Good afternoon, everybody. It's great to see so many people here and so many familiar faces. Very excited. For those that I have not met before, my name is Mike Spencer. I lead Investor Relations here at Salesforce. You like that? I'm testing the audience here. We're super excited for the day we have for you. We've got a lot of great speakers and content that I think you guys are gonna find very interesting. We're gonna kick off the day with Marc and Bret. We have about 40 minutes with them. They're gonna hand the microphone off to Amy Weaver, who's gonna come up and tell you about our financial outlook and where we're going.
That's gonna be followed by Suzanne DiBianca, our Chief Impact Officer, who's gonna come up and talk about our ESG strategy a bit. We'll have a short break, and then coming out of the break, we're gonna actually go into our organic innovation. I'm hoping a lot of you have spent time on the floor, gone to some keynotes. You'll have heard a bunch of new announcements come out, and we've had David Schmaier and Parker Harris here with us later to do a little bit of a double-click into that. We'll have some Q&A with them, and then we're gonna end the day with a broader Q&A with Amy, Brian Millham, our new COO, and Bret. I'm just gonna set expectations ahead of time.
For the first two sessions, for our CEO session and for our CFO session, we're actually not gonna be taking any Q&A during those sessions, and so I'll ask you to hold those questions for the end of the day from 4:00 P.M. to 4:30 P.M. That's the day and the setup. Of course, I'd be remiss if I didn't at least start with our risk statement. With that, as part of today's presentation, I will be discussing forward-looking guidance in both GAAP and non-GAAP form. Such guidance comes with risks and uncertainties that are out of our control, and we do not undertake any responsibility to update forward-looking guidance at any time.
Please refer to our SEC filings, Forms 10-Q and 10-K, and any other filings with the SEC. With that, I'm super excited to bring up Bret Taylor and Marc Benioff, and have them kick off the day for us. Okay. Well, thank you, everybody, and welcome to Dreamforce. Are you excited to be back here?
Have you all been down to Howard Street? Isn't it crazy down there? It's pretty crazy. It's packed.
How many of you is this your first Dreamforce?
What's amazing is I think the investors have been to more Dreamforces than the people in the audience at the keynote yesterday.
Yeah. Right.
What do you say about that?
I keep asking people, and there's a lot of new people here. It's amazing.
It's amazing.
I'd just like to begin by just recognizing our board of directors are here. So if you're with our board of directors, would you just stand up and be recognized? Thank you very much, guys. We're gonna make one slight change to our board of directors. I think a lot of you know Sandy Robertson very, very well. A lot of you used to work for Sandy. How many of you used to work for Sandy? Yeah. Isn't that awesome? You know, probably the most esteemed executive in our industry. Sandy has been our Lead Independent Director for, I think more than two decades.
He is taking a position on the board, but letting go of the Lead Independent Director title, and we are very excited to announce our new Lead Independent Director, Robin Washington. Robin, congratulations, and please stand up. Robin, would you just like to say just a couple words, which it's not rehearsed.
Marc loves to put people on the spot.
I know. I don't have bunny ears, though. I don't know. Really excited. I've had the wonderful opportunity of being able to work with Marc and the rest of leadership team and now Bret for 10 years, in September of next year. Also, the oversight of Sandy has been amazing. I hope you'll continue to mentor me in this role, and I'm looking forward to working with the rest of my directors and you and Bret and, ensuring our bright future continues.
Well, we're so grateful to Sandy for 20 amazing years. Congratulations. We're so grateful to Sandy for 20 amazing years, and Robin, we could not be more excited that you have accepted this amazing position with the company, so thank you for everything that you've done for us, and we're looking forward to some great times ahead. Thank you. Okay, so this is Dreamforce, surprise, surprising as it is. Is everybody having a good time here? I know the investors don't usually have a good time, but are you having a good time?
Yeah. You're allowed to say yes this time.
I don't really know. Yeah. I think everybody's having a good time, and I think everybody's happy to be back together. You can see that we have about 40,000 people who have paid to be at this event. San Francisco needed a good, solid kick in the ass, in terms of showing the world what it could do to host a big conference. It has this incredible new Moscone Center that really hasn't been broken in.
We're very pleased with how it's going.
Well, we have 40,000 people here in person, which is basically the fire marshal capacity. It's the biggest Dreamforce ever. We're actually not even doing free tickets this year because we had so many paid tickets, we just couldn't make it work from a capacity standpoint, just to give you a sense of the demand. We talk a lot about the Salesforce economy, 9.3 million jobs, $1.6 trillion in economic impact by 2026. Dreamforce is the center of the Salesforce economy. You know, everyone here is doing business. You know, our administrators, our Trailblazers, our developers, all of the independent software vendors. You know, this has been the pipeline generation event for all of them that they've been missing for the past three years.
The other incredible part, we have 150,000 people registered in Salesforce+. We're over 65 million views of the keynote on social media already, which is just incredible. It's interesting because we went through this digital transformation of Dreamforce through the pandemic, and now we're in this hybrid Dreamforce. We've got the biggest Dreamforce in person, and what I'm really proud of, and credit to Sarah Franklin, our Chief Marketing Officer, and her team, we've maintained the digital presence around that as well. Just incredible. I mean, it's a new day for Dreamforce, a new day for Salesforce. I mean, could you imagine three years ago, Marc, saying we're gonna get 65 million people watching the keynote? I mean, it's crazy.
No, it's been a bit of a revelation for Bret and I. We've been on the road now for more than a month. How many of you attended the keynote yesterday? Quite a few. We've been on the road, kind of writing and rewriting the keynote, really working with customers to try to understand, do they understand what we're saying? We're obviously rolling out a lot of new technology. The only way that we can really get to the bottom of our ability to communicate and present is to be eye to eye and face to face with our customers. It's an exhaustive amount of work.
It's hundreds of people that we're presenting to, and then we are able to pretty much have a high degree of confidence when we got on the stage yesterday morning that it was gonna be able to be rolled out successfully and have a good impact. I think it was one of our highest rated keynotes ever.
I think it was the highest, actually.
Yeah. It was the only one with bunny ears.
I think that photo's gonna be following us around.
I hope so.
Yes. Yeah.
One of the things that's extremely important to our customers is that we continue to reinforce to them our core values. This comes back over and over again, who are we as a company? I think for a lot of companies, especially during the pandemic, customers kind of became disconnected in some way. There was kind of a great separation that occurred between companies and their customers. The core values is very much kind of a signal to our customers, this is who we are and what we're holding ourself responsible for, these core values of trust, customer success, innovation, equality, and sustainability. I think on the last Dreamforce, sustainability really was not there and dominant.
I just finished a keynote with Jane Goodall, and we went through some of the material as well that we presented yesterday, including our new Net Zero Cloud, our new Net Zero Marketplace, our focus on ecopreneurs. We have an incredible keynote coming today as well with Al Gore. This is really something that's on a lot of our customers' minds, and one of the things I was surprised as we kind of toured around, got a lot of questions about helping our customers become more sustainable.
Well, it's interesting. You're absolutely right. You know, we had a few big innovation announcements. I think the theme of the strength of our organic innovation is definitely something that comes through strong for me in this keynote. We heard the feedback from the Trailblazers. We knew Genie was gonna be well received. It's as big as Einstein, as big as even the AppExchange, I think, in terms of the impact it's going to have on our customers and our Trailblazers. I knew that Slack Canvas was gonna be well received. Every time someone sees audio, video, and documents in Slack, their mind is blown. But you're absolutely right. You know, people, especially in Europe with the Green Deal, but every single company has a Net Zero strategy now, and there's not a lot of support and software to help them do that.
Our Net Zero Cloud, which is about tracking your carbon emissions and, you know, understanding your scope 1, 2, and 3 emissions, connecting that to a marketplace, I think is really meaningful. You know, it's something obviously near and dear to your heart personally, Marc, but it's near and dear to people's customer experiences as well because a lot of customers are choosing the brands that they work with and taking sustainability into account in doing so. You know, I think the insight that you had personally, Marc, that I've really internalized from the customer feedback is connecting our customers' sustainability and Net Zero strategies to how they communicate, collaborate, and their brands with their customers is actually extremely differentiated. It comes through.
I remember traveling through Latin America, and it was probably the top two things that every CIO I talked to wanted to talk about, which is, as you said, surprising. We wouldn't have been here two years ago.
I agree, and I think there's, you know, three things that are very important to us. One is that all of us need to become Net Zero. This is extremely important. We have to reduce our emissions. Nothing is more important than that. I'm sure you're gonna hear that today from Al Gore, who's been an incredible mentor of mine. Everyone has to become Net Zero. We have to reduce our emissions. That has a lot to do with, you know, stop burning coal and stop burning oil or reduce the amount that we're doing. The second piece is sequestration.
You know, we called it in the keynote, the great regeneration, the great reforestation, the idea that we have the ability to convert a lot of the CO2 in the atmosphere back to oxygen through tree planting and through also mangroves and through other kinds of incredible biological capabilities. Then the third piece is an ecopreneur revolution. Ecopreneurs are entrepreneurs like me, but they're focused on the ecology. We are seeing a lot of people, instead of coming into the tech industry, going into the ecology industry. These ecopreneurs, and we have a lot of them here, we're trying to profile them.
We also built a network called UpLink for the World Economic Forum, where we have 30,000 of these ecopreneurs, and you just watch the amount of new companies, new technology, new innovation. We wanna profile a lot of them here, and it gets really back to our core value of sustainability.
You know, I think I'm now going to your favorite slide in the whole deck, Marc.
Yes.
Do you want me to talk about SAP, or would you like to take your favorite line?
I have heard you.
How many times have you heard Marc say this past week? Go ahead, Marc. No, I'm teeing you up here. It's like a.
Well, I have a lot of.
Like a tee ball.
steam for SAP.
Oh, there you go. Here we go.
You know, 50 years old is incredible. You know, started in 1972. You all know the company very well and the sequential management teams. We did $7.7 billion this quarter in revenue, and they did $7.5 billion. We kinda knew it was coming, but to kinda see that we passed SAP and we could put this on the slide, the world's largest enterprise apps company. I think not only did we achieve that, but we did it with our core values, coming back to the previous slide, that we didn't sacrifice who we were to make money and to achieve our success. You know, I think we've probably become best place to work more than any other company in the world and recognized as most ethical company, leadership in many of these key areas.
Actually, just this week.
That's been so important to me.
Just this week we announced another $25 million grant to Oakland and San Francisco schools, and now over $110 million to local Bay Area schools. You look at the leader in philanthropy. It's interesting, when I first got to Salesforce six years ago, I couldn't have told you. Like, all I knew about Dreamforce was San Francisco's traffic gets really bad. I, you know, I didn't understand, like, why do 40,000 people show up to a tech conference? I think it's because of the values. It's because of the community. It's 'cause people are actually creating jobs here.
This connection, it's not a mistake that whenever we show the incredible top-line revenue growth of this company, we show it in conjunction with our values because, as Marc said, these are one and the same for us. Our values create value. I think it's one of the best business models and community in the world, you know, in large part thanks to that.
I think we're also very grateful. I think we've now encouraged about 17,000 other companies to follow our 1-1-1 model. I think that when we have a Dreamforce like this, we have a lot of friends of ours here who are entrepreneurs or starting companies, who have companies, and we see them embrace this model, and then they're going net zero, or they are creating a volunteerism focus, or they are running nonprofits and NGOs for free. It's been a great run, and just wanna thank all of you for being part of it. I know many of you have been with us almost from the beginning, and we're very grateful for you.
Yeah. Let's talk a little bit about product for a second. We're really proud to be the market leader. It's an important part of the conversations we have with customers. This isn't to brag. This is really for our customers saying, when I talk to, and you'll talk to David and Parker later, you know, when we talk about what it means to be number one, it means to be the most trusted. It means that, you know, when a CIO, a chief digital officer, a CEO calls their colleagues in another industry or in their same industry, and they say, "What is a platform I should choose for my customer transformation?" The answer is Salesforce. The answer is Salesforce because we've created the most customer success. We are the default. We work the best.
We're the number one in every Magic Quadrant, and we're the number one in customer sentiment. That's really what this chart means and why it's so important to us that we wanna be the leader in every category that we serve, from sales, marketing, e-commerce, customer service, and we also wanna be the best suite, and we wanna be the best portfolio of products. That's something that Marc and I talk a lot about. What I love about this slide, and Marc and I talk a lot about, is it's every single thing that we do at the company on a single slide. I think it really shows the simplicity of our focus, but also the completeness of our platform.
I know all of you saw the keynote, but I wanna highlight the right-hand side of this slide for a minute because I think, for me, one of the most exciting parts of this Dreamforce was just the reinvestment in our core platform. A couple things. As I spoke about in the keynote, we've done a lot of work to integrate our Marketing Cloud and Commerce Cloud into our core platform. We've done a number of acquisitions. You probably read about a few of them. One of the things we're trying to do is make sure that we're integrating our acquisitions. I would say Commerce Cloud is the farthest along here. Now, with a click of a button, you can add commerce capabilities to an Experience Cloud site.
This means that we're taking commerce capabilities, and we're enabling just a much broader range of customers to take advantage of it. If you see, and I see a couple Trailblazer hoodies in the audience here, thank you for that, by the way. If you talk to anyone wearing a Trailblazer hoodie on there, what it really means for them is that the skills that they've learned on Trailhead for Sales Cloud and Service Cloud now apply to these other clouds as well. If you think about the power of this ecosystem, it's not just our salespeople going into our customers and selling Salesforce, it's actually our Trailblazers saying, "Hey, if we have this problem as a business, I know the technology to solve it," and we're empowering them with this new technology. The other thing that we're doing is really invest in the foundation of our platform.
I'm so grateful to what Parker built 23 years ago, but technology is not like wine. It does not get better with age. You know, you need to constantly reinvent and refactor it. Hyperforce is going live in 17 countries by the end of next year. It's live in 10 already. This means you can deploy your sales applications and Salesforce applications with data residency in 17 different countries, which is highly differentiated. We've also announced a number of compliance capabilities, this new encryption partnership that you might have heard about.
You may not understand the bring your own key encryption, but what it means in practice is, for the areas that have data sovereignty regulations, it means that our customers can actually bring their own keys and meet really the highest standards of data residency compliance, which is a particularly big issue in the EU, but I think it's actually something that's becoming a global trend. Then, of course, there's Genie, which is a very cute bunny, which is why if you saw the pictures with bunny ears, it's not just a new fashion trend, but maybe we'll start one, who knows? We've really added a new capability to our platform. You have at the bottom, this automation, which is our Flow platform, which is doing over 44 billion automated workflows every day. This translates directly to the bottom line performance to our customers.
You have Einstein doing 175 billion predictions every day, which is incredible. I think that's the largest scale enterprise AI platform by a pretty big margin. Now with Genie, we've added a hyperscale real-time data platform that truly can, I think, expand well beyond the transactional database that used to be the foundation of our platform. You look at the capabilities of automation, intelligence, and real-time. Marc and I talked a lot about this. It does feel like we've taken, I think, a really brand-new vision for this Customer 360 platform can be. I am really excited about it. I think it's a reflection of not only our investment in integrating our acquisitions, but organic innovation to really say, what is the next 10 years of CRM looks like? I think the next 10 years looks like automated, intelligent, and real-time. I'm really excited about it.
Well, I think that when we look at the slide, of course, you know, a lot of these, as you know, are billion-dollar clouds, sales, service, marketing, commerce, Tableau, Slack, the platform, MuleSoft. Net Zero is not yet, but I certainly expect it to be, shortly. I think that, what we've done a really good job, and you've heard me talk about this, is we've built a full portfolio of products. I know that as investors, you focus on building a portfolio. It gives you a balanced return over time. We've built a portfolio of products. Some of the products are not on the slide, which is all of our vertical applications as well in healthcare or in pharmaceutical or in financial services, et cetera.
This idea that we have a full portfolio and that we're able to offer that through a wide variety, we're going to have to talk about all the geographies that we're able to offer that portfolio. It's really playing out that it's also not a bunch of independent silos. I think if you saw the demonstrations and the technology, you're seeing more and more of these technologies come together. We've done a really good job of getting the products to work together, to integrate each other. Our customers more and more wanna buy it as a suite. They really look at this and say, "Hey, I wanna buy Customer 360. I don't want sales, I don't want service, I don't want market.
I want the platform." We haven't made that shift yet to offer that kind of an E5 strategy. It hasn't really occurred in our company yet, but you can envision that that's the next step for us. I think that when you look at all of these software buyers who are here at the conference, they are not looking just at one particular product. They're looking at the whole platform, and they're also looking at the relationship with Salesforce. This has really been powerful for us. I think we took our time, and used the pandemic well, and we replatformed a number of these technologies. A lot of you remember, for example, when we bought Demandware, you know, this kind of amazing company.
I think it's in Burlington, Massachusetts. It's a great scalable commerce product. It's, you know, it sells the shoes that I'm wearing, and it sells the jacket that I'm wearing and all of this kind of stuff.
We only shop at Commerce Cloud sites. Yeah.
You know, LVMH has a lot of their sites. You heard L'Oréal has, I think, 200 Commerce Cloud sites. Adidas, you know the stories already. The thing that's interesting about Commerce Cloud is this is not the Commerce Cloud that we bought. We have rewritten the Commerce Cloud, and we've put it into the core platform. Because now it's inside the core platform, this is like a next level where it has the ability to integrate with all these other core platform services. That's also true for Genie. Genie isn't some separate SKU. Sales is not some separate, completely separate product or piece of code. More and more what we're doing is we're loading these code bases into our core platform and rewriting them so our customers have an integrated experience.
Well, you're gonna see from Amy later, a lot of the numbers sort of reflect what Marc and I say, and obviously will come in Amy's presentation. The way you see this is how many clouds do customers start with, which is going up. You know, customers starting not just with one, but starting with multiple. How quickly do customers expand to multiple clouds? It reflects exactly what Marc says, which is one of our biggest differentiators is our completeness. Just take the example of Commerce Cloud being integrated with our core. We have a, an order management capability, which is essentially post-purchase, how do you manage the orders, both reflecting the back end, you know, ERP systems, but also how is that reflected in the customer experience as well?
In the pandemic, it was things like buy online, pickup in store, but it could just be tracking your order. You saw a little bit of that in the Ford demonstration yesterday. You know, when we go into a retailer, if we're doing our job right, we're not competing head-to-head on digital checkout technologies and service technologies. We're really selling the complete retail experiences, which is everything from commerce to digital marketing to order management to customer service. What's also exciting, I was really happy to see how you could see the Slack integrations come through so strongly everywhere yesterday, is the employee experience and the partner experience all running through Slack.
You can just imagine, you know, with the current supply chain crisis, I've seen so many retailers work with their suppliers using Tableau to visualize, both for pricing and inventory, their supply chain, and then using Slack Connect channels to work with their partners to actually debug it. We're really trying to package this all up into real solution selling. The other thing which I talked about in the last earnings call, but our industry solutions are really taking this entire Customer 360 and building end-to-end industry workflows that work out of the box. It's powerful because they're actually the things that our customers care about. If you go into a retailer, they care about retail execution, they care about trade promotion management. You know, these things, if you're in those industries, like that's what you care about, that's great.
It's speaking the language of our customers. It's also in this, you know, complex economy that we're in right now, it also translates to time to value. You know, because instead of hiring either your own developers or a partner to recreate those experiences, you're just customizing the last mile. We're starting you with out-of-the-box basic functionality for now 12 different industries. Customer 360, I think it's the power of the suite. It's also with our industry solutions. It's really saying, you know, rather than imagining your customer experience, we've actually built those industry-specific workflows.
Obviously, David Schmaier, who we'll speak to later, his whole company was built on doing industry-specific products on Salesforce, and I think his influence on our portfolio has really been felt. I mean, the strength of our industries portfolio, I could not be more excited about. As Marc said, we have a version of this with the industries. I should have put up here, but it's just incredible, and it's been a growth engine for us.
Yeah. I think that when Amy comes up, you're gonna see why this is important. We've kinda told you what it is, but why this is important is when we sell the whole cocktail, not just, you know, one component, but we sell the whole cocktail and the customer is drinking it down the whole thing, our attrition drops.
I regret this metaphor, but we're good. Keep going, Marc. Yeah.
No, let's keep going. Yeah. Well, I think a lot of people here actually can relate to it. When we sell the whole cocktail, then the customers, they have really lower attrition. They're more strategically aligned with us. I think that we didn't expect, like the one that really kind of, you know, was the surprise for me was Tableau. I was like, Tableau, it's analytics, it's this, it's that. All of a sudden, when we went to Tableau, a lot of our customers started to view us much more strategic than we were before.
Obviously, we've done three huge acquisitions in the last five years, MuleSoft, Tableau, and Slack. Really, Tableau, all of a sudden, when you look at a big customer like Honeywell, who has tens of thousands, yes, they use some of this and some of that with us, but all of a sudden, the conversations with their CEO, Darius, is more about Tableau and how they're using it.
Well, that's because his dashboard's in Tableau. I mean, I've talked to so many CEOs who look at a Tableau dashboard every morning, and there's not a lot of Salesforce products like that. It's so important 'cause if you think about right now, there's a lot of consolidation of technology investments, right? As companies try to focus on bottom line, control their costs, and being a strategic vendor and having those C-level conversations, I mean, our acquisitions have been incredible to drive some of those conversations.
This is our strategy. Our strategy is to build a platform that's deeply integrated, that will be, you know, compliant and able to run in different countries and have high levels of security and privacy and so forth. When we look at this platform, that this is an integrated platform and not just a bunch of independent products. This is where customers really become sticky with us. This is where customers really end up here. Genie is kinda the next level of the platform, which is cool. We didn't really have two months ago, when we started this journey, we had brought all of our top 500 executives together in a meeting that we have every year called La Lima.
We were there, and we presented, and we thought we're so great, we're hot shit, and we're gonna show them this thing, blah, blah, blah, blah. They're like, "We don't get it. What are you? What are?" We knew how great it was intuitively, and from a technical perspective, but we weren't able to communicate it, which is a huge challenge with a technology like Genie. It was really a breakthrough that we had on our tour, the idea to kind of the rabbit, the name, the ability to kind of redact it to, w e love characters in case you hadn't figured that out.
To make it a little bit more fun. This is really connecting with customers, and I'm very pleased with how it's showing up here. It's also a huge accelerator for us because this is a separate product, and this is something that a lot of customers have wanted, the ability to have a receptacle for real-time information. You know, for a long time, you have a system of record, Salesforce. We all understand that, system of record. We have a system of engagement like Slack. We, you know. How many of you use Slack? Anybody here? Okay, quite a few. We also have a system of intelligence, Tableau. We kind of want a single source of truth for the customer information.
You know, like if you walk into some of our customers, even if you go down the street here to Brunello Cucinelli, and you say, and you look at the iPad, you'll see, like they have a single source of truth for all of their customers 'cause they use the entire platform. Their CTO, Francesco, is here at the show, for example. This idea that we have a single source of truth, that it's a system of engagement, system of record, system of intelligence. There's one more thing which we've never really had before, which is a system of real-time. How do you plug these real-time streams in from Google, from Meta, from this company, from that company, whatever.
In one example where I was in New York, and Bret wasn't on the trip with me, and this was like a revelatory experience where I had to get on email and communicate to everybody what had happened. I'm sitting with one of our.
I got about 25 texts during this meeting.
It was one of our trailblazers. I'm sitting next to them, and I'm trying to explain this, that. He goes, "Oh, I get this. Let me tell you, I have a shipping system, which is, and I have an inventory system, and then all my customer information is in Salesforce. But I've been trying to hard code these things together because basically 'cause of the supply chain issues that are going on, customers wanna know when it's gonna arrive." Not a very complicated thing, but you want it to show up, so you wanna have real-time feeds. You wanna have real-time information directly in the customer records. It's never really happened before. Now, within a low-code, no-code environment, the customer doesn't have to build this. Boom. All of a sudden, all of the real-time information that was separate is now in here. In one example of.
Actually, in Minneapolis, when we were together.
Go ahead.
Similarly, there was an HVAC company, and they use our Service Cloud to handle, you know, essentially complaints from their buildings. Again, exactly the same thing. They had wired together with duct tape, essentially a system to try to get ahead of these issues. Now they can, all the thermostats are connected. These are commercial buildings, right? These are well-connected systems. They could just wire it in directly and do predictive service, and it's gonna change their cost profile dramatically because they probably won't, they can probably fix things, put people on the road in a completely different way. It was interesting. When you know you've hit product market fit, when you're giving a keynote and you have five people saying, "When can I use this? When can I use this?" It's been an incredible reception so far.
Yeah. We love getting on the road together and kind of doing what we're doing with you and riffing back and forth with the customers. Another example, in New York, there was a customer there who has a credit card business. In part of the credit card business is on the app on your phone, you basically can hit the button, and boom, it cycles your credit card dynamically. It's very cool, right? If you think that your credit card is stolen or that somebody has the number or whatever it is, you just hit the button and it changes. In my case, I actually figured out that I was talking to the agent, and I was saying, "Yeah, I think I need a, you know, I think I need a new card.
I think I need a new number." The agent says, "Oh, just go in the app and hit this button, and your credit card number will be new." I said, "That's fantastic." They said, "Well, have you done it yet?" They couldn't see that I had done it because real-time information is generally separate from the system of record. Does that make sense? That's why this is cool. Again, everything on this slide is net zero. For our customers, this is our strategic direction for them. Connect with your customers in a whole new way. Let us kinda show you this incredibly highly automated platform. It has tremendous artificial intelligence. Now it has real-time. Up to this point, there's never really been a real-time CRM. I turned to Bret on the tour, and I said, "Bret, this is really the first real-time CRM.
We've never talked about this, and no one has." We add that to the slide. I think it kinda makes the point that this has got to be the most modern CRM platform in the world, the most scalable, reliable, available, and also all of the data residency built in.
Yeah. I mean, it's good. I covered this already, but I think it is worth highlighting again, just the power of Hyperforce. I've been talking to a lot of you about Hyperforce for a long time. You know, it's interesting because on one hand, it's really bringing sort of a cloud-native architecture to our core platform, which is really important. Again, we're always trying to modernize our platform and plan for the next generation. Einstein and Genie would not be possible if not for Hyperforce. It's because of the architectural changes that we put in Hyperforce that enable us to embrace these next-generation computing needs that you need for large-scale deep learning, that you need for large-scale data lakes, real-time streaming. Really proud of the engineering team. You can talk to Parker about it later.
Again, just the global scale. If you talk to any multinational CEO right now, they'll talk about two things: foreign exchange, which is a total nightmare right now with the strength of the dollar, and they'll talk about the complexity of compliance globally. You know, there's a joke that you can't, you know, leave Germany with a business card without violating the privacy rules, right? You know, it's a lot of complexity right now, and these global companies want a consistent customer experience globally, but they don't want separate technology systems. They need to have their customer and consumer data resident in the country, and they need to abide by what is becoming a relatively complex patchwork quilt of privacy regulations. GDPR in Europe, CCPA here in California, Brazil, India all have different capabilities.
What we're trying to do with our platform is say, because we're the single source of truth for your customers, you know, we are the one platform that will enable you to reach global scale with your customer engagement and meet those high levels of trust, privacy, and compliance. I think it is one of the advantages we have at our scale is that we can actually do this level of technology investment. Again, this external encryption ecosystem, really excited about a lot of European partners on here, and I think we're really excited about just, you know, recognizing with the cloud sovereignty trends going on in Europe, that we can be partners to particular multinational customers and saying, "Here's how you can have a consistent customer experience like L'Oréal with their..." How many commerce storefronts do they have?
I mean, this is a global.
Over 200.
Yeah, this is a global company.
I like Kiehl's. Anybody use Kiehl's here? A couple. Couple Kiehl's people.
Yeah. It's an incredible differentiator. I could not be prouder of.
This isn't a great opportunity for you to announce our new gyrocopter.
We should do that next year. We've got rabbits, gyrocopter.
Our new electric gyrocopter. Okay. I've got all these slides. It's great.
We're actually in real-time pivoting our business model to gyrocopters. I actually wanna spend a little bit of time before we get into sorta the end of this presentation just to talk about our ecosystem. You know, Marc and I on stage yesterday talked about this community. I cannot overstate just how differentiated this is. I took an interesting trip to Latin America just a couple months ago and went to Mexico, I went to Argentina, went to Brazil, and a couple of things stood out to me. First of all, the whole economy runs on WhatsApp. I figured that out. People are doing their mortgages on WhatsApp, that motivated our WhatsApp partnership, which we announced here at Dreamforce, and really recognized how we bring customer engagement as next generation.
The other thing I realized, though, is the biggest obstacle to our growth was not our technology, not our customer engagement, but actually the talent around Salesforce to help deploy these projects. This is true all over the globe. You know, right now, we have an acute shortage of technology talent in the world, period, for all platforms. It's not specific to Salesforce. The incredible superpower that we have is Trailhead. I love the story that we chose, showed yesterday of the refugee in the Netherlands. If you haven't seen that video, watch it. It's incredible. Every single person in that room who's wearing a Trailblazer hoodie has a similar story. We have manicurists who've become administrators.
We have somebody who worked in a meat packing plant in a cave. I'm not kidding you can find this on YouTube, who is a Salesforce developer now earning a six-figure salary. You have refugees coming to the Netherlands, finding a community and finding a job. By making our technologies accessible, and, you know, from a technology standpoint, this is low code. That's what that phrase means. We're basically enabling, if you have the will, and it's about as complicated as maybe doing a pivot table in Excel, speaking to this audience right here, like, not easy, but you can figure it out. That's how hard the Salesforce platform is. If you can do a pivot table, you can build a Salesforce app.
By making our platform low code and accessible, what sets us apart is every single one of our customers can actually find the skills and the talent they need to deploy their projects successfully. My favorite story, and actually he sat next to Marc at dinner last night, is the CEO of Standard Bank, Sim. Just an incredible executive. You meet him around, you just talk to him, like, you will not leave that conversation less inspired. He's just amazing. At one point, when we started talking to him, he really wanted to digitally transform his bank and wanted to transform his culture. He decided he was gonna go on Trailhead himself and become a ranger, which takes. How many hours does it take?
A lot.
Like, 100 hours. I don't know. It was quite a bit. His goal was to beat his CIO. No joke. I'll tell you this story. Get more badges than his CIO. His entire management team became rangers, and they had 10,000 rangers at their company or more, all at this bank. He used it to really show his company that we can be digital. Their 160-year-old birthday is this year, and they have 10,000 Salesforce rangers at their company. I mean, it's incredible. You know, we really love this. This is one of our key performance indicators, is how many Trailblazers do we have. If you think about it, you're choosing what technology platform am I going to use to deploy my project. One of the key metrics is what is the cost of deployment, and will the skills be around it that I can deploy it successfully?
Going back to my Latin American trip, I was just talking to one of the largest technology companies in Latin America, and like the last 7 conversations I had before that, he said, "I'm just having trouble finding Salesforce talent, like, what are you doing to cultivate the Trailblazer ecosystem here in Latin America?" I said, "How many engineers did you hire last year?" He said, like, "6,000." I said, "Just take 60 and send them a link to Trailhead. And in about a month you'll have all the Salesforce talent you need." You know, I just can't overstate just how differentiated that is, that 10,000 people in one of the oldest banks in the continent of Africa can become skilled enough to deploy Service Cloud. That is incredibly differentiated relative to our competitors.
It's why when we come here, we try not to make it too much of a celebration of us or our technology. It's a celebration of them. I really, you know, one of the things I love about Dreamforce, Marc always says, there's no boundaries here. You can go talk to anybody, right? Find your local Trailblazer. Just walk down Howard Street and just ask them a few questions. How did they discover Salesforce? Like, you know, how'd they find it? And the story will sound like, "I showed up in a new town. I saw a sign for a community group. They've become my best friends, and now I've changed careers." It's just incredible. I'm really excited about it. Before I go on, though, too, I want to say we have 11 million app installs in our AppExchange.
It continues to be, I think, the most successful enterprise application ecosystem. There's not really an app store enterprise software except for the AppExchange. I'm really excited, too. One of the important design details of Genie is we made it extensible by default. I've talked to five ISVs already in the past 24 hours who are also planning to build apps on Genie as well. Just an incredible opportunity to differentiate, and you can see it on the floor in Moscone West in particular.
Yeah, this is the wind beneath our wings, these individuals. We're so happy to be back together with them. I think it was maybe about six months ago, I was in Sydney, Australia, and I had lunch with a number of them, and it just occurred to me, they've really missed Dreamforce. They've really missed these events. They've really missed the ability to come back and, you know, for them to kind of self-organize and encourage others and bring in their friends. This has been very powerful for us. The other thing that we didn't realize was when we bought Tableau, we obviously bought great technology. We bought a great brand, okay? But we brought a great community of these, well, they call themselves the Data Fam. We weren't doing enough to kind of integrate and cultivate them in. That's also true with Slack.
It's true with our other acquisitions, that they have these amazing communities. If you can integrate basically and deliver the community and the product and then give them tremendous content like what you're seeing here at Dreamforce, it's a winning combination. That's the trinity I think that we're trying to achieve.
Yeah, it's incredible.
Okay.
Just to end, I'm really excited for Amy's presentation next. We've been talking a lot about the discipline that we're driving in the company. I'll say Marc, because I don't think I deserve any of the credit, over the past 22 years, I think, has grown the fastest growing enterprise software company of all time. You know, as we talked about, we've been talking about in the last few earnings calls, it is really a new day for how we're thinking about driving shareholder return and a real focus on profitable growth. We're really excited about our fiscal year 2026 $50 billion revenue target. It's something we're really proud of, but a lot of the things you'll hear from Amy.
As much as we want to take the power out of Amy's presentation, we're not gonna do it. I wanted to, but.
Yeah, I know. Amy looked. She was, like, glaring at me before. She's like, "If you give my presentation before I give my presentation." I'm trying to keep the serenity of our management team. We'll let her give all the numbers. But, you know, I think one of the things that we've been talking a lot about is the power of scale. We have around 80,000 employees. We've guided to $31 billion in revenue. We're excited about our $50 billion revenue target of FY 2026. With that scale comes a lot of opportunities for operational excellence. And with that comes a lot of opportunities to drive operating margin, to drive free cash flow.
You know what Marc and I are really committed to driving is profitable growth and understanding that, you know, the importance of dilution, not diluting either our share count or operating margin, and taking that into account and saying, "How do we grow in a disciplined way?" I'm really excited about it. One of the things. Actually, Amy knows this very well. When we talk about operating discipline, I like to use the word scalability, because actually, I think where we drive efficiency for our engineering teams, where we drive efficiency for our sales teams, where we drive digital experiences like self-service, which you see in things like Salesforce Easy, we're actually making our company healthier and more scalable when we reach that $50 billion target. We're really excited about this.
I do think it represents, I think, a new discipline at the company. Credit to Amy and team for really helping us, drive it. I think we'll be a much stronger, much more profitable company when we reach this milestone.
Very good. All right, well, we just wanna thank you so much for coming to Dreamforce and being here at Investor Day and being with us and being part of our community and our family, and that, you know, we look at Dreamforce as a family reunion. I'll tell you that the biggest surprise for Bret and I happened yesterday when we said, "How many of you have never been to Dreamforce before?" I don't know if you were in the audience at the keynote, but more than half the hands went up. Usually, it's the same community coming back over and over again, and it's a community that we've cultivated over a long period of time, but then we realized, "Whoa, we've done a lot. We've grown the company a lot. We have done these three major acquisitions.
We did these various things, but we have a lot of new people here. A lot of these people who are here have never been to a Dreamforce before, and they are having an experience, and I'm looking forward. I know a lot of you are out there. You'll do surveys, you'll do polls, you'll be giving people different pieces of paper to fill out or to, you know, a URL. I am looking forward to seeing a lot of that data because if you just walk down this street or if you go to. How many of you have been to Moscone West so far? Raise your hand. Oh, quite a few. Good for you. How many of you have been underneath Moscone to the trade show with,
Okay, you've seen what's happening, but you know, you wouldn't really know there's an economic issue globally. You'd be like, "Whoa, what is going on? This is like a lot of rabid buyers." This is good. We're happy to be able to do this. It's obviously back. We do this in every country. We'll be doing it in Japan. We always invite you to Japan, but you never come. In November, we do it in Europe. We do it. Then we do it as world tours in every major city in the world.
We also actually do have 100,000 Dreamforce tour goal, which is essentially these custom. Marc jokes he does 50,000, I do 50,000. It's actually our account executives organize it for our customers, and essentially, you can think of this as a discovery session for our customers where they learn the technologies they're interested in. We set up these personalized sessions, so our world tours are a part of it, and 100,000 of our customers are gonna get custom Dreamforce presentations over the next few months. Just, I think it's an incredible opportunity. As Marc said, and I think we talk a lot about in any economic environment, digital technology is the answer. For top-line growth, for bottom-line cost savings, it drives productivity, and you can see it, the energy here, and it is incredible.
I also am very, very happy with how the technology organization has delivered, but also the marketing organization and the work that we've done. I think that you probably agree this is a highly differentiated strategy against our competitors. It's a unique value proposition, Customer 360. I don't think anybody is able to deliver this at scale and coupling it with our core values. I don't think there is a software company quite like this, and I hope that we're inspiring a lot of others to move in this direction.
Thank you all for coming.
Very good.
I'll see you later today too. Amy, oh, you need this? Good.
Sorry. Quick technical check here. Can you see the chairs? Yeah. Great. Yeah.
Yeah. Good job.
While they're getting set up, let me say welcome to everyone back to Investor Day and to Dreamforce. I currently have music going as well. This feels like a far cry from two years ago when we were all online. I think I briefly joined from my bedroom. Then, of course, last year we were huddled out here. I think we had about 25 brave investment community members on what was a very chilly September morning. It's great to see today we are at capacity. We are probably well over capacity, and we also have hundreds of people who are joining online. Welcome to all of you. I'll try to get back up here on stage. All right. I have been looking forward so much to talking to you about our new day for profitable growth at scale.
First, I wanna say thank you. You know, I've met with so many of you over the past year, and again, it's delightful to see you in person today. Thank you to our shareholders for your support and to us. Thank you to the investment community and the analyst community for the time and the care that you put into telling our story. Thank you most of all for your feedback. Over the last year, you have come to tell me what you're excited about, what you're concerned about, what you think we're doing right, what you think we're doing wrong, and trust me, this is not a shy group.
We have gotten lots and lots of feedback, but I'm incredibly grateful for it. Yeah, Marc and Bret talked about the feedback that we get from our customers and from our Trailblazers and how that influences our strategy. The same is true for the feedback that you're giving us. This is directly impacting where we see the company going over our next decade, as well as what I'm gonna talk about today. Today, I'm going to try to directly address some of the questions that we've been hearing. Today is a new day. Today is a new day for our Customer 360, it's a new day for operating margin, and it's a new day for our shareholders. Let's start by jumping in with our Customer 360. Now, everything starts with the opportunity in front of us. As you can tell, we have a large TAM.
By the way, I was standing in the back earlier, and I realized that these it's a little bit hard to read. I was certainly squinting. I'll do my best to really call out what's on these slides. In addition, these will be filed very shortly, and they will be available online. As you can see, we are in an incredibly large and expanding TAM. What's important about this is that the TAM for every one of our products is expanding at scale. This is true throughout, regardless of the economy, as CEOs, CFOs, CIOs look to digital transformation to continue to grow their businesses. In fact, Gartner is now predicting that by 2026, our TAM will be almost $300 billion.
Now, to put that in perspective, that little box right there, that is the current Salesforce revenue run rate. The rest of that slide is the opportunity that we have in front of us. As we look forward to the years ahead, here's where I really see the opportunity coming. I think there's three key areas that are going to be accelerants for our business. It's the Customer 360 advantage, and particularly multi-cloud adoption, it's our industry business, and it's our geographic expansion. I can't underscore enough that all of this is supported by our Trailblazer ecosystem. Now, our Customer 360 portfolio, you have seen, we have carefully curated this over the last 23 years, and we are a leader around the clock. That having this level of a broad portfolio provides a resiliency as well.
The resiliency is also true in terms of our geographies, selling worldwide, and the diversity of our customers across industries, segments, and sizes. There's a particular advantage when I look at the portfolio, and I look at the advantages that we are getting from multi-cloud adoption. Now, it doesn't take much to understand that if you have a customer who buys 1 cloud and then another cloud, you're going to have more revenue flying in. That's addition. What we're seeing is a true multiplier effect. As you can see here, when you compare the average customer with a single cloud to a customer who has just 2 clouds, the ARR is 3 times as much. 3-cloud customers, 9 times as much. 4 clouds, 24 times as much ARR. It keeps going.
In fact, look at these numbers for seven cloud customers, they're generating 300 times more ARR than your average single cloud customer. Now, it goes on. It's even more powerful than this. Check out the attrition rates. The more clouds our customers have, the lower the attrition. It goes right down dramatically. This is providing increased lifetime value. Let's look at just how big this opportunity is. This slide shows our customer count by number of clouds, and this is medium and enterprise customers. What you can see is that almost half of our current installed base has a single cloud. Now, let's look at it from this angle. What this shows is ARR by those same number of bands.
The real opportunity here, as you can see, is customers with four or more clouds represent only 20% of our total customers, but they're driving 85% of our total ARR. The opportunity here, and what makes me so excited about this, and what makes Brian and I are even more excited, is look at this opportunity to move current customers. These are customers we already have a trusted relationship with, customers who are already seeing ROI from our products. By simply moving them up the chain, you can see how powerfully we can impact our revenue. Let's see how this actually plays out. If you look at this slide, what this is showing is this is showing our customers, everyone who's come into Salesforce since FY 2007. It's by each cohort.
That bottom line, I think it's blue, shows customers who joined in 2007 and the revenue that they have today, and then it's layered on year by year by year. If you look at these customers back in 2007, they generally started with about one cloud. Today, they have nearly six clouds each on average, and they are generating almost 50 times as much ARR as when they first joined. Five years later, those customers started at 1.4 clouds, they're now above five, generating nine times as much ARR. FY 2027, starting with even more, 1.7. There are now over four clouds generating three times as much. Here's the one I love. These are customers who joined just last year.
Already in a time of more measured buying, they're already starting with more clouds, and they are meaningfully accelerating in just one year to nearly 3 clouds and 1.2x. This really shows the opportunity we have when you add the clouds purely to our current installed base. It makes me very excited about the opportunity that we have going forward. The second pillar is industries, and Marc and Bret talked about this in their setup. When you look at our 12 industry solutions, plus public sector and Salesforce.org, which caters to nonprofits and higher education, it's driving $3.8 billion of revenue. This is up from just $2.9 billion when I was talking to you last year. Industries have never been more important.
When we talk about industry projects, what these are is they're really out-of-the-box solutions tailored to particular industries. Bret Taylor loves to say this helps these customers start on third base. Easy to install, shorter implementation time, quicker time to value. But there's something for us as well, and the reason I love these, our industry sales generate 30% higher ASPs, 2% lower attrition when compared to core, and 45% of the customers are new logos to Salesforce, beautifully balancing out our opportunities in our installed base while continuing to bring in a steady flow of new customers to Salesforce. The third pillar is geographic expansion. Now, we looked at the TAM a little bit earlier. That was done by product. This is a slightly different cut.
I'm showing it on North America in the blue and international in the, I'm gonna call it pink. The darker colors at the bottom show our current sales. The lighter color is the rest of the TAM and the opportunity. There's a couple things I'd like you to take away from this. First, North America is where we are currently the most penetrated, but look at the running room that we still have. Internationally, we are even less penetrated, and that TAM internationally is now making up 40% of our total addressable market. As you can see, we are growing faster in our revenue overseas. One of our incredible advantages in this area is Hyperforce, and you heard Bret talk about this. Talk about the excitement of how we are rolling out Hyperforce.
It's going to be available in 17 countries by the end of this year. Now, Hyperforce provides benefits for all of our customers. There's reliability, there's stability, there is compliance, there is privacy. All of these are advantages. Internationally, there are two other distinct advantages. First, data residency. This allows our customers to choose where they are storing their data. As you know, there are hotspots around the world where this has become absolutely table stakes, and it puts Salesforce at the head of the table. Second, this allows us to move very quickly and agilely into new markets. A first-party data center may have taken years, two years to set up. We can now move in quickly through this public cloud, providing another powerful opportunity for growth going forward.
Looking at these strategic goals, many of you have seen this slide before, and it shows the progression on each of these. Our land and expand continuing to increase, while still seeing a steady stream of new logos. Multi-cloud adoption, moving up every single year. Geographic expansion as we move to balance our North America and international. Now, all three of these pillars are powerfully supported by our Trailblazer community. As all of you have seen this week at Dreamforce, you really can't match the enthusiasm of this group. Salesforce has really developed almost its own weather system around us, and there's two parts to this. The first are the companies. These are the ISVs, the partners, the consulting firms that have dedicated Salesforce practices, or in many cases, are completely based on Salesforce.
What I love about this is that there are hundreds of them around the world, and they have the same goal that we do, which is creating customer success with Salesforce products. To have that support is hard to replicate. Second is the individuals. 17 million Trailblazers around the world. I'm always struck by the enthusiasm and their passion for their careers and what they have done with Salesforce. Several years ago, I was traveling with Marc in the Midwest. We were visiting a very large customer. Walking out of the meeting with the CEO and the COO, we were suddenly surrounded by about a dozen people wearing Trailblazer hoodies.
I remember the CEO of the customer kind of rolled his eyes, and he looked at Marc and he said, "What, you're traveling with an entourage?" Marc looked at him and said, "These aren't our customers, these are yours." These were customers at this company who were so dedicated to Salesforce, who felt this, such an association that when they heard we were visiting, they donned their hoodies, left their desks, and went to meet us. It's hard to describe how much of a support that is for our revenue in every single one of these pillars. Where does this put us? Yes, we are still on the path to $50 billion. Now, excited about where we're going, and it's really from these pillars that is going to drive us there. Over the last 12 months, we have seen increased risks and uncertainties.
Since I stood here last year, we have had $2 billion of headwinds just from FX impacting this number. When I look at the demand for software, when I look at the demand for digital transformation, the power of our opportunity with multi-cloud adoption, our industry's business, and our geographic expansion, I continue to see a clear path to $50 billion. Let me be clear, this is based on our current portfolio. All right, let's talk about profitability. I know what you wanna hear about. All right. Today is also a new day for profitability, and let's level set on where we are right now. Okay, margin progression. FY16 start moving up quite a bit year after year, and then we clearly leveled out. Now, this was deliberate. This is when we were adding very key features and products to our Customer 360.
This is Demandware, this is MuleSoft, this is Tableau. Something happened at that point. We didn't stop acquiring. In fact, our largest and our most strategic acquisition was just announced two years ago. We took a different approach. We didn't move backwards. We didn't stay flat. In fact, the year that we acquired Slack, we increased our operating margin by 100 basis points. Last year and this year, we are going to increase our operating margin by at least 270 basis points while absorbing Slack. Now, the good news here is we have room to go. I know what you wanna hear about is the how and the when. Let's talk about those. Looking forward in terms of driving leverage, we need this to be done across the entire business.
Right now we are seeing most of the contribution coming from G&A. As we go forward to FY 2026, not only do I expect further contribution across all five of these major areas, but we're looking in particular to sales and to G&A for our leverage. Let me double-click on sales right after I take a sip of water. Brian and I have spent a lot of time talking since he has taken over as COO about what we can do to make our sales team even more powerful, even more effective, and even more efficient. The first thing it starts with is channel diversification, and this means leaning in on digital sales or self-serve. We have an advantage here from acquiring Slack. Slack truly is best of class when it comes to self-serve assets.
We're learning from them, we are adapting, and we are diving in. There's also channel diversification through our partners. We have a powerful partner motion, some of which also we have learned from Tableau, another great example of learning from our acquisitions. Leaning in, particularly with resellers and particularly in geographies that are new to us, which will support our geographic expansion that I discussed earlier. We're also looking at how do we support our sales reps, how to make sure that they have the automation and the support they need to drive further efficiencies. Now on the G&A side, we have already been on this journey, and like I said, large percentage of what you have seen has come in this area. Now we are driving for automation and process improvement across G&A. I wanna give you just one small example.
In the past year, we have focused considerably on subscription contract automation. By focusing in this area, this is an area where we were continuing to see headcount rise and manual processes. By focusing on this and automating, we have actually saved 75,000 hours this year in terms of employee hours that will repeat next year. This allows us to refocus the headcounts and the time and the effort. I share this just as one example of things we are doing across the company. The other thing I'm very excited about is our new Chief Information Officer, Juan Perez. Juan joined us a few months ago from UPS, where he was led as CIO for 30 years. As he will tell you, the logistics company, like UPS, every second counts and every cent counts.
Juan is bringing the same focus on efficiencies and driving our automation to Salesforce that he had at UPS, and we're looking forward to the changes that he is making. We're also continuing to look at our hybrid workforce. We have had gains and benefits from our real estate strategy and choices we have made in the past and looking to continue maximizing going forward. Let's look at where this brings us to. By FY 2026, Brian and I intend to drive sales and marketing as a percentage of revenue below 35%. As a reminder, we've been hovering around 40% for the last few years, so this is a meaningful change. We're going to continue to invest in R&D, but also focus on best-in-class acquisition integration.
In G&A, we're gonna continue to focus on hybrid work, automation, and optimization. This is what you wanna hear. By doing this, we are going to drive to 25% or higher operating margin in FY 2026, the same year we intend to hit $50 billion. Okay, I'm gonna make two call-outs on this. First, I expect this to be progressive, and we will accelerate into the 25%. Second, yes, this is inclusive of any M&A. All right, let's move on to talk about shareholders. I actually get claps for this. This is amazing. All right, like I said, a new day for shareholders. Yes, I did hear from all of you. All right, let's talk about our capital allocation strategy. Capital allocation at Salesforce absolutely starts with innovation.
We have an incredible track record of innovation, of being a first mover in technology and moving in real time. We've done this for 23 years, and this starts with our organic innovation. As you heard this week, we are constantly innovating with major breakthroughs this week with Genie, Canvas for Slack, and it goes on and on and on. Now, Parker and David are going to be here later this afternoon, and they can really dive in and explain why Genie is such a powerful technology jump for Salesforce and why we think it's a game changer. Also, I saw the hands earlier that many of you, if not more than half, probably attended the keynote yesterday. If you did not, I really encourage you to go back and watch the product offering by. It sounds like there is a parade outside.
I encourage you to go back and watch the product demo by our Slack Chief Product Officer talking about Slack Canvas and how we are natively integrating Quip. What she also highlights is Huddles and changes that we have made this year, including bringing in video. It's a very powerful demonstration. I think it really shows what we can do when we're bringing the power of Slack to all of our customers. We don't just innovate organically. Over the last decade, we have continued to invest in best-in-class assets and bring them into our company. Five public company acquisitions that we have done, all of them have brought key products into our Customer 360. Now, one I would really like to highlight is MuleSoft.
You've heard me talk a lot about MuleSoft this year, but I really wanna dive into what a powerful acquisition it has been. As a reminder, when we bought MuleSoft, their revenue was $248 million a year. Today, $1.7 billion. Importantly, we were able to accelerate that trajectory after the acquisition, and they've brought a key component to our Customer 360. As have Tableau, Slack, Demandware, and ExactTarget. Now, M&A has been a powerful part of our capital allocation strategy, a powerful part of how we have built this company, and certainly, at some point in the future, it will be again. I wanna talk to you about how we're looking at M&A as we go forward, and this framework shows you how we evaluate it. First, it always starts with customer success.
We always have to ask ourselves whether this is a best-in-class asset that is going to meet our customers' needs. Next, how is this going to support us financially? Is there a way to monetize effectively the product? Are there ways to drive significant operational efficiencies? I need to be able to see a clear timeline for value accretion. Importantly, as we look forward to M&A, and we've discussed this many, many times internally, we wanna be able to prioritize the use of our balance sheet in using cash and debt primarily for any future M&A. The third part of our capital allocation strategy is our share repurchase. I was delighted in August to announce that our board had authorized our first-ever buyback of $10 billion.
I'm delighted to say we have already implemented this programmatically, and we are currently in the market and repurchasing our shares. Now, looking forward, what I would like to see is a dedication of 30% to 40% on average reuse of our free cash flow to return to shareholders through buybacks. I wanna emphasize this is on average. Different years are going to have different capital priorities, but 30% to 40% of free cash flow is what we intend to average going forward. All right, so let's put all of this together. We've talked about growth. We've talked about the powerful pillars of growth through our multi-cloud adoption, international expansion, and industries business. That's going to lead us to $50 billion in FY 2026, which is a 17% CAGR.
We've talked about operating margin, the steps that we have been taking and intend to continue to take to hit 25% or more in FY 2026, inclusive of M&A. We talked about our share buyback, $10 billion in the market currently, with a goal of averaging 30% to 40% free cash flow return going forward. When I add this all together, this is our profitable growth at scale. This is the journey we're going to be taking in the next few years, and I'm incredibly excited to be on this journey, and I'm incredibly excited to have all of you on it with us. Thank you very much. I look forward to talking to you later this afternoon. I love you.
Okay. We are gonna take a very, very brief break. I don't want everybody to get up 'cause we're gonna have a longer break later, but feel free if you can use the restroom. I just wanna give you two quick updates. First, the online portal for questions is open, so for everyone in the room, if you have a question and you wanna make sure you get it in and/or for anyone listening online, we'll be filtering those questions along with everybody in the room for the master Q&A later, as well as for our product groups. The second thing is, there was one other thing, now I'm blanking what the second thing was. Brooke, what was the second thing?
The deck is posted.
Oh, yeah. Sorry. The deck is posted online. You can go download the deck online. We recognize the screen's been out as well, and the team is gonna fix that here momentarily. Give us about five minutes or so, and then we'll be ready to roll with the next section.
While people are filling in here, I'm super excited to introduce Suzanne DiBianca, who's our Chief Impact Officer. I've actually, out of the entire executive pool at Salesforce, gotten to know Suzanne probably more than most of the executives. She actually has been a sponsor of mine since I started. It's I feel super lucky to be able to introduce her in this way and show her off to you guys. She's been a huge help for me as I've ramped up on Salesforce. With that, we're actually gonna kick off the session with a short video to give you a flavor of what we're doing here, and then Suzanne's gonna come on up and walk you through some things
Wow. Hi, it's great to be here today. I'm Suzanne. I love that video. I love it for a couple reasons. One, Amy served on the board of Year Up. She's such an incredible role model and for ESG. I think she's now on the board also of Habitat for Humanity. I also love it because we've had hundreds of Year Up interns come through Salesforce, and many of them are still there. The third reason I love it is 'cause I'm a mentor at Year Up, and there is nothing more satisfying than being able to mentor a young, hungry person who really just is looking for opportunities. I hope that you'll all think someday about or bring Year Up into your organizations. They're just really fantastic young people.
I'm gonna talk with you a little bit about ESG, how Salesforce thinks about it. As Mike mentioned, I've been here over two decades and have had the privilege of, for the first 16 years, running the foundation and now kind of looking after ESG strategy, reporting, climate. I run a ventures fund and, it's quite a fun job that I feel quite honored to have. First I wanna start by saying thank you. I don't know, Here, I hit this hard. How many of you were here last year? Like 15, 20%.
You heard me say this, and I deeply mean it from the bottom of my heart, which is in the absence of a lot of federal leadership and in some cases state leadership as it relates to ESG disclosures, as it relates to climate, the investor and analyst community really stepped up. You are pushing hard. I would invite you to keep pushing hard. It's really, really important. I feel like this is a gap from a federal perspective, and that this room of people has a real role to play. Keep doing it. Keep pushing all of us forward faster. I just have such gratitude for all of you in that way.
The way that Salesforce thinks about impact overall, you can sort of see here on our vision statement that we're really looking to mobilize the full power of Salesforce to address the world's most urgent challenges and create a more sustainable future for all. In a world that we live in today, where we have a lot of polarization, we now have a war happening in Europe, we have the climate crisis, there's a lot of inequality, it's sometimes hard to know where to focus. When we say the world's most urgent challenges, we've really kinda defined those areas to where Salesforce can make the most impact. You know, for example, in the war in Ukraine is really impacting a lot of our employees in Europe. We've done a lot of work with refugees. What we know is technology.
There's a lot of people who have been displaced. We've been doing incredible work in Europe in retraining people. I don't know if anyone saw the keynote yesterday, but we had an example of somebody who was displaced, and we're doing that all over Europe right now as it relates to the Ukrainian problem. There's a lot to do. Our mantra, if you try to do everything, you will do nothing. We try to stay really focused on the most urgent challenges, climate change being the macro one. Education and workforce development is really where we put our horsepower as it relates to philanthropy. A note that I'll make, 'cause I'm super excited about it, is we added sustainability as a value this year to the company, and we've been working really hard to operationalize it.
Many of you who know us for a long time, we don't add values easily. We hardly ever do. When we added this year, we did it in a very thoughtful way. What's been amazing about it is the way the company has really embraced this value. We don't have a chief sustainability officer specifically because we're asking all 85,000 employees to be chief sustainability officers from wherever they sit in the company. What we're seeing is fantastic. I'll do a little bit more of a deep dive in climate in a few minutes, but hopefully you're feeling that at Dreamforce. We had a Net Zero Summit today, which was incredible. It's still going on. I'm going over there after.
We had no pork or beef or almonds, and it saved us 10 million gallons of water since the last time we did Dreamforce in person. You can just hopefully look around and feel that we've operationalized that value. In terms of how we think about ESG for the company, it's really an integrated approach to driving impact, so we don't have a centralized ESG group. I have a few people on my team that are incredible leaders in this area, many of who you talk with, you know, after earnings. We've intentionally kept it very distributed because we know when it's distributed, it then really becomes owned throughout the company. You're familiar with the Customer 360.
You know, we think about impact in this way, and I'll just give one example, probably on each part of the wheel, to show you how it sort of plays out. Sustainability, I'm gonna come back to that one. Equality, we have done incredible work in that area. Many of you know the work we've done with equal pay, how we're very focused on women in leadership and underrepresented minorities, and we've, you know, fought fights in Indiana, and we really use our policy arm in many ways as it relates to equality. Accessibility is everything from our offices and how we think about the design of our offices, but also to make sure that our products are able to be used by folks that don't have sight or have difficulty, you know, with other challenges.
We think about it both from a physical and a product perspective. Health and wellbeing, the pandemic. There was. You know, one of the upsides of the pandemic, I think, is that mental health is no longer a dirty word. Many people dealt with something or knew someone who dealt with something, and so we've really leaned in on mental health. We had a series called B-Well Together that we led this year, for example. Workforce development and jobs. You know, this is all about our trailblazers. This is an example of the work that we do with refugees. Philanthropy, I'll talk a little more about, but education and workforce development. Philanthropy's always been really core to the company.
Salesforce.org is an incredible business unit that has built products for the nonprofit and the higher ed sector, and they continue to go fast with over, you know, 40,000 NGO customers, of which you saw Europe as an example. Governance, you know, we think a lot about this. It's really important as it relates to our board of directors. We present to the board all of our ESG metrics on a regular basis, all of our financial metrics, you know, as they're disclosed on our 10-K. Ethical and inclusive product. We've hired somebody that's very focused in this area and really thinking about how we use our product in ethical ways. You know, there's been a lot of conversation about that in the tech industry in particular. Public policy and civic engagement. I have incredible partners on the government relations team.
You know, we went this year to lobby Congress for more action as it related to climate. I was really proud of that. We were one of the, you know, first tech firms to get loud in that area. You know, we're not gonna directly correlate that with the IRA that was, you know, recently $300 billion for climate. I wanna feel at some level that our voice was heard in the business community. Impact investing and finance. I have $150 million off the balance sheet to do venture investing. We invest in entrepreneurs that are working on health tech and education tech and workforce development, and we're doing a lot of work right now in climate tech.
We did a billion-dollar green bond, as you know, when we bought Slack, which was an amazing way, I think, to sort of leverage the assets in the company. Procurement has been an incredible partner. We launched last year a supplier initiative for our biggest suppliers that requires them to set science-based targets as it relates to climate change, or we won't do business with them. We gave them three years to get there. We're giving them a product to help get there. But our procurement team, as it relates to both sustainability and also equality, has been incredible partners. When we think about ESG for the company, we think in a very holistic way.
We enable that work to happen in those groups, and then we do our best to kinda aggregate that data, report on that data every quarter and in an annual way through the Stakeholder Impact Report. Some of the outputs from this work, there's many, but we just pulled a couple. You know, we're proud to have over 50% of our organization made up of women and underrepresented groups. It's above our target that we had set this year at 50%, so we're gonna continue to try to move that dial faster. We have made this year with a big milestone, given half a billion dollars in grants, and some really interesting announcements at Dreamforce this week that I'll talk about in a minute.
About close to $2 billion, $1.8 billion in donated and discounted technology this year with, again, many tens of thousands nonprofits that use Salesforce from everything from fundraising to case management and, for example, student management and alumni management. We're proud to be a net zero company, and we're a founder in an effort called 1t.org. As it relates to sustainability, I sort of promised a little bit of a drill down here. I did a keynote on this this morning. There's really three things that we're focused on, and we think that any company anywhere should be really looking at these three things, which is net zero now. We have net zero residual emissions.
In a company like Salesforce, where we have 75% of our emissions in our supply chain, this is why it made it really important to partner with our procurement team and our suppliers to enable them to get their emissions down. We have 100% renewable energy. We reached that target last year. What I love about this goal is that my team is fantastic, and we invest in wind farms and solar projects, and we do it in places like West Virginia or in Australia. West Virginia is big coal country, so in addition to, you know, powering, for example, our data centers or which are co-located there, it's actually shifting and changing those grids. Net Zero Cloud is a product that we built. There's, you know, really two things we need to do with the climate crisis.
One is we need to reduce our emissions. We have a goal to halve our emissions by 2030. The whole world, in fact, needs to halve our emissions by 2030. That's what Net Zero Cloud does. You can't manage what you can't measure. This is what we built for our own team. We just kinda hacked it in Salesforce, and we realized that we went from 6 months of gathering all this data to 6 weeks, and we thought, "This is an incredible way that we can use our superpower with our customers, enable them to get to net zero now." Nature positive, the other thing we have to do is we've got to sequester carbon. It's like we're in an 'and' era, where we have to reduce emissions. There will be residual.
It will take companies time, and countries and states and cities, and at the same time, we gotta get it out of the air. Trees are an incredible carbon sink. Marc likes the carbon math of we had 6 trillion trees before the Industrial Revolution. We have 3 trillion trees now. Each trillion trees sequesters 250 gigatons of carbon. Trees are really, really important as it relates to the fight against climate change. By the way, this is also underwater trees. Mangroves, kelp, in some cases sequester 5x what terrestrial trees does. We made our own commitment outside of our carbon credit program to grow and restore 100 million trees in a decade. We're almost halfway there in just 2 years, and we've been really trying to bring customers with us on this journey.
I talked about blue carbon gold. This is something that's kind of new in the space, but we've made a commitment to purchase 1 million tons, equivalent to about $10 million, all built into our long-range plan. Finally, Ecopreneers. This is how we define Ecopreneers is really entrepreneurs that are building businesses to support the climate movement. It's incredible the amount of money that's going into climate tech. Sort of climate tech 2.0 is very different than climate tech, you know, the first time around. We're just finding great entrepreneurs there. We have this impact fund I talked a little bit about earlier. We have a lot of these entrepreneurs here with us at Dreamforce this week. Our announcements at Dreamforce were really exciting.
The two that we made that were sort of related to ESG, one was a Net Zero Marketplace. I talked about Net Zero Cloud. We built Net Zero Cloud to help customers manage, reduce their own emissions, and then we built the marketplace to do the sequestration part of this. The marketplace is about 90 partners, 90 projects you'll see. It'll be live in October. One of the problems in this moment of kind of carbon cowboys, where there's some bad actors, there's no international standards, these are voluntary carbon markets, is trust and transparency around things like pricing, around things like quality. This'll be an open marketplace to everyone. You don't, you know, need to use Net Zero Cloud. You don't even need to be a Salesforce customer. But it is a marketplace where we have all kinds of incredible projects, renewable projects.
We've got deforestation, sorry, reforestation projects on there. All kinds of different ways. Direct air capture, which is another really critical tool that we need to begin to get down on the cost curve. What I love about it is that we've partnered with 2, like, third-party rating agencies, and they use remote sensing technology, lidar sensors, and satellite imagery to monitor and manage these projects over time, and they give them a rating. So we are, you know, kind of a neutral. We don't rate these projects, but we've brought in some people with a lot of deep expertise to enable our customers to choose the best one. So I'm really excited about the marketplace. Then the second announcement that we made this week, which I also love, is about support of education.
We gave $25 million to five school districts. In San Francisco, we've now given over $100 million. The grants this year were really powerful, I think, because they focused on two things. We really do deep listening with our school partners, and they said mental health is still a really important issue in schools, so they're using these grants to bring in more resources for mental health for both students and parents. The second thing is to address the learning gap, which really happened during the pandemic, especially to students without much resources. In some cases, they're a full year behind students in their class that have the resources to bring in mentors and do learning groups in their backyards and such. We again partnered really deeply to listen to our districts to say what do they need?
This was the number one request for this year. This is an honor and a privilege to be able to do this job and exciting to make these announcements this week at Dreamforce. Mike, you and I are gonna have a little bit of a chat, and then I think we're gonna open for questions. Is that right?
Yes, we are. Yes.
Okay.
I'm being followed. We're gonna
That's the one-on-one on Salesforce.
We're gonna have some chairs follow us up here.
Thank you.
As a reminder, the online portal is open for questions. We're happy to take questions from the audience as well. Now I'm gonna kick things off here with Suzanne.
Oh, we're so far away. Oh. Thank you.
Thank you, guys. I'm actually gonna start by putting Suzanne a little bit on the spot here.
Great.
You know, because you've had a quite long and very successful tenure at Salesforce, I'd love to actually start with kind of a little bit of your vision since you took over the role a few years ago and what it means for you, as well as kind of how that reflects back on Salesforce, especially when it comes to our values.
One of the privileges of being here for two decades is I'm not necessarily trying to, like, build my brand, build a big team, you know. I really just wanna be an incubator, and I wanna empower others to do great work. You know, by design, we're a really small team. We're an incubator, so we built Net Zero Cloud, and then we moved it into the product organization. We do that a lot. We've done incredible work with, like, the military, for example. We've recently moved that into Trailhead. We're able to be sort of test beds for ways we can use impact across the company and then really move that into the organizations where they can really scale. My vision really is that, and really kind of always has been, is that this is.
If something is wrong, if this is me thinking up ideas and executing them, my job is to listen to our executives, to listen to all of our employees, see where people are passionate, see where they wanna bring impact, and then enable them to operationalize it.
Yeah. I will say, you know, from personal observation standpoint, it's not just a theme or a set of talking points that you're hearing from Marc, Brian, and Suzanne. I would say generally in the employee base, folks really live and breathe the values and the efforts behind what you hear Suzanne talking about. Speaking of operationalizing, I'd love to hear a little bit of how you think about accountability. I know you sponsored an initiative, and I may not get this exactly right, to drive some executive accountability around the topic on ESG performance over the past year or two maybe. Maybe can you expand on that and tell us a little bit more about the operational-
Operationalizing of that.
There you go.
We basically said for all SVPs and above, for the first year anyway, there will be four ESG metrics that will pay as a percentage of bonus, whether or not we meet them. There's two diversity goals around women, around underrepresented minorities, and then there's two sustainability goals. One is around travel. The other is around enabling suppliers to sign the exhibit. We wanted to do things that were under the control of our executives, and then we're able to now provide them dashboards on a regular basis on how we're doing, so we can tweak it real-time.
Great. It just says, as a reminder, almost they're done. We have mic runners here. Thank you.
Awesome. Thank you. Brad Zelnick with Deutsche Bank. Great presentation. I wanted to ask about the multiplier effect that you have with your customers. Specifically, when you were talking about reforestation efforts, the ability to kind of bring them along with. I'd love to hear just even beyond that in specific. More broadly, the you know, examples and things that you can talk about.
Yeah. Thank you for the question. I think you have two things. One is Mastercard is a great example of a customer that we shouldered up with as it related to 1t.org. We've now got over 100 global partners in that effort. You know, I meet with customers all day long. I've met yesterday with 10, and every conversation I just ask the question, especially as it relates to climate, which is top of mind for me right now. You know, "Are you interested in joining this effort? How do you think about your emissions?" The other thing is, you know, Salesforce has, because we started this work so early, we have a great model in that for Pledge 1%. You know, we have this 1% time equity product.
Atlassian came to us, and 'cause I coach their executives on how to do that. I was able to actually work with Google before they went public, which Marc and I joke was maybe one of the best days of my job in the last 20 years, 'cause they went from zero to $1 billion in their foundation on day one. Atlassian came and said, "We should make playbooks here. We should do this at scale. This shouldn't be your night job and my night job." We sort of spun off a separate organization called Pledge 1%, who now has 17,000 companies that are doing the 1, 1 model, and they have raised $2 billion in net new through philanthropy through IPOs. We
It's amazing, and all that we're doing really is learning from others, writing it down, and then sharing it widely.
Nice.
Right there. There you go. Go ahead, Kirk.
Thanks, Kirk Materne with Evercore. Can you talk a little about just your conversations with executives around the Net Zero Cloud, just being someone who's actually implemented it? How important is this to CEO-level execs at this point in time when they're thinking about their broader digitization strategy? You know, is this something that's now coming up in your conversations not only about sort of the Customer 360, but is Net Zero, you know, an important or becoming a more important part of that conversation?
Yeah, absolutely. I did a keynote this morning, and one of the stats on the things that said 99% of CEOs say climate is critical to their business, which made me think, who are the 1% that don't agree? 77% of them said, "We don't know where to start. We don't know how to get there." I think quite honestly, I have a lot of C-level conversations, a lot of CEO conversations. They don't know where to start. They don't know how to get a baseline. They don't often have, you know, big sustainability teams. It feels like, you know, my first conversation with them is generally like, "Have you set a net zero target? Have you set an absolute emissions reduction target, and you're not kinda offsetting your way out of this?
When I took over the climate work at Salesforce, our target was at 2040, and I said, "That is way too long. We have to be, like, net zero, like, today, like, right now." So I'm usually having the conversation around how can we help you gather the data, we've been there, and then how can we help you accelerate your targets? But yeah, it comes up in, like, every single conversation.
Over there.
Hey, Luv Sodha, Jefferies. Thank you again for taking my question. Wanted to ask, you know, following up on that question, could you talk a little bit about how Net Zero Cloud is monetized? Is it sold as a separate SKU within, you know, the broader platform? Also about the marketplace that was talked about yesterday, just share some insights there. Thank you.
Sure. Yeah, the Net Zero Cloud is. It's sort of got different packages. It's not a consistent product. We first put it up on the AppExchange for free because we're like, we're gonna do this. We realized people aren't gonna, A, take it seriously if it's a free product, and B, we're not gonna be able to continue to develop and support it if we don't monetize it. We've been kind of playing with pricing. It's early days. The original package, the sort of starter pack, if you will, and all, I think all the pricing's on the website. I might get it wrong. It was about $45,000. Really it does the sort of Scope 1, Scope 2 emissions. In other words, that which is in your direct control.
For companies that have Scope 3 emissions, then there's kind of a supplier module. We have water and waste. Some people, the technology industry, for example, doesn't have a big footprint in water and waste outside of our data centers, but again, that's sort of Scope 3. Some industries, manufacturing, CPG, retail, are really interested. They have to incorporate water and waste into their. It's kind of, it is a separate SKU. We do sometimes put it in ELAs, and it generally comes in those kind of compartmentalized way. As it relates to the marketplace, we'll take 1% of the total transaction fee, and that's sort of our original go-to-market proposition anyway. We wanna make it really affordable, but we also wanna make it the same ability to kind of maintain that product, onboard new projects over time, et cetera. Does that answer your question?
Okay, I'll keep going here. We actually, this is gonna tie into a question we got online. We've obviously from a Salesforce standpoint been disclosing ESG information and data for quite a while now. We'd love to hear a little bit about how you think about disclosures, how you think about the evolution of that. Then also, I think very close to what a lot of our audience deals with with other companies they invest in and an overview is how you think about rating agencies. 'Cause I think there's a lot of, I would say, conflict out there right now on kinda what's best in class. Some companies are developing, some investment agencies are developing their own proprietary rating agency structure. How do you think about it?
It's kind of a mess.
Yes.
It's kind of a mess. It needs regulation. In my view, it needs standardization. I love TCFD. I think that is a very rigorous reporting. We did it for the first time this year. I think we're the only tech company who does it, but it's very detailed. There's, you know, there's a whole bunch of different things you can sort of choose from. I would say 80% of the data is the same. It's 20% different. There's been some mergers in this space recently. I'm really hoping that we can get to some standards, that we can get to some regulatory means, and we're fairly vocal about trying to call for that. Joe Allanson, who is our former controller has taken a job as head of ESG reporting, and so he's been really out there on the forefront with these agencies, trying to create some consistency in standards.
Great. I think we've got. Oh, we do have one more question back there. Yeah.
Great. Thanks. Nick Kukrika from Generation. Could you talk about what goals you've established for gender parity within the executive team? You have a number of impressive representation goals more broadly for the employee base, but I don't think you have anything for the executive team. I'm wondering if you could share.
We do. There, it's VP and above, so it might not be for the, you know, each level above that, but it's VP and above are our goals. They're public on the website. I'm afraid to say them out loud 'cause I might get them wrong. But I believe it's 40%. But it's all public data on the website, and there are. We count VP and above, but we haven't been more distinguished within that band, if you will. You can go to equality.salesforce.com, and there's Tableau dashboards that give you all those metrics. They tell you where we are against those metrics, and then we update them on a quarterly basis. Again, we're trying to bring transparency because it holds us accountable.
Max, you're gonna pull on that thread as part of our last question if there's no other questions from the audience. Maybe if you could just talk a little bit about how we think about diversity and inclusion here at Salesforce and kind of the journey we've been on regarding that.
We've learned a lot, and there is a lot to learn. You know, the way we think about it is, you know, just really trying to focus on building inclusive teams, which one of the things we learned is when you build inclusive teams, you have to have people that look different on the interview panel. We didn't know that. It was just a miss on our part. We're now very deliberate about bringing on diverse interviewees when we're bringing candidates in, so that candidates can see themselves represented by gender, by race, et cetera. We also think about it a lot as it relates to our, you know, kind of company-wide events. We're always checking to see, you know, do we have the right level of diversity here?
How many people, you know, of color, you know, are included? How many women are included? We need to get the right balance so that we get diverse thinking. I personally won't speak at conferences when there's not 40% or more women on the docket, and it's been interesting to see that industry change a little bit. I should probably broaden it actually to include underrepresented groups. I think we think about it both individually but also from a company perspective.
Great. Well, thank you, Suzanne. I appreciate the time today.
Okay.
I hope everyone enjoyed the session. With that, we're gonna take a very brief break. We're gonna kick things off about 12 minutes after the hour.
All right.
Okay. I'll ask everyone to find their seats. For this next section, I'm gonna ask Parker. I'm gonna ask you to go over by David and huddle. I'm super excited about the next section. I think for those that I know a little bit better in the audience, I came from a product finance background, and so product is near and dear to my heart. I had a chance and opportunity to spend time with David and Parker, as we prepared for this and I'm really excited about the content they're gonna show you. For those that have been around Dreamforce the past couple days, you've seen a lot of the buzz and a lot of the new announcements.
It's very, very exciting for Salesforce and where we're headed. With that, we're gonna roll a short video. David's gonna come up, kind of walk through a few things about some of the announcements we have going, and then I'm gonna join him and Parker back up on stage for some Q&A. Start thinking of your questions now The real revolution in our industry is what most people are missing, which is shipping software to the car.
Hi, everybody. It is great to be here, and welcome, and thank you for coming to Dreamforce. I know many of you. I've seen a few of you around the block for the last 20 or 30 years in the CRM industry. For those who don't know me, I'm David Schmaier. I'm the Chief Product Officer and President of the company, and it is really a pleasure to be here. That Ford story was amazing, and it really was the launchpad for one of our two keynote demos. If you didn't see it, I suggest you look at that for our biggest announcement around Genie, which is the catalyst for the world's first real-time CRM. It's a really pivotal moment in this industry.
What I'm gonna do is tell you a little bit first about our strategy at Salesforce and how we do what we do. I'm gonna walk you through the news, and then we're gonna take your questions, and we're gonna bring the one and only Parker Harris up here to help me answer some of those questions. Again, I just wanna thank you for coming. It is great to hear your questions and your inquiries. This doesn't seem to be moving. There we go. Thank you. Let's talk a little bit about our product strategy. We believe that the best customer success and the best products are all driven by the best ideas from our customers. This is a formula we've evolved from 22 years, and it works and evolves very, very well.
It starts with our customers first and foremost, and we goad our product teams to deliver the cloud category leadership. What that means is we want the best product in each and every category, Sales Cloud, Marketing Cloud, Service Cloud. I'm proud to report that today, if you ask leading analysts like Gartner and Meta and Forrester and others, and I briefed them earlier this morning in this very same room, we have the number one product in 14 different product categories in CRMs. We're the number one in CRM overall. We're best in suite, and we're number one as best-in-breed. If you ask Marc or Bret about our strategy, it's really an integrated platform strategy. We didn't just build CRM applications in 1999 in the cloud, we took a metadata-driven capability that's trusted and proven and built a platform.
That platform strategy turned out to be really critical in our evolution because now we have a whole ISV ecosystem of 9,000 different applications on the AppExchange, 11 million different installs, and that platform-centric strategy is super important, and we've enriched that now with industry solutions. It was 12, but now 13 purpose-built industry solutions. They're the fastest path to digital transformation for our customers. We're always on the lookout for differentiated technology, so a good example of this is our new NFT Cloud. We brought this live this week with our first customer, and they printed thousands of NFTs using our NFT Cloud. We think this is an opportunity for companies to engage in the Web3 world and to take advantage of that to enhance their customer loyalty.
We think infrastructure and trust are all important, so I'll talk a little bit about Hyperforce, which is the next generation of our platform to deliver security, privacy, and the compliance and the data residency where people need it. Finally, we take a marketplace approach to everything that we do. The 9,000 apps, the 1.6 million jobs we created in the Salesforce economy, we really take a sort of platform and ecosystem-centric approach. Dreamforce, the world's largest technology conference, is a perfect example. 150,000 registered users and millions of people viewing it online. Now, it's all about the Customer 360, and this is really the operating system for growth for companies. In this new economy that we're in, it doesn't only help companies grow efficiently, but it helps them save time, and it helps them save money.
We're fortunate with this product portfolio. As I said earlier, we believe in cloud category leadership. We have the world's number one sales automation system, the number one customer service system. This is contact centers, field service, digital service, bots. The world's number one marketing automation system because we're in a cookieless future, and we're going to a data-first, world where marketers really have to look at the data to deliver mass personalization at scale. Commerce Cloud is our number one commerce capability. At the beginning of the pandemic, everyone rotated to digital, and we provided commerce capabilities. This sort of spiked up at incredible growth rates as we saw the whole economy go digital. Tableau is our number one data visualization capability because the best companies make data-driven decisions, and they not only wanna take insights but drive them into action.
MuleSoft is our number one API management solution, so this is a company that we acquired four or five years ago. Every Salesforce customer wants to take the front office and integrate it with the middle and the back office, and we estimate that all of our customers have on average 978 systems. The ability to integrate all of that data together to have sort of what the analysts call hyperautomation, to automate across systems, we think is critically important. Again, it's all a platform-centric approach that we provide to our customers. Suzanne talked to you about the Net Zero strategy, which we think is critically important, and we think is a really exciting new opportunity, including the Net Zero Marketplace, which is a new addition we announced yesterday. These industry clouds are one of the fastest-growing parts of our portfolio.
These are purpose-built with business flows and objects that are designed for banks, hospitals, governments, consumer packaged goods companies, and there's now 13 of them. We just launched our Automotive Cloud, which is really cool. You saw the Ford video, and it's sort of a who's who in the automotive industry of who uses Salesforce to run their business. Of course, we have an amazing partner network and a great set of success programs that ensure that we know that it's about success, not software. This stack that we've brought to bear is really an integrated platform play. All of these clouds run on top of this stack, and this is the stack that we bring to market for all 200,000 customers.
Hyperforce is us taking advantage of the hyperscalers so that now it can run on, the hyperscaler capabilities with the security and the compliance and the elastic scalability that our customers ask for, and we can put the data where our customers want it. Hyperforce will be live in 17 countries at the end of this year. It is really an important foundational technology. We've built the original versions of Salesforce in 1999 and to today on a transactional database. Einstein AI does 175 billion predictions every single day. As we speak, 175 billion predictions. This is real AI at scale. Then our Flow technology, we do 40 billion workflows a day, and we estimate that we save our customers 100 billion hours of time every month.
All of this powers the world's number one CRM. Now, the big news, if you saw the keynote yesterday, was we're introducing the world's very first real-time CRM. In 2007, we introduced the Salesforce platform. In 2015, we introduced Lightning. In 2016, we introduced Einstein. In 2020, we introduced Hyperforce. Yesterday, we unveiled our latest technology, which we call Genie. Genie is the foundation to provide you with real-time CRM. Now all of your flows are data-driven with real-time capabilities. Now, Einstein, the 175 billion predictions fire off in real time. Now, Genie is a high-speed data lake that not only takes data from our Salesforce clouds, but from the 978 systems on average that our customers have.
That means some customers have 100 systems, but some have 10,000. That means there's 10,000 different records about me or about you or Kash, I saw earlier, or some of my other friends here, Kirk, that there's all these different points of light about the customer. What they teach you in graduate school in the very first class is they ask you, "Who's the customer?" Then they ask you again, "Who's the customer?" Then they ask you again, "Who's the customer?" What they're really trying to drive home that point is it's all about the customer before I upsell, before I cross-sell, before I look at the lifetime value of that customer, before I monetize that relationship, before I look at the lead flow and really figure out how I lower that average cost of acquisition.
This capability powered by Genie, it's what, Srini, I see in the back, there, our head of engineering, this is the holy grail of CRM. I've been working on CRM since it was a $50 million industry, and it started out routing leads, then it went to cases in the service center and how we resolve cases, then marketing automation came online, then commerce, then industry capabilities. This data problem of how do I take all this data and have the single golden record about who the customer is critically important, and we're now the first company to solve this to truly power a real-time CRM. It's super exciting. This is a brand-new day for the whole entire industry. We couldn't be more thrilled about it.
There's a lot of other innovation that we're talking about at this conference, but ladies and gentlemen, this is a big, big deal, and we think this is really gonna power the next generation of what we call magical customer experiences. Now, is it really magic? When is the last time you went to the DMV, or you bought life insurance, or you got your cable installed, your DIRECTV to watch the Super Sunday NFL games? Let me tell you, there's a lot of experiences out there that are not all that magical. When you see them, you remember them forever.
We have a lot of sophisticated computer science and technology here that allows you to take this high-speed data lake to ingest all this data in real time, the signal from your website, from SAP, from your billing system, from your connected device, from your connected car, as you saw for the Ford F-150 Lightning. Now I really know who the customer is. I can do AI at scale. I can improve my relationships with the customer. At Salesforce, our vision's always been we help companies connect with their customers in new ways. Our kids all wanted immediate gratification. Well, guess what. Now we all want immediate gratification. We live in a real-time world. Now we're introducing too, Salesforce Genie, Sales Cloud Genie, Service Cloud Genie, Marketing Cloud Genie, Commerce Cloud Genie, Tableau Genie.
We're walking the talk and powering the entire 360 Genie technology. Now, let's talk for a minute about how it works. This clicker doesn't seem to be clicking. Thank you. We start by ingesting all of this data. You can do it in batch, you can do it near real time, but you can do it in real time. Milliseconds really matter when it comes to the customer experience. Today, I was talking to one of our largest healthcare providers and some members of the Blues networks that are big customers of ours. Let's say I have a preexisting condition, and I go into the ER. My vital signs and my blood work and my temperature as of four months ago, that's not good enough. As of four days ago, that's not good enough.
Milliseconds matter when it comes to the patient experience because people's lives are at stake. That's what the power of Genie really allows you to deliver. We can automatically ingest these 978 records about David or about Kirk or about Kash. We harmonize them, we unify them, and we can deliver what appears to be a magical customer experience. It's really sophisticated data and AI that delivers that, but when it's magical, your customers truly remember that. If I talk about how this powers the Customer 360, it's all powered by Genie. Genie is one of our fastest-growing organic products to date. We launched this for marketeers as our CDP product. We now have 500 customers that are using this technology, so it's really been a sensational product launch.
This was the foundation, first in the marketing department, but we've enriched this and built this in a platform-centric way, so now this data powers the service experience in real-time. Now it powers the commerce experience in real time. Now it powers the sales experience in real time. This is amazingly cool. It takes Hyperforce and our automation technology and our intelligence technology and now provides a whole new real-time suite of capabilities that our customers are incredibly interested in. I talked about the patient experience in the healthcare industry. Let's talk about the telecom and media industry, where I have connected devices. Let's talk about connected governments. We talk about the Citizen 360, the Patient 360, the Member 360, or the Subscriber 360. These 13 purpose-built industry clouds are tailoring the way this experience works for every one of our customers.
It's a huge differentiator. Now you don't have to do these industry customizations yourself. We build in the best practices and workflows for consumer goods companies, for hospitals, for banks, for insurance companies already into the software out of the box. The other thing that's amazing about Genie is it's all built in a very consistent way to our Salesforce platform strategy. Genie is open and it's extensible. We announced partnerships with Snowflake for open data sharing. We announced first-party data integration with Google, Meta, and AWS, and we also announced bring your own AI technology. I talked about Einstein and how you can do 175 billion predictions a day at scale, but you can also use SageMaker from Amazon, and you can mix and match.
You can use Einstein for some projects, and maybe your data scientists have an affinity to another AI engine. You'll see us sort of support interactions with more different AI and machine learning platforms. We also have the AppExchange. We have 18 partners that announced their support for Genie. We couldn't be more excited about the response of this. I've been in probably 40 customer meetings so far. I hosted a CIO dinner last night. We're gonna be with a bunch of our customers tonight at the concert. In every single conversation, people are very interested in Genie, what it is, how it works, how they can apply it, how they can integrate with the technologies they have.
This is an incredibly new forefront, and I believe this will be. We'll look back at this as a point of inflection for the entire CRM industry. Now, before I ask Parker to join me on stage, I also wanna talk a little bit about Slack. As a longtime product person. This clicker's really not working. Thank you.
You're welcome.
Slack is your digital headquarters, and if you've ever used Slack, it really is an incredible piece of technology. We announced, and we demonstrated live in the keynote some really cool. Thank you. That'd be great. You're clicking three times for every advance. Slack really allows you to, in real time, visualize your workspace. You have a channel, and we have a huddle, and now I wanna talk to you all live. I can talk to you using audio channels. I can also talk to you using video technology, which is really cool. We introduced something called Canvas, and it looks very familiar to those of you who know Quip, which is a company founded by Bret Taylor. This is really an amazing document technology that's now built into Slack, so you have persistent storage.
We showed a capability for account briefings. All of us get called in to talk with customers, and those briefings, now you can serve up in Slack. The people on the team can serve that up for you. When you exit the call, how many times have you been in a Zoom or a Google meeting, and then all the links and all the documents shown all go away, vanish, poof, they're gone? With Slack now, this is all persistent, and you have a record of what happened and what you showed and what was presented and the links that were there. This is really incredible technology. Encourage you to look more at that. We've also integrated Slack with each and every one of our clouds in the Customer 360.
Sales Cloud, now you have deal rooms which allow you to close deals with DocuSign right in the deal room. Service Cloud, we have service swarming, so you can bring the case and the experts right into the service problem, and maybe they're in the ambulance coming here to help us live to solve the problem. Maybe in Marketing Cloud, we have real-time segmentation and real-time campaigns going on, and we wanna coordinate all the members of the marketing department using Slack Connect with agencies. This is all now pre-integrated in GA and live for all of our customers. There's broad support from our ISVs. We announced 11 different ISVs using our SDK to integrate with Slack, and you'll see many, many more going forward. In summary, you know, we're really excited about Genie.
That's the big headline news, along with the innovations of Slack. We think that the future of CRM is automated, that customers really wanna automate everything they do. We think that it's intelligent, where you wanna use the full power of Einstein in these 175 billion predictions so that these interactions are smarter. Genie is truly powering the first real-time CRM, and this is just a summary of some of our announcements here at the conference. Again, it's great to see all of you. Now I think we're gonna do a little Q&A, and I think Parker's gonna join me. Thank you. Bring some stools up here. You can sit in the middle. Oh, thank you.
They don't wanna see me in the middle. Thank you. Okay, while they're getting that set up, just we do have mic runners. We'll be ready to take questions, and we got a lot of interest already. Look at this. I don't even need to sell it. We're gonna go right here to Mr. Zukin.
Hey, guys. Thanks. Alex Zukin from Wolfe Research. So the real-time CRM Genie, I wanted to ask about the architecture, the underlying architecture. There were, I think, press reports about it being a lake house architecture. It'd be just great to understand what kinda went into changing it, what was required to make this data much more accessible and amenable. You know, if you think about the next few years of innovations around this as it expands beyond to all your clouds, are you there from an architecture perspective, or is there still a ways to go?
Yeah. First of all, it's built on public cloud infrastructure, so we can take advantage of really cheap storage that's currently on AWS, so S3's super cheap storage, scale out, compute, all. Basically what everyone else is doing when they're building data platforms, they're doing them. It's, you know, if you looked at what we're doing and you looked at any of our customers, you know, who are going with an AWS or GCP, so there's some similarities in there. There's a lot of organic innovation. We've also used things like Spark and other things. When you think about batch and real-time, it's not a database. It's a lake house. You don't write directly to it.
You either have data coming in in batch, so that's where you can think about non-real-time, so big chunks of data coming in, and over time they get processed or streaming, which is, you know, think of it's listening. There's a telephone with the line's open, and the bits can come whenever they need to come. That's where you can think about the real-time nature is that, you know, a click on a website happens. It doesn't go into some pipeline and waits for an ETL batch thing to happen. It goes straight in. It's streamed in. There's a listener saying, "I wanna listen to what's happening on that website." That's the difference, and that's how you end up with both a batch-oriented system for large scales of data, maybe your SAP system, you wanna bring in some data.
You don't really need that to be real-time. You can bring that in batch. What's happening now, there are types of data that is really interesting, like what's happening, you know, at the conference, you know, when they badge in. That would be real-time data. I wanna know what keynotes are they going to right now. What are they interested in? That can be streamed in.
Parker, one more add to that is it supports batch. It supports real time or real time enough, so it's configurable. As part of our Snowflake partnership too, you don't need to copy the data.
Yes.
It supports a zero copy architecture. Many of the CIOs that we've been meeting with, and when we architected this with Snowflake and other partners, they wanna leave the data where it is. That, I think, we get a lot of head nodding from the CIOs when they hear that because that's what they want. We use distributed query technology to present a single view of the customer, but you don't have to move the data around if you don't want to.
To ask your other question, architecture's never done. There's a lot more we wanna do, but in terms of adding value to all clouds might have been the direction of your question. All clouds get value out of it now. I'll tell you how. CDP is classically marketing automation segmentation on targeted customers, or I wanna do real-time stuff on websites with an offering called Interaction Studio, which works natively in there. What you saw, the harmonization, is you get this unified profile, and you know, a real-time profile of that customer. That profile can be surfaced as a Lightning component in your service console. We ship with Lightning components. You can customize them 'cause of the beauty of our platform. You get that for the service agent. You see all the data today because it's a unified profile.
That data, even if you just use it for marketing automation, immediately start to get value in service, or you get value in sales, same kinda thing. We're gonna see lots of opportunities for new types of applications. Think of CDP as one of the first applications built on this platform. The Privacy Center is another application. We're gonna come up with a lot of applications, and because it's built in a unified way in our platform, that was the hard architecture rocket science. We also can support ISV communities building applications on this, so not just us. We see this as a huge move for us.
Right here to Keith.
Excellent. Thank you guys for taking the time. Can you help us, when I hear data integration and about bringing in data, MuleSoft comes to mind. Can you help us understand where does Genie lie? Where does MuleSoft lie? Where do they cross? We just better understand those product solutions together. From a monetization standpoint, it sounds like this is a fundamental capability of the platform. Should we think that the monetization comes through products that you're gonna build on top of it? It would be through CDP built on Genie versus selling Genie as a separate SKU in and of itself.
Think of Genie as the high-speed, hyperscale data lake architecture. It's the repository where we bring all the data in or where we do the logical view with the zero-copy architecture. MuleSoft is one of the very first integrations that we did, so there's connectors between MuleSoft and between Snowflake and between other systems that we'll build more and more and more of those so that you can harmonize that data across those 970 systems, and we sort of have a list of that we're sorta working through on that. But MuleSoft is integrated out of the box, so you can take the APIs from another system, use MuleSoft to manage and coordinate the transactions or the automations across different systems and workflows.
CDP and Genie are the repository, the single source of truth, if you will, for each golden record for me and for you and for Parker and for Mike. Now we know who each and every customer is. They work well hand in hand, but they're not the same thing.
Yeah, I would just add on monetization strategy. CDP is an application. You wanna do segmentation for marketing automation, that would be, you know, more of a license-based play. We see opportunities to also, the more customers use this, the more value they get, and the more value we'll get from them over time. We see opportunities in both ways.
Go to Bret.
Thank you. Good afternoon. Brent Bracelin with Piper Sandler. Great to see you in person again. Thanks for hosting this. Two questions if I could. The first question for David really is just around those discussions with the CIOs. How quickly can you implement Genie, this new replatform CDP? What does it cost? And then for Parker, if you just think about what's new to me is AWS and their presence at Dreamforce. I think they have 30 different sessions here. They're front and center when you go down to the floor. Maybe walk through what's evolved with that AWS relationships with Salesforce. It feels different, this Dreamforce, and just love to get your view. Thanks.
Yeah, I'll talk about the speed of implementation. Because we pre-integrated Genie with all of our clouds, it you know, obviously the mileage and speed may vary, so, you know, take what I'm about to say with a caveat. We have a weekly cadence where we review all of our Genie implementations, so we're really, like, all over this, if you will. What's great is they're going live in months, like, low numbers of months, so 3-6 months. Some have gone live as fast as 4 weeks, and some have taken longer. If there's more complexity and there's more systems, so obviously that affects the implementation timeline. The other thing that we're doing is really building out the enablement, so Trailhead so that people can learn.
This is a whole new technology, so you really need to understand the data world and how you connect all these different systems. The good news is, our MuleSoft teams and our Tableau teams and our CDP teams already are very literate in data, but now we're teaching our whole ecosystem about this. Then our systems integrators, you know, the Accenture, Deloitte, the Capgemini and IBM of the world, you know, we were just talking to the leaders of some of those companies, and we're now bringing their data practices into the Salesforce practice. We think that, you know, it's just getting faster and faster.
We're making it more pre-integrated and out of the box with all the clouds. It's, you know. I think one of the beauties of what Parker and team invented is we take hard problems and make them easy. That's what we're trying to do here too, is make it as easy as it possibly can be.
Yeah, the Amazon question, you know, I think what's great is if you look at Amazon and Salesforce, you know, we're both crazily customer-centric, so we kinda start with shared values, and we get each other really well. They're one of our biggest customers, we're a big customer of theirs, and so it's a very deep relationship. We listen to our customers, and what our customers are saying, "Hey, you know, I've got a lot of workloads that are on Amazon. I've got my data lake on Amazon already. I'm already doing AI with SageMaker. You know, don't tell me I can't get the value from that." We've worked together, our engineering teams and our business development, like, everybody's working together, dreaming up ideas, like, with our customers' feedback to say, "Great, like SageMaker, don't move the data.
Just, yeah, sure, your data science can use that." We use some of their services. Amazon Chime is used. We have Amazon Connect, so we can, you know, share workloads. If you have services that you wanna extend Salesforce with and integrate, we wanna just make that easy. You know, when we started Salesforce, we didn't invent Salesforce automation. There's some other companies that were really leaders in this space. All we did is just made it easier. When I look at what customers are doing, you know, on Amazon, we wanna make it easier if they have those workloads. If you look at the CDP, we're just making it easier. A lot of our customers have been chasing this data dream. The problem is, it often ends with, "Ta-da, here's the data. Come get it.
Here's, you know, here's some insights. Come get it. We're closing that. Let's just make it easier, you know, and let's make it automated in real time, without saying, you know, give up on all the IT and all your investment you've already done.
Let's go back here in the middle. Raimo.
Hey. Raimo Lenschow from Barclays. Quick one on if I think about the evolutions in terms of, you know, Genie and the new platform, what's the relationship going to be in the long term with the transactional part of the business or the database that you still have? Are we going to kind of commoditize it and kind of manage it out? Like, what's the traffic situation between those two? Are we kind of pushing from Genie down into the transactional database as just a persistent layer? How do I have to think about that in the long run? Thank you.
I think both are gonna grow considerably. You know, Genie is not a transactional database, so if you wanna do order management, you're not gonna do it on this system. You know, even, you know, opportunity management, same thing. You're not gonna do it. You know, think about the volume of transactions that our customers are doing in their call centers, you know, in order management, e-commerce. All of that will still be going through the transactional store. You may choose, like, not to need all that data longer term if, you know, and you're gonna move it off, but you wanna keep it for analysis. You want to, you know, get more AI out of it. I see that it'll already be in the CDP. It'll already be in Genie.
You might choose to say, "Okay, I don't need this in the operational store," I would call it, anymore. You know, in terms of growth, they'll both grow. I think, Genie is going to grow in just in scale much faster because it's not just the data that our customers are putting inside of Salesforce, which is Salesforce automation, customer service, marketing. They're going to plug it to these other systems, some of which are kicking off a lot of data. If you think about like the scale of Bret did a fantastic job in the keynote talking about scaled data, web clicks, you know, activities, entrance into keynotes, you know, things coming off your phone, telemetry. That is different scale of data, and you need a different platform for it.
You need to have a platform that can afford that cost, so it's highly cost optimized. They're just very different, but both are really core. That's why that slide that David showed, the two are critical components, what we have, and they serve unique use cases, but they work together on the common platform and the common ecosystem, the common AppExchange. That is the magic that we've done. It's not just like we didn't go and buy a company and like, okay, now we have a CDP, it's over here. Copy your data over here. You know, we could have done that, but we didn't do that. We built it organically, fully integrated to everything else that we do.
One of the beauties, Parker, to add on what you said, is the metadata, so the data about the data about objects and accounts and contacts and products, is shared across the data lake in Genie and across the transactional system. The semantics of how the system works and what it means for each one of these objects is shared, which is really what you want. You don't want to have to do that twice. You want to do that once. I think Parker is exactly right. Both are gonna keep growing at massive scale.
Let's hear Mark.
Thank you. Mark Murphy with JP Morgan. Earlier, Marc had mentioned the possibility of an E5 type offering. Wondering if you could just flesh that out a little. You know, what's the opportunity that you're seeing? What form might that take? You know, what kind of pricing premium? And just how does that come together? Maybe a little more complicated doing that with a large, you know, kind of cross-functional stack than a kind of desktop productivity suite.
Yeah. I'm happy to. I believe you're talking about E5, right?
E5.
Yeah. This is the suite concept. Yeah, let me make a couple comments about this.
I thought you were talking about some financial offering, like what's an E5 offering? Gotcha.
Just make sure I'm answering the right question here. Amy, I think if today, she didn't do it today, she shows frequently that for our enterprise customers, that they're buying more and more and more of our clouds, which makes sense. You know, you start with sales automation, then we have a seed and grow strategy, then you buy marketing automation, then you go to service center. What we're finding is the number of enterprise customers is in between four and five clouds, and we can give you the exact data on that, but we have presented that to this community before. We see an opportunity, whereas if we provide a pre-integrated bundle of all of these products, there's a win-win here, where, you know, the, you know, I'm a big believer that the suite always wins.
If you look at these suites, you know, it doesn't mean you have to buy all of them. It means there could be variants of it, like the E5 that you're talking about, they have variants of that, too, different kinds of editions. We actually founded this edition strategy in 1999 with Salesforce, where there was three editions, and you could pick and choose, you know, small, medium, and large, which size that you wanted. But we do think there's a big opportunity that some companies wanna start line of business and some companies wanna go all in. I will say at this conference, more than ever before, I think because of Genie, my number of conversations about.
I'll relay one with a large healthcare company, where they were saying, "We have 240 systems in the front office." I had the conversation with their CTO saying, like, "Why don't we just make this easy and just lean in? You know, it'll be faster, it'll be easier, the customer experience will be better. By the way, it's all integrated, and it'll cost less money, and you can do it faster." That's the vision behind our version of E5, and we still wanna have the best of breed software, so we still wanna have the best marketing automation or commerce. If people wanna buy one of the clouds, that's great, and we're gonna support open extensibility to other clouds.
We do think there's a package deal where more and more customers will wanna do this. One example, I'll give you this, we're doing cloud-specific suites now. We have something called the UE edition, unlimited edition for Sales Cloud, and that allows you to get sales engagement and CPQ, our Revenue Cloud, and all the sorta related add-on products. We now have a bundled price to just make it easy for people to buy, and they don't need to integrate other point solutions. Now they can just use Salesforce.
I'm actually gonna inject a question here from our friend Deb at Northern Trust, and she wants to ask about Hyperforce. What she wanted to understand is how they should think about it from an availability across all public clouds, a single public cloud, and then how to think about the cost implications, CapEx, gross margin, etc.
Let me just start by saying, you know, the decision we made three to four years ago to move public cloud, to move onto these hyperscalers, we were trying to do this ourselves for our own needs, was critical to what you saw at this conference. If we hadn't done that, we would not have the innovation that you saw. That's the first point, because it's not our business. I wish we had that business too, by the way, but it's not our business to be a hyperscaler. Two is, you know, we have it working on AWS. It's working at scale, 17 countries by the end of the year. That is a huge accomplishment. We and we've moved, I don't.
Probably, I don't know how many customers, but we've moved a lot of customers and a lot of our ACV, as we call it, to public cloud. It's working. We have a partnership with Alibaba, so we also are working on China as a region. That is customer-driven. We're gonna do that. That is where how we're gonna focus until we see a need to go further than that. The technology is using fairly simple substrate capabilities, blob storage, virtual storage, virtual compute, that's available everywhere. It's not, you know, unique. A lot of the other technology is our own, like our database. You know, so, you know, that's where we're headed. Then the other question was?
Just around the cost.
Oh, around the cost. The cost is one of the reasons that internally we had massive debate, and Bret Taylor in the back was part of that debate. We had a lot of people that are in, looked at us like, "There's so many smart people. Why can't you guys agree what you're doing?" One of the reasons was there was this fear of the cost model. We did a lot of analysis on it and basically proved that, yes, it's more expensive for me to rent a computer from Amazon than it is to buy one and put it in my own data center. Now, that doesn't factor in everything else around it, the people and everything.
We proved, you know, in our models, and we've proven it empirically in the data we have now, that we can keep our cost line constant in terms of a percent of revenue, the expense line of our infrastructure. That's the only thing I care about. You know, well, I would like to make it even better, by the way, you know. We have seen some opportunities to make it even better. If we just do that, the model of Salesforce continues to work really well because we continue to fuel the line of the sales line, all the other lines. If you look historically, you guys can see this data. It hasn't changed. In 23 years, those lines have been pretty consistent. What I wanna focus on is the innovation that it gives us, like the innovation that you saw here at this conference.
Great. Kirk?
David, could you just give us an idea of, you know, an update rather on the industry cloud effort? I think Amy talked about, you know, it's $3.8 billion in ARR. It's a huge part of your growth opportunity. What industries are breaking out? I think implicit in that comes when you buy an industry cloud, you're buying multiple clouds as part of that. You know, what should we be looking for maybe over the next 12 months to know that that's pushing ahead as you might want it to?
Sure. Happy to do that. The biggest industries are financial services, healthcare, communications, and public sector are the biggest ones, and then there's sort of a middle size, and then we have sort of the more embryonic ones, mostly because, not 'cause they're big opportunities. The TAMs for these industries are huge. It's just we started first with financial services and health, so therefore they're bigger, so we started earlier. Just to remind people on these industry clouds, there were 12 and now 13. We just launched our Auto Cloud here at the conference, and these are purpose-built applications. We've designed the workflows and the functionality for those companies. We launched this year trade promotions management for consumer goods companies.
If you talk to a CEO or a CRO or a head of marketing of a leading CPG company, that's all they want to talk about. That's very specialized industry functionality. If you go in the insurance industry, they wanna talk about policies and claims and how they adjudicate that in now with Genie in real time. We think that the other part of the strategy that's really exciting is it's not just the front office, it's not just the Customer 360, but in many cases, we've expanded to the mid-office. These applications are very sticky because they run mission-critical parts of companies, and therefore it's highly valuable.
We see that, you know, the upsell, the attach, and also the speed of implementation is the primary value because it comes out pre-tailored for a hospital, pre-tailored for a government, pre-tailored for a telco, pre-tailored for a bank. You know, who wouldn't want something that's already pre-tailored for the kind of business they have? We see a big opportunity. It's sort of an extension of, Kirk, you know well, my prior company, Vlocity, we sort of productized one of our concepts from there of the best practice business process library. I'm proud to say we launched the Flow library of industry processes. Now you can go to our library online, you can download these trade promotions practices or how to upsell and cross-sell a certain insurance product.
That flow, you download it into your Salesforce instance, and you run it, and it works. We're trying to do more and more things to accelerate that time to value for customers 'cause I believe that digital transformation is an industry specific sport.
Okay. Let's go here to Brad.
Thanks so much. Brad Sills from BofA Securities. Thanks so much for doing this, guys. Another question on Genie, if I may. You mentioned, David, four to six months to implementation. I think Ford yesterday said four months. Is this the kind of system that once it's in place, you have that data lake, you've got that data ingest engine in place that you can really start to see more applications, more flows identified more rapidly than that, and then over time, you might even see tens or even hundreds of applications, that the possibilities within your stack are just unlimited when you think about all the different AI-enabled workflows that you can enable over time?
No, that's a very perceptive question. In the like, the four months for Ford, they're gonna take out of their, let's say, they have the 970 systems on average. They're gonna prioritize which ones. Some of the customers, we did 50 systems, some we did 100, some we did hundreds. That sort of dictates a little bit the speed. Once you get this up and running, it's easy to add more. The real hard work is at the beginning of just mapping all the systems, which, you know, that is, you know, not hard, but does require a little bit of work to sort of line that all up because of the topologies of these old systems are sort of, some of them are pretty archaic.
Once you get that lined up, we see people adding more and more and more to Genie. As Parker said, we're building more applications and our ISVs are building more applications on top, on top of this. We expect that the Genie data lake is gonna grow really, really fast.
With that, we're actually gonna wrap up this section. Thank you, Parker. Thank you, David. Very, very much appreciate it. We're gonna just really shortly transition. I'm gonna invite Amy, Brett, and Brian to join me on stage here. We'll go right into our master Q&A.
Okay. As we're getting settled here, I recognize I've been concentrating questions here at the front, so I'm gonna try and be a little more holistic. I'm first actually gonna start and put Brian on the spot here. You guys know Amy and Brett well. We introduced Brian on the last call, but I just want him to quickly introduce himself and give a little bit of your background here at Salesforce.
Sure. Thanks, Mike. I didn't know you were gonna ask me that. Brian Millham. I'm the COO of the company now, running all of our sales organization and customer success teams globally. Almost everything customer-facing, with the exception of marketing, rolls up through me. 23 years with the company. Just celebrated my 23rd anniversary with the company, and so been around quite some time. Looking forward to meeting with all of you today.
Employee number 13?
That is correct.
Okay, let's go to Mr. Bachman there in the middle.
Hi. Thank you very much. Keith Bachman from Bank of Montreal. Amy, I wanted to direct this from you over here. Yeah. Thank you for the slides. Very interesting, informative. As it relates to the $50 target, though, and 2026, if you could just talk about. I think that's a reported number, just a clarification there, and how do you think about currency from this point forward? The real question, though, is, you know, as I look at that, you know, some things have to go well in order to reach that $50. How much is the margin target functionally dependent on making sure you realize that revenue growth?
I think there were a few things packed into that question. First, $50 billion, yes, looking at that by the end of FY 2026. Now, there are risks. There are real risks on this. This is the type of environment right now where I almost wanna go back and force everyone to read every single word on that forward-looking statement slide. As we continue to look at this and look at the 50, and I look at the different accelerants in our business, and in particular, I think the multi-cloud adoption is incredibly powerful, I still do see a solid line to 50. Now, foreign exchange has taken about $2 billion off any cushion I had before looking at this. Foreign exchange is down again today. I mean, we.
I never would have dreamed a year ago that I would be standing here and the euro would be below parity. I mean, it was unheard of that the yen would be at 144. Now, at some point, that's gotta turn, but right now, if that continued to go down, that would put a lot of pressure on that number. In terms of operating margins, we're aiming to get to 25% or higher in FY 2026. If we have more revenue, my job gets a lot easier, but no, that's not necessarily dependent on hitting that $50.
Actually, just as one point of illustration, obviously this year our revenue came down and we maintained our operating margin and in fact raised it by 40 basis points in our first quarter. It reflects that our operating discipline is independent of these targets and something that's I think really represents a systematic change to how we're operating the business from a discipline standpoint.
Mike, can I take the prerogative of calling on someone?
Please.
All right. I am so thrilled to see all of you here. If I had one change for next year, I would absolutely love to see more women in the room, and I'm gonna call on Gili to give her a question. All right. Gili, please go ahead.
Hi. Thanks, Amy. Gili Naftalovich on with for Kash Rangan from Goldman Sachs. Bret and Brian, this is probably mostly for you, but also Amy. You guys touched on how much pipeline generation is really happening at this conference. You also reiterated your full year guide. What are you hearing from customers around prioritization for Salesforce, and are you changing out your go-to-market at all for a potential recession?
Do you want me to start? You take it, Brian? I'll start. I think actually David brought up his conversation with that CTO. I think there's a ton of excitement here. You don't feel the, you know, what we refer to as sort of a measured buying environment when you're walking Howard Street right now. There's a ton of excitement around technology. As we said on the earnings call, actually, our pipe generation has actually been really good through the first half of the year and continues to be really good. I think the scrutiny we see from our customers right now is driving time to value, and Amy's counterparts in the finance departments of all of our customers ensuring that there's a very well-articulated return on investment for every single technology investment that our customers make.
How that's shifting sort of our go-to-market. Number one, you heard David talk about things like the unlimited edition for Sales Cloud. We are really recognizing that we are the leader in CRM, and we can actually help our customers consolidate some of their software investments and really do more with less. Many of our customers already have bought things they're not fully utilizing from our platform, and you'll see people see demos here and say, "You do that?" They're like, "You own that, and you haven't started using it yet." That can really help drive value there. Similarly, multi-cloud deals sort of follow the same motion, you know, because there is, you know, our customers can drive a lot of leverage in their own technology investments by consolidating on Salesforce's platform.
The second thing that we're doing is really focusing. If you look at the key pillars of our message, they are on automation, intelligence, and real-time. Automation and intelligence for real-time all correspond to cost savings for our customers. You know, just the classic example that I bring up a lot, but I think it's really easy to understand. If you deploy an automated chatbot for either sales or service, essentially you're saving time and your human capital costs on the other side. In most parts of the world, your human capital costs far outweigh your software investment costs. Classic, you know, the contact center deals that, you know, Brian and I spend a lot of time doing. It's essentially saying, "We're gonna set up self-service capabilities, chatbots and others, to deflect, say, the 60% of cases that are common. Where's my order?
Change my password, file a claim of your insurance company so that you reduce agent volume, sometimes reduce the number of agents as well, and really drive cost efficiencies. That case needs to be formalized in a way that perhaps last year or the year before was a lot more informal. Now, you know, there's folks inside of our customers really scrutinizing those. I think we have the capabilities, and I would say we're selling essentially the same solutions. You know, we have a lot of direct sellers now we're enabling to say, "Okay, you have a lot more stakeholders in these deals now. You need to form a business plan, a set of milestones that perhaps are a lot more granular than they once were." Walking around here, you know, I had a very similar experience as to David Schmaier, actually.
I just talked to one of our largest customers in Southeast Asia, and he literally said, "I wanna go all in with you and replace these four systems." It was because they saw how integrated our platform is, and I think that will continue to be the pillars of our strategy. Integrating our acquisitions, industry solutions, multi-cloud deals, I think directly translates to cost savings for our customers. As you saw from Amy, for us, there's significant multipliers in what we see from the ongoing investment when they become sort of an all-in Salesforce customer.
I'm not sure I need to follow up on that. That was exactly what we're seeing. Just to reiterate a couple of things there. Number one, we are seeing the demand environment continue to be very strong. I was in the exec summit this past morning, and they said record-breaking pipeline going through that particular program here at Dreamforce. So we feel very good about the demand environment. There are some changes in our go-to-market, and we're thinking about from an enablement perspective. Brett talked about it. We're re-educating our sales teams about how to go sell around business value and making sure we're building those business case right now to justify those spends out there.
Some work that's being done right now and has been done over the past couple months here to ensure that we have our account executives armed with the right talk tracks and the right business models to make sure that we're able to win those deals, able to take out other systems or justify the spend of why people would wanna go fast. Industry is a great play for us. David talked about being able to go faster with an industry cloud, wrap a bunch of products together in a bundle, and get to value faster. Positioning our industry clouds a lot more often right now is gonna be a winning formula for us.
Let's go right here. In front. Phil?
Yeah, thanks. A question for Bret. We were talking about this earlier about Salesforce CDP versus Genie, and obviously Salesforce CDP was originally really targeted at Marketing Cloud. My question for you is really in the context of multi-cloud. Do you think with Salesforce Genie, since it's targeted at every cloud, there's a function of, you know, there's sales genie, marketing genie, commerce genie, et cetera, that can actually drive further adoption of multi-cloud deals? Because the more cloud you use, the more data, the better that theoretically Genie gets. Is this actually potentially not just simply an upsell of Genie but a driver of multi-cloud?
Yeah. I think the answer is yes, and I'll give a little more detail. I think there is essentially for an individual customer, a network effect of a capability like Genie, because the more data you have in it, the more it becomes a center of gravity for the rest of your IT infrastructure. That's why we took a very, what David described, as a very platform-centric approach, so that our ISVs can build around it and our customers can build around it as well. As you know, I think the magic of what Parker built 23 years ago is it's extensible, and you can go to any Salesforce instance that looks different. The same is true of Genie, so we really want this to be a center of gravity.
I think there's a bigger thing here that I won't go too deep into this. You just saw the David and Parker section, which I loved. I think CRM traditionally was a B2B product. If you think about the heritage of Salesforce, it was for B2B sales, and even our customer service product really started for B2B companies. The idea that a company with 100 million consumers would have a CRM doesn't make sense if you think about it as forms and fields in a web browser in the cloud. You know, no one's gonna like type in the name of every consumer for a consumer goods company. When you said like what CDP, which is an emerging category, means it's really a system of record for B2C companies or a system of record for marketeers.
With what we've done with Genie, I think we really said we now have a CRM that works for B2B companies or B2C companies or the companies that are B2B2C. Like most consumer companies have a wholesale retail channel in addition to a direct-to-consumer channel. Now they can have one CRM to serve all of those use cases. I think that's extremely differentiated. What's exciting to me is, you know, if you talk to some of our product managers and engineers, they'll tell you in 1999, you know, CRM meant, you know, you open up a browser and you have a database in the cloud with opportunities and leads. Now you think about articulating a customer journey that's entirely automated. That's what CRM means nowadays.
It means that when you leave the storefront, you know, Marc talks about his fancy clothes and the Brunello Cucinelli stores and all that stuff. It's true. If you look behind that iPad, it's actually a Salesforce screen. When he leaves that, the email journey he's on is also powered by Salesforce. That seamless connection between the in-person interactions or the B2B sales calls with what you traditionally associate with a consumer company, which is automated journeys, which is traditionally a marketing use case, I think those worlds are converging. I think you're seeing a convergence of B2C and B2B. You're seeing the impact of artificial intelligence and automation on CRM.
You could see in the demos yesterday, you know, you saw a lot more like automation and Flow and probably things, if you've been coming, and many of you have come for many years, pretty different demos than we were given a few years ago. I think that's why you probably hear a lot of excitement for us and the technological shift this represents. I think it's truly authentic, and I do think Genie, if we play our cards right, is a real center of gravity for our customers' IT systems. Let's go to Karl right in the back there.
Hi. Thanks so much. Karl Keirstead at UBS. Amy, if I could ask a few more prosaic modeling questions for you, just so we're fully tight on your guidance. On the margin side, I think you alluded to in your comments that it wouldn't be a straight line, 150 basis points per year, but could you elaborate on the kind of that trajectory over the next three years? Secondly, when we're modeling cash flow, should we also assume something akin to a 450 basis point improvement in cash flow margins? In other words, should there be any difference between EBIT margins and cash flow margins? Lastly, on the $50 billion, just to be clear, is that a full year fiscal 2026 target or an exit Q4 target? Thank you so much.
Okay, let me see if I can get these in order. We started with op margin.
Yes.
Okay. As I said, we're gonna hit 25 % or more in FY 2026. This will not be a straight linear build. There are a number of things, you know, when we talk about digital selling, when we talk about resellers, you're investing into this, so it's going to be back-loaded. However, I do expect improvement immediately, so there will be improvement next year. Second question, I believe, was cash flow. All right. We are not guiding on cash flow very explicitly, but naturally, as you increase operating margin, or cash flow should increase in line or above with that.
Okay. On the $50 billion?
We expect to hit $50 billion at the close of FY 2026.
Got it. Okay. Super clear. Thank you, Amy.
Let's go right in front of him, right there. Right there. Brad, right there. Yeah. Wonderful. Thank you. Rishi Jaluria, RBC. Just wanted to talk a little bit more about the self-service motion and how that helps improve sales efficiency over time. Can you dive a little bit deeper into some of the work that you wanna do to get greater self-service adoption? Is that pricing and packaging or is there some work technologically you need to do to make it easier for people to get up and running? Thank you. I'll start, and I'd love you, Brian, to add on too, because there's a couple different self-service motions. There's the purchase experience and the renewal experience. I think, Brian, you can elaborate how it impacts our sellers, but I'll just talk from a more foundational level.
If you talk to any of the startups here in Silicon Valley, they'll all use a phrase called product-led growth. Effectively, what that means is teams sign up for a product, typically buy it with a credit card, and a lot of the selling teams will call on existing customers that had sold to a team to expand a department or a company. That's something I think Slack represents in spades, and in fact, has sort of become a trend for the vast majority of modern software as a service companies. Salesforce, as we've moved up market, if you look at the percentage of our net new like bookings, net new ARR that come from self-service, it's lower than you'd see with these next generation companies. Fundamentally, there's two pillars from an investment standpoint. Number one is making our products easy to use.
You know, when you have a product that is directly sold, you often can sort of afford the opportunity to have sort of an implementation time. That's probably most illustrated by Salesforce Easy, which we announced just prior to our last earnings call. It's generally available. You can sign up yourself. You can log in with your Google account, with your Slack account. You do not need an administrator to set it up. It integrates sales, customer service, and some limited forms of email marketing as well. We plan on adding a lot more capabilities to that one all-in-one suite going forward. That's number one, that people can sign up without a lot of support system around it, because I think it's a prerequisite for a lot of self-service capabilities.
The second is making it easy to purchase in a self-service manner. That's not only for those easy suites, but also customers that wanna, for example, add a seat to their sales hub. You know, just ensuring that our web store enables you to buy anything you want from Salesforce. The same applies to our renewals business as well, and obviously, we've had historically low attrition. I'm so proud of the work that Brian and his team have done. I think quite a bit more rapidly I think many people expected coming out of the pandemic. It's a very broad range of investments, and essentially, we're measuring, you know, what percentage of those transactions are happening in a self-service manner.
Philosophically, small businesses should not need to talk to a sales force, and small transactions should not need a direct sales interaction. You know, as Amy and I look at sort of the structural cost savings in our sales and marketing expenses, you know, there's a pretty clear line as we think about this 25% operating margin target to say, "Okay, we have a pretty clear path of if this mix of transactions become self-service, we understand the impact on sales and marketing. We have a pretty clear set of investments to get there." It is interesting, though, because it's different motion for a lot of our sellers and the renewals business. Brian, I don't know if you wanna provide any perspective on that. Yeah, a couple things there. It's certainly a productivity driver.
If we're transacting all these smaller deals through an account executive, it's taking their time. Push all of this to self-serve and drive productivity up, they're spending more time in high-value transactions, so we expect to see that. On the renewals side, we've actually done some learning there. We've actually driven a lot of automation on our renewals business, not as much on the new business or add-on business that we've been doing. A lot of learnings that we've had there. As Bret said, we have a great use case right now in Slack and learning a lot from them as we think about sort of the next generation of what self-serve looks like. Very importantly, our customers are asking for it.
They don't wanna actually pick up the phone and talk to us all the time. They just like to add those 10 licenses. There's an added benefit of customer satisfaction and success when you provide a great seamless environment for them to add licenses, going forward.
I'm ex.
Could I just add one thing on here?
Please.
When we're speaking about small companies, because this has come up with a few questions that I've gotten during the break. When I was talking about multi-cloud adoption, showed you a number of slides that showed number of customers that showed the ARR. To be clear, and you'll see this when you really look at the slides carefully, that excludes small business. We could have included small business. The slide would have looked fantastic in terms of our opportunity, but even better. But we took that out. What we're really looking to are the medium and enterprise businesses where we feel like that we have the greatest opportunity to sell into that and to move them up the clouds. Sorry, Mike.
No, it's okay. We have quite a few questions online as well, so I'm gonna pull on this thread a little bit more that we were just on and specifically around sales and marketing, 'cause I know I've gotten the question from a number of you directly. So maybe might be for Brian, but whoever else wants to chime in. How should the audience think about, and I'm gonna paraphrase a little bit, sales and marketing as we move forward? You gave the target of below 35% by FY 26. And as a result of focusing more on sales and marketing, how should the audience think about that impacting growth potentially on the top line as we think about striving to hit the $50 billion?
A couple things. Amy stole some of the thunder in her presentation today. We are working very closely across the three of us, actually, to look at how we can think differently about our cost models on the sales and marketing side. We talk a lot about our ecosystem. It's an amazing ecosystem of partners, huge SIs that are doing incredible business with us, billion-dollar practices on our platform. We talk about our ecosystem of trailblazers and MVPs. Our ISV community is remarkable. We don't talk a lot about resellers. It has not been a component of our business that we have leveraged, particularly on the core side of our business.
As we think about emerging markets and going after those emerging markets, we think we can drive much more business through a reseller channel, lower cost to book, and drive some very good bookings through these models. That's one area where we can drive costs down and expect to see continued growth in that area. This digital channel, the self-serve channel, is obviously one where we have a lot of opportunity, I think, to drive not only our cost down a bit, but also productivity of all of our sellers.
In our go-to-market, we're gonna be looking at, as we sort of roll into the next year, how do we think about our acquired companies, and can we get some synergies there in the way that we are, bringing those businesses into our core, taking some costs down, certainly. We're gonna go look at that. Also, how do we get more multi-cloud deals? You know, how do we sell more of those acquired companies in every single transaction that we're doing out there? Drive productivity up and potentially cost down as we think about a new go-to-market strategy going into our next fiscal year. Bret, I don't know if you have any other comments.
Yeah, I'll just add, I know I wanna get a lot of questions in, so I'll keep it brief. I think also broadly at the company, Juan Perez, who Amy mentioned, our new CIO, there's also a broad focus at the company on operational excellence and, you know, a fair percentage of the company now works for Brian in sales and marketing, and that consistent focus on operational excellence will disproportionately benefit sales and marketing as well, simply because of the math of the number of people that we have in sales and marketing. You know, I joke with Brian, sometimes we're like the cobbler's children selling cost-efficient Customer 360 to our customers, and I think we wanna shine that light back on ourselves.
You know, when you look at all the tools we surround our sellers with, I think there's significant structural opportunities, and I say structural in the sense of, you know, how many other people do we need to hire for every quota-carrying account executive to be productive? I think, you know, Brian and I have talked a lot about it. I've given him a few challenging targets to hit around this. I think if we do our job right, I think we can make our sellers a lot more productive and continue to invest in what I think is the best direct sales force in the world, but surround them with a lot more efficient support system around them.
Well said. Let's go right over here.
Hey, Michael Turrin with Wells Fargo. Thanks for presenting and for the event. I wanna go back to the industry focus. It was a great panel with David, one of the key growth pillars Amy presented as well. It's something your partners have been talking a lot about in terms of keeping busy with these micro industry-specific areas. I'm just wondering if there are any tweaks you've made to your own go-to-market to just make sure you're aligned there, how that industry focus might be helping in the current environment where there's budget constraints and you have that incumbent position, and then maybe also how it fits within the operational framework and the emphasis there today.
I'll be really quick, and then Brian can answer because I think it's extremely integrated with our go-to-market motion. I actually forgot that we had 13 industries, which I'm embarrassed today. I think I said 12 this morning, and David reminded me our Automotive Cloud launched here at Dreamforce, so 13. Need to remember that. It is a very tightly integrated go-to-market motion. We, with all of our industries, have a field leader responsible for it and a general manager on our product team. The whole goal of our industry solutions is to be very tightly connected to more of a solution mindset with our customers. If we're doing our job right, we tend to have design partners with our customers for the first version of these industry products. Then as David said, there's sort of a maturity model.
You know, our Financial Services Cloud, extremely mature, and we're expanding to different commercial banking, retail banking, investment banking, and really trying to get the whole end-to-end bank. Many of you are customers of this product. We have the emerging rounds where we're going for key workflows that we feel we have some unique value to add, which we use as a jumping-off point. Brian, do you wanna talk about our go-to-market model?
Yeah, appreciate it, Bret. So we have over the last five years, probably invested more heavily in our industry go-to-market than any other part of our go-to-market strategy, more AEs, more expertise in that area. I think the linkage with our product teams has been phenomenal. You just mentioned, you know, how do you think about this with your partners? They sort of brought us along actually in some ways because they're all organized around industries, and so we're even closer with them right now as we think about some of the things that are going on in the market. How are we very specific about a process that we can solve along with our partners? Some system that's been in there for 30 years, and they need to rip it out, and now is the time to go do that.
Had a great meeting with one of our top partners this morning for breakfast and talked about this very thing about, hey, how can we get closer together on a particular product for a specific industry and take that to market as a partner/product/sales team and go win that market? A great question and exactly where we're headed on the industry side. By the way, Amy showed it earlier, while maybe a smaller footprint, but the ASPs are higher. We feel great about that opportunity to go win in the industries.
Let's go right here to John.
Thanks. John DiFucci from Guggenheim. Amy, thanks for that great presentation today, but I wanted to ask a question, maybe a little more philosophical around profit. You talked about the 25% operating margin.
John, I just gave you 25.
I know. I know.
I told Amy the first question would be.
This was like key.
How about more?
For him last year. How much further could we go?
No. I'm not even gonna go there. I'm not gonna say you should raise it. I think that was great, that your stock's gonna be up tomorrow. So it's, like, people here will be happy. But Brent talked about, you know, the margin showing some discipline this year. Your operating cash flow, you guided down. I'm not even just talking about operating cash flow. I'm talking about free cash flow, and not just free cash flow minus CapEx, because acquisitions are free, right? I mean, it's a make or buy decision. That's how you guys look at it, that's how we look at it, too. So when you look.
Like, I took a look just recently and I was kind of surprised that the last 20 years, if you look at the free cash flow defined that way, cumulatively it's negative. Listen, we know they're lumpy though, right? You just bought Slack. Let's take out that last year, and it's like at a mid-single digit free cash flow margin. It's positive, but not very positive. With everything you gave us, which was good, and really, your stock is gonna be up tomorrow, I think, anyway, unless the whole world's not. How should we think about that?
'Cause it's really sort of philosophical a little bit, right? Like, yeah, you're buying some cool companies and integrating them, but it's hard to say that it's actually working. It's building the top line. Philosophically, if you just stopped buying companies, that operating cash flow would convert the operating free cash flow with just a little CapEx taken out. I don't know. I'll stop there. Sorry.
Well, philosophically, I love the idea that the stock will be up tomorrow. Thank you. Fully support you on that statement. I was looking at free cash flow, and we've certainly dedicated a lot of that in the past years to our acquisition strategy. In terms of going forward, it is really doing this with the discipline that I talked about. I think we are looking at M&A through a very different lens. We're looking at how quickly it is going to be accretive. We're looking at the choice of consideration. We're looking at the financial alignment. I think that is going to show a different trajectory than what you've seen in the past.
Let's go right over here on this side.
Thank you. Tyler Radke from Citi. I'll ask you a slightly shorter financial question. No offense, Sean. It's good to have you back. I wanted to ask you about stock-based comp and dilution. How are you thinking about GAAP margins in the context of 25%? And then should we think about your buyback offsetting the dilution? Just help us frame how you're thinking about share count growth, too. Thank you.
Sure. When I look to the future in terms of dilution, first, most of our dilution or about half of our dilution in recent years has come from M&A. As I mentioned, we are going to be prioritizing the use of cash and debt for M&A in the future. When I turn to stock-based compensation, a couple of things on that. First, it's still a very, very competitive market for talent. Despite how the economy seems to be turning, we are still fighting to retain and to acquire the best talent possible. I don't see stock-based compensation necessarily going down in the short term. I do see the buyback as meaningfully offsetting that dilution. I do not expect that it will fully offset, at least initially, but it should significantly cut into that.
Apparently, the SFPD is not a big fan of that.
No. What was it that we had flying over our first year, the first earnings?
You had a parade during your presentation.
I had the parade. We've had flocks of birds during earnings calls. You know, the usual.
We got time for one more. Let's go in the back there, Brooke.
Yeah, hi. Stefan Slowinski from BNP Paribas. Just wanted to come back on the international opportunity, and especially with FX US dollar at a 20-year high. We're aware of the headwinds that creates in the top line, but does that also create an opportunity to invest more, whether it's organically or inorganically or hiring, especially now that you've got Hyperforce and some of the sovereign opportunities there as well?
It's a great question. Certainly Marc always jokes, "It's a great time to buy real estate in Japan," and I laugh. You know, first of all, I do think it creates some opportunities. We are trying to take a long-term view of our growth, though. You know, at the end of the day, we're a recurring revenue model, right? So essentially, our companies are signed up. I think our average contract length is, what? 2.1 years or something like that. He can correct you.
It is.
2.4.
2.4. See, I know all the metrics. You know, we're doing these contracts, and we're taking into account growth, and we're taking into account foreign exchange. It does feel like we're taking into account things outside of our control. I think the reason, the way we build for the long term is around our competitive advantages. You know, first is making sure we have the best-in-class products, which translates into a low attrition rate. Number two is we have the best-in-class suite, and the full Customer 360 platform leads to multi-cloud deals. Over time, that acceleration on I thought Amy's slide on sort of cohort analysis was quite powerful and the way we think about our long-term strategy. Number three is the moat of our technology differentiation with Einstein Genie and our ecosystem differentiation.
Over the long term, you'll see fluctuations in currency, and that contract might look different one year to the next. You are pretty sophisticated on foreign exchange. We've been more transparent in our disclosures around foreign exchange, and we plan on taking a really long-term view there. That said, if there's good opportunities to invest because the exchange rate is great, there's a startup. We bought an interesting company in Brazil. You didn't even hear about it 'cause it was so small. It was probably affordable, you know, now because of the exchange rate. But we're really trying to take the long-term view here. I always joke with Marc, he invented, I think, the best business model in the world in software as a service because of just the durability of our revenue model.
I think with the discipline Amy's bringing to the company and the associated profitability and free cash flows we just spoke about, I think taking the long-term view is the right thing. While it's been a total pain to see the foreign exchange headwinds, this too shall pass, you know? The dollar is not gonna be this strong forever. We'll be transparent with all of you about what we see. Certainly, as we think about things like that $50 billion milestone, we're focused on the TAM, not foreign exchange. As Amy said, it's about 40% outside of North America. You know, we think that's the shape of our business, and we're focused on, you know, capturing as much market share as possible.
With that, I wanna thank Bret, Amy, and Brian for joining us, and thank you all for attending and those online. We are gonna have cocktail hour, so please, you know, grab a drink, grab some snacks. We have a number of executives who've been gracious enough to hang out in the back for most of this presentation that, you know, are happy to answer questions as well.
There's a few members of the board as well. A few members of the board, yes. I didn't mean to not mention.
Thank you all. Appreciate it.
Thank you guys very much.