constraints related to the terms of and repayment obligation related to the incurrence of indebtedness that could affect the market price of our common stock
Our ability to acquire other businesses or technologies or integrate acquired businesses effectively may be impaired by trade tensions and increased global scrutiny of foreign investments and acquisitions in the technology sector For example several countries including the United States and countries in Europe and the Asia Pacific region are considering or have adopted restrictions of varying kinds on transactions involving foreign investments and acquisitions Antitrust authorities in a number of countries have also reviewed acquisitions in the technology industry with increased scrutiny Governments may continue to adopt or tighten restrictions of this nature some of which may apply to acquisitions or integrations of businesses by us and such restrictions or government actions could negatively impact our business and financial results
Supporting our existing and growing customer base could strain our personnel resources and infrastructure and if we are unable to scale our operations and increase productivity we may not be able to successfully implement our business plan
We continue to experience significant growth in our customer base including through acquisitions which has placed a strain on and in the future may strain our management administrative operational and financial infrastructure We anticipate that significant additional investments including in human capital software as well as leveraging agentic AI and other technologies will be required to scale our operations and increase productivity to address the needs of our customers to further develop and enhance our services to expand into new geographic areas and to scale with our overall growth These investments will increase our cost base making it more difficult for us to offset any future revenue shortfalls by reducing expenses in the
We regularly upgrade or replace our various software systems and processes If the implementations of these new applications are delayed or if we encounter unforeseen problems with our new systems and processes or in migrating away from our existing systems and processes our operations and our ability to manage our business could be negatively impacted
Our success will depend in part upon the ability of our senior management to plan and manage our projected growth effectively To do so we must continue to increase the productivity of our existing employees and to hire train and manage new employees as needed Additionally changes in our work environment and workforce may not meet the needs and expectations of our workforce or may create operational and workplace culture challenges which could negatively impact our ability to increase employee productivity or attract and retain our employees and could adversely affect our operations To manage the expected domestic and international growth of our operations and personnel we will need to continue to improve our operational financial and management controls our reporting systems and procedures and our utilization of real estate If we fail to successfully scale our operations and increase productivity we may be unable to execute our business plan and the value of our common stock could decline
If our customers do not renew their subscriptions for our services or if they reduce the number of paying subscriptions at the time of renewal our revenue and current remaining performance obligation could decline and our business may suffer If customer usage of certain consumption based offerings is below expected levels our revenue could decline If we cannot accurately predict subscription renewals or upgrade rates or optimal pricing for consumption based contracts we may not meet our revenue targets which may adversely affect the market price of our common stock
Our customers have no obligation to renew their subscriptions for our services after the expiration of their contractual subscription period which is typically 12 to 36 months and in the normal course of business some customers have elected not to renew In addition our customers may renew for fewer subscriptions renew for shorter contract lengths or switch to lower cost offerings of our services particularly in times of general economic uncertainty It is difficult to predict attrition rates given our varied customer base and the number of multi year subscription contracts Our attrition rates may increase or fluctuate as a result of various factors including customer dissatisfaction with our services customers spending levels mix of customer base decreases in the number of users at our customers competition pricing increases or changes such as the increased prevalence of consumption based pricing models and economic downturns
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 This may also require increasingly sophisticated and costly sales efforts that are targeted at senior management Similarly the rate at which our customers purchase new or enhanced services depends on a number of factors including general economic conditions and customer receptiveness to any price changes related to these additional features and services
In addition the markets and monetization strategies for certain offerings including Agentforce and Data Cloud remain relatively new and uncertain and as a result our expansion into such offerings and related investments may present additional risks and challenges For example we offer certain products including Agentforce and Data Cloud through a consumption based business model and may increase the number of products through which we do so We have limited experience with determining optimal pricing for our consumption based contracts Additionally due to customer flexibility in the timing of their consumption we could have lower levels of customer consumption of our products than we expect which may result in suboptimal pricing for consumption based contracts
We periodically change and make adjustments to our sales organization in response to market opportunities competitive threats management changes product introductions or enhancements acquisitions sales performance increases in sales headcount cost levels and other internal and external considerations Such sales organization changes have in some periods resulted in and may in the future result in a reduction of productivity which could negatively impact our rate of growth in the current and future quarters and operating results including revenue In addition any significant change to the way we structure our compensation of our sales organization may be disruptive and may affect our revenue growth
We sell our services throughout the world and are subject to risks and challenges associated with international business We intend to seek to continue to expand our international sales efforts The risks and challenges associated with sales to customers outside the United States or those that can affect international operations generally include
compliance with complex and evolving governmental laws and regulations including employment tax anti corruption import export customs anti boycott sanctions and embargoes antitrust cybersecurity sustainability and industry specific laws and regulations including rules related to compliance by our third party resellers
liquidity issues or political actions by sovereign nations including nations with a controlled currency environment could result in decreased values of these balances or potential difficulties protecting our foreign assets or satisfying local obligations
treatment of revenue from international sources evolving domestic and international tax environments and changes to tax codes including being subject to and paying withholding taxes under foreign tax laws
uncertainty regarding the imposition of and changes in trade policies including trade wars tariffs or other trade restrictions or the threat of such actions or other geopolitical events including the evolving relations between the United States and China the United States and Russia and ongoing conflicts such as the war in Ukraine and the regional conflict in the Middle East
different or lesser protection of our intellectual property including increased risk of theft of our proprietary technology and other intellectual property and more prevalent cybersecurity risks particularly in jurisdictions in which we have historically chosen not to operate and
Any of these factors could negatively impact our business and results of operations The above factors may also negatively impact our ability to successfully expand into emerging market countries where we have little or no operating experience where it can be costly and challenging to establish and maintain operations including hiring and managing required personnel and difficult to promote our brand and where we may not benefit from any first to market advantage or otherwise succeed
As more of our sales efforts are targeted at larger enterprise customers our sales cycle may become more time consuming and expensive we may encounter pricing pressure and implementation and configuration challenges and we may have to delay revenue recognition for some complex transactions all of which could harm our business and operating results
As we target more of our sales efforts at larger enterprise customers including governmental entities and specific industries such as financial services and healthcare and life sciences we may face greater costs longer sales cycles greater competition and less predictability in completing some of our sales In these market segments the customer s decision to use our services is often an enterprise wide decision and if so may require us to provide greater levels of education regarding the use and benefits of our services as well as addressing concerns regarding privacy and data protection laws and regulations of prospective customers with international operations or whose own customers operate internationally
In addition larger customers and governmental entities often demand more configuration integration services and features As a result of these factors these sales opportunities often require us to devote greater sales support and professional services resources to individual customers driving up costs and time required to complete sales and diverting our own sales and professional services resources to a smaller number of larger transactions while potentially requiring us to delay revenue recognition on some of these transactions until the technical or implementation requirements have been met
Pricing and packaging strategies for enterprise and other customers for our existing and future service offerings including for our AI offerings such as Agentforce may not be widely accepted by new or existing customers We offer certain products such as Agentforce and Data Cloud through a consumption based pricing model and we have limited experience with determining the optimal pricing for our consumption based contracts Due to customer flexibility in the timing of their consumption we could have lower levels of customer consumption of our products than we expect may result in suboptimal
Our success depends substantially upon the continued services of our executive officers and other key members of management particularly our chief executive officer We are also substantially dependent on the continued service of our existing development and operations personnel because of the complexity of our services and technologies Our executive officers key management development or operations personnel could terminate their employment with us at any time Effective succession planning for management is important to our long term success and changes in our management team resulting from the hiring departure or realignment of executives may be disruptive to our business If we do not develop adequate succession planning for our key personnel the loss of one or more of our key employees or groups of employees could seriously harm our business
The technology industry is subject to substantial and continuous competition for engineers with high levels of experience in designing developing and managing software and technology services as well as competition for sales executives data scientists and operations personnel We have experienced challenges with significant competition in talent recruitment and retention and may not in the future be successful in recruiting or retaining such talent We have experienced and expect to continue to experience difficulty in hiring developing integrating and retaining highly skilled employees with appropriate qualifications These difficulties may be amplified by evolving restrictions on immigration travel or availability of visas for skilled technology workers Additionally our compensation arrangements and benefits may not always be successful in attracting new employees or retaining and motivating our existing personnel If we fail to attract new personnel or fail to retain and motivate our current personnel our business and future growth prospects could be severely harmed
In January 2023 we announced a restructuring plan intended to reduce operating costs improve operating margins and continue advancing our ongoing commitment to profitable growth which included a reduction of our workforce and office space reductions within certain markets The workforce reduction was substantially completed by the end of fiscal 2024 and real estate actions are expected to be completed by the end of fiscal 2026 Additionally throughout fiscal 2025 we initiated further targeted workforce and office space reductions These restructuring actions or any similar actions taken in the future could negatively impact our ability to attract integrate retain and motivate key employees
In addition we believe in the importance of our corporate culture which fosters dialogue collaboration recognition equality and a sense of family As our organization has grown and expanded globally and as our workplace plans have developed including workforce and office space reductions related to our restructuring actions we have experienced and may continue to experience difficulties maintaining our corporate culture globally including managing the complexities of communicating with all employees Any inability to maintain our corporate culture could negatively impact our ability to attract and retain employees harm our reputation with customers or negatively impact our future growth
Any failure in the delivery of high quality professional and technical support services related to our online applications may adversely affect our relationships with our customers and our financial results
Our customers sometimes require highly skilled and trained service professionals to successfully implement our applications and depend on our support organization to resolve technical issues relating to our applications Implementation services may be performed by us our customers a third party or a combination thereof Our strategy is to work with third parties to increase the breadth of capability and depth of capacity for delivery of these services to our customers If customers are not satisfied with the quality and timing of work by us or a third party or with the type of services or solutions delivered we could incur additional costs to address the situation the profitability of that work might be impaired our revenue recognition could be impacted and the customer s dissatisfaction with the services received could negatively impact our ability to sell our other offerings to that customer or retain existing customers In addition negative publicity related to our customer relationships regardless of its accuracy may further damage our business by affecting our ability to compete for new business with current or prospective customers We may be unable to respond quickly enough to accommodate short term increases in customer demand for support services across our varying and diverse offerings In addition our sales process is highly dependent on our applications and business reputation and on positive recommendations from our existing customers Any failure or perceived failure to maintain high quality professional and technical support services could adversely affect our reputation our ability to sell our service offerings to existing and prospective customers and our business operating results and financial position
The market for enterprise applications and platform services is highly competitive rapidly evolving fragmented and subject to changing technology low barriers to entry shifting customer needs and frequent introductions of new products and services Many prospective customers have invested substantial personnel and financial resources to implement and integrate their current enterprise software into their businesses and therefore may be reluctant or unwilling to migrate away from their current solution to a different enterprise software service Additionally third party developers may be reluctant to build application services on our platform since they have invested in other competing technology platforms
vendors of packaged business software as well as companies offering enterprise applications delivered through on premises offerings from enterprise software application vendors and cloud computing application service providers either individually or with others
software companies that provide their product or service free of charge as a single product or when bundled with other offerings or only charge a premium for advanced features and functionality as well as companies that offer solutions that are sold without a direct sales organization
vendors who offer software tailored to specific services industries or market segments as opposed to our full suite of service offerings including suppliers of traditional business intelligence and data preparation products integration software vendors marketing vendors e commerce solutions vendors or AI software and service vendors
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
In addition we may face more competition as we expand our product offerings Some of our current and potential competitors may have competitive advantages such as greater name recognition longer operating histories more significant installed bases broader geographic scope broader suites of service offerings and larger marketing budgets as well as substantially greater financial technical personnel and other resources In addition many of our current and potential competitors have established marketing relationships and access to larger customer bases and have major distribution agreements with consultants system integrators and resellers We also experience competition from smaller younger competitors that may be more agile in responding to customers demands and offer more targeted and simplified solutions Our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities technologies standards or customer requirements or provide competitive pricing more flexible contracts or faster implementations Additionally as we continue to increase building AI into many of our offerings we face more competition as AI technologies are increasingly integrated into the markets in which we compete New AI offerings may disrupt workforce needs and negatively impact demand for our offerings or our competitors may be able to incorporate AI into their offerings more efficiently or successfully than we are able to and achieve greater and faster adoption Even if our services are more effective than the products and services that our competitors offer potential customers might select competitive products and services in lieu of purchasing our services For all of these reasons we may not be able to compete successfully against our competitors which could negatively impact our future sales and harm our business
Our efforts to expand our service offerings and to develop and integrate our existing services in order to keep pace with technological developments may not succeed and may reduce our revenue growth rate and harm our business
Our efforts to expand our current service offerings may not succeed and may reduce our revenue growth rate In addition the markets and monetization strategies for certain offerings including Agentforce and Data Cloud remain relatively new and uncertain and as a result our expansion into such offerings and related investments may present additional risks and challenges For example we offer certain products including Agentforce and Data Cloud through a consumption based business model and may increase the number of products through which we do so We have limited experience with determining optimal pricing for our consumption based contracts Additionally due to customer flexibility in the timing of their consumption we could have lower levels of customer consumption of our products than we expect which may result in suboptimal pricing for consumption based contracts Further the introduction of future platform changes and upgrades may not result in long term revenue growth
If we are unable to develop enhancements to and new features for our existing or new services that keep pace with rapid technological developments our business could be harmed The success of enhancements new features and services depends on several factors including its timely completion introduction and market acceptance as well as our ability to integrate all of our product and service offerings and develop adequate selling capabilities in new markets Failure in this regard may significantly impair our revenue growth as well as negatively impact our operating results if the additional costs are not offset by additional revenues In addition because our services are designed to operate over various network technologies and on a
variety of mobile devices operating systems and computer hardware and software platforms we need to continuously modify and enhance our services to keep pace with changes in these technologies as well as continue to maintain and support our services on legacy systems We may not be successful in either developing these modifications and enhancements or in bringing them to market timely
Additionally if we fail to timely anticipate or identify significant technology trends and developments or if we do not devote appropriate resources to adapting to such trends and developments our business could be harmed Uncertainties about the timing and nature of new network platforms or technologies modifications to existing platforms or technologies including text messaging capabilities or changes in customer usage patterns thereof could increase our research and development or service delivery expenses or lead to our increased reliance on certain vendors Any failure of our services to operate effectively with future network platforms and technologies could reduce the demand for our services result in customer dissatisfaction and harm our business
We believe that the brand identities we have developed including associations with trust customer success innovation equality and sustainability have significantly contributed to the success of our business Maintaining and enhancing the Salesforce brand and our other brands is critical to expanding our base of customers partners and employees Our brand strength particularly for our core services depends largely on our ability to remain a technology leader and to continue to provide high quality innovative products services and features in a secure reliable manner that enhances our customers success even as we scale and expand our services In order to maintain and enhance the strength of our brands we have made and may in the future make substantial investments to expand or improve our product offerings and services or we may enter new markets that may be accompanied by initial complications or ultimately prove to be unsuccessful
In addition we have secured the naming rights to facilities controlled by third parties such as office towers and a transit center and any negative events or publicity arising in connection with these facilities could adversely impact our brand
Further entry into markets with weaker protection of brands or changes in the legal systems in countries we operate may impact our ability to protect our brands If we fail to maintain enhance or protect our brands or if we incur excessive expenses in our efforts to do so our business operating results and financial condition may be materially and adversely affected
We are subject to risks associated with our strategic investments including partial or complete loss of invested capital Significant changes in the fair value of this portfolio could negatively impact our financial results
We manage a portfolio of strategic investments in both privately held and publicly traded companies focused primarily on enterprise cloud companies technology startups and system integrators While we invest in companies that we believe are digitally transforming their industries advancing responsible generative AI improving customer experiences helping us expand our solution ecosystem or supporting other corporate initiatives we may still experience unforeseen brand or reputational harm associated with our investments Our investments range from early to late stage companies including investments made concurrent with a company s initial public offering Investments in early stage companies are inherently speculative as these companies may not yet be revenue generating and could still be in the process of developing their products and services at the time of our investment The financial success of our investment in any company is typically dependent on a liquidity event such as a public offering acquisition or other favorable market event reflecting appreciation to the cost of our initial investment Our investments may face challenges from regulatory authorities including antitrust authorities potentially resulting in unexpected costs delays or unfavorable conditions imposed on transactions involving our investment portfolio In certain cases our ability to sell these investments may be impacted by contractual obligations to hold the securities for a set period of time after a public offering All of our investments are subject to a risk of partial or total loss of invested capital
We are exposed to volatility in our operating results due to changes in market prices observable price changes and impairments of our strategic investments The measurement of our non marketable equity and debt securities at fair value is inherently subjective and requires management judgment and estimation The resulting gains or losses could be material depending on market conditions and events particularly in periods with economic uncertainty inflation geopolitical conflict volatile public equity markets or unsettled global market conditions
If third party developers and providers do not continue to embrace our technology delivery model and enterprise cloud computing services or if our customers seek warranties from us for third party applications integrations data and content our business could be harmed
Our success depends on the willingness of a growing community of third party developers and technology providers to build applications and provide integrations data and content that are complementary to our services Without the continued development of these applications and provision of such integrations data and content both current and potential customers may not find our services sufficiently attractive which could impact future sales In addition for those customers who authorize a third party technology partner to access their data we do not provide any warranty related to the functionality security or integrity of the data access transmission or processing Despite contract provisions to protect us customers may look to us to
support and provide warranties for the third party applications integrations data and content even though not developed or sold by us which may expose us to potential claims liabilities and obligations all of which could harm our reputation and our business
Policies we adopt or choose not to adopt on social and ethical issues especially regarding the use of our products may be unpopular with some of our employees or with our customers or potential customers and have in the past impacted and may in the future impact our ability to attract or retain employees and customers Our decisions about whether to conduct business with potential customers or whether to continue or expand business with existing customers may also impact our ability to attract or retain employees and customers and could result in negative publicity or reputational harm Further actions taken by our customers and employees including through the use or misuse of our products or new technologies for illegal activities or improper information sharing may result in reputational harm or possible liability particularly in light of regulatory requirements like the Digital Services Act DSA from the EU For example we have been subject to allegations in legal proceedings that we should be liable for the use of certain of our products by third parties Although we believe that we have a strong defense against these allegations legal proceedings can be lengthy expensive and disruptive to our operations and the outcome of any claims or litigation regardless of the merits is inherently uncertain Regardless of outcome these types of claims could cause reputational harm to our brand or result in liability
We are increasingly building AI into many of our offerings including generative and agentic AI As with many innovations AI offerings such as Agentforce and our Salesforce Platform present additional risks and challenges that could affect their adoption and therefore our business For example the development of our AI offerings and the Salesforce Platform which provides information regarding our customers customers present emerging ethical issues If we enable or offer solutions that draw controversy due to their perceived or actual impact on human rights privacy employment or in other social contexts we may experience new or enhanced governmental or regulatory scrutiny brand or reputational harm competitive harm or legal liability especially as geopolitical turmoil creates increasingly volatile political and market conditions Inadequate or ineffective AI development deployment content labeling or governance by us or others that result in controversy could also impair the acceptance of AI solutions or result in unintended performance of the services This in turn could undermine confidence in the decisions predictions analysis or other content that our AI applications produce subjecting us to competitive harm legal liability and brand or reputational harm The rapid evolution of AI will require the application of resources to develop test and maintain our products and services to help ensure that AI is implemented ethically in order to minimize unintended harmful impact Uncertainty around new and emerging AI applications such as generative AI content creation and AI agents will require additional investment in compliance governance and the licensing or development of proprietary datasets machine learning models and systems to test for accuracy bias and other variables which are often complex may be costly and could impact our profit margin Moreover the move from AI content classification to AI content generation through our development of Agentforce and other generative AI products brings additional risks and responsibility Known risks of generative AI currently include risks related to accuracy bias toxicity privacy and security and data provenance For example AI technologies including generative AI may create content that appears correct but is factually inaccurate or flawed or contains copyrighted or other protected material and if our customers or others use this flawed or protected content to their detriment or the owners of such copyrighted material seek to enforce their rights we may be exposed to brand or reputational harm competitive harm and or legal liability Developing testing and deploying AI systems may also increase the cost profile of our offerings due to the nature of the computing costs involved in such systems If we are unable to mitigate these risks or if we incur excessive expenses in our efforts to do so our reputation business operating results and financial condition may be harmed
Equality and sustainability are core values of the Company In furtherance of these values we have in the past and may in the future establish and disclose quantitative and qualitative statements related to ESG matters which are aspirational and subject to numerous risks and dependencies The proliferation of regulations addressing climate human capital and other ESG topics at the regional state national and international levels has required and may continue to require significant effort and resources and our practices processes and controls may not ensure compliance with evolving standards Further various regulations may conflict with each other making universal compliance challenging as a multinational company and our status as a government contractor in various jurisdictions including but not limited to the U S where we are headquartered may also result in greater exposure or differentiated obligations or requirements with which we would seek to comply The standards and frameworks for tracking and reporting on ESG matters continue to evolve and our use interpretation or application of such frameworks and standards may change from time to time or differ from those of other companies which may result in a lack of consistent or meaningful comparative data from period to period or between Salesforce and other companies In addition our ESG practices and disclosures may not satisfy appropriately respond to the concerns of or be supported by all investors customers partners regulators enforcement authorities or other stakeholders including those in support of and those in
opposition to various ESG practices whose expectations and requirements are evolving and varied Any violation of non compliance with or failure to meet such expectations or requirements or negative publicity related to our ESG practices or disclosures could result in harm to our reputation our ability to attract or retain employees and our attractiveness as an investment business partner acquiror or service provider could expose us to increased scrutiny or criticism or to regulatory or enforcement actions or litigation and could cause us to incur increased costs to address or defend against such actions
Privacy concerns and laws as well as evolving regulation of cloud computing AI services cross border data transfer restrictions and other domestic or foreign regulations may limit the use and adoption of our services and adversely affect our business
Regulation related to the provision of services over the Internet is evolving as federal state and foreign governments continue to adopt new or modify existing laws and regulations addressing data privacy cybersecurity data protection data sovereignty and the collection processing storage hosting transfer and use of data generally In some cases data privacy laws and regulations such as the EU s General Data Protection Regulation GDPR impose obligations directly on us as both a data controller and a data processor as well as on many of our customers In addition domestic data privacy laws such as the California Consumer Privacy Act as amended by the California Privacy Rights Act CCPA and laws that have recently passed and or gone into effect in many other states similarly impose new obligations on us and many of our customers potentially as both a covered business and service provider These laws continue to evolve including for example India s Digital Personal Data Protection Act 2023 and as various jurisdictions introduce similar proposals which often include subsequent rules and regulation we and our customers become subject to additional regulatory burdens New EU laws including the DSA the Data Act and the AI Act may impose additional rules and restrictions on the use of our products and services
In addition various safe harbors have historically been provided to those who hosted content provided by others such as safe harbors from monetary damages for copyright infringement arising from copyrighted content provided by customers and others and for defamation and other torts arising from information provided by customers and others There is an increasing demand for repealing or limiting these safe harbors by either judicial decision or legislation and we have active legal proceedings that have been impacted by the repeal or limiting of safe harbors that were previously available to us Loss of these safe harbors may require altering or limiting some of our services or may require additional contractual terms to avoid liabilities for our customers misconduct
Although we monitor the regulatory judicial and legislative environment and have invested in addressing these developments these laws may require us to make additional changes to our practices and services to enable us or our customers to meet the new legal requirements and may also increase our potential liability exposure through new or higher potential penalties for noncompliance including as a result of penalties fines and lawsuits related to data breaches Furthermore privacy laws and regulations are subject to differing interpretations and may be inconsistent among jurisdictions These and other requirements are causing increased scrutiny among customers particularly in the public sector and highly regulated industries and may be perceived differently from customer to customer These developments could reduce demand for our services require us to take on more onerous obligations in our contracts restrict our ability to store transfer and process data or in some cases impact our ability or our customers ability to offer our services in certain locations to deploy our solutions to reach current and prospective customers or to derive insights from customer data globally For example in July 2020 the Court of Justice of the European Union CJEU invalidated the EU U S Privacy Shield Framework one of the mechanisms that allowed companies including us to transfer personal data from the European Economic Area EEA to the United States Even though the CJEU decision upheld the Standard Contractual Clauses SCCs as an adequate transfer mechanism the decision created uncertainty around the validity of all EU to U S data transfers While the EU and U S governments have since adopted the EU U S Data Privacy Framework to foster EU to U S data transfers and address the concerns raised in the aforementioned CJEU decision it is uncertain whether this framework will be overturned in court like the previous two EU U S bilateral cross border transfer frameworks As a result regulators may continue to be inclined to interpret the CJEU s decision and the logic behind it as significantly restricting certain cross border transfers and the cost and complexity of providing our services in certain markets may increase Certain countries outside of the EEA have also passed or are considering passing laws requiring varying degrees of local data residency By way of further example statutory damages available through a private right of action for certain data breaches under the CCPA may increase our and our customers potential liability and the demands our customers place on us
The costs of compliance with and other burdens imposed by privacy laws regulations and standards may limit the use and adoption of our services reduce overall demand for our services make it more difficult to meet expectations from our commitments to customers and our customers customers lead to significant fines penalties or liabilities for noncompliance impact our reputation or slow the pace at which we close sales transactions in particular where customers request specific warranties and unlimited indemnity for noncompliance with privacy laws any of which could harm our business
In addition to government activity privacy advocates and other industry groups have established or may establish new self regulatory standards that may place additional burdens on our ability to provide our services globally Our customers expect us to meet voluntary certification and other standards established by third parties If we are unable to maintain these certifications or meet these standards it could adversely affect our ability to provide our solutions to certain customers and could harm our business In addition we have seen a trend toward the private enforcement of data protection obligations including through private actions for alleged noncompliance which could harm our business and negatively impact our reputation For example in 2020 we were made a party to a legal proceeding brought by a Dutch privacy advocacy group the Privacy Collective on behalf of certain Dutch citizens that claims we violated the GDPR and Dutch Telecommunications Act through the processing and sharing of data in connection with our Audience Studio and Data Studio products In December 2021 the Amsterdam District Court declared the Privacy Collective s claims against us inadmissible and dismissed the case however this ruling was appealed by the Privacy Collective The appeal hearing took place in the Amsterdam Court of Appeal in February 2024 and the appellate court reversed the district court s judgment We have appealed that appellate decision to the Dutch Supreme Court We were also named as a defendant in a similar lawsuit brought in the UK which has subsequently been dismissed Although we believe we have a strong defense for these claims these or similar future claims could cause reputational harm to our brand or result in liability In addition a shift in consumers data privacy expectations or other social economic or political developments could impact the regulatory enforcement of privacy regulations which could require our cooperation and increase the cost of compliance with the imposed regulations
Furthermore the uncertain and shifting regulatory environment and trust climate may raise concerns regarding data privacy and cybersecurity which may cause our customers or our customers customers to resist providing the data necessary to allow our customers to use our services effectively In addition new products we develop or acquire in connection with changing events may expose us to liability or regulatory risk Even the perception that the privacy and security of personal information are not satisfactorily protected or do not meet regulatory requirements could inhibit sales of our products or services and could limit adoption of our cloud based solutions
Our customers and potential customers conduct business in a variety of industries including financial services the public sector healthcare and telecommunications Regulators in certain industries have adopted and may in the future adopt regulations or interpretive positions regarding the use of cloud computing AI services and other outsourced services The costs of compliance with and other burdens imposed by industry specific laws regulations and interpretive positions may limit our customers use and adoption of our services and reduce overall demand for our services Compliance with these regulations may also require us to devote greater resources to support certain customers which may increase costs and lengthen sales cycles For example some financial services regulators have imposed guidelines for use of cloud computing services that mandate specific controls or require financial services enterprises to obtain regulatory approval prior to outsourcing certain functions If we are unable to comply with these guidelines or controls or if our customers are unable to obtain regulatory approval to use our services where required our business may be harmed In addition an inability to satisfy the standards of certain voluntary third party certification bodies that our customers may expect such as an attestation of compliance with the Payment Card Industry Data Security Standards may have an adverse impact on our business and results Any inability in the future to achieve or maintain industry specific certifications or other requirements or standards relevant to our customers may harm our business and adversely affect our results
Further in some cases industry specific regionally specific or product specific laws regulations or interpretive positions may impact our ability as well as the ability of our customers partners and data providers to collect augment analyze use transfer and share personal and other information that is integral to certain services we provide The interpretation of many of these statutes regulations and rulings is evolving in the courts and administrative agencies and an inability to comply may have an adverse impact on our business and results This impact may be particularly acute in countries that have passed or are considering passing legislation that requires data to remain localized in country as this may impose financial costs on companies required to store data in jurisdictions not of their choosing and to use nonstandard operational processes that add complexity and are difficult and costly to integrate with global processes This is also true with respect to the global proliferation of laws regulating the financial services industry including its use of cloud services In Europe the Digital Operational Resilience Act DORA which aims to ensure the resilience of the EU financial sectors including through mandatory risk management incident reporting resilience testing and third party outsourcing restrictions went into effect in January 2025 The UK is advancing similar legislation and other countries may follow
Further countries and states are applying their data and consumer protection laws to AI and particularly generative AI and or are enacting or considering legal frameworks on AI such as the Utah Artificial Intelligence Policy Act the Colorado Artificial Intelligence Act and the draft CCPA regulations on automated decision making technology Any failure or perceived failure by us to comply with such requirements could have an adverse impact on our business
There are various statutes regulations and rulings relevant to direct email marketing and text messaging including the Telephone Consumer Protection Act TCPA and related Federal Communication Commission orders which impose significant restrictions on the ability to utilize telephone calls and text messages to mobile telephone numbers as a means of communication when the prior consent of the person being contacted has not been obtained We have been and may in the future be subject to one or more class action lawsuits as well as individual lawsuits containing allegations that one of our businesses or customers violated the TCPA A determination that we or our customers violated the TCPA or other communications based statutes could expose us to significant damage awards that could individually or in the aggregate materially harm our business In addition many jurisdictions across the world are currently considering or have already begun implementing changes to antitrust and competition laws regulations or interpretative positions to enhance competition in digital markets and address practices by certain digital platforms that they perceive to be anticompetitive These regulatory efforts could result in laws regulations or interpretative positions that may require us to change certain of our business practices undertake new compliance obligations or otherwise may have an adverse impact on our business and results
We are involved in various legal matters arising from the normal course of business activities These include claims suits government investigations and other proceedings involving alleged infringement of third party patents and other intellectual property rights as well as commercial corporate and securities labor and employment class actions wage and hour antitrust data privacy cybersecurity and other matters
The software and Internet industries are characterized by the existence of many patents trademarks trade secrets and copyrights and by frequent litigation based on allegations of infringement or other violations of intellectual property rights We have received in the past and may receive in the future communications from third parties including practicing entities and non practicing entities claiming that we have infringed their intellectual property rights We have also been and may in the future be sued by third parties for alleged infringement of their claimed proprietary rights Our technologies may be subject to injunction if they are found to infringe the rights of a third party or we may be required to pay damages or both Further many of our subscription agreements require us to indemnify our customers for third party intellectual property infringement claims which would increase the cost to us of an adverse ruling on such a claim
In addition we have in the past been and may in the future be sued by third parties who seek to target us for actions taken by our customers including through the use or misuse of our products For example we have been subject to allegations in legal proceedings that we should be liable for the use of certain of our products by third parties Although we believe we have a strong defense for these claims such claims could cause reputational harm to our brand or result in liability
Our exposure to risks associated with various claims may be increased as a result of acquisitions of other companies For example we are subject to ongoing securities class action litigation and related stockholder derivative claims brought against Slack that remain outstanding and as to which we may ultimately be subject to liability or settlement costs Additionally we may have a lower level of visibility into the development process with respect to intellectual property or the care taken to safeguard against infringement risks with respect to acquired companies or technologies In addition third parties have made claims in connection with our acquisitions and may do so in the future and they may also make infringement and similar or related claims after we have acquired technology that had not been asserted prior to our acquisition
The outcome of any claims or litigation regardless of the merits is inherently uncertain Any claims or lawsuits and the disposition of such claims and lawsuits whether through settlement or licensing discussions or litigation could be time consuming and expensive to resolve divert management attention from executing our business plan result in efforts to enjoin our activities lead to attempts on the part of other parties to pursue similar claims and in the case of intellectual property claims require us to change our technology change our business practices pay monetary damages or enter into short or long term royalty or licensing agreements
Any adverse determination or settlement could prevent us from offering our services to others could be material to our financial condition or cash flows or both or could otherwise adversely affect our operating results including our operating cash flow in a particular period In addition depending on the nature and timing of any such dispute an unfavorable resolution of a legal matter could materially affect our current or future results of operations or cash flows in a particular period
Any failure to obtain registration or protection of our intellectual property rights could impair our ability to protect our proprietary technology and our brand causing us to incur significant expenses and harm our business
If we fail to protect our intellectual property rights adequately our competitors may gain access to our technology affecting our brand causing us to incur significant expenses and harming our business Any of our patents trademarks or other intellectual property rights may be challenged by others or invalidated through administrative process or litigation While we have many U S patents and pending U S and international patent applications we may be unable to obtain patent protection for the technology covered in our patent applications or the patent protection may not be obtained quickly enough to meet our business needs In addition our existing patents and any patents issued in the future may not provide us with competitive
advantages or may be successfully challenged by third parties Similar uncertainty applies to our U S and international trademark registrations and applications Furthermore legal standards relating to the validity enforceability and scope of protection of intellectual property rights are uncertain and we also may face proposals to change the scope of protection for some intellectual property rights in the U S and elsewhere Additionally the intellectual property ownership and license rights including copyright surrounding AI technologies which we are increasingly building into our product offerings has not been fully addressed by U S courts or other federal or state laws or regulations and the use or adoption of AI technologies in our products and services may expose us to copyright infringement or other intellectual property misappropriation claims related to AI training or output Effective patent trademark copyright and trade secret protection may not be available to us in every country in which our services are available and legal changes and uncertainty in various countries intellectual property regimes may result in making conduct that we believe is lawful to be deemed violative of others rights The laws of some foreign countries may not be as protective of intellectual property rights as those in the U S and mechanisms for enforcement of intellectual property rights may be inadequate Also our involvement in standard setting activity our contribution to open source projects various competition law regimes or the need to obtain licenses from others may require us to license our intellectual property in certain circumstances Accordingly despite our efforts we may be unable to prevent third parties from using our intellectual property
We may be required to spend significant resources and expense to monitor and protect our intellectual property rights We may initiate claims or litigation against third parties for infringement of our proprietary rights or to establish the validity of our proprietary rights If we fail to protect our intellectual property rights it could impact our ability to protect our technology and brand Furthermore any litigation whether or not it is resolved in our favor could result in significant expense to us cause us to divert time and resources from our core business and harm our business
Contracting with federal state local and foreign governments or state owned entities subjects us to various procurement regulations and other requirements relating to these contracts formation administration and performance and how we engage with government officials We are from time to time subject to audits inquiries and investigations relating to our government contracts which may result in adverse perceptions of our business reductions in utilization of our services or termination of our contracts without cause and at any time Additionally any violations could result in various civil and criminal penalties and administrative sanctions including termination of contracts refunding or suspending of payments forfeiture of profits payment of fines and suspension or debarment from future government business as well as reputational harm Additionally our contracting with certain government entities may result in negative publicity or reputational harm Any of these risks related to contracting with governmental entities could adversely impact our future sales costs of doing business and operating results
We are subject to governmental sanctions and export and import controls that could impair our ability to compete in international markets and may subject us to liability if we are not in full compliance with applicable laws
Our solutions are subject to trade control laws and regulations where we conduct our business activities including the U S Commerce Department s Export Administration Regulations U S customs regulations U S supply chain regulations and various economic and trade sanctions regulations administered by the U S Treasury Department s Office of Foreign Assets Control If we fail to comply with applicable trade control laws and regulations we and certain of our employees could be subject to substantial civil or criminal penalties including the possible loss of trade privileges fines which may be imposed on us and responsible employees or managers and in extreme cases the incarceration of responsible employees or managers Obtaining necessary authorizations including any required licenses may be time consuming requires expenditure of corporate resources is not guaranteed and may result in the delay or loss of sales opportunities or the ability to realize value from certain acquisitions or engagements Acquisitions may also subject us to successor liability and other integration compliance risks Furthermore export control and economic sanctions laws and regulations may prohibit or limit the transfer of certain products and services to embargoed or sanctioned countries governments and parties We can provide no assurance that any of the precautions we take to prevent our solutions from being provisioned or provided to sanctions targets in violation of applicable regulations will be effective and accordingly our solutions could be provisioned or provided to those targets including by our resellers or other third parties which could have negative consequences for our business including government investigations penalties and reputational harm Changes in our solutions or trade control laws and regulations may create delays in the introduction sale and deployment of our solutions in international markets or prevent the export or import of our solutions to certain countries governments or persons altogether Any decreased use of our solutions or limitation on our ability to export or sell our solutions may adversely affect our business financial condition and results of operations Sanctions and export and import control regulations in the United States and other countries are subject to change and uncertainty including as a result of rapidly evolving technology increased government regulation of AI and cloud service solutions and geopolitical developments such as events affecting relations between the United States and China multi jurisdictional sanctions on Russia the war in Ukraine and regional conflict in the Middle East Regulators in the United States and elsewhere have signaled an increased emphasis on sanctions and export control enforcement including efforts to combat diversion of services to sanctioned countries and parties several recent high profile enforcement actions and increased pressure for companies to self disclose potential violations
Because we generally recognize revenue from subscriptions for our services over the term of the subscription downturns or upturns in new business may not be immediately reflected in our operating results
We generally recognize revenue from customers ratably over the terms of their subscription and support agreements which are typically 12 to 36 months As a result most of the revenue we report in each quarter is the result of subscription and support agreements entered into during previous quarters Consequently a decline in new or renewed subscriptions in any one quarter may not be reflected in our revenue results for that quarter but will negatively impact our revenue in future quarters Accordingly the effect of significant downturns in sales and market acceptance of our services and changes in our attrition rate may not be fully reflected in our results of operations until future periods Our subscription model also makes it difficult for us to rapidly increase our revenue through additional sales in any period as revenue from new customers must be recognized over the applicable subscription and support term
If we experience significant fluctuations in our rate of anticipated growth and fail to balance our expenses with our revenue forecasts our business could be harmed and the market price of our common stock could decline
Due to the unpredictability of future general economic and financial market conditions including from the global economic impact of ongoing conflicts such as the war in Ukraine and the regional conflict in the Middle East the pace of change and innovation in enterprise cloud computing services the impact of foreign currency exchange rate fluctuations uncertainty regarding changes in trade policy changing interest rates and inflation the growing complexity of our business including the use of multiple pricing and packaging models and the increasing amount of revenue from term software license sales and our increasing focus on enterprise cloud computing services we may not be able to realize our projected revenue growth plans We plan our expense and investment levels based on estimates of future revenue and future anticipated rate of growth We may not be able to adjust our spending appropriately if the addition of new subscriptions or the renewals of existing subscriptions fall short of our expectations and unanticipated events may cause us to incur expenses beyond what we anticipated A portion of our expenses may also be fixed in nature for some minimum amount of time such as with costs capitalized to obtain revenue contracts data center and infrastructure service contracts or office leases so it may not be possible to reduce costs in a timely manner or at all without the payment of fees to exit certain obligations early Additionally if sales through indirect channels or for consumption based product offerings increase this may lead to greater difficulty in forecasting revenue and anticipated rate of growth As a result our revenues operating results and cash flows may fluctuate significantly on a quarterly basis and revenue growth rates may not be sustainable and may decline in the future If we are not able to provide continued operating margin expansion our business could be harmed and the market price of our common stock could decline
We are subject to income taxes in the United States and various other jurisdictions Significant judgment is often required in the determination of our worldwide provision for income taxes Our effective tax rate could be impacted by changes in our earnings and losses in countries with differing statutory tax rates changes in operations changes in non deductible expenses changes in the tax effects of stock based compensation expense changes in the valuation of deferred tax assets and liabilities and our ability to utilize them the applicability of withholding taxes effects from acquisitions and changes in accounting principles and tax laws Any changes ambiguity or uncertainty in taxing jurisdictions administrative interpretations decisions policies and positions could also materially impact our income tax liabilities
We may also be subject to additional tax liabilities and penalties due to changes in non income based taxes resulting from changes in federal state local or international tax laws changes in taxing jurisdictions administrative interpretations decisions policies and positions results of tax examinations settlements or judicial decisions changes in accounting principles or changes to our business operations including as a result of acquisitions Any resulting increase in our tax obligation or cash taxes paid could adversely affect our cash flows and financial results
We are also subject to tax examinations or engaged in alternative resolutions in multiple jurisdictions While we regularly evaluate new information that may change our judgment resulting in recognition derecognition or changes in measurement of a tax position taken there can be no assurance that the final determination of any examinations will not have an adverse effect on our operating results or financial position
As our business continues to grow increasing our brand recognition and profitability we may be subject to increased scrutiny and corresponding tax disputes which may impact our cash flows and financial results Furthermore our growing prominence may bring public attention to our tax profile and if perceived negatively may cause brand or reputational harm
Global tax developments applicable to multinational businesses may have a material impact to our business cash flows or financial results Such developments for example may include certain provisions introduced by certain Organization for Economic Co operation and Development s proposals including the implementation of the global minimum tax under the Pillar Two model rules and the European Commission s and certain major jurisdictions heightened interest in and taxation of
companies participating in the digital economy Furthermore governments responses to macroeconomic factors and tax revenue needs may lead to tax rule changes that could materially and adversely affect our cash flows and financial results
We are exposed to fluctuations in currency exchange rates that have in the past and could in the future negatively impact our financial results and cash flows from changes in the value of the U S Dollar versus local currencies
We primarily conduct our business in the following regions the Americas Europe and Asia Pacific The expanding global scope of our business exposes us to risk of fluctuations in foreign currency markets including in emerging markets This exposure is the result of selling in multiple currencies growth in our international investments additional headcount in foreign locations and operating in countries where the functional currency is the local currency Specifically our results of operations and cash flows are subject to currency fluctuations primarily in Euro British Pound Sterling Japanese Yen Canadian Dollar Australian Dollar Brazilian Real and Indian Rupee against the U S Dollar These exposures may change over time as business practices evolve economic and political conditions change and evolving tax regulations come into effect The fluctuations of currencies in which we conduct business can both increase and decrease our overall revenue and expenses for any given fiscal period Furthermore fluctuations in foreign currency exchange rates combined with the seasonality of our business could affect our ability to accurately predict our future results and earnings
Additionally global events as well as geopolitical developments including the war in Ukraine and regional conflict in the Middle East fluctuating commodity prices uncertainty regarding changes in trade policy and inflation have caused and may in the future cause global economic uncertainty and uncertainty about the interest rate environment which has and could in the future amplify the volatility of currency fluctuations Although we attempt to mitigate some of this volatility and related risks through foreign currency hedging our hedging activities are limited in scope and may not effectively offset the adverse financial impacts that may result from unfavorable movements in foreign currency exchange rates which could adversely impact our financial condition or results of operations
As of January 31 2025 we had a substantial level of outstanding debt including our Senior Notes We are also party to the Revolving Loan Credit Agreement which provides for our 5 0 billion Credit Facility Although there were no outstanding borrowings under the Credit Facility as of January 31 2025 we may use the proceeds of future borrowings under the Credit Facility for general corporate purposes
In addition to the outstanding and potential debt obligations above we have also recorded substantial liabilities associated with noncancellable future payments on our long term lease agreements We also have significant other contractual commitments including leases that have not yet commenced and commitments with infrastructure service providers which are not reflected on our consolidated balance sheets
Our ability to meet our expenses and debt obligations will depend on our future performance which will be affected by financial business economic regulatory and other factors We will not be able to control many of these factors such as economic conditions and governmental regulations Further our operations may not generate sufficient cash to enable us to service our debt or contractual obligations resulting from our leases If we fail to make a payment on our debt we could be in default on such debt If we are at any time unable to generate sufficient cash flows from operations to service our indebtedness when payment is due we may be required to attempt to renegotiate the terms of the instruments relating to the indebtedness seek to refinance all or a portion of the indebtedness or obtain additional financing There can be no assurance that we would be able to successfully renegotiate such terms that any such refinancing would be possible or that any additional financing could be obtained on terms that are favorable or acceptable to us Any new or refinanced debt may be subject to substantially higher interest rates which could adversely affect our financial condition and impact our business
In addition adverse changes by any rating agency to our credit ratings may negatively impact our reputation the value and liquidity of both our debt and equity securities as well as the potential costs associated with a refinancing of our debt Downgrades in our credit ratings could also affect the terms of any such refinancing or future financing or restrict our ability to obtain additional financing in the future
The indentures governing our Senior Notes and the Revolving Loan Credit Agreement impose restrictions on us and require us to maintain compliance with specified covenants Our ability to comply with these covenants may be affected by events beyond our control A failure to comply with the covenants and other provisions of our outstanding debt could result in
events of default under such instruments which could permit acceleration of all of our debt and borrowings Any required repayment of our debt as a result of a fundamental change or other acceleration would lower our current cash on hand such that we would not have those funds available for use in our business
Lease accounting guidance requires that we record a liability for operating lease activity on our consolidated balance sheet which increases both our assets and liabilities and therefore may impact our ability to obtain the necessary financing from financial institutions at commercially viable rates or at all Our lease terms may include options to extend or terminate the lease Periods beyond the noncancellable term of the lease are included in the measurement of the lease liability and associated asset only when it is reasonably certain that we will exercise the associated extension option or waive the termination option We reassess the lease term if and when a significant event or change in circumstances occurs within our control The potential impact of these options to extend could be material to our financial position and financial results
Our quarterly results are likely to fluctuate Fluctuations have occurred due to known and unknown risks such as the global economic impact of ongoing conflicts including the war in Ukraine and the regional conflict in the Middle East and uncertainty about the interest rate environment In addition our fiscal fourth quarter has historically been our strongest quarter for new business and renewals and the year over year compounding effect of this seasonality in billing patterns and overall new business and renewal activity causes the value of invoices that we generate in the fourth quarter to continually increase in proportion to our billings in the other three quarters of our fiscal year As a result our fiscal first quarter has typically in the past been our largest collections and operating cash flow quarter
general economic or geopolitical conditions including the impacts of the war in Ukraine and the regional conflict in the Middle East financial market conditions uncertainty regarding the imposition of and changes in trade policies including trade wars tariffs or other trade restrictions or the threat of such actions and increasing costs of operation
income tax effects resulting from but not limited to tax law changes court decisions on tax matters global tax developments applicable to multinational corporations changes in operations or business structures and acquisition activity
Many of these factors are outside of our control and the occurrence of one or more of them might negatively and materially impact our operating results If we fail to meet or exceed operating results expectations or if securities analysts and investors have estimates and forecasts of our future performance that are unrealistic or that we do not meet the market price of our common stock could decline In addition if one or more of the securities analysts who cover us adversely change their recommendations regarding our stock the market price of our common stock could decline
The trading prices of the securities of technology companies have historically been highly volatile Accordingly the market price of our common stock has been and is likely to continue to be subject to wide fluctuations Factors affecting the market price of our common stock include
our ability to meet or exceed forward looking guidance we have given or to meet or exceed the expectations of investors analysts or others our ability to give forward looking guidance consistent with past practices
announcements or rumors of technological innovations new services or service enhancements strategic alliances mergers or other strategic acquisitions or significant agreements by us or within our industry
trading activity or positions by a limited number of stockholders who together beneficially own a significant portion of our outstanding common stock as well as other institutional or activist investors
our ability to execute on our Share Repurchase Program as planned including whether we meet internal or external expectations around the timing or price of share repurchases and any changes to the program
In addition if the market for technology stocks or the greater securities market in general experience uneven investor confidence the market price of our common stock has and could in the future decline for reasons unrelated to us including as a reaction to events that affect other companies within or outside our industry Some companies that have experienced volatility
in the trading price of their stock have been the subject of securities class action litigation such as the securities litigation against Slack that was brought before our acquisition Such litigation whether against us or an acquired subsidiary could result in substantial costs and a diversion of management s attention and resources and any liability resulting from or the settlement of such litigation could result in material adverse impacts to our operating cash flows or results of operations for a given period
Provisions in our amended and restated certificate of incorporation and bylaws and Delaware law might discourage delay or prevent a change of control of the Company or changes in our management and therefore depress the market price of our common stock
Our amended and restated certificate of incorporation and bylaws contain provisions that could depress the market price of our common stock by acting to discourage delay or prevent a change in control of the Company or changes in our management that the stockholders of the Company may deem advantageous These provisions among other things
In addition Section 203 of the Delaware General Corporation Law may discourage delay or prevent a change in control of our company Section 203 imposes certain restrictions on merger business combinations and other transactions between us and holders of 15 percent or more of our common stock
Whether we continue to pay cash dividends as well as the rate at which we pay cash dividends in the future is subject to continued capital availability general economic and market conditions applicable laws and agreements and our Board continuing to determine that the declaration of dividends is in the best interests of the Company and its stockholders The declaration and payment of any dividend may be discontinued at any time and dividend amounts may be reduced at any time A discontinuation of or reduction in our dividend payments could have a negative effect on our stock price
Our overall performance depends in part on worldwide economic and geopolitical conditions The United States and other key international economies have experienced significant economic and market downturns in the past and are likely to experience additional cyclical downturns from time to time in which economic activity is impacted by falling demand for a variety of goods and services restricted credit poor liquidity reduced corporate profitability volatility in credit equity and foreign exchange markets inflation bankruptcies and overall uncertainty with respect to the economy These economic conditions can arise suddenly and the full impact of such conditions can be difficult to predict In addition geopolitical and domestic political developments such as uncertainty regarding changes in trade policy and other events beyond our control such as war in Ukraine and the regional conflict in the Middle East have increased and may continue to increase levels of political and economic unpredictability globally and the volatility of global financial markets Moreover these conditions have affected and may continue to affect the rate of IT spending could adversely affect our customers ability or willingness to attend our events or to purchase our enterprise cloud computing services have delayed and may delay customer purchasing decisions and have reduced and may in the future reduce the value and duration of customer subscription contracts or cause our customers to seek to modify their existing subscription contracts All of these risks and conditions could materially adversely affect our future sales attrition rates and operating results
Geopolitical crises natural disasters or other catastrophic events have in the past and may in the future cause damage or disruption to our people operations international commerce and the global economy and thus could have a strong negative effect on us Our business operations the business operations of third party providers or suppliers that we rely on to conduct our business and the business operations of our customers are subject to interruption by geopolitical crises natural disasters fire power or water shutoffs or shortages telecommunications failures terrorist attacks acts of violence political and or civil unrest acts of war or other military actions actual or threatened public health emergencies and other events beyond our control
For example the occurrence of regional conflicts epidemics or a global pandemic have in the past and may in the future materially affect how we and our customers operate our businesses as well as our operating results and cash flows Although we maintain crisis management and disaster response plans such events could make it difficult or impossible for us to deliver our services to our customers and could decrease demand for our services Our corporate headquarters and a significant portion of our personnel research and development activities and other critical business operations are located near major seismic faults in the San Francisco Bay Area Because we do not carry earthquake insurance for direct earthquake related losses and significant recovery time could be required to resume operations our financial condition and operating results could be materially and adversely affected in the event of a major earthquake or catastrophic event and the adverse effects of any such catastrophic event would be exacerbated if experienced at the same time as another unexpected and adverse event
While we seek to mitigate our business risks associated with climate change by establishing appropriate environmental programs and partnering with organizations who are also focused on mitigating their own climate related risks there are inherent climate related risks where our business is conducted Any of our primary locations may be vulnerable to the adverse effects of climate change For example our offices globally have historically experienced and are projected to continue to experience climate related events at an increasing frequency including drought water scarcity heat waves cold waves flooding wildfires and resultant air quality impacts and power shutoffs associated with climate related events These events in turn have impacts on inflation risks the cost and availability of insurance food security water security including for water availability for data center cooling energy security and on our employees health productivity and well being Furthermore it is more difficult to mitigate the impact of these events on our employees working remotely or at client sites Changing market dynamics global policy developments and the increasing frequency and impact of extreme weather events on critical infrastructure in the United States and elsewhere have the potential to disrupt our business the business of companies we invest in the business of third party providers or suppliers that we rely on to conduct our business and the business of our customers and may cause us to experience higher attrition losses and additional costs to maintain or resume operations In particular climate related events energy market volatility and power grid disruptions may increase the operational costs related to inputs across our value chain including for data centers Perceived associations with data centers growing energy demand or data center AI related changes to existing environmental pledges in certain jurisdictions may also result in increased targeting of our sites and operations by activists Additionally failure to uphold meet or make timely forward progress against our public commitments and goals related to climate action could adversely impact the resilience of our business to the impacts of climate related events
As a global leader in CRM technology our services involve the storage and transmission of our customers and our customers customers data As such we have in the past been and likely will in the future be the target of cybersecurity threats and other efforts to breach or compromise our services and underlying infrastructure With trust as our foremost value and the foundation of everything we do we recognize the importance of maintaining the safety and security of our systems and data
Management is responsible for the day to day administration of the Company s cybersecurity policies processes practices and risk management The Board including through its dedicated Cybersecurity and Privacy committee the Committee oversees the various cybersecurity risks facing the Company and the Company s efforts to mitigate those risks
During the last fiscal year we did not identify any risks from cybersecurity threats including as a result of any previous cybersecurity incidents that materially affected the Company including its business strategy results of operations or financial condition However we face ongoing and increasing cybersecurity risks including from bad actors that are becoming more sophisticated and effective over time as well as a result of potential defects or disruptions in our or our customers services If realized these risks are reasonably likely to materially affect the Company Additional information on the cybersecurity risks we face is discussed in Part I Items 1A C Risk Factors
When a company purchases our service offerings they gain a trusted digital advisor who will work together with them in their efforts to protect their data We aim to provide a secure and compliant enterprise cloud platform and we work to build trust and in depth defense into all of our systems Among other things we employ an experienced team of cybersecurity professionals engage in community events and offer free online cybersecurity incident prevention training to help enable our customers to focus on their business knowing their data is safe and accessible as needed
We seek to address material cybersecurity risks through a company wide approach that assesses ranks and prioritizes cybersecurity threats vulnerabilities and issues as they are identified to maintain the confidentiality integrity and availability of our information systems and the information that we collect and store The Company s cybersecurity policies standards processes and practices are informed by recognized frameworks established by the National Institute of Standards and Technology the International Organization for Standardization and an array of other applicable standards setting bodies which are integrated into a broader risk management framework and related processes We also hold various security related industry certifications and attestations that have been validated by external auditors including SOC 1 SOC 2 SOC 3 ISO 27001 27017 and 27018 CSA STAR and others
Leveraging threat intelligence and other signals the Company undergoes periodic testing audits and reviews of its policies standards processes and practices to identify assess and address cybersecurity risks and events The Company also undergoes routine internal and external penetration testing The results of such tests and assessments are evaluated by management and periodically reported to the Committee The Company further adjusts its cybersecurity policies standards processes and practices based on these results and evolving industry practices The Company also publishes attestations of its various certifications audits and penetration tests on its global compliance webpage
As mentioned above the Board established the Committee to provide dedicated oversight of cybersecurity related management strategy initiatives risks threats and remediation activities The Committee receives regular presentations reports and updates from the Company s Chief Trust Officer CTrO and other members of management on developments regarding the Company s cybersecurity program broader cybersecurity trends evolving industry standards the threat environment and other topics After each quarterly meeting of the Committee the Board receives a report from the Chair of the Committee with an update on the Company s oversight of cybersecurity risks and mitigation efforts The Committee also receives periodic reports from an experienced outside consultant with information security expertise providing insights on key focus areas to aid in the Committee s oversight of the Company s cybersecurity program
The Company s processes also allow for the Board and the Committee to be informed of key cybersecurity risks outside the regular reporting schedule While regular meetings of the Committee are scheduled on a quarterly cadence the Committee is authorized to meet with management or individual directors at any time it deems appropriate to discuss matters relevant to the Committee In between meetings the Board and the Committee receive information regarding relevant cybersecurity risks
The CTrO reporting to the Company s Chief Engineering Customer Success Officer C E is responsible for designing and implementing a security program and strategy based on the mandate provided by the Board and senior management The CTrO has extensive experience in the management of cybersecurity risk programs having served in various leadership roles in information technology and information security for over 15 years including serving as the Chief Security Officer of two other large public technology companies He also holds an undergraduate and master s degree in computer science We believe the Company s business leaders including our CEO CFO C E and CLO who have experience managing cybersecurity risk at the Company and at similar companies have the appropriate expertise background and depth of experience to manage risks arising from cybersecurity threats
The CTrO in coordination with other members of senior management works collaboratively across the Company to implement a program designed to help protect the Company s information systems from cybersecurity threats and to promptly respond to cybersecurity incidents in accordance with the Company s incident response and recovery plans To facilitate the success of the Company s cybersecurity program cross functional teams throughout the Company are tasked with addressing cybersecurity threats and responding to cybersecurity incidents Through ongoing communications with these teams the CTrO and senior management are able to be informed promptly about and monitor the prevention detection investigation mitigation and remediation of cybersecurity threats These teams are expected to operate pursuant to documented plans and playbooks that include processes for escalation of incidents to leadership and to the Committee and Board as appropriate based on the severity level of a cybersecurity incident In addition the Company periodically consults with outside advisors and experts to assist with assessing identifying and managing cybersecurity risks including to anticipate future threats and trends and their impact on the Company s risk management environment
The Company has implemented a robust cross functional approach to identifying assessing and managing cybersecurity threats and risks The Company s program includes controls and procedures designed to properly identify classify and escalate cybersecurity risks and incidents to provide management with visibility and prioritization of risk mitigation efforts and to publicly report material cybersecurity incidents when appropriate
The Company maintains a Threat Intelligence team focused on profiling intelligence collection and threat analysis supporting the Company s ongoing efforts to identify assess and manage cybersecurity threats The team s input supports both near term response to cybersecurity events and long term strategic planning and development of the Company s cybersecurity risk management framework
The Company implements technical safeguards that are designed to protect both the Company s service offerings and other information systems we control from cybersecurity threats including firewalls intrusion prevention and detection systems anti malware functionality vulnerability management encryption processes and access controls all of which are periodically evaluated and improved through risk and control assessments and in response to cybersecurity threat intelligence as well as outside audits and certifications
The Company has established and maintains incident response business continuity and disaster recovery plans designed to address the Company s response to a cybersecurity incident including the public disclosure and reporting of material incidents in a timely manner These plans and procedures serve to guide and document a rigorous incident response program that reflects the roles of an array of stakeholders including personnel providing technical operational engineering legal and other perspectives across the Company The Company conducts regular tabletop exercises involving multiple operational teams including senior management to test these plans and to familiarize personnel with their roles in a response scenario
The Company maintains a risk based approach to identifying and overseeing cybersecurity threats presented by certain third parties including vendors service providers and other external users of the Company s systems as well as the systems of third parties that could adversely impact our business in the event of a significant cybersecurity incident affecting those third party systems
The Company regularly provides employee training on security related duties and responsibilities including knowledge about how to recognize cybersecurity incidents and how to proceed if an actual or suspected incident should occur This training is mandatory for employees across the Company and is intended to provide the Company s employees with effective tools to address cybersecurity threats and to communicate the Company s evolving information security policies standards processes and practices The Company maintains several
As of January 31 2025 our executive and principal offices for sales marketing professional services development and administration consisted of approximately 0 9 million square feet of leased and owned property in San Francisco Excluded from this amount is approximately 2 1 million square feet of leased and owned property in San Francisco that is currently leased to others or available for lease
We also lease office space for our operations in various locations throughout the United States as well as office space in a number of countries in Europe North America Asia South America Africa and Australia
We believe that our existing facilities and offices are adequate to meet our current requirements If we require additional space we believe that we will be able to obtain such space on acceptable commercially reasonable terms
We evaluate all claims and lawsuits with respect to their potential merits our potential defenses and counterclaims settlement or litigation potential and the expected effect on us Our technologies may be subject to an injunction if they are found to infringe the rights of a third party In addition many of our subscription agreements require us to indemnify our customers for third party intellectual property infringement claims which could increase the cost to us of an adverse ruling on such a claim
The outcome of any claims or litigation regardless of the merits is inherently uncertain Any claims and other lawsuits and the disposition of such claims and lawsuits whether through settlement or litigation could be time consuming and expensive to resolve divert our attention from executing our business plan result in efforts to enjoin our activities lead to attempts by third parties to seek similar claims and in the case of intellectual property claims require us to change our technology change our business practices pay monetary damages or enter into short or long term royalty or licensing agreements
is Chair of the Board Chief Executive Officer and co Founder of Salesforce and a pioneer of cloud computing Mr Benioff has served as Chief Executive Officer since 2001 and under his leadership Salesforce has become the 1 provider of CRM software globally Mr Benioff was named Innovator of the Decade by Forbes and recognized as one of the World s 50 Greatest Leaders by Fortune and 10 Best Performing CEOs by Harvard Business Review As a member of the World Economic Forum WEF Board of Trustees Mr Benioff serves as the inaugural chair of WEF s Forum Center for the Fourth Industrial Revolution in San Francisco Mr Benioff currently serves as Chair of the Salesforce Foundation Mr Benioff
has served as a Director since August 2018 and as Chief Technology Officer of Slack since January 2024 Mr Harris co founded Salesforce in February 1999 and has served in senior technical positions since inception including Chief Technology Officer from September 2016 to January 2024 and Executive Vice President Technology from December 2004 to February 2013 Prior to Salesforce Mr Harris co founded Left Coast Software a Java consulting firm and served as its Vice President from October 1996 to February 1999 Mr Harris received his B A in English Literature from Middlebury College
has served as our President and Chief Revenue Officer since August 2023 Prior to rejoining Salesforce Mr Milano served as Co Owner and Chief Revenue Officer at Celonis a German data processing company from April 2020 to July 2023 Previously Mr Milano served in various international sales leadership roles at Salesforce from 2011 to 2020 including President International EMEA APAC and LACA from August 2018 to March 2020 Prior to that Mr Milano held various leadership positions at Oracle Corporation i2 Technologies Telefónica and McKinsey Company Mr Milano received his B S and M S E in Electrical Engineering from the Polytechnic University of Catalonia and M B A from the Sloan School of Management at the Massachusetts Institute of Technology
has served as our President and Chief Operating Officer since August 2022 Mr Millham will transition from these roles to serve as an advisor to the Company effective March 21 2025 Mr Millham has been with Salesforce since its inception in 1999 most recently serving as Chief Customer Success Officer and Chief Operating Officer Global Distribution from February 2022 to August 2022 From February 2021 to February 2022 he served as President Customer Success Group and Chief Operating Officer Worldwide Distribution From August 2018 to February 2021 Mr Millham served as President Customer Success Group From June 2017 to August 2018 Mr Millham served as Executive Vice President Americas Commercial and B to C Sales Global Strategy Previously Mr Millham served in various leadership roles in business development account management and sales Mr Millham received his B A from the University of California Berkeley
has served as our President and Chief Legal Officer since July 2023 He also serves as Salesforce s Corporate Secretary and oversees Salesforce s global legal and corporate affairs organization including government affairs and the office of global governance integrity ethics and compliance Prior to joining Salesforce Mr Niles was a Partner at Wachtell Lipton Rosen Katz where he practiced law from September 2006 to July 2023 Mr Niles received his B S B A and B S in Finance Economics and Decision Information Sciences respectively from the University of Maryland and J D from Harvard Law School
has served as our Chief Accounting Officer since September 2021 Prior to joining Salesforce Mr Reddy served in a variety of corporate finance leadership roles at McKesson Corporation a pharmaceutical distribution company from 2013 to 2021 including Senior Vice President Controller and Chief Accounting Officer from July 2018 to September 2021 Senior Vice President Assistant Controller from June 2017 to July 2018 Senior Vice President McKesson Technology Solutions Finance and Accounting from March 2017 to June 2017 and Vice President Controller of McKesson Technology Solutions from December 2013 to February 2017 Mr Reddy is a Certified Public Accountant and received his B B A from Georgia State University and M B A from Emory University
has served as our President and Chief Product Impact Officer since February 2025 Prior to this he served as our President and Chief Product Officer from February 2021 to 2025 and as Chief Executive Officer of Salesforce Industries from June 2020 to February 2021 Mr Schmaier joined Salesforce through the acquisition of Vlocity Inc an industry specific cloud software company where he was co founder and served as Chief Executive Officer from March 2014 to June 2020 Previously Mr Schmaier served in various leadership roles including as Chief Operating Officer and Strategic Advisory Board Member at C3 ai from 2009 to 2014 and as Executive Vice President and Founding Team Executive at Siebel Systems from 1994 to 2006 Mr Schmaier received his B S in Mechanical Engineering from the Rensselaer Institute and M B A from Harvard Business School
has served as our President and Chief Engineering Customer Success Officer since February 2025 Prior to this he served as our President and Chief Engineering Officer from December 2019 to February 2025 President Technology from June 2018 to December 2019 Executive Vice President Engineering from March 2014 to June 2018 and Senior Vice President Engineering from May 2012 to February 2014 Prior to Salesforce Mr Tallapragada served as Senior Vice President at Oracle Corporation from April 2011 to June 2012 and as Senior Vice President at SAP Labs from February 2009 to April 2011 Previously Mr Tallapragada held various technical management roles at Oracle Infosys and Asian Paints Mr Tallapragada currently serves on the Board of Directors of GoDaddy Inc Mr Tallapragada received his master s degree from the School of Human Resources at XLRI Jamshedpur and B T in Computer Science from the National Institute of Technology Warangal
has served as our President and Chief Financial Officer since February 2021 Ms Weaver will transition from these roles to serve as Special Advisor to the Chief Executive Officer effective March 21 2025 Prior to this she served as our President and Chief Legal Officer from January 2020 to January 2021 President Legal Corporate Affairs and General
Counsel from February 2017 to January 2020 Executive Vice President and General Counsel from July 2015 to February 2017 and Senior Vice President and General Counsel from October 2013 to July 2015 Prior to Salesforce Ms Weaver served as Executive Vice President and General Counsel at Univar Inc a global chemical distributor from December 2010 to June 2013 and Senior Vice President and Deputy General Counsel at Expedia Inc an online travel services provider from July 2005 to December 2010 Previously Ms Weaver practiced law at Cravath Swaine Moore LLP and Perkins Coie LLP She also served as a clerk on the U S Court of Appeals Ninth Circuit and as a legislative assistant to a member of the Hong Kong Legislative Council Ms Weaver currently serves on the Board of Directors of McDonald s Corporation and Habitat for Humanity International Ms Weaver received her B A in Political Science from Wellesley College and J D from Harvard Law School
Prior to the fiscal year ended January 31 2025 we had never declared or paid any cash dividends on our common stock For the fiscal year ended January 31 2025 we announced the following dividends in millions except dividend per share
The payment of future cash dividends is subject to future declaration by our Board which will be based in part on continued capital availability general economic and market conditions applicable laws and agreements and our Board continuing to determine that the declaration of dividends is in the best interests of the Company and its stockholders
As of January 31 2025 there were 369 registered stockholders of record of our common stock including The Depository Trust Company which holds shares of Salesforce common stock on behalf of an indeterminate number of beneficial owners
The graph below compares the cumulative total stockholder return on our common stock with the cumulative total return on the Standard Poor s 500 Index S P 500 Index Nasdaq Computer Data Processing Index Nasdaq Computer the Nasdaq 100 Index and the Dow Jones Industrial Average for each of the last five fiscal years ended January 31 2025 assuming an initial investment of 100 Data for the S P 500 Index Nasdaq Computer Nasdaq 100 Index and Dow Jones Industrial Average assume reinvestment of dividends
In connection with the Company s acquisition of Zoomin Software Ltd on November 1 2024 the Company issued 116 132 shares of its common stock to certain former stockholders of Zoomin Software Ltd that will vest over time In connection with the Company s acquisition of Own Company Ltd on November 18 2024 the Company issued 43 682 shares of its common stock to certain former stockholders of Own Company Ltd that will vest over time These issuances were made in reliance on one or more of the following exemptions or exclusions from the registration requirements of the Securities Act Section 4 a 2 of the Securities Act Regulation D promulgated under the Securities Act and Regulation S promulgated under the Securities Act
1 In August 2022 the Board of Directors authorized a program to repurchase up to 10 0 billion of the Company s common stock the Share Repurchase Program In February 2023 the Board of Directors authorized an additional 10 0 billion in repurchases under the Share Repurchase Program for an aggregate total authorized of 20 0 billion In February
2024 the Board of Directors authorized an additional 10 0 billion in repurchases under the Share Repurchase Program for an aggregate total authorized of 30 0 billion The Share Repurchase Program does not have a fixed expiration date and does not obligate the Company to acquire any specific number of shares Under the Share Repurchase Program shares of common stock may be repurchased using a variety of methods including privately negotiated and or open market transactions including under plans complying with Rule 10b5 1 under the Exchange Act as part of accelerated share repurchases and other methods The timing manner price and amount of any repurchases are determined by the Company in its discretion and depend on a variety of factors including legal requirements price and economic and market conditions All repurchases disclosed in the table were made pursuant to the publicly announced Share Repurchase Program
The following discussion contains forward looking statements including without limitation our expectations and statements regarding our outlook and future revenues expenses results of operations liquidity plans strategies and management objectives and any assumptions underlying any of the foregoing Our actual results may differ significantly from those projected in the forward looking statements Our forward looking statements and factors that might cause future actual results to differ materially from our recent results or those projected in the forward looking statements include but are not limited to those discussed in the section titled Forward Looking Information and Risk Factors of this Annual Report on Form 10 K Except as required by law we assume no obligation to update the forward looking statements or our risk factors for any reason
The following section generally discusses fiscal 2025 and 2024 items and year to year comparisons between fiscal 2025 and 2024 as well as certain fiscal 2023 items Discussions of fiscal 2023 items and year to year comparisons between fiscal 2024 and 2023 that are not included in this Form 10 K can be found in Management s Discussion and Analysis of Financial Condition and Results of Operations in Part II Item 7 of our Annual Report on Form 10 K for the fiscal year ended January 31 2024
Salesforce is a global leader in customer relationship management CRM technology enabling companies of every size and industry to connect with their customers through the power of data artificial intelligence AI CRM and trust Founded in 1999 we bring humans together with AI agents to drive customer success on one deeply unified platform
Our platform unites sales service marketing commerce and IT teams by connecting customer data across systems apps and devices to create a complete view of customers With this single source of customer truth and integrated AI teams can be more responsive productive and efficient deliver intelligent personalized experiences across every channel and increase productivity During the third quarter of fiscal 2025 we introduced Agentforce a new layer of our trusted platform that enables companies to build and deploy AI agents that can respond to inputs make decisions and take action autonomously across business functions Agentforce includes a suite of customizable agents for use across sales service marketing and commerce We continue to invest for growth including investing in generative and agentic AI across all products which we believe will change how our customers help their customers and continuously look to expand our leadership role in the cloud computing industry
We continue to focus on several key growth levers including driving multiple service offering adoption increasing our penetration with enterprise and international customers and expanding our industry specific reach with more vertical software solutions These growth levers often require a more sophisticated go to market approach and as a result we may incur additional costs upfront to obtain new customers and expand our relationships with existing customers including additional sales and marketing expenses specific to subscription and support revenue As a result we have seen that customers with many of these characteristics drive higher annual revenues and have lower attrition rates than our company average
In addition to our focus on top line growth levers we are also focused on reducing our operating expenses to improve our operating margin For example in January 2023 we announced a restructuring plan intended to reduce operating costs improve operating margins and continue advancing our ongoing commitment to profitable growth which included a reduction of our workforce by approximately ten percent and office space reductions within certain markets The employee actions were substantially completed in fiscal 2024 and the real estate actions are expected to be fully complete in fiscal 2026 In addition we continued to evaluate and operationalize future programs to drive further operational efficiencies optimize our management structure and increase cost optimization efforts to realize long term sustainable growth including targeted workforce and office space reductions that were initiated in fiscal 2025 and are expected to be substantially complete in fiscal 2026 We have started to see improvements in our operating expenses across all operating categories with the most opportunity in sales a
nd marketing expense and general and administrative expenses Over the long term we expect to see additional operating expense improvements which could include various restructuring initiatives or measured hiring initiatives to drive operational efficiencies
In the second half of fiscal 2025 we continued seeing increasing momentum for Agentforce and other AI service offerings Outside of the demand for AI the buying environment trends seen over the past two fiscal years have stabilized A reemergence of slower growth in new and renewal business could impact our remaining performance obligation revenues and our ability to meet financial guidance and long term targets
n growth as of January 31 2025 compared to January 31 2024 was negatively impacted by two percent compared to what would have been reported using constant currency rates The impact of foreign currency fluctuations could impact our near term results and ability to accurately predict our future results and earnings The impact of these fluctuations can also be compounded by the seasonality of our business in which our fourth quarter has historically been our strongest quarter for new business and renewals
Subscription and support revenues include subscription fees from customers accessing our enterprise cloud computing services collectively Cloud Services software license revenues from the sales of term software licenses and support revenues from the sale of support and updates beyond the basic subscription fees or related to the sales of software licenses Our Cloud Services allow customers to use our multi tenant software without taking possession of the software Revenue is generally recognized ratably over the contract term Subscription and support revenues also include revenues associated with term software licenses that provide the customer with a right to use the software as it exists when made available Revenues from term software licenses are generally recognized at the point in time when the software is made available to the customer Revenue from support and updates is recognized as such support and updates are provided which is generally ratably over the contract term Changes in contract duration for multi year term software licenses can impact the amount of revenues recognized upfront Revenues from term software licenses represent less than
The revenue growth rates of each of our service offerings as described below in Results of Operations fluctuate from quarter to quarter and over time Additionally we manage the total balanced product portfolio to deliver solutions to our customers and as a result the revenue result for each offering is not necessarily indicative of the results to be expected for any subsequent quarter In addition some of our Cloud Service offerings have similar features and functions For example customers may use our Sales Service or Platform service offerings to record account and contact information which are similar features across these service offerings Depending on a customer s actual and projected business requirements more than one service offering may satisfy the customer s current and future needs We record revenue based on the individual products ordered by a customer not according to the customer s business requirements and usage
Our growth in revenues is also impacted by attrition Attrition represents the reduction or loss of the annualized value of our contracts with customers We calculate our attrition rate at a point in time on a trailing twelve month basis as of the end of each month In general we exclude service offerings from acquisitions from our attrition calculation until they are fully
We continue to maintain a variety of customer programs and initiatives which along with increasing enterprise adoption have helped keep our attrition rate consistent as compared to the prior year Consistent attrition rates play a role in our ability to maintain growth in our subscription and support revenues
Unearned revenue primarily consists of billings to customers for our subscription service Over 90 percent of the value of our billings to customers is for our subscription and support service We generally invoice our customers in advance in annual installments and typical payment terms provide that our customers pay us within 30 days of invoice Amounts that have been invoiced are recorded in accounts receivable and in unearned revenue or in revenue depending on whether transfer of control to customers has occurred In general we collect our billings in advance of the subscription service period We typically issue renewal invoices in advance of the renewal service period and depending on timing the initial invoice for the subscription and services contract and the subsequent renewal invoice may occur in different quarters There is a disproportionate weighting toward annual billings in the fourth quarter primarily as a result of large enterprise account buying patterns Our fourth quarter has historically been our strongest quarter for new business and renewals The year on year compounding effect of this seasonality in both billing patterns and overall new and renewal business causes the value of invoices that we generate in the fourth quarter for both new business and renewals to increase as a proportion of our total annual billings Accordingly because of this billing activity our first quarter is typically our largest collections and operating cash flow quarter Generally our third quarter has historically been our smallest operating cash flow quarter
Unearned revenues accounts receivable and operating cash flow may also be impacted by acquisitions For example operating cash flows may be adversely impacted by acquisitions due to transaction costs financing costs such as interest expense and lower operating cash flows from the acquired entity
Our remaining performance obligation represents all future revenue under contract that has not yet been recognized as revenue and includes unearned revenue and unbilled amounts Our current remaining performance obligation represents future revenue under contract that is expected to be recognized as revenue in the next 12 months
Remaining performance obligation is not necessarily indicative of future revenue growth and is influenced by several factors including seasonality the timing of renewals average contract terms foreign currency exchange rates and fluctuations in new business growth Remaining performance obligation is also impacted by acquisitions Unbilled portions of the remaining performance obligation denominated in foreign currencies are revalued each period based on the period end exchange rates For multi year subscription agreements billed annually the associated unbilled balance and corresponding remaining performance obligation are typically high at the beginning of the contract period zero just prior to renewal and increase if the agreement is renewed Low remaining performance obligation attributable to a particular subscription agreement is often associated with an impending renewal but may not be an indicator of the likelihood of renewal or future revenue from such customer Changes in contract duration or the timing of delivery of professional services can impact remaining performance obligation as well as the allocation between current and non current remaining performance obligation
Cost of subscription and support revenues primarily consists of expenses related to our employee related costs which includes salaries benefits and stock based compensation expense 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 and allocated overhead Our cost of subscription and support revenues also includes amortization of certain acquisition related intangible assets such as the amortization of the cost associated with an acquired company s research and development efforts 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 specific to customer experience and technical operations
Cost of professional services and other revenues consists primarily of employee related costs associated with these services the cost of subcontractors certain third party fees and allocated overhead We believe that our professional services organization facilitates the adoption of our service offerings helps us to secure larger subscription revenue contracts and supports our customers success The cost of professional services may exceed revenues from professional services in future fiscal periods
Sales and marketing expenses make up the majority of our operating expenses and consist primarily of employee related costs and commissions for our sales and marketing staff as well as payments to partners marketing programs and allocated overhead Marketing programs consist of advertising events corporate communications brand building and product marketing activities We capitalize certain costs to obtain customer contracts such as commissions and amortize these costs on a straight line basis As such the timing of expense recognition for these commissions is not consistent with the timing of the associated cash payment
Our sales and marketing expenses include amortization of certain acquisition related intangible assets such as the amortization of the cost associated with an acquired company s trade names customer lists and customer relationships
General and administrative expenses consist primarily of employee related costs for finance and accounting legal internal audit human resources and management information systems personnel as well as professional services fees and allocated overhead
We allocate overhead such as information technology infrastructure rent occupancy charges and certain employee benefits based on headcount As such these types of expenses are reflected in each cost of revenue and operating expense category
Restructuring consists of charges related to employee transition severance payments employee benefits and stock based compensation as well as exit charges associated with office space reductions Restructuring excludes allocated overhead
Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets liabilities revenues costs and expenses and related disclosures On an ongoing basis we evaluate our estimates and assumptions Our actual results may differ from these estimates under different assumptions or conditions
We believe that of our significant accounting policies which are described in Note 1 Summary of Business and Significant Accounting Policies to our consolidated financial statements the following accounting policies and specific estimates involve a greater degree of judgment and complexity
We enter into contracts with our customers that may include promises to transfer multiple Cloud Services software licenses premium support and professional services A performance obligation is a promise in a contract with a customer to transfer products or services that are distinct Determining whether products and services are distinct performance obligations that should be accounted for separately or combined as one unit of accounting may require significant judgment
Cloud Services and software licenses are distinct as such offerings are often sold separately In determining whether professional services are distinct we consider the following factors for each professional services agreement availability of the services from other vendors the nature of the professional services the timing of when the professional services contract was signed in comparison to the subscription start date and the contractual dependence of the service on the customer s satisfaction with the professional services work To date we have generally concluded that professional services included in contracts with multiple performance obligations are distinct
We allocate the transaction price to each performance obligation on a relative standalone selling price SSP basis The SSP is the price at which we would sell a promised product or service separately to a customer Judgment is required to determine the SSP for each distinct performance obligation We determine SSP by considering our overall pricing objectives and market conditions Significant pricing practices taken into consideration include our discounting practices the size and volume of our transactions the customer demographic the geographic area where services are sold price lists our go to market strategy and historical and current sales and contract prices In instances where we do not sell or price a product or service separately we maximize the use of observable inputs by using information that may include market conditions As our go to market strategies evolve we may modify our pricing practices in the future which could result in changes to SSP
In certain cases we are able to establish SSP based on observable prices of products or services sold separately in comparable circumstances to similar customers We use a single amount to estimate SSP when it has observable prices If SSP is not directly observable for example when pricing is highly variable we use a range of SSP We determine the SSP range using information that may include pricing practices or other observable inputs We typically have more than one SSP for individual products and services due to the stratification of those products and services by customer size and geography
Accounting for business combinations requires us to make significant estimates and assumptions especially at the acquisition date with respect to tangible and intangible assets acquired and liabilities assumed and pre acquisition contingencies We use our best estimates and assumptions to accurately assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date as well as the useful lives of those acquired intangible assets
Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized based on the weighting of positive and negative evidence Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character for example ordinary income or capital gains within the carryback or carryforward periods available under the applicable tax law We regularly review the deferred tax assets for recoverability based on historical taxable income projected future taxable income the expected timing of the reversals of existing temporary differences and tax planning strategies Our judgment regarding future profitability may change due to many factors including future market conditions and the ability to successfully execute our business plans and tax planning strategies Should there be a change in the ability to recover deferred tax assets our income tax provision would increase or decrease in the period in which the assessment is changed
Our tax positions are subject to income tax audits by multiple tax jurisdictions throughout the world We recognize the tax benefit of an uncertain tax position only if it is more likely than not that the position is sustainable upon examination by the taxing authority based on the technical merits The tax benefit recognized is measured as the largest amount of benefit which is greater than 50 percent likely to be realized upon settlement with the taxing authority We recognize interest accrued and penalties related to unrecognized tax benefits in our income tax provision
Accounting for strategic investments in privately held debt and equity securities in which we do not have a controlling interest or significant influence requires us to make significant estimates and assumptions Valuations of privately held securities are inherently complex and require judgment due to the lack of readily available market data Privately held debt and equity securities are valued using significant unobservable inputs or data in an inactive market and these valuations require our judgment due to the absence of market prices and inherent lack of liquidity The carrying values of our privately held equity securities are adjusted if there are observable price changes in a same or similar security from the same issuer or if there are identified events or changes in circumstances that may indicate impairment as discussed below In determining the estimated fair value for these investments we utilize the most recent data available and apply valuation methods including the market approach and option pricing models OPM adjusted to reflect the specific rights and preferences of the classes of securities we hold Such information available to us from investee companies is supplemented with estimates such as volatility and expected time to liquidity
We assess the privately held debt and equity securities in our strategic investment portfolio for impairment quarterly Our impairment analysis encompasses an assessment of both qualitative and quantitative analyses of key factors including the investee s financial metrics market acceptance of the product or technology and the rate at which the investee is using its cash Depending on our contractual rights as an investor investee specific information available to us to make this assessment may be limited or may be available on a delayed basis If the investment is considered to be impaired we record the investment at fair value by recognizing an impairment through the consolidated statements of operations and establishing a new carrying value for the investment
Remaining performance obligation represents contracted revenue that has not yet been recognized which includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods
The increase in subscription and support revenues for fiscal 2025 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 the period Revenues from term software licenses which are recognized at a point in time represented approximately six percent and seven percent of total subscription and support revenues for fiscal 2025 and 2024 respectively Subscription and support revenues accounted for approximately 94 percent and 93 percent of our total revenues for fiscal 2025 and 2024 respectively
The decrease in professional services and other revenues for fiscal 2025 was due primarily to less demand for larger multi year transformation engagements and in some cases delayed projects These trends may continue in the near term
Integration and Analytics subscription and support revenues include revenues from term software licenses which are recognized at the point in time when the software is made available to the customer Therefore we expect Integration and Analytics to experience greater volatility in revenues period to period compared to our other service offerings and recent revenue trends may not be indicative of future performance Additionally as we transition customers within the Integration and Analytics offering from term software licenses to subscription based services revenue associated with such customers will generally be recognized ratably over the contract term which we expect may potentially result in less revenue in the period the customer transitions but incremental revenues over the remaining term
Revenues by geography are determined based on the region of the Salesforce contracting entity which may be different than the region of the customer The increase in revenues across all regions was primarily due to the continued execution of our business and growth strategy including increasing our geographic reach primarily through extending our go to market capabilities globally Foreign currency did not contribute materially to the year over year fluctuations in revenue
For fiscal 2025 the increase in cost of revenues in absolute dollars was primarily due to an increase in employee related costs including stock based compensation expense partially offset by a decrease in amortization of purchased intangibles and a decrease in service delivery expenses Our cost of revenues headcount increased by seven percent during fiscal 2025 primarily in lower cost regions Cost of revenues as a percentage of total revenues during fiscal 2025 decreased by two percent from the same period a year ago primarily due to our total revenues growth outpacing our cost of revenues growth
We intend to continue to invest additional resources in enterprise cloud computing services to allow us to scale with our customers and continue to evolve our security measures The timing of these expenses which also includes the use of AI and agents may cause our cost of revenues as a percentage of revenues to fluctuate over time due to changes in demand for our service offerings
For fiscal 2025 the increase in research and development expenses in absolute dollars was primarily due to an increase in employee related costs including stock based compensation expense Research and development expenses as a percentage of total revenues during fiscal 2025 increased by one percent from the same period a year ago primarily due to an increase in relative employee related costs including stock based compensation expense Our research and development headcount increased by 13 percent during fiscal 2025 primarily in lower cost regions
We expect that research and development expenses will likely remain consistent as a percentage of revenue over time as we continue to invest in technology to support the development of new and improve existing technologies including AI agents and our Data Cloud service offerings and the integration of acquired technologies
For fiscal 2025 the increase in sales and marketing expenses in absolute dollars was primarily due to an increase in employee related costs including stock based compensation expense Sales and marketing expenses as a percentage of total revenues during fiscal 2025 decreased by two percent from the same period a year ago due to a decrease in relative employee related costs including stock based compensation expense and advertising expense Our sales and marketing headcount increased by one percent during fiscal 2025 primarily in lower cost regions
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
For fiscal 2025 the increase in general and administrative expenses in absolute dollars was primarily due to an increase in employee related costs including stock based compensation expense and professional services expenses General and administrative expenses as a percentage of total revenues during fiscal 2025 was consistent with the same period a year ago Our general and administrative headcount increased by three percent during fiscal 2025
In fiscal 2025 approximately 461 million of costs were incurred related to our restructuring initiatives which was primarily related to employee transitions severance payments and employee benefits We do not expect to incur significant additional charges in connection with our restructuring initiatives in the near term
Losses on strategic investments net consists primarily of mark to market adjustments related to our publicly held equity securities observable price adjustments related to our privately held equity securities and other adjustments including impairments Our strategic investment portfolio continues to be affected by challenging market conditions for companies in which we hold private equity debt or other investments as well as high public equity market volatility In fiscal 2025 these factors resulted in impairments on privately held equity and debt securities of 582 million partially offset by 358 million in unrealized gains on privately held equity securities
Other income primarily consists of interest income on our marketable securities portfolio which is partially offset by interest expense on our debt as well as our finance leases Other income increased in fiscal 2025 primarily due to an increase in investment income from higher interest rates
We recorded a tax provision of 1 2 billion on pretax income of 7 4 billion for fiscal 2025 Our tax provision increased from a year ago primarily due to higher pretax income Our effective tax rate may fluctuate due to changes in our domestic and foreign earnings or material discrete tax items or a combination of these factors resulting from transactions or events including acquisitions changes to our operating structure and other macroeconomic factors
Several countries have enacted legislation to implement the Organization for Economic Cooperation and Development s 15 global minimum tax regime effective January 1 2024 There was no material impact to our income tax provision for fiscal 2025 We continue to evaluate the impacts of legislation in the jurisdictions in which we operate Our effective tax rate and cash tax payment could increase in future years
For a discussion of the year ended January 31 2024 compared to the year ended January 31 2023 refer to Part II Item 7 Management s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10 K for the year ended January 31 2024
At January 31 2025 our principal sources of liquidity were cash cash equivalents and marketable securities totaling 14 0 billion and accounts receivable of 11 9 billion Our cash equivalents and marketable securities are comprised primarily of corporate notes and obligations U S treasury securities U S agency obligations asset backed securities foreign government obligations mortgage backed obligations covered bonds time deposits money market mutual funds and municipal securities Our Revolving Loan Credit Agreement as defined below which provides the ability to borrow up to 5 0 billion in unsecured financing the Credit Facility as of January 31 2025 also serves as a source of liquidity
Net cash provided by operating activities could continue to be affected by various risks and uncertainties including but not limited to the risks detailed in Part I Item 1A Risk Factors We believe our existing cash cash equivalents marketable securities cash provided by operating activities unbilled amounts related to contracted noncancellable subscription agreements which are not reflected on the balance sheet and if necessary our borrowing capacity under our Credit Facility will be sufficient to meet our working capital capital expenditure and debt maintenance needs over the next 12 months and thereafter
In the future we may enter into arrangements to acquire or invest in complementary businesses services technologies and intellectual property rights To facilitate these acquisitions or investments we may seek additional equity or debt financing which may not be available on terms favorable to us or at all impacting our ability to complete subsequent acquisitions or investments
The net cash provided by operating activities during fiscal 2025 was primarily comprised of net income of 6 2 billion adjusted for non cash items including 3 5 billion of depreciation and amortization and 3 2 billion of stock based compensation expense Net cash provided by operating activities can be significantly impacted by factors such as growth in new business timing of cash receipts from customers vendor payment terms and timing of payments to vendors Net cash provided by operating activities during fiscal 2025 was further benefited by
The net cash provided by operating activities during fiscal 2024 was primarily comprised of net income of 4 1 billion adjusted for non cash items including 4 0 billion of depreciation and amortization and 2 8 billion of stock based compensation expense Net cash provided by operating activities can be significantly impacted by factors such as growth in new business timing of cash receipts from customers vendor payment terms and timing of payments to vendors Net cash provided by operating activities during fiscal 2024 was further benefited by the change in unearned revenue of 1 6 billion partially offset by the changes in accounts receivable net of 659 million and the change in accounts payable and accrued expenses and other liabilities of 478 million
The net cash used in investing activities during fiscal 2025 was primarily related to net outflows for acquisitions of 2 7 billion net outflows from strategic investment activity of 413 million and capital expenditures of 658 million partially offset by net inflows from marketable securities activity of 642 million
The net cash used in investing activities during fiscal 2024 was primarily related to capital expenditures of 736 million net outflows from strategic investment activity of 388 million and net outflows related to marketable securities activity of 121 million
The net cash used in financing activities during fiscal 2025 was primarily related to 7 8 billion used for repurchases of common stock 1 5 billion related to payments of dividends and 1 0 billion related to repayments of debt partially offset by 1 5 billion from proceeds from equity plans
Net cash used in financing activities during fiscal 2024 was primarily related to 7 6 billion from repurchases of common stock and 1 2 billion related to repayments of debt partially offset by 2 0 billion from proceeds from equity plans
As of January 31 2025 we had senior unsecured debt outstanding with maturities starting in April 2028 and extending through July 2061 with a total carrying value of 8 4 billion We were in compliance with all debt covenants as of January 31 2025
In October 2024 we entered into a Credit Agreement with the lenders and issuing lenders party thereto and Bank of America N A as administrative agent the Revolving Loan Credit Agreement The Revolving Loan Credit Agreement replaced the Credit Agreement dated December 23 2020 as amended the Prior Credit Agreement among us the lenders and the issuing lenders party thereto and Citibank N A as administrative agent which provided for a 3 0 billion unsecured revolving credit facility that was scheduled to mature on December 23 2025 There were no outstanding borrowings under the Prior Credit Agreement
The Revolving Loan Credit Agreement provides for a 5 0 billion unsecured revolving credit facility Credit Facility and matures in October 2029 We may use the proceeds of future borrowings under the Credit Facility for general corporate purposes There were no outstanding borrowings under the Credit Facility as of January 31 2025
In August 2022 the Board authorized a program to repurchase up to 10 0 billion of our common stock the Share Repurchase Program The Share Repurchase Program does not have a fixed expiration date and does not obligate us to acquire any specific number of shares In February 2023 the Board authorized an additional 10 0 billion in repurchases under the Share Repurchase Program In February 2024 the Board authorized an additional 10 0 billion in repurchases under the Share Repurchase Program for an aggregate total authorization of 30 0 billion
All repurchases were made in open market transactions As of January 31 2025 we were authorized to purchase a remaining 10 6 billion of the Company s common stock under the Share Repurchase Program Subsequent to January 31 2025 we have incurred approximately 535 million through February 28 2025 for additional shares under the Share Repurchase Program
The declaration and payment of future cash dividends is subject to our Board continuing to determine that the declaration of dividends is in the best interests of the Company and our stockholders after giving consideration to continued capital availability general economic and market conditions and applicable laws and agreements
Our principal commitments consist of obligations under leases for office space co location data center facilities and our development and test data center as well as leases for computer equipment software furniture and fixtures As of January 31 2025 the future noncancellable minimum payments under these commitments were approximately 4 0 billion with payments of 1 0 billion due in the next 12 months and 3 0 billion due thereafter In addition to our leasing arrangements we have other contractual commitments associated with agreements that are enforceable and legally binding including those with infrastructure service providers As of January 31 2025 our total commitments under these agreements were approximately 17 3 billion of which payments of 2 8 billion are due in the next 12 months and 14 5 billion are due thereafter We generally expect to satisfy these commitments with cash on hand and cash provided by operating activities
and in future years we have made and expect to continue to make additional investments in our infrastructure to scale our operations to increase productivity and enhance our security measures We plan to upgrade or replace various internal systems to scale with our overall growth While we continue to make investments in our infrastructure and with infrastructure service providers to provide capacity for the growth of our business our strategy may continue to change related to these investments and we may slow the pace of our investments
As of January 31 2025 we expect approximately 300 million to 325 million in future cash payments related to our restructuring initiatives primarily related to workforce costs such as severance payments We generally expect to satisfy these commitments with cash on hand and cash provided by operating activities
We believe that business is the greatest platform for change Guided by our values we work to earn the trust of our stakeholders Transparency is key to trust which is why we have published an annual Stakeholder Impact Report for over ten years to keep our stakeholders informed and to hold ourselves accountable to our sustainability impact and equality strategies Our disclosures in these areas are also informed by topics identified through relevancy assessments and third party ESG reporting organizations frameworks and standards such as the Sustainability Accounting Standards Board SASB Standards Read more about these initiatives and view our Stakeholder Impact Report at https salesforce com stakeholder impact report Website references throughout this document are provided for convenience only and the content on the referenced websites is not incorporated by reference into this report
We are exposed to financial market risks including changes in foreign currency exchange rates interest rates and equity investment risks This exposure has increased due to recent financial market movements and changes to our expectations of near term possible movements caused by the impact of the macroeconomic environment as discussed in more detail below
We primarily conduct our business in the following locations the United States Europe Canada Latin America Asia Pacific and Japan The expanding global scope of our business exposes us to the risk of fluctuations in foreign currency markets including emerging markets This exposure is the result of selling in multiple currencies operating in countries where the functional currency is the local currency and growth in our international investments including data center expansion costs associated with third party infrastructure providers and additional headcount in foreign countries Specifically our results of operations and cash flows are subject to fluctuations in the following currencies the Euro British Pound Sterling Japanese Yen Canadian Dollar Australian Dollar and Brazilian Real against the United States Dollar USD These exposures may change over time as business practices evolve and economic conditions change Changes in foreign currency exchange rates could have an adverse impact on our financial results and cash flows
Our foreign currency exposures typically arise from selling annual and multi year subscriptions in multiple currencies customer accounts receivable intercompany transfer pricing arrangements and other intercompany transactions Our foreign currency management objective is to minimize the effect of fluctuations in foreign exchange rates on selected assets or liabilities without exposing us to additional risk associated with transactions that could be regarded as speculative
We pursue our objective by utilizing foreign currency forward contracts to offset foreign exchange risk Our foreign currency forward contracts are generally short term in duration We neither use these foreign currency forward contracts for trading purposes nor do we currently designate these forward contracts as hedging instruments under the relevant accounting and financial reporting guidelines Accordingly we record the fair values of these contracts as of the end of our reporting period to our consolidated balance sheets with changes in fair values recorded to our consolidated statements of operations Given the short duration of the forward contracts the amount recorded is not significant Our ultimate realized gain or loss with respect to foreign currency exposures will generally depend on the size and type of cross currency transactions that we enter into the currency exchange rates associated with these exposures and changes in those rates the net realized gain or loss on our foreign currency forward contracts and other factors
In addition fluctuations in foreign currencies negatively impacted our current remaining performance obligation growth rate as of January 31 2025 by approximately two percent compared to what we would have reported as of January 31 2024 using constant currency rates
As of January 31 2025 we had cash cash equivalents and marketable securities totaling 14 0 billion This amount was invested primarily in money market funds time deposits corporate notes and bonds government securities and other debt securities with credit ratings of at least BBB or better The cash cash equivalents and marketable securities are held for general corporate purposes including share repurchases dividend payments acquisitions of or investments in complementary businesses services or technologies working capital and capital expenditures Our investments are made for capital preservation purposes We do not enter into investments for trading or speculative purposes
Our cash equivalents and our portfolio of marketable securities are subject to market risk due to changes in interest rates Fixed rate securities may have their market value adversely impacted due to a rise in interest rates while floating rate securities may produce less income than expected if interest rates fall Due in part to these factors our future investment income may fall short of expectations due to changes in interest rates or we may suffer losses in principal if we are forced to sell securities that decline in market value due to changes in interest rates However because we classify our debt securities as available for sale no gains or losses are recognized in our consolidated statements of operations due to changes in interest rates Gains or losses recognized in our consolidated statements of operations are limited to those related to either the sale of securities prior to maturity or expected credit losses
Our fixed income portfolio is also subject to interest rate risk An immediate increase or decrease in interest rates of 100 basis points at January 31 2025 could result in a 61 million market value reduction or increase of the same amount This estimate is based on a sensitivity model that measures market value changes when changes in interest rates occur Fluctuations in the value of our investment securities caused by a change in interest rates gains or losses on the carrying value are recorded in other comprehensive income net and are realized only if we sell the underlying securities
Any borrowings under our Credit Facility bear interest at our option at a base rate plus a spread of 0 00 or an adjusted benchmark rate plus a spread of 0 50 to 0 85 in each case with such spread being determined based on our credit rating We are also obligated to pay an ongoing commitment fee on undrawn amounts As of January 31 2025 there was no outstanding borrowing amount under the Credit Facility
The bank counterparties to our derivative contracts potentially expose us to credit related losses in the event of their nonperformance To mitigate that risk we only contract with counterparties who meet the minimum requirements under our counterparty risk assessment process We monitor ratings credit spreads and potential downgrades on at least a quarterly basis Based on our ongoing assessment of counterparty risk we adjust our exposure to various counterparties We generally enter into master netting arrangements which reduce credit risk by permitting net settlement of transactions with the same counterparty However we do not have any master netting arrangements in place with collateral features
Fluctuations in the value of our privately held equity securities are only recorded when there is an observable transaction for a same or similar security of the same issuer or in the event of impairment These investments are in various classes of equity with varying rights and preferences The particular securities we hold and their rights and preferences relative to other securities within the capital structure of a company may impact the magnitude by which our investment value moves in relation to changes in the total fair value of that company For example our five largest privately held equity securities represent 1 3 billion in total strategic investments as of January 31 2025 If the enterprise value of the companies in which we hold those securities decreased by ten percent the carrying value of our investment portfolio would decline by approximatel
84 million We anticipate future volatility in our consolidated statements of operations due to changes in market prices observable price changes and impairments of our strategic investments The resulting gains or losses could be material depending on market conditions and events particularly in periods with economic uncertainty inflation volatile public equity markets or unsettled global market conditions
We continually evaluate our investments in privately held and publicly traded companies In certain cases our ability to sell these investments may be impacted by contractual obligations to hold the securities for a set period of time after a public offering
In addition the financial success of our investment in any company is typically dependent on a liquidity event such as a public offering acquisition or other favorable market event reflecting appreciation to the cost of our initial investment All of our investments particularly those in privately held companies are therefore subject to a risk of partial or total loss of invested capital
We have audited the accompanying consolidated balance sheets of Salesforce Inc the Company as of January 31 2025 and 2024 the related consolidated statements of operations comprehensive income stockholders equity and cash flows for each of the three years in the period ended January 31 2025 and the related notes collectively referred to as the consolidated financial statements In our opinion the consolidated financial statements present fairly in all material respects the financial position of the Company at January 31 2025 and 2024 and the results of its operations and its cash flows for each of the three years in the period ended January 31 2025 in conformity with U S generally accepted accounting principles
We also have audited in accordance with the standards of the Public Company Accounting Oversight Board United States PCAOB the Company s internal control over financial reporting as of January 31 2025 based on criteria established in
Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework and our report dated March 5 2025 expressed an unqualified opinion thereon
These financial statements are the responsibility of the Company s management Our responsibility is to express an opinion on the Company s financial statements based on our audits We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U S federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB
We conducted our audits in accordance with the standards of the PCAOB Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement whether due to error or fraud Our audits included performing procedures to assess the risks of material misstatement of the financial statements whether due to error or fraud and performing procedures that respond to those risks Such procedures included examining on a test basis evidence regarding the amounts and disclosures in the financial statements Our audits also included evaluating the accounting principles used and significant estimates made by management as well as evaluating the overall presentation of the financial statements We believe that our audits provide a reasonable basis for our opinion
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that 1 relate to accounts or disclosures that are material to the financial statements and 2 involved our especially challenging subjective or complex judgments The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements taken as a whole and we are not by communicating the critical audit matters below providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate
As described in Notes 1 and 2 to the consolidated financial statements the Company recognizes revenue primarily from subscription and support services and professional services contracts in an amount that reflects the consideration the Company expects to receive in exchange for those products or services The Company enters into contracts with its customers that may include promises to transfer multiple cloud services software licenses premium support and professional services Significant judgment may be required by the Company in determining revenue recognition for these customer agreements including the determination of whether products and services are considered distinct performance obligations and the determination of standalone selling prices particularly for products and services that are not sold separately
We obtained an understanding evaluated the design and tested the operating effectiveness of controls over the Company s process to identify performance obligations and allocate the transaction price to those performance obligations including controls over determining standalone selling prices
To test the Company s judgments and conclusions related to the identification of performance obligations and determination of standalone selling prices our audit procedures included among others obtaining an understanding of the Company s various service offerings and evaluating management s conclusions regarding which were distinct We read a sample of executed contracts to assess management s evaluation of significant terms including the determination of distinct performance obligations and the related standalone selling price We evaluated the information utilized to determine standalone selling price and we tested the mathematical accuracy of the Company s calculations
As described in Notes 1 and 3 to the consolidated financial statements the Company holds investments in privately held equity securities which are assessed for impairment at least quarterly The Company s impairment analysis encompasses an assessment of both qualitative and quantitative factors including the investee s financial metrics market acceptance of the investee s product or technology and the rate at which the investee is using its cash Significant judgment may be required by the Company in determining if an investment is impaired based on the information available about the investee
Auditing the Company s accounting for impairment of privately held equity securities required significant judgment to evaluate management s assessment of impairment indicators to evaluate whether investments are impaired considering the current economic environment
We obtained an understanding evaluated the design and tested the operating effectiveness of controls over the Company s process to identify impaired privately held equity securities including controls over assessing impairment indicators
To test the Company s judgments and conclusions related to impairment of privately held equity securities our audit procedures included among others obtaining an understanding of the nature of the privately held equity securities and evaluating the Company s assessment of both qualitative and quantitative factors We read the Company s analysis of a sample of investments and available information including financial metrics and cash usage We evaluated the information available to determine the appropriateness of the Company s conclusions of whether the investments are impaired
We have audited Salesforce Inc s internal control over financial reporting as of January 31 2025 based on criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework the COSO criteria In our opinion Salesforce Inc the Company maintained in all material respects effective internal control over financial reporting as of January 31 2025 based on the COSO criteria
We also have audited in accordance with the standards of the Public Company Accounting Oversight Board United States PCAOB the consolidated balance sheets of the Company as of January 31 2025 and 2024 the related consolidated statements of operations comprehensive income stockholders equity and cash flows for each of the three years in the period ended January 31 2025 and the related notes and our report dated March 5 2025 expressed an unqualified opinion thereon
The Company s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management s Report on Internal Control Over Financial Reporting Our responsibility is to express an opinion on the Company s internal control over financial reporting based on our audit We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U S federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB
We conducted our audit in accordance with the standards of the PCAOB Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects
Our audit included obtaining an understanding of internal control over financial reporting assessing the risk that a material weakness exists testing and evaluating the design and operating effectiveness of internal control based on the assessed risk and performing such other procedures as we considered necessary in the circumstances We believe that our audit provides a reasonable basis for our opinion
A company s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles A company s internal control over financial reporting includes those policies and procedures that 1 pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company 2 provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company and 3 provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition use or disposition of the company s assets that could have a material effect on the financial statements
Because of its inherent limitations internal control over financial reporting may not prevent or detect misstatements Also projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate
Common stock 0 001 par value 1 600 shares authorized 1 056 and 1 035 shares issued as of January 31 2025 and 2024 respectively and 962 and 971 shares outstanding as of January 31 2025 and 2024 respectively
Salesforce Inc the Company is a global leader in customer relationship management technology that brings companies and customers together With the deeply unified Salesforce Platform the Company delivers a single source of truth connecting customer data with integrated artificial intelligence AI across systems apps and devices to help companies sell service market and conduct commerce from anywhere During the third quarter of fiscal 2025 the Company introduced Agentforce a new layer of the trusted Salesforce Platform that enables companies to build and deploy AI agents that can respond to inputs make decisions and take action autonomously across business functions Agentforce includes a suite of customizable agents for use across sales service marketing and commerce Since its founding in 1999 the Company has pioneered innovations in cloud mobile social analytics and AI enabling companies of every size and industry to transform their businesses in the digital first world
Actual results could differ materially from these estimates The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable which forms the basis for making judgments about the carrying values of assets and liabilities as well as income and expenses to be recognized
The Company operates as one operating segment Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker CODM who is the Company s Chief Executive Officer in deciding how to allocate resources and assess performance Over the past few years the Company has completed a number of acquisitions which have allowed the Company to expand its offerings presence and reach in various market segments of the enterprise cloud computing market While the Company has offerings in multiple enterprise cloud computing market segments including as a result of the Company s acquisitions and operates in multiple countries the Company s business operates in one operating segment because most of the Company s service offerings operate on the Salesforce Platform and are deployed in a nearly identical manner and the Company s CODM evaluates the Company s financial information and resources and assesses the performance of these resources on a consolidated net income basis Additionally the measure of segment assets is reported on the balance sheet as total consolidated assets
The Company s significant segment expenses which are the expenses included in operating income as well as losses on strategic investments and other segment items which includes other income expense and benefit from provision for income taxes are included in the Company s consolidated statement of operations Additionally further components of the Company s measure of profit or loss which is net income are included throughout the Company s financial statements
The Company s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents marketable securities and accounts receivable The Company monitors and manages the overall exposure of its cash balances to individual financial institutions on an ongoing basis The Company s marketable securities portfolio consists primarily of investment grade securities and the Company s policies limit the amount of credit exposure to any one issuer The Company does not require collateral for accounts receivable The Company maintains an allowance for its doubtful accounts receivable for estimated credit losses This allowance is based upon historical loss patterns the number of days that billings are past due an evaluation of the potential risk of loss associated with delinquent accounts and current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss patterns The Company records the allowance against bad debt expense through the consolidated statements of operations included in general and administrative expense up to the amount of revenues recognized to date Any incremental allowance is recorded as an offset to unearned revenue on the consolidated balance sheets Receivables are written off and charged against the recorded allowance when the Company has exhausted collection efforts without success
No single customer accounted for ten percent or more of accounts receivable as of January 31 2025 and January 31 2024 No single customer accounted for ten percent or more of total revenue during fiscal 2025 2024 and 2023 As of January 31 2025 and January 31 2024 assets located outside the Americas were 17 percent and 16 percent of total assets respectively As of January 31 2025 and January 31 2024 assets located in the United States were 81 percent and 82 percent of total assets respectively
The Company is also exposed to concentrations of risk in its strategic investment portfolio including within specific industries as the Company primarily invests in enterprise cloud companies technology st
artups and system integrators As of January 31 2025 the Company held four investments all privately held with carrying values that were individually greater than five percent of its total strategic investments portfolio and represented approximately
the Company held two investments both privately held with carrying values that were individually greater than five percent of its strategic investments portfolio and represented approximately 16 percent of the portfolio in the aggregate
The Company derives its revenues from two sources 1 subscription and support revenues and 2 professional services and other revenues Subscription and support revenues include subscription fees from customers accessing the Company s enterprise cloud computing services collectively Cloud Services software license revenues from the sales of term software licenses and support revenues from the sales of support and updates beyond the basic subscription or software license sales Professional services and other revenues include professional and advisory services for process mapping project management and implementation services and training services
Revenue is recognized upon transfer of control of promised products and services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services If the consideration promised in a contract includes a variable amount for example overage fees contingent fees or service level penalties the Company includes an estimate of the amount it expects to receive for the total transaction price if it is probable that a significant reversal of cumulative revenue recognized will not occur
Cloud Services allow customers to use the Company s multi tenant software without taking possession of the software Revenue is generally recognized ratably over the contract term Substantially all of the Company s subscription service arrangements are noncancellable and do not contain refund type provisions
Subscription and support revenues also include revenues associated with term software licenses that provide the customer with a right to use the software as it exists when made available Revenues from term software licenses are generally recognized
at the point in time when the software is made available to the customer Revenue from software support and updates is recognized as the support and updates are provided which is generally ratably over the contract term
The Company typically invoices its customers annually and its payment terms provide that customers pay within 30 days of invoice Amounts that have been invoiced are recorded in accounts receivable and in unearned revenue or revenue depending on whether transfer of control to customers has occurred
The Company s professional services contracts are either on a time and materials fixed price or subscription basis These revenues are recognized as the services are rendered for time and materials contracts on a proportional performance basis for fixed price contracts or ratably over the contract term for subscription professional services contracts Other revenues consist primarily of training revenues recognized as such services are performed
The Company enters into contracts with its customers that may include promises to transfer multiple performance obligations such as Cloud Services software licenses support and updates and professional services A performance obligation is a promise in a contract with a customer to transfer products or services that are concluded to be distinct Determining whether products and services are distinct performance obligations that should be accounted for separately or combined as one unit of accounting may require significant judgment
Cloud Services software licenses and support and updates services are generally concluded to be distinct because such offerings are often sold separately In determining whether professional services are distinct the Company considers the following factors for each professional services agreement availability of the services from other vendors the nature of the professional services the timing of when the professional services contract was signed in comparison to the subscription start date and the contractual dependence of the service on the customer s satisfaction with the professional services work To date the Company has concluded that professional services included in contracts with multiple performance obligations are distinct
The Company allocates the transaction price to each performance obligation on a relative SSP basis The SSP is the price at which the Company would sell a promised product or service separately to a customer Judgment is required to determine the SSP for each distinct performance obligation
The Company determines SSP by considering its overall pricing objectives and market conditions Significant pricing practices taken into consideration include the Company s discounting practices the size and volume of the Company s transactions the customer demographic the geographic area where services are sold price lists the Company s go to market strategy historical and current sales and contract prices In instances where the Company does not sell or price a product or service separately the Company maximizes the use of observable inputs by using information that may include market conditions As the Company s go to market strategies evolve the Company may modify its pricing practices in the future which could result in changes to SSP
In certain cases the Company is able to establish SSP based on observable prices of products or services sold or priced separately in comparable circumstances to similar customers The Company uses a single amount to estimate SSP when indicated by the distribution of its observable prices
Alternatively the Company uses a range of amounts to estimate SSP when the pricing practices or distribution of the observable prices are highly variable The Company typically has more than one SSP for individual products and services due to the stratification of those products and services by customer size and geography
The Company capitalizes incremental costs of obtaining revenue contracts related to noncancellable Cloud Services subscription ongoing Cloud Services support and license support and updates For contracts with term software licenses where revenue is recognized upfront when the software is made available to the customer costs allocable to those licenses are expensed as they are incurred Capitalized amounts consist primarily of sales commissions paid to the Company s direct sales force Capitalized amounts also include 1 amounts paid to employees other than the direct sales force who earn incentive payouts under annual compensation plans that are tied to the value of contracts acquired 2 commissions paid to employees upon renewals of subscription and support contracts 3 the associated payroll taxes and fringe benefit costs associated with the payments to the Company s employees and 4 to a lesser extent success fees paid to partners in emerging markets where the Company has a limited presence
Costs capitalized related to new revenue contracts are amortized on a straight line basis over four years which is longer than the typical initial contract period but reflects the estimated average period of benefit including expected contract renewals In arriving at this average period of benefit the Company evaluates both qualitative and quantitative factors which included the estimated life cycles of its offerings and its customer attrition Additionally the Company amortizes capitalized costs for renewals and success fees paid to partners over two years
The capitalized amounts are recoverable through future revenue streams under all noncancellable customer contracts The Company periodically evaluates whether there have been any changes in its business the market conditions in which it operates or other events which would indicate that its amortization period should be changed or if there are potential indicators of impairment
Amortization of capitalized costs to obtain revenue contracts is included in sales and marketing expense in the accompanying consolidated statements of operations There were no impairments of costs to obtain revenue contracts for fiscal 2025 and 2024
The Company considers all of its marketable debt securities as available for use in current operations including those with maturity dates beyond one year and therefore classifies these securities within current assets on the consolidated balance sheets Securities are classified as available for sale and are carried at fair value with the change in unrealized gains and losses net of tax reported as a separate component on the consolidated statements of comprehensive income until realized Fair value is determined based on quoted market rates when observable or utilizing data points that are observable such as quoted prices interest rates and yield curves Securities with an amortized cost basis in excess of estimated fair value are assessed to determine what amount of the excess if any is caused by expected credit losses Expected credit losses on securities are recognized in other income on the consolidated statements of operations and any remaining unrealized losses net of taxes are included in accumulated other comprehensive loss in stockholders equity For the purposes of computing realized and unrealized gains and losses the cost of securities sold is based on the specific identification method Interest on securities classified as available for sale is included as a component of investment income within other income on the consolidated statements of operations
Privately held equity securities where the Company lacks a controlling financial interest but does exercise significant influence are accounted for under the equity method Privately held equity securities not accounted for under the equity method are recorded at cost and adjusted only for observable transactions for same or similar investments of the same issuer or impairment events referred to as the measurement alternative All gains and losses on privately held equity securities realized and unrealized are recorded through losses on strategic investments net on the consolidated statements of operations Privately held debt securities are recorded at fair value with changes in fair value recorded through accumulated other comprehensive loss on the consolidated balance sheets Other privately held investments not classified as debt or equity securities are recorded at cost and adjusted for impairment events with any associated gains and losses recorded through losses on strategic investments net on the consolidated statements of operations
Valuations of privately held securities are inherently complex and require judgment due to the lack of readily available market data In determining the estimated fair value of its strategic investments in privately held companies the Company utilizes the most recent data available to the Company The Company assesses its privately held strategic investments quarterly for impairment The Company s impairment analysis encompasses an assessment of both qualitative and quantitative factors including the investee s financial metrics market acceptance of the investee s product or technology and the rate at which the investee is using its cash If the investment is considered impaired the Company estimates the fair value of the investment and recognizes any resulting impairment through the consolidated statements of operations
The Company measures its cash and cash equivalents marketable securities publicly held equity securities and foreign currency derivative contracts at fair value In addition the Company measures certain of its strategic investments including its privately held debt and equity securities at fair value on a nonrecurring basis when there has been an observable price change in a same or similar security or an impairment event The additional disclosures regarding the Company s fair value measurements are included in Note 4 Fair Value Measurement
The Company enters into foreign currency derivative contracts with financial institutions to reduce foreign exchange risk associated with intercompany transactions and other monetary assets or liabilities denominated in currencies other than the functional currency of a subsidiary The Company uses forward currency derivative contracts which are not designated as hedging instruments to minimize the Company s exposure to balances primarily denominated in the Euro British Pound Sterling Canadian Dollar Australian Dollar Brazilian Real and Japanese Yen The Company s derivative financial instruments program is not designated for trading or speculative purposes The Company generally enters into master netting arrangements with the financial institutions with which it contracts for such derivatives which permit net settlement of transactions with the same counterparty thereby reducing risk of credit related losses from a financial institutions nonperformance While the contract or notional amount is often used to express the volume of foreign currency derivative contracts the amounts potentially subject to credit risk are generally limited to the amounts if any by which the counterparties obligations under the agreements exceed the obligations of the Company to the counterparties The notional amount of outstanding foreign currency derivative contracts as of January 31 2025 and January 31 2024 was 10 7 billion and 8 6 billion respectively
Outstanding foreign currency derivative contracts are recorded at fair value on the consolidated balance sheets Unrealized gains or losses due to changes in the fair value of these derivative contracts as well as realized gains or losses from their net settlement are recognized as other income expense in the consolidated statements of operations consistent with the offsetting gains or losses resulting from the remeasurement or settlement of the underlying foreign currency denominated receivables and payables
The Company estimates the useful lives of property and equipment upon initial recognition and periodically evaluates the useful lives and whether events or changes in circumstances warrant a revision to the useful lives
When assets are retired or otherwise disposed of the cost and accumulated depreciation and amortization are removed from their respective accounts and any loss on such retirement is reflected in operating expenses
The Company determines if an arrangement is a lease at inception and classifies its leases at commencement Operating leases are included in operating lease right of use ROU assets and current and noncurrent operating lease liabilities on the Company s consolidated balance sheets Assets also referred to as ROU assets and liabilities recognized from finance leases are included in property and equipment accrued expenses and other liabilities and other noncurrent liabilities respectively on the Company s consolidated balance sheets ROU assets represent the Company s right to use an underlying asset for the lease term The corresponding lease liabilities represent its obligation to make lease payments arising from the lease The Company does not recognize ROU assets or lease liabilities for leases with a term of 12 months or less for any asset classes
Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement net of any future tenant incentives The Company has lease agreements which contain both lease and non lease components which it has elected to combine for all asset classes As such minimum lease payments include fixed payments for non lease components within a lease agreement but exclude variable lease payments not dependent on an index or rate such as common area maintenance operating expenses utilities or other costs that are subject to fluctuation from period to period The Company s lease terms may include options to extend or terminate the lease Periods beyond the noncancellable term of the lease are included in the measurement of the lease liability only when it is reasonably certain that the Company will exercise the associated extension option or waive the termination option The Company reassesses the lease term if and when a significant event or change in circumstances occurs within the control of the Company As most of the Company s leases do not provide an implicit rate the net present value of future minimum lease payments is determined using the Company s incremental borrowing rate The Company s incremental borrowing rate is an estimate of the interest rate the Company would have to pay to borrow on a collateralized basis with similar terms and payments in the economic environment where the leased asset is located
Lease expense for operating leases which includes amortization expense of ROU assets is recognized on a straight line basis over the lease term Amortization expense of finance lease ROU assets is recognized on a straight line basis over the lease term and interest expense for finance lease liabilities is recognized based on the incremental borrowing rate Expense for variable lease payments is recognized as incurred
On the lease commencement date the Company also establishes assets and liabilities for the present value of estimated future costs to retire long lived assets at the termination or expiration of a lease Such assets are included in property and equipment net and are amortized over the lease term
The Company has entered into subleases or has made decisions and taken actions to exit and sublease certain unoccupied leased office space Similar to other long lived assets discussed below management tests ROU assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable For leased assets such circumstances would include the decision to leave a leased facility prior to the end of the minimum lease term or subleases for which estimated cash flows do not fully cover the costs of the associated lease
Intangible assets are amortized over their estimated useful lives Each period the Company evaluates the estimated remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization
The Company evaluates intangible assets and other long lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable including but not limited to significant adverse changes in business climate market conditions or other events that indicate an asset s carrying amount may not be recoverable Recoverability of these assets is measured by comparing the carrying amount of each asset group to the future undiscounted cash flows the asset is expected to generate If the undiscounted cash flows used in the test for recoverability are less than the carrying amount of these assets the carrying amount of such assets is reduced to fair value
The Company evaluates and tests the recoverability of its goodwill for impairment annually during its fourth quarter of each fiscal year or more often if and when circumstances indicate that goodwill may not be recoverable
The Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date The Company s estimates are inherently uncertain and subject to refinement During the measurement period which may be up to one year from the acquisition date the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed with the corresponding offset to goodwill In addition uncertain tax positions tax related valuation allowances and pre acquisition contingencies are initially recorded in connection with a business combination as of the acquisition date The Company continues to collect information and reevaluates these estimates and assumptions quarterly and records any adjustments to the Company s preliminary estimates to goodwill provided that the Company is within the measurement period Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed whichever comes first any subsequent adjustments are recorded to the Company s consolidated statements of operations
In the event the Company acquires an entity with which the Company has a preexisting relationship the Company will generally recognize a gain or loss to settle that relationship as of the acquisition date within operating income on the consolidated statements of operations In the event that the Company acquires an entity in which the Company previously held a strategic investment the difference between the fair value of the shares as of the date of the acquisition and the carrying value of the strategic investment is recorded as a gain or loss and recorded within losses on strategic investments net in the consolidated statements of operations
The Company generally recognizes employee severance costs when payments are probable and amounts are estimable or when notification occurs depending on the region an employee works Costs related to contracts without future benefit or contract termination are recognized at the earlier of the contract termination or the cease use dates Other exit related costs are recognized as incurred
Stock based compensation expense is measured based on grant date at fair value using the grant date closing stock price for restricted stock units and restricted stock awards and using the Black Scholes option pricing model for stock options The Company recognizes stock based compensation expense related to restricted stock units restricted stock awards and stock
options on a straight line basis net of estimated forfeitures over the requisite service period of the awards which is generally the vesting term of four years The estimated forfeiture rate applied is based on historical forfeiture rates
The Company grants performance share awards to executive officers and other members of senior management which may include a market condition a performance condition or both Stock based compensation expense related to awards with a market condition are measured at fair value using a Monte Carlo simulation model and the expense related to these awards is recognized on a graded vesting basis net of estimated forfeitures over the requisite service period of the awards which is generally the vesting term Stock based compensation expense related to awards with a performance condition are measured based on the grant date closing stock price and the expense related to these awards is recognized based on the requisite service period elapsed as well as the probability of achievement and estimated attainment of the performance condition as of the end of our reporting period
Stock based compensation expense related to the Company s Amended and Restated 2004 Employee Stock Purchase Plan ESPP or 2004 Employee Stock Purchase Plan is measured based on grant date at fair value using the Black Scholes option pricing model The Company recognizes stock based compensation expense related to shares issued pursuant to the 2004 Employee Stock Purchase Plan on a straight line basis over the offering period which is 12 months The ESPP allows employees to purchase shares of the Company s common stock at a 15 percent discount from the lower of the Company s stock price on i the first day of the offering period or on ii the last day of the purchase period The ESPP also allows employees to reduce their percentage election once during a six month purchase period December 15 and June 15 of each fiscal year but not to increase that election until the next one year offering period The ESPP includes a reset provision for the purchase price if the stock price on the purchase date is less than the stock price on the offering date
The Company at times grants unvested restricted shares to employee stockholders of certain acquired companies in lieu of cash consideration These awards are generally subject to continued post acquisition employment Therefore the Company accounts for them as post acquisition stock based compensation expense The Company recognizes stock based compensation expense equal to the grant date fair value of the restricted stock awards based on the closing stock price on grant date on a straight line basis over the requisite service period of the awards which is generally four years
The Company uses the asset and liability method of accounting for income taxes Under this method deferred tax assets and liabilities are determined based on temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse The effect on deferred tax assets and liabilities of a change in tax laws is recognized in the consolidated statements of operations in the period that includes the enactment date
The Company s tax positions are subject to income tax audits by multiple tax jurisdictions throughout the world The Company recognizes the tax benefit of an uncertain tax position only if it is more likely than not that the position is sustainable upon examination by the taxing authority solely based on its technical merits The tax benefit recognized is measured as the largest amount of benefit which is greater than 50 percent likely to be realized upon settlement with the taxing authority The Company recognizes interest accrued and penalties related to unrecognized tax benefits in the income tax provision
Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized based on the weighting of positive and negative evidence Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character for example ordinary income or capital gain within the carryback or carryforward periods available under the applicable tax law The Company regularly reviews the deferred tax assets for recoverability based on historical taxable income projected future taxable income the expected timing of the reversals of existing temporary differences and tax planning strategies The Company s judgments regarding future profitability may change due to many factors including future market conditions and the ability to successfully execute its business plans Should there be a change in the ability to recover deferred tax assets the tax provision would increase or decrease in the period in which the assessment is changed
The functional currency of the Company s major foreign subsidiaries is generally the local currency All assets and liabilities denominated in a foreign currency are translated into U S dollars at the exchange rate on the balance sheet date Revenues and expenses are translated at the average exchange rate during the period Equity transactions are translated using historical exchange rates Adjustments resulting from translating foreign functional currency financial statements into U S
dollars are recorded as a separate component on the consolidated statements of comprehensive income Foreign currency transaction gains and losses are included in other income in the consolidated statements of operations
The Company s arrangements generally include certain provisions for indemnifying customers against liabilities if its products or services infringe on a third party s intellectual property rights To date the Company has not incurred any material costs as a result of such obligations and has not accrued any material liabilities related to such obligations in the accompanying consolidated financial statements
The Company has also agreed to indemnify its directors and executive officers for costs associated with any fees expenses judgments fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is or is threatened to be made a party by reason of the person s service as a director or officer including any action by the Company arising out of that person s services as the Company s director or officer or that person s services provided to any other company or enterprise at the Company s request The Company maintains director and officer insurance coverage that would generally enable the Company to recover a portion of any future amounts paid The Company may also be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions
In November 2023 the Financial Accounting Standards Board FASB issued Accounting Standards Update No 2023 07 Segment Reporting Topic 280 Improvements to Reportable Segment Disclosures ASU 2023 07 which requires additional operating segment disclosures in annual and interim consolidated financial statements The Company adopted ASU 2023 07 in the fourth quarter of fiscal year 2025 on a retrospective basis
In December 2023 the FASB issued Accounting Standards Update No 2023 09 Income Taxes Topic 740 Improvements to Income Tax Disclosures ASU 2023 09 which requires disclosure of disaggregated income taxes paid prescribes standard categories for the components of the effective tax rate reconciliation and modifies other income tax related disclosures ASU 2023 09 is effective for annual periods beginning after December 15 2024 on a retrospective or prospective basis The Company is evaluating the effect that ASU 2023 09 will have on its financial statement disclosures
In November 2024 the FASB issued Accounting Standards Update No 2024 03 Income Statement Reporting Comprehensive Income Expense Disaggregation Disclosures Subtopic 220 40 Disaggregation of Income Statement Expenses ASU 2024 03 which requires disaggregation of certain costs in a separate note to the financial statements such as the amounts of employee compensation depreciation and intangible asset amortization included in each relevant expense caption in annual and interim consolidated financial statements ASU 2024 03 is effective for annual periods beginning after December 15 2026 and for interim periods within fiscal years beginning after December 15 2027 on a retrospective or prospective basis with early adoption permitted The Company is evaluating the effect that ASU 2024 03 will have on its financial statement disclosures
Revenues by geography are determined based on the region of the Company s contracting entity which may be different than the region of the customer Americas revenue attributed to the United States was approximately 93 percent during fiscal 2025 2024 and 2023 respectively No other country represented more than ten percent of total revenue during fiscal 2025 2024 and 2023
The Company records a contract asset when revenue recognized on a contract exceeds the billings Contract assets were 724 million as of January 31 2025 as compared to 758 million as of January 31 2024 and are included in prepaid expenses and other current assets and deferred tax assets and other assets net on the consolidated balance sheets
Unearned revenue represents amounts that have been invoiced in advance of revenue recognition and is recognized as revenue when transfer of control to customers has occurred or services have been provided The unearned revenue balance does not represent the total contract value of annual or multi year noncancellable subscription agreements The unearned revenue balance is influenced by several factors including seasonality the compounding effects of renewals invoice duration invoice timing dollar size and new business linearity within the quarter
Revenue recognized over time primarily includes Cloud Services subscription and support revenue which is generally recognized ratably over time and professional services and other revenue which is generally recognized ratably or as delivered
Remaining performance obligation represents contracted revenue that has not yet been recognized and includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods The transaction price allocated to the remaining performance obligation is based on SSP Remaining performance obligation is influenced by several factors including seasonality the timing of renewals the timing of term license deliveries average contract terms and foreign currency exchange rates Remaining performance obligation is also impacted by acquisitions Unbilled portions of the remaining performance obligation denominated in foreign currencies are revalued each period based on the period end exchange rates Remaining performance obligation is subject to future economic risks including bankruptcies regulatory changes and other market factors
Interest income from marketable securities for fiscal 2025 2024 and 2023 was 647 million 527 million and 199 million respectively and is included in other income expense in the consolidated statements of operations
The Company holds investments in or management agreements with variable interest entities VIEs which the Company does not consolidate because it is not considered the primary beneficiary of these entities The carrying value of VIEs within strategic investments was 484 million and 382 million as of January 31 2025 and January 31 2024 respectively
Unrealized gains and losses recognized on privately held equity securities net includes upward and downward adjustments from equity securities accounted for under the measurement alternative as well as gains and losses from private equity securities in other measurement categories For privately held securities accounted for under the measurement alternative the Company recorded upward adjustments of 385 million and 125 million
All of the Company s cash equivalents marketable securities and foreign currency derivative contracts are classified within Level 1 or Level 2 because these assets are valued using quoted market prices or alternative pricing sources and models utilizing observable market inputs
Substantially all of the Company s privately held debt and equity securities and other investments are recorded at fair value on a non recurring basis The estimation of fair value for these investments requires the use of significant unobservable inputs and as a result the Company deems these assets as Level 3 within the fair value measurement framework For privately held equity investments without a readily determinable fair value the Company applies valuation methods based on information available including the market approach and option pricing models OPM Observable transactions such as the issuance of new equity by an investee are indicators of investee enterprise value and are used to estimate the fair value of the privately held equity investments An OPM may be utilized to allocate value to the various classes of securities of the investee including classes owned by the Company Such information available to the Company from investee companies is supplemented with estimates such as volatility expected time to liquidity and the rights and obligations of the securities the Company holds When indicators of impairment are observed for privately held equity securities the Company generally uses the market approach to estimate the fair value of its investment giving consideration to the latest observable transactions as well as the investee s current and projected financial performance and other significant inputs and assumptions including estimated time to exit selection and analysis of guideline public companies and the rights and obligations of the securities the Company holds The Company s privately held debt and equity securities and other investments amounted to 4 8 billion and 4 8 billion as of January 31 2025
The Company has operating leases for corporate offices data centers and equipment under noncancellable operating and finance leases with various expiration dates The leases have noncancellable remaining terms of 1 year to 15 years some of which include options to extend for up to 5 years and some of which include options to terminate within 1 year
Operating lease amounts above do not include sublease income The Company has entered into various sublease agreements with third parties Under these agreements the Company expects to receive sublease income of approximately 303 million in the next five years and 29 million thereafter
Of the total lease commitment balance including leases not yet commenced of 4 0 billion approximately 3 3 billion is related to facilities space The remaining commitment amount is primarily related to equipment
In February 2024 the Company acquired all outstanding stock of Spiff Inc Spiff an incentive compensation management platform company The acquisition date fair value of the consideration transferred for Spiff was 419 million which consisted primarily of 374 million in cash The Company recorded 323 million of goodwill which is primarily attributed to the assembled workforce and expanded market opportunities The goodwill associated with the acquisition of Spiff has no basis and is not deductible for U S income tax purposes The Company also recorded approximately 52 million of intangible assets for developed technology and customer relationships with useful lives of nine and five years respectively The fair values assigned to assets acquired and liabilities assumed are based on management s estimates and assumptions and may be subject to change as additional information is received and certain tax returns are finalized The Company expects to finalize the valuation as soon as practicable but not later than one year from the acquisition date The Company has included the financial results of Spiff which were not material in its consolidated financial statements from the date of acquisition The transaction costs associated with the acquisition were also not material
In November 2024 the Company acquired all outstanding stock of Zoomin Software Ltd Zoomin a data management company The acquisition date fair value of the consideration transferred for Zoomin was 374 million which consisted primarily of 344 million in cash The Company recorded 284 million of goodwill which is primarily attributed to the assembled workforce and expanded market opportunities The goodwill associated with the acquisition of Zoomin has no basis and is not deductible for U S income tax purposes The Company also recorded approximately 94 million of intangible assets for developed technology with a useful life of three years The fair values assigned to assets acquired and liabilities assumed are based on management s estimates and assumptions and may be subject to change as additional information is received and certain tax returns are finalized The Company expects to finalize the valuation as soon as practicable but not later than one year from the acquisition date The Company has included the financial results of Zoomin which were not material in its consolidated financial statements from the date of acquisition The transaction costs associated with the acquisition were also not material
of data protection and data management solutions The Company has included the financial results of Own which were not material in the consolidated financial statements from the date of acquisition The transaction costs associated with the acquisition were not material The acquisition date fair value of the consideration transferred for Own was approximately 2 1 billion which consisted of the following in millions
The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill which is primarily attributed to the assembled workforce and expanded market opportunities for which there is no basis for U S income tax purposes The fair values assigned to tangible assets acquired and liabilities assumed are preliminary based on management s estimates and assumptions and may be subject to change as additional information is received and certain tax returns are finalized The Company expects to finalize the valuation as soon as practicable but not later than one year from the acquisition date
The fair value of the Company s noncontrolling equity investment in Own prior to the acquisition was 172 million The Company recognized a gain of approximately 40 million as a result of remeasuring its prior equity interest in Own held before the business combination The gain is included in losses on strategic investments net in the consolidated statement of operations
In April 2022 the Company acquired all outstanding stock of Traction Sales and Marketing Inc Traction on Demand a professional services firm that provides innovative and critical solutions to clients using the Company s service offerings and other advanced cloud technologies The acquisition date fair value of the consideration transferred for Traction on Demand was approximately 340 million which consisted primarily of 302 million in cash
respectively The fair value was determined based on the closing trading price per 100 of the Senior Notes as of the last day of trading of fiscal 2025 and fiscal 2024 and are deemed Level 2 liabilities within the fair value measurement framework
Interest expense primarily from out debt instruments for fiscal 2025 2024 and 2023 was 272 million 283 million and 300 million respectively and is included in other income expense in the consolidated statements of operations
In October 2024 the Company entered into a Credit Agreement with the lenders and issuing lenders party thereto and Bank of America N A as administrative agent the Revolving Loan Credit Agreement The Revolving Loan Credit Agreement replaced the Credit Agreement dated December 23 2020 as amended the Prior Credit Agreement among the Company the lenders and the issuing lenders party thereto and Citibank N A as administrative agent which provided for a 3 0 billion unsecured revolving credit facility that was scheduled to mature on December 23 2025 There were no outstanding borrowings under the Prior Credit Agreement
The Revolving Loan Credit Agreement provides for a 5 0 billion unsecured revolving credit facility Credit Facility and matures in October 2029 The Company may use the proceeds of future borrowings under the Credit Facility for general corporate purposes
In January 2023 the Company announced a restructuring plan intended to reduce operating costs improve operating margins and continue advancing the Company s ongoing commitment to profitable growth This plan included a reduction of the Company s workforce and select real estate exits and office space reductions within certain markets The employee actions were substantially completed in fiscal 2024 and the real estate actions are expected to be substantially complete in fiscal 2026 In fiscal 2025 the Company approved restructuring initiatives focused on driving further operational efficiencies optimizing our management structure and increasing cost optimization efforts to realize long term sustainable growth through a targeted workforce reduction which are expected to be substantially complete in fiscal 2026
The liability for restructuring charges which is related to workforce and office space reductions is included in accounts payable accrued expenses and other liabilities on the consolidated balance sheets The charges reflected in the tables above related to workforce reduction included charges for employee transition severance payments employee benefits and share based compensation The charges reflected in the tables above related to office space reductions included exit charges associated with those reductions
The Company estimated its future stock price volatility considering both its observed option implied volatilities and its historical volatility calculations Management believes this is the best estimate of the expected volatility over the expected life of its stock options and stock purchase rights
The estimated life for the stock options was based on an analysis of historical exercise activity The risk free interest rate is based on the rate for a U S government security with the same estimated life at the time of the option grant and the stock purchase rights
The total intrinsic value of the options exercised during fiscal 2025 2024 and 2023 was 0 7 billion 0 6 billion and 0 2 billion respectively The intrinsic value of options exercised during each year is calculated as the difference between the market value of the stock at the time of exercise and the exercise price of the stock option
As of January 31 2025 options to purchase 6 million shares were vested at a weighted average exercise price of 187 48 per share and had a weighted average remaining contractual life of approximately 3 0 years The total intrinsic value of these vested options based on the market value of the stock as of January 31 2025 was approximately 0 9 billion
Restricted stock which upon vesting entitles the holder to one share of common stock for each share of restricted stock has an exercise price of 0 001 per share which is equal to the par value of the Company s common stock and generally vests over four years The total fair value of shares vested during fiscal 2025 and 2024 was 3 4 billion and 2 5 billion respectively
In fiscal 2025 2024 and 2023 the Company granted performance based restricted stock unit awards to executive officers and other members of senior management The performance based restricted stock unit awards are subject to vesting based on the achievement of a market based condition and a service based condition or a performance based condition and a service based condition At the end of the service periods which range from approximately one year to four years these performance based restricted stock units will vest in a percentage of the target number of shares between 0 and 200 percent depending on the extent the market based condition or performance based condition or both are achieved
The aggregate expected stock based compensation expense remaining to be recognized reflects only outstanding stock awards as of January 31 2025 and assumes no forfeiture activity and no changes in the expected level of attainment of performance share grants based on the Company s financial performance relative to certain targets
The Company s board of directors has the authority without further action by stockholders to issue up to 5 000 000 shares of preferred stock in one or more series The Company s board of directors may designate the rights preferences privileges and restrictions of the preferred stock including dividend rights conversion rights voting rights terms of redemption liquidation preference sinking fund terms and number of shares constituting any series or the designation of any series The issuance of preferred stock could have the effect of restricting dividends on the Company s common stock diluting the voting power of its common stock impairing the liquidation rights of its common stock or delaying or preventing a change in control As of January 31 2025 and 2024 no shares of preferred stock were outstanding
In August 2022 the Board of Directors authorized a program to repurchase up to 10 0 billion of the Company s common stock the Share Repurchase Program In February 2023 the Board of Directors authorized an additional 10 0 billion in repurchases under the Share Repurchase Program In February 2024 the Board of Directors authorized an additional 10 0 billion in repurchases under the Share Repurchase Program for an aggregate total authorization of 30 0 billion The Share Repurchase Program does not have a fixed expiration date and does not obligate the Company to acquire any specific number of shares Under the Share Repurchase Program shares of common stock may be repurchased using a variety of methods including privately negotiated and or open market transactions including under plans complying with Rule 10b5 1 under the Securities Exchange Act of 1934 as amended the Exchange Act as part of accelerated share repurchases and other methods The timing manner price and amount of any repurchases are determined by the Company in its discretion and depend on a variety of factors including legal requirements price and economic and market conditions The Company accounts for treasury stock under the cost method
A reconciliation of income taxes at the statutory federal income tax rate to the provision for benefit from income taxes included in the accompanying consolidated statements of operations is as follows in millions
Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes
At January 31 2025 the Company had federal net operating loss carryforwards of approximately 415 million which expire in fiscal 2026 and through fiscal 2038 with the exception of post 2017 losses that do not expire federal research and development tax credits of approximately 5 million which expire in fiscal 2029 through fiscal 2045 foreign tax credits of approximately 164 million which expire in fiscal 2029 through fiscal 2035 The Company had California net operating loss carryforwards of approximately 480 million which expire beginning in fiscal 2029 through fiscal 2045 California research and development tax credits of approximately 932 million which do not expire For other states income tax purposes the Company had tax credits of approximately 75 million which expire beginning in fiscal 2026 through fiscal 2034 and insignificant net operating loss carryforwards Utilization of the Company s net operating loss carryforwards are subject to annual limitation due to the ownership change limitations provided by the Internal Revenue Code and similar state provisions Such an annual limitation could result in the expiration of the net operating loss and tax credit carryforwards before utilization
The Company had a valuation allowance of 786 million and 733 million as of January 31 2025 and January 31 2024 respectively The Company regularly assesses the realizability of its deferred tax assets and establishes a valuation allowance if it is more likely than not that some or all of its deferred tax assets will not be realized The Company evaluates and weighs all available positive and negative evidence such as historic results future reversals of existing deferred tax liabilities projected future taxable income as well as prudent and feasible tax planning strategies The assessment requires significant judgment and is performed in each of the applicable jurisdictions The increase in the valuation allowance during fiscal 2025 was primarily due to state tax credits and certain U S foreign tax credits that are not expected to be realized At the end of January 31 2025 the valuation allowance was primarily related to U S states net operating loss and tax credits and certain U S foreign tax credits The Company will continue to evaluate the need for valuation allowances for its deferred tax assets
The Company records liabilities related to its uncertain tax positions Tax positions for the Company and its subsidiaries are subject to income tax audits by multiple tax jurisdictions throughout the world The Company recognizes the tax benefit of an uncertain tax position only if it is more likely than not that the position is sustainable upon examination by the taxing authority based on the technical merits The tax benefit recognized is measured as the largest amount of benefit which is greater than 50 percent likely to be realized upon settlement with the taxing authority
In fiscal 2025 2024 and 2023 the Company reported a net increase of approximately 336 million 108 million and 153 million respectively in its unrecognized tax benefits For fiscal 2025 2024 and 2023 total unrecognized tax benefits in an amount of 1 7 billion 1 7 billion and 1 5 billion respectively if recognized would have reduced income tax expense and the Company s effective tax rate
The Company has recognized interest and penalties related to unrecognized tax benefits in the income tax provision of 89 million 29 million and 48 million in fiscal 2025 2024 and 2023 respectively Interest and penalties accrued as of January 31 2025 2024 and 2023 were 225 million 136 million and 107 million respectively
Certain prior year tax returns are currently being examined by various taxing authorities in major tax jurisdictions including the United States Germany and Israel The Company currently considers U S federal Japan Australia Germany France United Kingdom Ireland Canada India and Israel to be major tax jurisdictions The Company s U S federal tax returns since fiscal 2008 remain open to examination and non U S tax returns generally remain open to examination since fiscal 2019 The Company believes that it has provided adequate reserves for its income tax uncertainties in all open tax years As the outcome of the tax audits cannot be predicted with certainty if any issues addressed in the Company s tax audits are resolved in a manner inconsistent with management s expectations the Company could adjust its provision for income taxes in the future
The Company anticipates it is reasonably possible that an insignificant decrease of its unrecognized tax benefits may occur in the next 12 months as the applicable statutes of limitations lapse ongoing examinations are completed or tax positions meet the conditions of being effectively settled
Basic net income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding for the fiscal period Diluted net income per share is computed by giving effect to all potential weighted average dilutive common stock including options and restricted stock units The dilutive effect of outstanding awards is reflected in diluted net income per share by application of the treasury stock method
The weighted average number of shares outstanding used in the computation of diluted net income per share does not include the effect of the following potentially outstanding common stock The effects of these potentially outstanding shares were not included in the calculation of diluted net income per share because the effect would have been anti dilutive in millions
In the ordinary course of business the Company is or may be involved in various legal or regulatory proceedings claims or purported class actions related to alleged infringement of third party patents and other intellectual property rights commercial corporate and securities labor and employment wage and hour and other claims The Company has been and may in the future be put on notice or sued by third parties for alleged infringement of their proprietary rights including patent infringement
In general the resolution of a legal matter could prevent the Company from offering its service to others could be material to the Company s financial condition or cash flows or both or could otherwise adversely affect the Company s reputation and future operating results
The Company makes a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations estimated settlements legal rulings advice of legal counsel and other information and events pertaining to a particular matter The outcomes of legal proceedings and other contingencies are however inherently unpredictable and subject to significant uncertainties At this time the Company is not able to reasonably estimate the amount or range of possible losses in excess of any amounts accrued including losses that could arise as a result of application of non monetary remedies with respect to the contingencies it faces and the Company s estimates may not prove to be accurate
In management s opinion resolution of all current matters including those described below is not expected to have a material adverse impact on the Company s financial statements However depending on the nature and timing of any such dispute payment or other contingency the resolution of a matter could materially affect the Company s current or future results of operations or cash flows or both in a particular quarter
Beginning in September 2019 seven purported class action lawsuits were filed against Slack its directors certain of its officers and certain investment funds associated with certain of its directors each alleging violations of securities laws in connection with Slack s registration statement on Form S 1 the Registration Statement filed with the SEC All but one of these actions were filed in the Superior Court of California for the County of San Mateo though one plaintiff originally filed in the County of San Francisco before refiling in the County of San Mateo and the original San Francisco action was dismissed The remaining action was filed in the U S District Court for the Northern District of California the Federal Action In the Federal Action captioned Dennee v Slack Technologies Inc Case No 3 19 CV 05857 SI Slack and the other defendants filed a motion to dismiss the complaint in January 2020 In April 2020 the court granted in part and denied in part the motion to dismiss In May 2020 Slack and the other defendants filed a motion to certify the court s order for interlocutory appeal which the court granted Slack and the other defendants filed a petition for permission to appeal the district court s order to the Ninth Circuit Court of Appeals which was granted in July 2020 Oral argument was heard in May 2021 On September 20 2021 the Ninth Circuit affirmed the district court s ruling Slack filed a petition for rehearing with the Ninth Circuit on November 3 2021 which was denied on May 2 2022 Slack filed a petition for a writ of certiorari with the U S Supreme Court on August 31 2022 which was granted on December 13 2022 On June 1 2023 the Supreme Court issued a unanimous decision vacating the Ninth Circuit s decision and remanded for further proceedings The Ninth Circuit ordered the parties to submit additional briefing in light of the Supreme Court s decision On February 10 2025 the Ninth Circuit issued an opinion reversing the district court s order and instructing the district court to dismiss the complaint with prejudice The state court actions were consolidated in November 2019 and the consolidated action is captioned In re Slack Technologies Inc Shareholder Litigation Lead Case No 19CIV05370 the State Court Action An additional state court action was filed in San Mateo County in June 2020 but was consolidated with the State Court Action in July 2020 Slack and the other defendants filed demurrers to the complaint in the State Court Action in February 2020 In August 2020 the court sustained in part and overruled in part the demurrers and granted plaintiffs leave to file an amended complaint which they filed in October 2020 Slack and the other defendants answered the complaint in November 2020 Plaintiffs filed a motion for class certification on October 21 2021 which remains pending On October 26 2022 the court stayed the State Court Action pending resolution of Slack s petition for a writ of certiorari in the Federal Action The State Court Action remains stayed pending resolution of the appellate proceedings in the Federal Action The Federal Action and the State Court Action seek unspecified monetary damages and other relief on
The Company has been named as a defendant in a number of state and federal actions relating to the activities of one of its former customers Website Technologies LLC Website Technologies an affiliate of Backpage com LLC Backpage Plaintiffs in these actions generally allege that they were victims of sex trafficking by individuals who advertised them on backpage com a website operated by Backpage and assert various claims and theories premised on the Company s provision to Website Technologies of Salesforce CRM Software and related products which the plaintiffs allege facilitated the operation and growth of Backpage s business The initial action filed in the Superior Court of California for the County of San Francisco on behalf of numerous plaintiffs was dismissed with prejudice under Section 230 of the Communications Decency Act Section 230 and that dismissal was affirmed by the California Court of Appeal in December 2021 In April 2020 an action was filed on behalf of a single plaintiff in the U S District Court for the Northern District of Illinois The district court granted the Company s motion to dismiss the action and the Seventh Circuit Court of Appeals reversed that ruling in August 2023 The court has scheduled trial in that matter for June 2026 Beginning in April 2020 five actions involving six plaintiffs were filed and consolidated in the U S District Court for the Southern District of Texas as A B v Salesforce Inc Case No 4 20 CV 01254 The Company moved for summary judgment on the basis that the claims were barred by Section 230 In November 2023 the court denied the Company s motion and in December 2024 the Fifth Circuit Court of Appeals affirmed that ruling Beginning in May 2023 a number of similar actions have been filed in Texas federal and state courts including principally 1 30 actions filed in the U S District Court for the Northern District of Texas which were consolidated as S M A v Salesforce Inc Case No 3 23 CV 0915 B S M A 2 21 actions filed in Texas state court in Dallas County which were removed by the Company to the Northern District of Texas and consolidated as A S v Salesforce Inc Case No 3 23 CV 1039 B A S and 3 one action filed in Texas state court in Harris County which was removed to the U S District Court for the Southern District of Texas as T S v Salesforce Inc Case No 4 23 CV 01792 T S Separately 19 actions have been filed in Texas state court which are proceeding in a Texas state court multidistrict litigation in Harris County District Court captioned In re Jane Doe Cases MDL 2020 28545 In March 2024 the district court in S M A granted the Company s consolidated motion to dismiss the complaint on the ground that plaintiffs had not alleged the requisite intent element under the federal trafficking statute and in April 2024 an amended complaint was filed amending the federal law claim and adding a Texas state law claim In May 2024 the Company moved to dismiss the amended complaint In September 2024 the district court in A S denied the Company s motion to dismiss and the court has scheduled trial for November 2025 In November 2024 the Company moved for judgment on the pleadings in A S In June 2023 the Company moved to dismiss the T S action and that motion remains pending Plaintiffs counsel in these actions have stated that they represent several hundred additional possible claimants All of the foregoing actions seek unspecified monetary damages attorneys fees and costs The Company intends to defend its interests in these proceedings vigorously
Under the supervision and with the participation of our management including our principal executive officer and principal financial officer we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a 15 e and 15d 15 e under the Securities Exchange Act of 1934 as amended the Exchange Act as of the end of the period covered by this report
In designing and evaluating our disclosure controls and procedures management recognizes that any disclosure controls and procedures no matter how well designed and operated can provide only reasonable assurance of achieving the desired control objectives In addition the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs
Based on management s evaluation our principal executive officer and principal financial officer concluded that as of the end of the period covered by this report our disclosure controls and procedures are designed to and are effective to provide assurance at a reasonable level that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded processed summarized and reported within the time periods specified in Securities and Exchange Commission SEC rules and forms and that such information is accumulated and communicated to our management including our chief executive officer and chief financial officer as appropriate to allow timely decisions regarding required disclosures
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rules 13a 15 f and 15d 15 f Under the supervision and with the participation of our management including our principal executive officer and principal financial officer we conducted an evaluation of the effectiveness of our internal control over financial reporting as of January 31 2025 based on the guidelines established in the
2013 framework issued by the Committee of Sponsoring Organizations of the Treadway Commission COSO Our internal control over financial reporting includes policies and procedures that provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U S generally accepted accounting principles
Based on the results of our evaluation our management concluded that our internal control over financial reporting was effective as of January 31 2025 We reviewed the results of management s assessment with our Audit Committee
The effectiveness of our internal control over financial reporting as of January 31 2025 has been audited by Ernst Young LLP an independent registered public accounting firm as stated in its report which is included in Item 8 of this Annual Report on Form 10 K
There was no change in our internal control over financial reporting that occurred during the quarter ended January 31 2025 that has materially affected or is reasonably likely to materially affect our internal control over financial reporting
Our management including our principal executive officer and principal financial officer do not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud A control system no matter how well conceived and operated can provide only reasonable not absolute assurance that the objectives of the control system are met Further the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs Because of the inherent limitations in all control systems no evaluation of controls can provide absolute assurance that all control issues and instances of fraud if any within the Company have been detected These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of a simple error or mistake Additionally controls can be circumvented by the individual acts of some persons by collusion of two or more people or by management override of the controls The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions over time controls may become inadequate
because of changes in conditions or the degree of compliance with policies or procedures may deteriorate Because of the inherent limitations in a cost effective control system misstatements due to error or fraud may occur and not be detected
During the three months ended January 31 2025 none of our directors or officers as defined in Rule 16a 1 f of the Exchange Act informed us of the adoption or termination of a Rule 10b5 1 trading arrangement or non Rule 10b5 1 trading arrangement as defined in Item 408 of Regulation S K except as follows On December 17 2024 Parker Harris Co Founder and Chief Technology Officer Slack adopted a Rule 10b5 1 trading arrangement intended to satisfy the affirmative defense of Rule 10b5 1 c for the sale of up to 150 662 shares of the Company s common stock subject to certain conditions through December 15 2025 or the date all shares are sold under the arrangement if earlier On January 9 2025 Marc Benioff Chair and Chief Executive Officer adopted a Rule 10b5 1 trading arrangement intended to satisfy the affirmative defense of Rule 10b5 1 c for the sale of up to 353 684 shares of the Company s common stock subject to certain conditions through March 20 2026 or the date all shares are sold under the arrangement if earlier
The information concerning our directors our Audit Committee our Insider Trading Policy and any changes to the process by which stockholders may recommend nominees to the Board required by this Item are incorporated herein by reference to information contained in the Proxy Statement including Directors and Corporate Governance Insider Trading Policy and as applicable Delinquent Section 16 a Reports
The information concerning our executive officers required by this Item is incorporated by reference herein to the section of this Annual Report on Form 10 K in Part I entitled Information About Our Executive Officers
We have adopted a code of ethics our Code of Conduct which applies to all employees including our chief executive officer Marc Benioff principal financial officer Amy Weaver principal accounting officer Sundeep Reddy and all other executive officers The Code of Conduct is available on our website at
We intend to satisfy the disclosure requirement under Item 5 05 of Form 8 K regarding amendment to or waiver from a provision of our Code of Conduct by posting such information on the website address and location specified above
The information required by this Item is incorporated herein by reference to information contained in the Proxy Statement including Compensation Discussion and Analysis Summary Compensation Table Grants of Plan Based Awards Table Outstanding Equity Awards at Fiscal 2025 Year End Table Options Exercised and Stock Vested Table Committee Reports Directors and Corporate Governance and Employment Contracts and Certain Transactions
The information required by this Item is incorporated herein by reference to information contained in the Proxy Statement including Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters and Equity Compensation Plan Information
The information required by this Item is incorporated herein by reference to information contained in the Proxy Statement including Directors and Corporate Governance and Employment Contracts and Certain Transactions
The information concerning our financial statements and Report of Independent Registered Public Accounting Firm required by this Item is incorporated by reference herein to the section of this Annual Report on Form 10 K in Item 8 entitled Financial Statements and Supplementary Data
The Financial Statement Schedules have been omitted because they are not applicable or are not required or are not present in material amounts or the information required to be set forth herein is included in the Consolidated Financial Statements or Notes thereto
Pursuant to the requirements of Section 13 or 15 d of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized
KNOW ALL PERSONS BY THESE PRESENT that each person whose signature appears below constitutes and appoints Marc Benioff Amy Weaver Sundeep Reddy and Sabastian Niles his or her attorney in fact each with the power of substitution for him or her in any and all capacities to sign any amendments to this Annual Report on Form 10 K and to file the same with exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission hereby ratifying and confirming all that said attorney in fact or his or her substitute or substitutes may do or cause to be done by virtue hereof Pursuant to the requirements of the Securities Exchange Act of 1934 this Annual Report on Form 10 K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated

Company Name	Salesforce, Inc. Vist SEC web-site
Category	SERVICES-PREPACKAGED SOFTWARE
Trading Symbol	CRM