Salesforce.Com Inc at William Blair Growth Stock Conference (Virtual) Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : With that, let's dive in, Amy. It's -- so you've been -- you've had quite the journey with Salesforce. You've been at Salesforce for about 8 years, if I have my dates right, but recently became CFO. Just walk us through your background a little bit, what you've been doing at Salesforce before the CFO role, and what the transition has really been like since you took on the new role.

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Yes. I've seen -- I'm sure you've seen quite a lot of changes over those past 8 years, like you said, ExactTarget, that feels like a long time ago.

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Yes. Absolutely. So maybe just give us a sense for what you're focused on now. What are some of the near-term priorities as you look at putting your take on the CFO role? And what may be near-term priorities and long-term priorities in terms of what you're focused on?

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Let's touch on the first point that you mentioned there, which is just that the demand environment seems to be in high gear, right? We had an odd year last year with the pandemic. But give us an overview of what you're seeing from customers, what their willingness is to invest, particularly in front office, right, revenue driving solutions like Salesforce. And then how do you think that just compares to what we -- where we were at this point last year and then even at 2019 levels? How has just the demand environment progressed?

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Can you talk -- so there's been a lot of, I think, both organic and inorganic product changes that seem like they're contributing to the success you're having with larger deals, with 7-figure deals, with multiproduct adoption. Can you just talk about maybe the role that Customer 360 -- some of the newer product announcements, right, MuleSoft and Tableau, I think we talked about them as being kind of this core service layer and all these deals being involved. Just talk about maybe some of the product factors, the innovation factors that are driving customers to make bigger investments with Salesforce.

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : So one of the things, right, in addition to just the top line growth and the deal acceleration that we're seeing, we're also seeing margins, and you touched on this, right, efficiency in the model, right? You delivered 20% operating margins last quarter. You raised your full year guide on operating margin. What are you doing on the efficiency side that's enabling you to deliver profitability? And just maybe talk about some of the initiatives that you've undertaken specifically to drive that because that was obviously a big focus last quarter.

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : And you announced that Dreamforce this year is going to be a hybrid event, but it will obviously have an in-person component to it, which is, I think, very exciting for a lot of your customers and investors as well. But what does that mean for Salesforce to now have an in-person component to that as opposed to the COVID hiatus, I guess, that we took last year? And then just how should we think about implications for lead gen, pipeline development, deal closing as a result of Dreamforce coming back this year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 03, 2021 / 7:00PM, CRM.N - Salesforce.Com Inc at William Blair Growth Stock Conference (Virtual)

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Well, I'm sure everyone will be very interested to hear what happens with that aspect of it. Let's switch to a topic that, I think, is on everyone's mind, which is Slack, right? You announced this deal where, I think, the latest guidance is that it's going to close towards the end of the second quarter. Maybe if we just zoom out, help us paint that picture of what Slack and Salesforce mean together? And why it's so -- why it was so important for the company to make this acquisition?

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Yes. And I want to bring in an audience question here because I think it's very relevant. So the question is, "It's incredible what you did with the MuleSoft acquisition, which I think has been just a tremendous success. But what are the lessons that you've learned from MuleSoft that you can actually repeat with Slack to get that to be just a successful of an acquisition?"

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Yes. I think -- no, that's very interesting. I think the numbers from Tableau and MuleSoft were both very remarkable last quarter. And then let's just follow up because I think one of the things that -- one of the questions that I actually get from investors quite a lot is does Salesforce end up closing down or closing the Slack ecosystem, right, making it less open as you tend to integrate it. I'd just be curious how you're thinking about that question because it is something that comes up quite a lot with investors. How would you answer that?

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Yes. I think the MuleSoft point is particularly great because I think of Slack almost as an integration engine in its own way just because of the broad reach that it has and MuleSoft is very much the same way. And no, that's a great point. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 03, 2021 / 7:00PM, CRM.N - Salesforce.Com Inc at William Blair Growth Stock Conference (Virtual) I want to ask another audience question here, which is also kind of pertinent to this. "But what are you thinking of the -- of your M&A strategy going forward? There's obviously a lot on your plate right now with Slack. But how are you thinking about that going forward? And then what do you think of the current valuation environment as Salesforce looks out in the market?"

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Okay. Understood. Let's -- maybe let's just switch gears off of the M&A and Slack route for a second. And I want to touch on maybe just the go-to-market for a little bit because if I rewind to a year ago today, I kind of distinctly remember Marc Benioff making this point that, "Hey, we're going to invest through the pandemic. We're going to -- we've learned our lessons from 2008." What has -- what was that -- what is that decision to invest as opposed to cut back last year? What is that -- what impact is that having on the business today and for your overall growth trajectory as you look to go out and capture your market opportunity?

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Yes. I can certainly imagine those were some very tough decisions to make last year with all the uncertainty that was there just a year ago. The other part to kind of just dovetail into is you invested last year, as you just -- philosophically, you're thinking about growth versus margin expansion, right? How do you think about that over time for Salesforce? Are you prioritizing growth? And how do you think about just balancing that with keeping your margins like healthy going forward here?

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : And I'll bring in just a question from the audience here because there's one on the sales and marketing leverage, which I think relates to the conversation that we were just having. "But is there -- when you think about just the operating profile of larger deals, right, when you're seeing these multi-cloud deals come in, is there -- are those economics on this -- on the commission structure different for the larger deals versus smaller deals at all? And do you think there's any changes that you can make to the commission structure going forward to get leverage on the sales and marketing line?"

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Yes. That's a very interesting point. I'm curious if -- you acquired Vlocity, I want to say it's been maybe a year, 1.5 years, if I...

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Almost exactly a year. So maybe talk about the role that verticalization is playing in your growth. And specifically, what the impact of the Vlocity acquisition has been on that vertical strategy for Salesforce.

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : And what do you -- so just -- when you think about the increasing vertical strategy, how do you think about the impact on sales efficiency, sales cycles for vertically focused deals, right, which are vertical solutions versus what you see on maybe the horizontal side? Is there a difference there at all just on your efficiency in closing those deals?

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : Perfect. And we have maybe time for just one more question, but I'll leave it at maybe a higher-level question. You put out a target at last year's Analyst Day to get to $50 billion in revenue by fiscal 2026. Just maybe talk about your confidence in getting to that $50 billion revenue target and what some of the drivers are that will get you there.

Question: Arjun Rohit Bhatia - William Blair & Company L.L.C., Research Division - Analyst : All right. Well, wonderful. Amy, really enjoyed having you here. Thank you for taking the time with us today. And thank you, everyone, on the line for joining as well.