Salesforce Inc at UBS Women in Tech Summit Transcript

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

Question: Taylor McGinnis - UBS Equities - Analyst : Maybe, Amy -- maybe a good place to start was the 1Q April results and guide we're only offered a couple of weeks ago. The stock obviously had somewhat of a reaction to that. So maybe --

Question: Taylor McGinnis - UBS Equities - Analyst : But maybe you could take the moment to provide a little bit of context there and what you believe should be the key takeaways for investors.

Question: Taylor McGinnis - UBS Equities - Analyst : Perfect. Appreciate that. And maybe before we dive deeper into the Salesforce story, I think you'd agree that last few weeks, there's been unusual activity across the software space in terms of a lot of the software stocks, and Salesforce wasn't alone in terms of maybe flagging some of the weakness in the demand environment. So when we think about the weaker-than-expected results that we saw across the software space, I would just be curious to -- it might be helpful to hear what Salesforce is seeing out there in terms of the demand environment and maybe what might be causing some of the softness in the first half of this year. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 11, 2024 / 4:40PM, CRM.N - Salesforce Inc at UBS Women in Tech Summit

Question: Taylor McGinnis - UBS Equities - Analyst : That's really helpful. And maybe as a follow-on question to that, was there anything Salesforce maybe specific to that? So you mentioned Salesforce has a great go-to-market engine. Was it possible that that was pushed maybe a little bit too hard in 4Q? You had a softer pipe going into this year. Is -- the normal post fiscal year sales reorg, does that play into it at all? Maybe you can comment, one, on how much of that could have been Salesforce specific versus something wider going on. And then maybe as a second part to that, when you think about the pockets of weakness, is there any vertical geo product segment or customer segment that you would flag in particular?

Question: Taylor McGinnis - UBS Equities - Analyst : Perfect. And then, as investors are trying to think through, I think, the different explanations about what might be causing some of the disruption that we've seen in 1Q, one area that could be a plausible explanation is AI, right? So AI is one of the hottest topics within tech right now. And our team is thinking about something called maybe like an AI crowding-out thesis. So is there the potential that as companies are evaluating AI, are they potentially deprioritizing other software initiatives or things getting pushed out? So I guess in terms of the conversations that you guys have with customers, do you think that that's a plausible explanation at all? Are you hearing that having any impact at all?

Question: Taylor McGinnis - UBS Equities - Analyst : Perfect. Now maybe let's pivot to the outlook and what's to come. So on the last call, you reaffirmed the full-year 8% to 9% growth guidance. One of the reasons being is you saw -- or you see areas of strength, essentially in the second half. So for the audience, could you maybe just provide a little bit more color on what you exactly mean by that and what those areas are?

Question: Taylor McGinnis - UBS Equities - Analyst : Perfect. Yes, let's dive a little bit deeper maybe into some of those bright spots. And I know, earlier in our discussion, you mentioned the strong vertical industry momentum that you guys are seeing. So is there any vertical that you would flag in particular that feel that they have the best momentum as we look throughout this year?

Question: Taylor McGinnis - UBS Equities - Analyst : Perfect. And then one of the product segments you mentioned in particular earlier was Data Cloud. So it seems that Salesforce has a huge opportunity here as being the system of record for some of the most valuable data of your customers. So why is Data Cloud so well positioned in your view? And as you think about AI, do you view Data Cloud as being a big precursor to AI adoption? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 11, 2024 / 4:40PM, CRM.N - Salesforce Inc at UBS Women in Tech Summit

Question: Taylor McGinnis - UBS Equities - Analyst : Perfect. And as a follow on question there, In terms of just where your customers are in adopting AI, I'd love to get a little bit more color there. So it seems like there's a lot of experimentation going on, but not yet a lot of companies that are in production and at scale. So I guess how do you guys think about the timeline to adoption? Is this more turning into maybe a calendar year 2025 event?

Question: Taylor McGinnis - UBS Equities - Analyst : Perfect. And on that, I guess outside of Data Cloud, is there any areas like within AI that you're more particularly excited about? Any specific use cases with Einstein or anything to flag to the group? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 11, 2024 / 4:40PM, CRM.N - Salesforce Inc at UBS Women in Tech Summit

Question: Taylor McGinnis - UBS Equities - Analyst : Perfect. Shifting gears to the profitability line, so you reaffirmed operating margins for this year, your fiscal year 2025, at 32.5%. Just given the strong 32.1% operating margin in 1Q, it seems like that part of the story is still very much intact. And I know that you have a number of levers there. So could you maybe just go into a little bit more detail and elaborate on what the key areas of further margin upside are?

Question: Taylor McGinnis - UBS Equities - Analyst : Perfect. Awesome. Thank you for that. Maybe going to cash flow, which was strong in Q1, is there any specific drivers to call out for the quarter and the year? And maybe turning to capital returns as well too, so you paid out your first dividend, you're continuing to pace well on the buyback program. So can you maybe talk about your commitment to capital return and management of dilution?

Question: Taylor McGinnis - UBS Equities - Analyst : Perfect, awesome. And then maybe sticking on capital allocation but moving on to M&A, so that's obviously been a very hot topic of the late. So in terms of areas that would make sense for Salesforce, maybe you can opine there a little bit. So is it still fair to think of those as aligning with some of the internal investment priorities that you mentioned around data or AI data and vertical-specific software?

Question: Taylor McGinnis - UBS Equities - Analyst : Perfect. And given that this is a women's event and your amazing career trajectory, Amy, I want to make sure that we take a moment to give you an opportunity to share any advice that you have for the women that are sitting in the audience today that aspire to have similar leadership roles that you've had in your career. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 11, 2024 / 4:40PM, CRM.N - Salesforce Inc at UBS Women in Tech Summit

Question: Taylor McGinnis - UBS Equities - Analyst : Perfect. And then I'd also be curious too because now that you're in the C-suite, right, within Salesforce, is there anything Salesforce is doing in particular to empower women or maybe even something that you're doing as well too? Something that we, for everyone in the audience, programs or initiatives that they even put in place at their own companies in order to help drive greater diversity and inclusion.

Question: Taylor McGinnis - UBS Equities - Analyst : I appreciate all of that color. That was really helpful. Maybe now, I'd love to turn it to the audience to the extent that anyone has any questions. And I think we'll have on mikes coming around here. So if you just raise your hand. Anyone? Here. Go to Joyce.

Question: Taylor McGinnis - UBS Equities - Analyst : Hey, Joyce.

Question: Taylor McGinnis - UBS Equities - Analyst : Okay, any other questions from the audience? Amy, maybe I'll ask you a final one, which would just be -- I'm sure you've had several conversations with investors over these last couple of weeks since the earnings were announced. Anything that I didn't ask you about that you feel like you're getting a lot of questions from the investment community that you think would be important to share with the audience here or any key takeaways?

Question: Taylor McGinnis - UBS Equities - Analyst : Awesome. Well, we'll leave it there. Everyone, give Amy a big round of applause. And Amy, thank you so much for joining us.

Question: Taylor McGinnis - UBS Equities - Analyst : Your presence is always well appreciated. So thank you. (Multiple speakers) without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 11, 2024 / 4:40PM, CRM.N - Salesforce Inc at UBS Women in Tech Summit

Question: Taylor McGinnis - UBS Equities - Analyst : Okay, perfect. Awesome. Thank you, Amy.