Salesforce, Inc. (CRM) Earnings Call Transcript & Summary

At this time, I would like to welcome you to the Salesforce Second Quarter Fiscal 2027 Conference Call. This conference is being recorded. [Operator Instructions] At this time, I would like to turn the call over to Mark Murphy, Executive Vice President of Global Investor Relations. Sir, you may begin.

Good afternoon, and thanks for joining us today on the fiscal 2027 Second Quarter Results Conference Call. Our press release, SEC filings and a replay of today's call can be found on our website. Joining me on the call today is Marc Benioff, Chair CEO and Co-Founder; and Robin Washington, Chief Operating and Financial Officer. We also have Patrick Stokes, President, Applications and Marketing; and Miguel Milano, President and Chief Operating Officer, joining us for the Q&A portion of the call. Some of our comments today may contain forward-looking statements that are subject to risks, uncertainties and assumptions, which could change. Should any of these risks materialize or should our assumptions prove to be incorrect, actual company results or outcomes could differ materially from these forward-looking statements. A description of these risks, uncertainties and assumptions and other factors that could affect our financial results or outcomes is included in our SEC filings, including our most recent report on Forms 10-K, 10-Q and any other SEC filings. Except as required by law, we do not undertake any responsibility to update these forward-looking statements. As a reminder, our commentary today will include non-GAAP measures. Reconciliations between our GAAP and non-GAAP results and guidance can be found in our earnings materials and press release. Before turning to our prepared remarks, Marc and Dario just announced Claudeforce a few minutes ago live on CNBC, let's roll the clip.

This is really the best of both worlds. This is the #1 AI in the world, anthropic and the #1 CRM, Salesforce, are coming together for the first time in an incredibly powerful way to build a new product called Claudeforce. It's really a first in the industry, Jim. We've never seen anything like it. It's completely exciting. I think that this is the way all enterprise systems are going to run in the future.

We found that this combination product that we built together is the most useful thing in accelerating it. Within Anthropic for a long time, we've been accelerating the research teams within Claude. But this is the first time that we've really been able to incredibly accelerate our go-to-market efforts within Claude. And we want that for all the other enterprises. And we want to -- me and Marc, I want to bring it together to everyone. We've already worked with Salesforce in a number of ways. We're big users of Salesforce. Salesforce is big users of Claude code, of Cowork of other tools. We put products like Claude Tag in Slack already, which is a part of Salesforce. And now this combination is a way to gain something that's it's 1 plus 1 equals 3, something that's bigger than the sum of its parts. My Chief Commercial Officer was just demoing this for me with some of the internal stuff we do within Anthropic just half an hour ago, where he asked what are the biggest accounts that Anthropic is trying to close now. Like give me a list of the biggest accounts. Talk me through the risks of each one. All the data, all the information comes from being managed in Salesforce. But the conversation, the interaction, that comes through Claude. And so you can see how these 2 things can be more than the sum of their parts.

Why this is exciting as it's a perfect complement. Anthropic builds this amazing model. And now the model has this incredible user interface, Cowork. And when you take Cowork and then you're able to put it right on top of Salesforce, it's able to bring the data, the applications, the semantics, the agents themselves and build complete applications, a total user interface to let you get all the value out of Salesforce that's been trapped. So customers have put hundreds of billions of dollars into Salesforce. There is a huge amount of value that can be unleashed through this combination.

And with that, let me hand the call to Marc.

Well, thanks so much. I'm really excited to have the call. And it was great to be on CNBC with Dario announcing Claudeforce. We're going to get into that in more details as well. And before I get into all of that, I really want to start here at the beginning and talk about the Saaspocalypse. I think you can see from the results, net new AOV growth, it's the strongest in 4 years. Skeptics really said that seats would decline. And also that Agentforce sales and service in Slack, all seats grew year-over-year. Skeptics said, customers would leave, but attrition was near its lowest level ever. Skeptics said pricing power would erode and A1E and A4X bookings more than doubled quarter-over-quarter. And contract linked terms improved across all segments and new business and renewals. An agent agentic use, well, use of the platform, it surged 6x, sixfold via model context protocoled calls and CLA calls. Apps are not [ dime ]. In fact, they're growing. And 9 of the 10 AI companies, like you just heard from Anthropic that's standardized on Salesforce, use Salesforce and Slack. They spend up -- their spend is up 435% year-over-year. Frontier models depend on CRM, they make sure that it works, that it all comes together, they'd not replace them. Let's now -- let me start from the beginning of my script and actually read my prepared remarks for you, so you can really understand our vision for the future of where Salesforce is now, where we're going, and we cannot wait to get all of you to Dreamforce because we have some incredible things to show you. Look, we're here in Salesforce Tower in San Francisco. I want to welcome all of you, and I'm thrilled to share the tremendous progress we've made and momentum we're seeing across the business. As everyone can see, we just had 1 of the best quarters ever, and we outperformed on all of our key metrics. And as I just went through in all these key metrics in these key areas, this nonsense of this SaaSpocalypse, I think it's time for it to stop. That's why I'm so excited about Claudeforce as well. It really shows how we're bringing together the world's #1 AI and the #1 CRM. It's really the best of both worlds. We're combining Claude's extraordinary intelligence and reasoning with Salesforce's, trusted data and applications and workflows and business rules and governance. And while Claudeforce -- Claude might have been, for example, for developers, now it's also for knowledge workers. And when you do that, you get something in the world has never seen. This is a dynamic, deeply personalized interface that thinks reasons and act. It's a truly game-changing experience for our customers. And I'm going to get into the highlights from the quarter. But before I do, I want to just tell you 1 quick story. And I'm going to get into more details on this. I just spent 2 months in Europe. And I just had an exhaustive schedule. I won't go through all the detail, but I've never met with more customers in my life. And I was with 1 of our very largest, probably our largest customer in Switzerland, and I was sitting there with them, and we went through and they spent maybe, I don't know, the they spent more than $1 billion for sure, with Salesforce. They spend about $100 million a year with us. And I'm talking with them, and it's a great meeting, it's 3 hours and then at the end, we're like, no, I want to show you this thing. We haven't shown it to anybody yet and we'll show them Claudeforce, because the head of all of our operating units have been using Claudeforce to run their businesses inside Salesforce this quarter. It's 1 of the reasons why we're getting such great performance. And all of a sudden, literally, I could see the customer's mouth just dropped open because it was astonishing. They were seeing that we were able to reveal this value that had been trapped in their systems, okay, right into this dynamic user interface. And they weren't having to hire all these FTEs and all this stuff to get it going, it building these apps on the fly for them using the foundation that they had spent 2 decades building with Salesforce. Now I want to get back to the quarter. We had record revenue and EPS, strong margin performance. CRP accelerated. It was up about 14%. Look, we generated $1.1 billion in free cash flow, that was up 81% year-over-year. I'm going to come back to that in just 1 second. And our AI business, just incredible momentum. Agentforce ARR, it hit $1.5 billion. Our ARR for AI and data is about to cross $4 billion, really helps, I guess, that we have 15,000 peer account executives, Miguel. And the number of accounts with agents in production grew 70% over last quarter. We had great wins with Deutsche Telekom. I met with them when I was in Europe. FIFA, met them. NTT Data, I have met with them. Cisco, all expanding their AI investment with us. Great companies, by the way, great visions for the world and really exciting executives leading their companies who have tremendous vision for what they're going to do with their company using this new technology. And we also completed a multibillion dollar agreement contract expansion with the U.S. Army. The Army Human Resource Command expects to drive up to 55 million Agentforce conversations every single month, amazing. The Secretary of the Army took me aside and said, he finished recruiting 4 months early because he was able to use not only the power of all of these human agents, but AI agents as well, that was the Army being all they could be. And I'll tell you, we're expanding in the markets and seeing an incredible success. We launched Agentforce IT service in November, and it already has more than 450 customers, including NYU Langone Hospitals at McAfee, conversions from ServiceNow. I think that's very exciting that we can see that more companies coming into our platform. And as they come into our platform where we expand it to be not just sales, not just service, not just marketing, not just commerce, not just analytics but also IT service and other critical functionality, that all of that can be revealed and now rendered through the Agentforce user interface. The more that's in the platform, the more Claudeforce is going to be able to deliver for it. Now Agentforce Life Sciences is more than 140 customers, including all top 5 pharmaceutical companies, and Agentforce ops is helping companies like Kellogg's and Dell turn manual back-office work and supply chains into agentic workflows. That's the Regrello platform we bought now more than a year ago, it has the ability to deliver and render for a company, red, yellow, green on their supply chain every single day. For Dell, they have 20,000 suppliers. And why that's important is we see supply chain as 1 of the very first applications. So many companies are actually revising for AI because it gives them the ability to actually look into something and do something with an area that really has not moved forward for in decades. With this strong performance and momentum and the strategic acquisitions, especially Contentful and Fin, we're expecting to close in the coming weeks, and we're raising our fiscal year '27 revenue guidance by about $300 million in constant currency. Now what's driving all this? Well, it's a fundamental shift in the software industry. AI is unlocking value, as I said, across every part of our platform. AI is able to look into the platform and say, "Hey, I can see this application construct. I can see this user model. I could see the share model. I can put all of this together and deliver value in a totally new way." I've never seen a moment like this in my life, but for our customers, the question isn't whether AI is transformative, it's actually how they get there. And I want to talk to customers every single day. That's why I was in Europe. Most of them have not started their AI transformations yet. If you talk to most CEOs they may say they have a project or they have a failed experiment or they were told to build a model, but it didn't work out for them. That is not AI transformation. We're going to see AI transformation, and you're really going to see AI transformation when you start using Claudeforce. And the reason why I feel so strongly about that is I've seen it here at Salesforce. For our operating unit leaders when we gave them Claudeforce, they came back to us and said, "I built this app. I did that. I did this other thing." That was so exciting. They built their businesses on not just a few core systems. They're not going to just rip out how their company just runs to get to they want intelligence delivered inside the software. They're already using to run their business. And that's what Salesforce, that's what Claudeforce is going to do. So I showed them Claudeforce. I showed them reasoning across their Salesforce data and workflows. I can show it right inside Cowork. I also show it right inside Slack, 1 click to deploy and their path to AI transformation just opens up in front of them. It's pretty incredible. It's a great experience as a software executive to see the customers' reaction. And this is what we're building with our new enterprise harness. So this new enterprise harness AI for us, you're going to hear a lot about this at Dreamforce. First, you're going to hear a lot about our data layer. You're going to hear a lot about how we've invested in the federation and integration and harmonization of data, you know that's why we bought MuleSoft. It's why we bought Informatica. It's why we built Data 360. You're going to hear about our application layer, of course, sales, service, marketing, commerce, analytics, as I just said, supply chain or ITSM, all the different components, field service, all the application lever in that application layer, then the agentic layer on top of that. And then finally, the interface layer. These 4 layers, data, apps and semantics, agents and interface. When it's turned on together, that is when you start to see the true enterprise transformation. And I'm confident that when you come to Dreamforce, for your own company since so many of them are already on Salesforce, you're going to see how you are going to be able to transform as well. Now let me show you what this looks like for AthenaHealth. Every time someone needed a case summary or opportunity insight, they had to ask IT to run a report. So they use Data 360 to bring together all the product usage and account data from across their systems to create a single source of truth. Then with AI force, this new user interface harness that sits on top of our core systems, they've connected all of it to their AI, complete with the context and the permissions that already lived in Salesforce. Now employees across every level can get instant answers from real Salesforce data -- from real Salesforce metadata and all of the sharing models and security models and all of this, all of this is done with 0 data retention. That means no data goes to any model. It all stays in your company. We started engineering that in 2023. We have been perfecting over the last 3 years and we audit it and we are sure that, that data is staying with you without ever opening a browser, the usage and the value they're getting with Salesforce is going way up. This is the future of enterprise software. And I'll tell you what it's not. This is not the SaaSpocalypse paces. This is not the SaaSpocalypse. As I said earlier, we've been hearing about this for the last 2 quarters, these dire predictions about the end of software and how but the models need everything. But none of them have come true for us, and I don't think -- I don't even understand how they could possibly come true. Look, models, you have to remember, models are probabilistic systems. They're nondeterministic systems. But our system, those 4 layers that we talked about with data and apps and semantics and agents, those are deterministic systems. But when you put those 2 things together, that's a level of value we've never seen before. We've been told our growth would slow, that net new AOV growth would not continue to grow. And yet it's the strongest it's ever been in 4 years and significantly outpacing AOV growth. And by the way, did you know that Salesforce, Salesforce has higher free cash flow, higher free cash flow than Costco, Coca-Cola, Home Depot, Ford, Disney, Pepsi, oh, we also have higher revenue growth rates than Costco, Coca-Cola, Home Depot, Ford, Disney, Pepsi. By the way, all of them are great Salesforce customers, too. I love all those companies and all those CEOs, but we have higher free cash flow and higher growth rates in them. I just think it's important for speaking directly to the analysts who cover us to actually look and compare our business metrics against those others so you can really see what we do and how we're doing. Our seats were supposed to decline. Instead, Agentforce sales, services Slack, all saw year-over-year growth, and we were told customers would abandon us, but attrition is near its lowest level ever. I know that you know that because you're calling all of our customers asking them. So we're told customers would pay less for our products, but what Miguel will about to tell you is they're upgrading, an A1E and A4X bookings, they more than doubled quarter-over-quarter. We're told contract links would shrink. Well, they improved across all segments, and we're told agents accessing our system would kill apps. Well, actually, usage is exploding, agentic use of our apps through model context protocol calls and CLI calls also surged sixfold, 6x. And we're told the frontier models would eliminate the need for CRM. Instead, they depend on it, and we're showing how 1 plus 1 can equal 3. Nine out of the top 10 AI companies in the world use Salesforce and Slack. You know that. You're talking to them, companies like Anthropic, for example. Well, these companies, these 9 out of 10 top 10 AI companies, they've increased their spend with us by 435% year-over-year. Look at that great company Replit, you saw them in the preshow. It's an amazing company. Their sales team lives here in Slack with Salesforce as their source of truth, they've tripled the number of Agentforce sales seats. They're building custom apps that connect directly to Salesforce data and workflows. It all works together. By the way, Replit is a great tool on Salesforce. As you can see, AI isn't raised replacing Salesforce. It's unlocking more value across all 4 layers of our platform. again, across the data layer, the apps layer and the semantic layer, the agent layer and the interfaces. Now we all know that if your data is not right, your AI is not right. I've seen that over and over again in customers where all of a sudden, we'll go in and try to show them some magic and all of a sudden, we'll go, "Well, are you really paying attention to your AI, because your data quality doesn't seem to be exactly right." Well, all that data inside Salesforce now provides hundreds of petabytes of critical context so agents can actually understand your business. We're doing more to help customers clean up their data to make sure that it's well harmonized to make sure that it's -- they have the right level of data cleansing, building the right data warehouses, then our apps, well, they can be more valuable than they've ever been because now they don't just run your business, they're running all of your agents as well. Think about it. There's more data insight Salesforce than any human can comprehend. A human works 1 record at a time, an agent works around the cross -- the clock. It sees everything, not 1 thing. It reads across millions of records to find the perfect opportunity, forecast the quarter and close cases. We know we've been using these models now for almost a decade. For a decade ago, I would sit in my staff meeting, and I would ask "Einstein, tell me how is the forecast going to turn out." And in many cases, it do more than our folks. Why? Because it's able to see everything. So here's another great example, Uber for Business. They've got 30 onboarding specialists and a mountain of inbound leads nobody was ever going to reach, their rules, their workflows, every deal that's ever gone through them. They've used Salesforce since the start of Uber, and all of that lived inside Salesforce. Now this is how they sell. So they paint -- just pointed Agentforce at the pile, got to work, looked at their whole history of their whole company, all the institutional memory everything that's inside Uber, now 6 weeks to launch within 2 weeks, 60% more leads and converting. This is that power. We're introducing hundreds of packaged agents that understand your business and industry right out of the box, so they can start delivering value within days, not months. And now with AI force, we're bringing all that to any interface, this is the magic moment. People don't have to come to Salesforce to get work done, Salesforce comes to them. And Claude and Slack and ChatGPT and Teams, wherever they want to work, and it's a shift from software as the interface to software, powering every interface. Of course, this is already happening in Slack, which had a phenomenal quarter. It's the best acquisition we ever made regardless of all the financial analyst reports that I read about 6 years ago. When we bought it, we won't go through the details, it's water that's now all under the bridge. But let me just say this. When you look at Slack today, it is where work happens. And it's where these AI lives and work and could do things. And not only is it where human work happens, now it's where you can build together to with Slack Codes. AI isn't trapped in a single-player chat window. It's a teammate that works across all your people, finding the right agent, the right action, all the flow work, fueled by all the enterprise context that lives in Salesforce, the conversational context in Slack. Companies like Anthropic, OpenAI, Lovable, Replit on and on and on. I think there's more than 1 million companies on Slack now, are all building their agentic products directly into Slack because Slack is where their customers want them. And Slack bot is our fastest adopted AI product ever. Five months after launch, it's got 1 million active users, up 150% quarter-over-quarter. If you don't have Slack bot turned on in your Slack instance and you're not using it every day, you are really missing out. It has the ability to read across all of your Slack data, and you were going to have insights in your business, you just were not able to have before. It just makes you a better executive. Robin Hood is a great example of what's happening. Robin Hood needed AI adoption across its whole workforce, not just engineers. So what Vlad did was he put AI inside Slack, the place where the entire business comes together and connects to Salesforce. Google, Okta and other systems. And now any employee can use Slack bot to surface past decisions and conversations, solve problems without engineering support and Slack isn't just the best place to work with AI. It's also the best place to build with AI. We just introduced Slack Code, a shared space for teams of agents and humans to build together right where they already work. So when you combine Slack Code with Slack bot, it becomes an incredibly powerful multiplayer IDE. Okay. Well, as you can see, across our whole platform, we're redefining how our customers build, deploy and scale AI, and we have a very special guest today on our earnings call, and our friend, David Friedberg is here. He's got this great next-generation bioengineering company, Ohalo. Welcome, David. Fantastic. Welcome to our earnings call. Great to have you.

Thanks for having me, Marc.

And they're changing how we feed the planet with a breeding technology that boost crop yields by 50%, maybe 100%. [indiscernible] sent me a can of seeds. I don't know if I'm allowed to talk about what I got or not, but it was pretty awesome. And I'll tell you, David had chosen a CRM product when he first started Ohalo and -- how does it pronounce? Oholo? Ohalo? Mahalo?

Ohalo. I should ask you. It sounds like a Hawaiian word.

It sounds like it, but it's not. It's based on an important actually part of bioengineering history, right?

Yes. Well, there was an agricultural find in the Sea of Galilee where they found this whole pot of seeds 20,000 years. So kind of rewrote what we thought about the history of agriculture and plant breeding. So we named it after that little village.

Fantastic. Well, yes, you're right. It sounds like a Hawaiian word but it's not. And I know that you started with another CRM product, we won't talk about which -- what it is and -- but I remember when you called me and you said, well, maybe I'll try to vibe code this whole thing, whatever. And then a few months later, it turns out your...

Yes, we did a little vibe coding. I did a vibe code to make a CRM product over a weekend. And you quickly realize just how much it takes to do maintenance, to do accounts, to do security, there's just much more to it. And we realized pretty quickly, there are certain, I would say, software applications that are maybe verticalized where you have to build custom workloads that make sense for your particular business, but then there's platform software. And platform software, we realize pretty quickly is really what we need to build our entire company around. And Salesforce is what we kind of decided to go with on CRM, we're already on Slack. We're not going to go vibe code Slack, we're not going to vibe code CRM. But then we build custom workflows, custom interfaces, custom prospecting tools that my sales teams. I've got agents that are out scanning public county databases, trying to find where farmers are planting what crops, what their names are, what their contact info is. I've got agents doing all sorts of prospecting, that interface gives my sales team leads that integrates with Salesforce. They can then go run the standard workflows that are a little bit more standardized across verticals, and we could build all of our custom workflows in parallel and in concert with the Salesforce tool.

Well, it's been very exciting. And I'll tell you, I'm thrilled to have you with now a large Salesforce customer and...

One of your smallest, but yes.

Well, I would say large in terms of presence, in terms of -- everybody knows you now Dave because your podcast is so popular. The #1 podcast in the world is what I heard.

In San Francisco. For now. That's right.

But what I want to know is this, so when you do think about the future and you think about your company and bringing the best of AI and the best of CRM together, how do you plan to do that?

Again, I think it goes back to this point about where do we create value? I'm not going to create value as a business by doing something that everyone else does. If everyone else is using Microsoft Excel, I'm not going to go build Microsoft Excel. If everyone else is using an ERP tool, we integrate with NetSuite, and I know that you guys have an integration with NetSuite. We're not going to go build an ERP tool. And we're not going to go build Slack. We're not going to build communications and messaging. We're not going to build CRM. We're going to build custom interfaces for doing plant breeding. We're going to build custom interfaces for prospecting customers. We're going to build custom interfaces for selecting the right product for a farmer based on my satellite and radar imagery that shows me what that farmers field is going to look like next season, making an estimation and then making the right product selections for him. So the interface to do that for my sales team for my customers, that's where we add value. And then the actual following up with the customer, connecting with the customer record making that transaction record, storing it. That needs to be done safely, securely, it needs to be done with the right account settings, the right access. That's what we're not going to go build. And that's really where the partnership works. Now when we make a selection, it has to be a selection with standard platforms that we can work with that integrate that have the integration capabilities that have the ability to service and support. I'll give you another example. Just internally, we use Slack, right? That's our primary communication messaging tool. And in Slack, we've got an Ask HR channel now. And so we basically use Claude to set up an Ask HR channel that anyone in my company can ask the HR questions that they would normally spend time calling up the HR people saying, "Hey, I got this question, I got this question." Ask HR has access to all of our internal HR documents, and it knows who you are, whether or not it can access your personal information. It knows standard benefits policies, and I can just answer all your questions for you through Ask HR. I don't need to go build a communications tool to do that. I can leverage Slack and I can leverage Claude to deliver that internally. It's another good example of kind of the sort of thing where we can build something custom using our internal benefits, our internal HR policies, but then we can leverage the platforms and Claude to deliver that.

Okay. Now because I'm a competitive person, I have to ask you this last question, which is kind of where I started. This all started because we were just talking on the phone about something else, we're personal friends. And all of a sudden, you said to me, yes, I'm using the CRM product. And I'm turning it off completely. I'm not going to use this product anymore. And then I was like, well, why? So can you just tell us the story, you had already invested in the CRM platform. This is 1 of our competitors. And then -- but you decided not now, you don't have to tell us who it was, but what are some of the features and functions that you saw in Salesforce that then gave you this ability to achieve all this productivity that you so badly desired?

It wasn't sold as great a sales guy as you are. I wasn't sold installed in our first conversation. I was still pretty reticent. I'm like, Marc wants me to do this. I'm going to do it for Marc. But I'm not sure, okay? This is what I told my team. And there's a guy, a great guy named Ben. Ben worked at my shop and Ben used Claude. He used Cursor, and he spoke to your Salesforce guys, stood it up. And what took us months of going back and forth trying to customize this other CRM tool and build the application and workflows around it that we needed. We were like pulling our hair out we're like, let's just build it all from scratch, and that's when you and I talked. So Ben used Claude and Cursor, got into Salesforce and was able to get everything stood up in under a month. And so I wasn't sold until we did it. And then I was like, okay, I'll give them our credit at this point. And maybe we should send them a check and pay for the product. But I would say that was the...

By way that a huge...

You're a big marketing guy, but the product and the capabilities...

Thank you, David. Appreciate that.

That sold itself actually. Like when we got in there and Ben was able to do this in under a month, and he told me he did the whole thing in under a month. Just Ben. And he ran the whole thing.

And I think that has been the huge shock for us that these new next-gen tools, the Cursors, the Replits, the Claudes of the world, make our product better that all of a sudden, it can customize the data, the metadata, set up the preferences, do the administration, do things that maybe you needed a bunch of service folks to kind of do. Now all of a sudden you're getting going in a month, maybe it might have taken a view before, 6 months to a year, all of a sudden now you're fully automated and your ability to add new functionality and do new things. This has provided this kind of very strong platform. And as I said, it's a terministic platform. And while Cursor is more nondeterministic and probabilistic on the front end, it's helping you to administer it, maybe Bill starting to build new screens for you, analytics, but nothing is going to be better than having this solid foundation.

I was probably early on a SaaSpocalypse train, as you know, because I know you listen to my show. And I always said, like, I think SaaS was this temporary phenomenon between the founding of the Internet and the start of AI. But I think that it's a little more nuanced than that. It's probably this verticalized SaaS where you're trying to standardize a vertical on a bunch of workflows, which actually destroys value in that vertical because everyone is now doing the same thing in the same way. So no one can differentiate in that vertical. We've actually dumped all our vertical software -- verticalized software. We make all of our verticalized SaaS in-house. But the horizontal, the platform, Salesforce, standardizing on Slack. This is really where I think we've realized that's not -- that's actually going to get bolstered and it's more valuable with all the other capabilities we can now build around it. So I'm definitely sold in that sense. I don't think -- I think there's still a SaaSpocalypse with a lower case S rather than the upper case S for verticalized tools, where I think AI really allows you to rebuild something that's unique which creates value for your business in a vertical.

Rebuild it on Salesforce.

Yes. That's right.

Great. Thanks so much David for being with us. We really appreciate you coming in today. All right. We're so thrilled to have David here, and we're so grateful to have him now as our new customer. And I just thought everyone would love to hear that story because I think as everybody has heard David has been wondering how will he use enterprise software in this new company, where does he achieve that productivity. And I've just never been more excited about our future. The scale of the opportunity in front of us is extraordinary. You're going to see it at Dreamforce. Not only are we going to have great entertainment, probably the better, best entertainment we've ever had. So we can't wait announce that. But also we've got probably the best products we've ever had. And you're going to see it in just a couple of weeks, it's going to be a huge accelerator for Salesforce for all of our customers. We're going to bring 50,000 people here to San Francisco and show them some unbelievable capabilities. And we're going to show you some of the most exciting transformative technology we've ever built. It's the future of enterprise software. And I'll tell you, we're deploying it not just for the Army or for the IRS or for all the major U.S. agencies, all these incredible new customers that Miguel has signed up from Uber to Deutsche Telekom, FIFA you're going to see not only meet all of them, but you're going to see an incredible lineup of speakers at Dreamforce. And yes, Dario is going to come in there. It's going to be in my keynote. You're also going to see Sam there. Jensen is going to be there. Actually, all the major AI leaders is going to be there. David is coming, if he's bringing all his friends. And you're going to see how great companies like Amazon, NVIDIA, F1, L'Oreal are bringing humans, agents, platforms together to connect with customers in new ways that were never possible before. We're looking forward to seeing you all there. And before that, we've got you, Robin.

Thanks, Marc. I appreciate it. Your enthusiasm is in infectious. So I'm going to go with a big speedy here because we want to be sure that we value all of your questions and want to be sure that we can tell you everything we can about the quarter. First and foremost, we delivered a record second quarter. AI is amplifying the value of our platform. This isn't just the technology shift, as you've heard, it's a reinvention of our customers' work and it is fueling our growth. So I want to take you through a few of the proof points. It starts with our operational focus on net new AOV, which is driving our reacceleration. Exceptional Q2 bookings, along with near record low attrition, drove our Q2 CRPO beat. Half 1 net new AOV growth significantly outpaced AOV growth, keeping us on track for second half organic revenue reacceleration. Contract lift terms for new business and renewals are increasing across all segments. Slack continues to shine. Q2 Slack net new AOV was the fastest quarterly growth since acquisition. AI innovation across our platform is delivering measurable value. Agentforce ARR reached $1.5 billion, as you heard, driven by Slack bot and Headless launches and continued AI momentum. Upgrades to our premium Slack additions have tripled since we launched Slack bot. Our consumption flywheel is turning. AW use continue to scale as customers drive agentic use cases across the platform. In Q2 alone, customers drove 3.2 billion AW use, up 97% quarter-over-quarter. And Slack bot users were up over 150% quarter-over-quarter. With this clear demand, we are making it even easier to adopt. Our premium bundles give our customers access to our innovation in real time. Bookings from Agentforce 1 edition and Agentforce for apps more than doubled quarter-over-quarter. Headless takes this even further, bringing Salesforce to the surfaces where teams already work, Slack, Claudeforce and with AI force, many more to come. MCP and API usage grew significantly in the quarter as customers embed sales force intelligence, the data, metadata and semantics directly into their workflows. You can see the momentum in our results from the quarter. Q2 revenue came in at $11.35 billion, up 11% year-over-year, above the high end of our guidance in constant currency, driven by continued momentum in Slack and Agentforce. And we continue to accelerate Informatica's business. Subscription and support revenue was $10.82 billion, up 12% year-over-year in nominal and 11% in constant currency. Our top line performance reflects the breadth and resilience of our portfolio. Agentforce apps delivered solid growth, anchored in momentum in Slack and resilience in sales and service with early signs of recovery in marketing. While it is too soon to call this a sustainable trend, we're very encouraged by the success enterprise customers are having on our next-generation marketing product. Headless platform, Data 360 and other growth was fueled by continued momentum in Informatica and Data 360, partially offset by license revenue headwinds and volatility in integration and analytics. CRPO accelerated quarter-over-quarter, with $33.5 billion, up 14% in constant currency, that's 1 point ahead of our guide, driven by strength in Slack, Agentforce and Data 360. Our continued focus on operational discipline is evident in our profitability. Q2 non-GAAP operating margin was 34.1% and GAAP operating margin was 20.5%. As customer zero, we are putting Agentforce to work across our own business. Salesforce's help agent have surpassed 5 million customer conversations with 64% resolved autonomously. Slack bot is driving 8.1 million hours of annualized productivity gains for our employees. That's more than double quarter-over-quarter. We generated $1.1 billion in free cash flow. That's up 81% year-over-year. Execution of our 25 billion accelerated share repurchase continues. We expect to repurchase at least 14% of shares outstanding through this program thus far at an average price of $176 per share. Our responsible capital return strategy underscores our conviction in our future. So turning to our outlook for the year. I want to walk you through the components of the $300 million constant currency raise to our revenue guide. We are raising our FY '27 revenue guide for organic performance by $100 million. This is driven by the continued momentum in Agentforce, Data 360 and Slack. These areas of strength offset the continued volatility in overall license revenue. Alongside this organic growth, our raise incorporates a $200 million expected contribution from the anticipated closings of content and then in the coming weeks. Of note, our FY '27 revenue now incorporates a $100 million FX headwind compared to our prior guidance. This brings our updated FY '27 guidance for revenue to $46.1 billion to $46.4 billion, resulting in subscription and support growth of slightly above 12% year-over-year and slightly under 12% in constant currency. We're holding our non-GAAP operating margin guidance at approximately 34.3%. And we're updating our GAAP operating margin guidance to approximately 20.1%. We continue to expect operating and free cash flow growth of approximately 4% to 5% year-over-year. So moving to our Q3 guidance. We expect Q3 revenue of $11.42 billion to $11.5 billion, growth of approximately 11% to 12% in constant currency. Q3 CRPO growth is expected to be approximately 14% year-over-year in constant currency. I do want to note that this does not include incremental contributions from Contentful and Fin, as we await deal closing to ensure accurate balances are reflected. In closing, building on the momentum from a strong first half, we are delivering record revenue and cash flows this year. We look forward to sharing more on our latest innovation and financial framework during Investor Day at Dreamforce next month and connecting with many of you here in San Francisco. So before I turn the call back over, I want to thank Mike Spencer for his incredible leadership of Investor Relations. His candor and clarity earn the trust of the investor community and I'm personally grateful for his partnership. Luckily, he's not going far. He's now taking on a broader role in our finance organization. I also want to extend a very warm welcome to Mark Murphy as our new Head of IR. He's covered Salesforce as a top sell-side analyst going all the way back to our IPO. So he knows many of you in our story very well. Back to you, Marc.

Thank you for the kind words, Robin. With that, we will move to questions. [Operator Instructions] Sophie, please queue up the first question.

[Operator Instructions] We'll take our first question from Kirk Materne from Evercore ISI.

Yes. Thanks very A lot of great things going on this quarter, but I have to ask about Claudeforce. And Marc, I think specifically, I'd love to understand how you and Miguel are going to be taking this product to the field, what are you doing with Anthropic to make sure that this gets out and gets to the hand to your customers as soon as it's available. And I assume we can be seeing Anthropic and Salesforce salespeople working together to bring a lot of value to both your collective customers.

Well, we're really excited about this product. This is the best of both worlds. It's the #1 AI meeting the #1 CRM and putting them together. As I said, when you do that, you get this incredible result, a radically different type of interface on top of Salesforce's entire platform. It's really powered by this incredible new AI harness that you're going to see at Dreamforce AI force. And that harness is able to power not only Claudeforce but a new version of Slack that you're going to be seeing as well as Coworker, which is something inside our lightning interface and other amazing things as well. But once you have that enabled, then you're able to really unleash the power of our data, our applications and semantic layer, agent layer and all of it comes to light in a whole new way. And I really saw it myself, as I said, in Europe, where we would really show these exhaustive demos to customers and when they could see that all this value that they have in their systems that has been trapped becomes untrapped, but you also saw it here at Salesforce. This quarter, we actually released it to many of our executives all over the world. And many of those executives were the ones who are actually demoing it directly to those customers that it was sales executives are my most senior sales executives, my operating unit leaders we're showing Claudeforce to our top customers already. And you're right, we'll also work hand-in-hand with in Anthropic sales executives as well and we'll do whatever we can to make sure that this becomes a huge part of our sales ecosystem. I think this is going to be an incredible opportunity for both companies. And I'd love for Miguel to come in and talk about his vision for how this has come together, and Miguel has been a huge driver of the relationship with Anthropic as well as really broadening the capabilities of both companies.

Thank you, Marc. Listen, I've been obsessed with this surface. I, myself and a number of my leadership team have been using very profusely the surface connected. We've done it manually, connected the SEP servers, created skills on our own. So I just can't believe that we have now this product available. We are rolling it out to the whole enterprise or the whole company. And then we're going to make it path. We're going to make it available to GA in September to everyone at Dreamforce. Every single seller of Salesforce will be demoing this product as 1 of the surfaces. By the way, we love Slack as 1 of the surfaces, but not everybody has Slack. They are complementary. Slack. You are working with your teams is a multiplayer surface with Cowork, you and Claudeforce or Salesforce before Claude. We are simply going deep and research and understanding your business. By the way, you are able to engage also through Slack through e-mail with your team members, it's going to be very powerful. Every customer will be able to buy it. They will have to upgrade to our premium additions and it's going to be a new wave of demand. I'm very excited about it.

And Miguel, just give us just a couple of anecdotes because I just know like -- when we turn this over to several of your European leaders specifically, and obviously, I was in Europe for that time, and they started using it, just even at the most basic level, the kind of things that they were building and the kind of things they could see about their business and how to drive their business forward really changed. Can you explain that?

So currently -- and by the way, this is what I want all our sellers to do. We're going to be living in 3 surfaces, what we built, and this innovation came from Europe more than the U.S. I'm very excited about that. We basically created a cockpit to understand the business.

So you're saying that Europeans can innovate.

Sometimes, we can. Yes. So we build our own agents based on our Claude and that agent expect, they are our deputy CROs for all our businesses, and they inspect the business, the pipeline, they tell us if there is risk in the month or in the quarter. And I do 1 thing that is -- Marc, you would love this. I talk -- by the way, I do this on Slack. This is 1 of the surfaces. I do this in -- I mean, at the time, Cowork now is Claudeforce. But I also do it in an app that I built with Claude Code. So depending on the moment I use 1 of the surfaces. But I do 1 thing that is very powerful. Every time that I visit a country, and don't tell anyone because I don't want my team to know. But essentially, what I do is, okay, I'm visiting Italy. I mean we have an amazing leader there, Vanessa Forteza, she's our [indiscernible]. And I said, okay, give me all the opportunities, open opportunities for the month and then send a Slack to every account executive copying the whole chain all the way to Vanessa, telling them, look at the opportunity record, look at everything, make it sound like it's me. I review all the e-mails all this like before they go. And in [indiscernible] 50 very customized Slack messages to the AEs, asking them if I can help, if we can do anything, it's incredible. The engine is very smart. It proposes already ideas to close the deal. And then when I visit the country, everybody is mobilized. Everybody has been working over the weekend. Vanessa is crazy running around, and we close deals faster.

Yes. Very exciting.