Salesforce [CRM] Conference call transcript for 2021 q1
2021-05-27 23:59:08
Fiscal: 2022 q1
Operator: Welcome to Salesforce's Fiscal 2022 First Quarter Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers presentation there will be a question-and-answer session. Please be advised, that today's conference is being recorded. I would like to hand the conference over to your speaker Mr. Evan Goldstein, Senior Vice President of Investor Relations. Sir, you may began.
Evan Goldstein: Thank you, Shantao. Hello, everyone and thanks for joining us for our fiscal 2022 first quarter conference call. I'm Evan Goldstein, Senior Vice President of Investor Relations. Our press release, SEC filings and a replay of today's call can be found on our IR website at www.salesforce.com/investor. With me on the call today is Marc Benioff, Chair and CEO; Amy Weaver, President and CFO; Bret Taylor, President and COO; and Gavin Patterson, President and Chief Revenue Officer. As a reminder, our commentary today will primarily be in non-GAAP terms. Reconciliations between our GAAP and non-GAAP results and guidance can be found in our earnings press release. Some of our comments today may contain forward-looking statements that are subject to risks uncertainties and assumptions. In particular, our expectations around the impact of the COVID-19 pandemic on our business, acquisitions, results of operations and financial condition and that of our customers and partners are uncertain and subject to change. Any of these materialize or should our assumptions prove to be incorrect, actual company results could differ materially from these forward-looking statements. A description of these risks, uncertainties, and assumptions and other factors that could affect our financial results is included in our SEC filings including our most recent report on Form 10-K. With that, let me hand the call to Marc.
Marc Benioff: Well, thank you so much Evan and thank you for everyone being on the call today. I mean, it's just going to be a great call, I'll tell you, this is the best quarter Salesforce has ever had. It was just a phenomenal Q1. And everyone is so excited to do this call with you and to talk about it and also just to talk about so many of the things that are important to Salesforce. Because everyone knows business is the greatest platform for change, we do believe that you can do well and do good at the same time. And before we go into these incredible results, we just want to let everybody know that our hearts and prayers are with all of our Ohana and India. They're on our mind every day. And we're so sorry for everything that they are going through. So I am now here with Amy and Brett and Gavin and Evan as well. And I'll just tell you that we're all vaccinated. We're grateful that we can be together. We're grateful that we, you know, are in a moment where we've been able to do that. We just finished a two day off site with our top managers from around the world. We - this is our third off site we've done. We've done about eight total management off sites. And through the miracle testing and now through the miracle of vaccinations and ability to get back into business and be in person where we're just grateful for that. We definitely are missing each other. And it's been great to be able to run our business in person.
Amy Weaver: Thank you, Marc. And good afternoon everyone. Performance in q1 was professed - impressive across all financial metrics, with a record levels of Q1 new business performance and strength across all products, regions and customer sizes. Importantly, we were able to achieve growth, while also delivering profitability. So let me take you through some of the results for Q1 fiscal '22. I'll begin with top line commentary. Total revenue for the first quarter was $5.96 billion, up 23% year-over-year, or 20% in constant currency. The strong new business pipeline that we discussed last quarter enabled us to deliver these results. While we had a favorable comparison for Q1, our two year new business CAGR also illustrates the continued strength in the business. A few areas to highlight. As Mark mentioned, we saw a record number of Q1 seven figure deal. Not only were these deals this, they were multi-cloud transformation, was on average more than four clouds included in each. Our vertical strategy continues to align our products to strategic industries. In particular, we saw strengths in the public sector, which continues to accelerate as governments around the world turned to Salesforce Solutions. Service Cloud demonstrated another quarter of incredible growth at scale, with Q1 revenue of $1.5 billion growing 20% year-over-year, and Tableau continues to perform well. We are pleased with the progress of the integration. For example, in Q1 Tableau was in eighth of our top 10 deals for the company, and in more than 60% of our seven figure plus deals. Revenue attrition in Q1 was between 9% and 9.5%. We were - we continued to be pleased with the progress made on attrition. Our remaining performance obligation, representing all future revenue under contract ended Q1 at approximately 35 billion, up 19% year-over-year. Current remaining performance obligation or CRPO which represents all future revenue under contract that is expected to be recognized as revenue in the next 12 months was approximately $17.8 billion, up 23% year-over-year or 20% in constant currency. Turning to operating margin. Q1 non-GAAP operating margin was 20.2%, largely driven by revenue outperformance and incremental expense efficiency. Q1 GAAP EPS was $0.50 and non-GAAP EPS was $1.21. The outperformance in the quarter was primarily due to higher revenue and expense efficiencies, as well as realized and unrealized gains on our strategic investment portfolio. These mark-to-market adjustments benefited GAAP EPS by approximately $0.23 and non-GAAP EPS by approximately $0.24. Turning to cash flow, operating cash flow in the first quarter was $3.2 billion, up 74% year-over-year. As a reminder, last year cash flow seasonality was impacted by our decision to provide temporary financial flexibility to some of our customers during the pandemic. And we continue to expect cash flows seasonality to skew higher in Q1 and Q4. CapEx for the quarter was $171 million, leading to free cash flow of $3.1 billion, up 99% year-over-year. Before moving on to guidance, I want to update you on the status of the Slack transaction. We remain on track to close in Q2. You know, as we've refined our Q2 and full year guidance, we have also refined our expectation on the Slack closing date, which we now expect to be near the very end of the quarter. So I want to emphasize that all guidance assumptions involve changes involving Slack are completely timing driven. So turning to guidance. We expect Q2 revenue of $6.22 billion to $6.23 billion or approximately 21% growth year-over-year. This guidance assumes no contribution from Slack. For Q2 we expect to deliver CRPO growth of approximately 20%. This guidance assumes approximately three points of growth from Slack. As a reminder, Q2 fiscal '21 benefited from strong renewal performance. We expect Q2 GAAP loss per share of negative $0.10 to negative $0.09, and non-GAAP earnings per share of $0.91 to $0.92. Our assumptions include a $0.09 impact from Slack, primarily driven by OIE and transaction and integration costs. Now moving to fiscal '22 update. As a result of our Q1 performance, we are raising our fiscal '22 revenue guidance by $250 million to $25.9 billion to $26 billion or approximately 22% growth year-over-year. Now this guidance incorporates an expected revenue contribution of $500 million from Slack, due to the changes I mentioned in our closed timing assumptions. Our guidance continues to include $190 million from Acumen. Net of the revised Slack contribution, this represents a $350 million raise on our core business. Our decision to raise fiscal '22 revenue is reflective of our Q1 performance and our confidence in our ability to execute for the rest of the year. We're also raising our fiscal '22 non-GAAP operating margin to 18%, an expansion of 30 basis points year-over-year. This continues to include an expected 160 basis points headwind from Slack and Acumen, continued investment in our core business and the moderate increase of travel in the second half of this year. We are raising fiscal '22 GAAP diluted EPS to $0.22 to $0.24 and non-GAAP diluted EPS to $3.79 to $3.81. We expect recent M&A will be an approximately $0.53 headwind to non-GAAP diluted EPS. Please recall that our OIE and EPS guidance assume no contribution from mark-to-market accounting as required by ASU 2016-01. We're also raising fiscal '22 operating cash flow guidance by two points, now expecting 12% to 13% growth year-over-year. The increase from our previous guide is primarily driven by revenue performance, and by the refined timing expectations on M&A. The diluted cash flow impact of Slack and Acumen now represents a headwind to our year-over-year growth of approximately eight points. We continue to expect CapEx to be approximately 3% of revenue in fiscal '22, resulting in a free cash flow growth rate of approximately 12% to 13% for the fiscal year. Excluding the anticipated impact of M&A as previously noted, this rate would be 22% to 23%. To close, our impressive start to fiscal ‘22 positions us well for the rest of the year, and keeps us on track to achieve our goal of$ 50 billion by fiscal '26. It really was a terrific quarter, and I'm grateful to our employees for their focus on both growth and efficiency during the quarter. Finally, it has been a pleasure to meet many of our shareholders over the past few months, and I want to thank all of you for your continued support of Salesforce. And with that, Shantao, let's open up the call for questions.
Operator: Thank you. Our first question comes from Kash Rangan with Goldman Sachs. Your line is open.
Kash Rangan: Thank you very much. Congratulations to the team. My first question is for Amy. Amy, nice work on the margins, and clearly, Marc talked about how you're re-imagining the company from a fundamental level. Can you just talk about what are the things that you're working on that would give you the right balance between growth, which is great, and the margin expansion? And if I could sneak in one for Marc, if you look at the future of work, what is the position for salesforce.com as you look at that future? How is Salesforce positioned to take advantage of what you believe to be the future of working and whatever that is, the way we work in the future? Thank you.
Amy Weaver: Hi, Kash. Thanks for the question. So when I look at the balance between growth and profitability, I want to be clear that growth remains our No. 1 priority. Investing into growth, especially in this demand environment, is simply the best thing we can do for the company. That said, I am a big believer that a focus on discipline makes for a stronger and more durable company. So over the long term, I believe we need to be able to deliver both.
Marc Benioff: Well, Kash, I really appreciate your question. You know, we have a tremendous vision for the future of work at Salesforce, future of our own business, like I mentioned that home workers or in-office workers, the ability to meet and have off-sites and events and programs and large cultural facilities like we talked about, but we believe there is a fundamental technology platform that is needed to bring all this together. And we also believe that we also have to include all stakeholders, not just our company but our customers and our partners, and even consumers. And I think that Bret has created an incredible vision for the future of work and an incredible platform. And when you think about as well what Slack is going to do in terms of transforming our company, when each one of our clouds become Slack first, well, that, I think, is a huge accelerator in all this. So, Bret, would you just kind of tell us what is the future of work?
Bret Taylor: It's a great question. And more importantly, it's a question on the mind of every CEO in every single one of our customers. When you look at the trends of this past year, like that wonderful Honeywell story that Marc mentioned in his script, they shifted 7,000 salespeople from in-person to virtual customer meetings. Customer meetings aren't going back to conference rooms only. They're going to stay on Zoom as companies like ours just realize that we can execute, as well as ever before in this digital environment. The contact centers that move from being buildings to be in the cloud, thanks to the power of Service Cloud, they're not going back to buildings anymore. When you think about to move from doctors' offices to telemedicine, you look across our portfolio, the move to digital commerce and digital marketing, and incredible Cyber Week numbers we talked about last quarter, we really think that this digital Customer 360, this platform we've been building is an absolutely crucial part of the future of work for every single one of our customers, in particular, because things aren't going to snap back to the way they were. It's also, as Marc mentioned, I think, one of the reasons we're so excited about the prospect of closing this Slack transaction. When you think about what does it mean to succeed in the all-digital work-anywhere world, it's Customer 360, which enables you to digitize your entire customer experience and get back to growth in this incredible economy. And it's the digital HQ from Slack, which enables you to connect to all of your employees, all of your partners, and all of your customers together in this incredible new engagement platform. And we think the two together represent an incredible opportunity that I think is truly the operating system for growth for every company embracing this new way of working and getting back to growth in this new normal.
Operator: Our next question comes from Brent Bracelin with Piper Sandler. Your line is open.
Brent Bracelin: Thank you for taking my question. I guess, first, great to hear this new concept of a regional in-person Dreamforce. Looking forward to an in-person reunion here. I guess for maybe Marc or Bret here, Salesforce has, by far, the broadest portfolio of different cloud applications today. I was hoping you could parse out what customers are asking for what cloud application could see the highest uptick in interest. As you look at the pipeline, you mentioned Tableau being a meaningful part of the large deal pipeline but would love to just better understand what cloud applications specifically are ramping the most here in this kind of post-vaccine era that we're entering.
Bret Taylor: Yeah. Thank you for the question. I think one of the things, if you see the numbers, the strength is really across the portfolio. When we talk about the fact that of those seven-figure deals, they, on average, included more than four of our clouds, we're not selling individual products. We're selling a Customer 360 solution to really transform the entire customer experience. That said, you know, last quarter, I talked a lot about the amazing growth in marketing and e-commerce due to Cyber Week. It's really heartening to see just all aspects of the economy and our portfolio growing. One of the most fun for me this quarter in Sales Cloud, we're seeing over 5 million opportunities created every day. That is almost a 20% increase over last quarter. This is every B2B selling team in the world investing in growth again, recognizing the demand environment we see in the economy at every single part of our customer base. Another great example of this is that -- and I don't even know if you know this, Marc, but in April, Einstein started doing over 100 billion predictions per day. And it's a great example of these platform investments that we did multiple years ago that our customers, that the whole economy goes digital is really -- are really benefiting from. When you think about what does that mean, it means that every email you get is more personalized. It means that every e-commerce you paid is suited to your interest and your needs, driving growth and success for our customers but really represents, I think, the importance of these foundational technology investments. And another great example of this, Marc talked about Customer 360, Analytics, and Tableau, integration with MuleSoft. You're really seeing the importance of, I'll call it, that technology foundation as it relates to these Customer 360 multi-cloud deployments. MuleSoft is now doing 4.86 billion integration transactions every day. That is up 28% quarter over quarter. And it's sort of the boring but important part of this Customer 360, integrating all of those legacy systems so our customers can move faster in the face of an economy that's, I think, shifting more rapidly than ever before and really, I think, shows the importance of our acquisitions as it relates to our overall value proposition of Customer 360.
Operator: Our next question comes from Keith Weiss with Morgan Stanley. Your line is open.
Keith Weiss: Thank you, guys, for taking the questions, and a great start to the year. It looks like there's a ton of momentum at Salesforce right now. Maybe one question for Marc and one for Amy. For Marc, there's been some investor debate on sort of to what degree digital transformations are really accelerating. A lot of other companies had a more mixed or difficult Q1. You guys seem to have really hit it out of the park this Q1. Can you tell us kind of your view on sort of how your customers are changing their investment profiles? And when is that going to hit? Is that something that is really a 2021 event? Or because of the big strategic nature of these deals, this could take some time to flush out? I guess I'm asking, how is the pipeline looking for these big strategic deals? And then the question for Amy. We were impressed when you sort of stuck it with 17.5% operating margins with the initial FY '22 guide. Now you're raising it another 50 basis points. Can you talk to us about does that come from sort of expenses being pushed out? Or is it just kind of - is there actual kind of more efficiencies that you're finding in the business that enable you to raise the operating margin guide here? Thank you.
Marc Benioff: Well, I'm so excited that you're excited about Amy's new model. I mean, I, by the way, am also - I mean, she - I think Kash said it well. She has reimagined the business. She has rebalanced our ratios. She's figured out how to take this kind of changes that have occurred in the pandemic, which is less travel and less real estate and less events, and kind of rebuilt the company from the bottom up. And I think that's where we're really starting to see Amy's genius kind of take place, which is that -- when I look at the revenue, $5.96 billion, up 23%, 20% in constant currency. The cash flow, $3.23 billion. But then when I really get down into this operating margin at 20.2% but also the ability to raise for the year, it really gets down to this new model that she's really pioneered and has installed in the company. And it's given us a fresh look at how we run our business and what we're going to do in the future and how we think about the right balance between revenue and cash flow and margin. And the pandemic gave all of us the ability to reset our lives but also our businesses. And when we look at resetting our businesses, we also have to reset our financial models. And I think that this is the result of now four amazing quarters of this financial model emerging. And I think we're going to see that continue to pay out for the rest of the year and future years as well that we will benefit from this. And I don't think it's something that's getting pulled forward or pushed back or this or that. It's all zero-based from the bottom. So that's what's exciting, and it's a commitment that we have to a new model and a new approach. And also, this idea, though, it's a new way to work. Now, in regards to the customer focus, I think, well, we just have never seen customer demand like this, and there's certain applications that we've been asked not to profile on the call, for example, in regards to some things that the US government has done in terms of making sure that stimulus gets to the right place at the right time. And we were asked to do things in a matter of weeks. It's not just limited to our government. It's other governments. It's other businesses. I mean, I've never seen, and I said this in the last couple of calls, so many, what I would call, emergency deployments. Usually, they say, hey, we like to have this in six months, 12 months, the most 18 months. That's one of the reasons they come to Salesforce. Very fast time to value, this is critical. But for us, they want instant time to value. We're like, wait, we have to build this in the cloud. We don't go - we got to go. All right, we'll build. We'll build it. We'll deliver this. We'll make this happen for you. And I've been so fortunate to have Gavin really by my side during all of this. I mean, everybody knows Gavin's tremendous lineage. And Gavin and I worked together, have been friends for more than a decade. But of course, as the CEO of BT, I always admired his business process and business practice and his ability to bring discipline. But now watching him run our customer organization and what he's done now over the last year, that's just been a shock to me. But, Gavin, I think you should just kind of come in here because it's not just Amy, who's re-imagined the financial model. You've re-imagined the entire customer model and how we're going to market and the balance of sales and service, and you've re-imagined the level of management that we have and where we're putting that management level of capacity, the relevance, the participation, I mean, the enablement, these things that you've laid in. So would you just tell us - give us what's happening on the customer side? And how do you see the market today?
Gavin Patterson: Well, thanks, Marc. As you say, it's been an absolutely stellar quarter, incredible quarter. And three words come to mind for me: relevance, investment, and execution. Relevance is, I think, really, really clear. What we offer at the moment is what organizations around the world, be those companies or governments, it's what they're looking for to manage their business, and we see that in the new business pipeline. It's extraordinarily strong. Yes, we have a favorable compare, but if you look at the two-year performance, it's really, really strong. And that's the key number to look at. We're not persuaded by just the year on year. It needs to be the two-year performance with an easy compare. So I think taking advantage of the economy, the strength of investment going into the economy in many places around the world. We're perfectly placed to take advantage of that. I think the second thing is about investment. So in the mid part of last year, when we were restructuring the business, we also put new investment back into the business, particularly with capacity, and we're seeing the benefit of that now as we come into the year really strong, ready to take advantage of the strong economies we're seeing around the world. So being able to invest when others won't, I think, is a significant factor. And then the final thing is around execution. We had a really strong, I think, quarter because of the execution and the grip that we've got on the sales and service organization. We had a digital launch this year, and that meant we got all the quotas deployed very, very quickly. We've got more selling days into the quarter. We've got a flatter organization now, so there's really clear accountability throughout the business. And we've seen that turn into great results, great results both in terms of the run-rate business but also particularly strong results in the big deals. And Marc talked about some of those numbers. So the business is really humming. The pipeline is super strong. It's across all clouds. It's across all geographies. There's a real strong focus on industries as well. The business is really, really pumping.
Marc Benioff: All right. And I really want to ask a follow-up question, Gavin, because you mentioned this, but I think it's important to illuminate this, which is Q1 was very much frictionless. We decided we're going to do digital kickoffs. We're going to get all of the quotas and the territory assignments out as quickly as possible. You've really led this amazing program to do this and to make sure we have this fast start to the first quarter into the fiscal year. You brought a level of discipline into the sales org I've never seen before. So I never really understood how the British did it. So let me just -- if you just fill in the detail there in terms of the velocity of the distribution organization is just incredible.
Gavin Patterson: Well, I think this is one of the silver clouds that's come out of the pandemic, is that we couldn't meet face to face. So we have to do everything digitally, but that meant we got out of the blocks really, really fast. It meant that we're able to compress the launch of the year into about a week. It gave us more seven days, made sure that everybody was clear what they had to achieve. Their goals were deployed earlier in the year, and that meant we're able to focus on our customers. And that's the most important thing we do. And when the demand is there, which is the case at the moment, there is undoubtedly demand for our products. The key is making sure that your turf, your customers, and you're there helping them solve their problems. It's been about execution.
Marc Benioff: It's inspiring, Gavin. And I'll tell you, we've had a lot of great distribution leaders in our company and a lot of great people by my side over the last two decades, who have been running this distribution organization, but you've just done an incredible job. And I just want to congratulate you on not only a great year last year but now just this amazing first quarter and the execution you've done. Amy, do you want to just come in here now, go into details? Because this velocity that Gavin has given us, well, now you're really paying it out with this new model, aren't you?
Amy Weaver: So it's terrific. And, Keith, thanks for the question. As you know, very, very pleased to raise from 17.7% up to 18%, so a 30-basis-point improvement for the year. This is not a push out. What it really is it's a combination of a few things. First, it's the great quarter that Gavin just described, and having such terrific revenue, this really gives us some additional room to operate this year. It's also a focus on what we've learned about how we're working. We learned a lot over the past year. Gavin pointed out, having a virtual PKO and kick-off led to different efficiencies and also led to savings. And then finally, it is a renewed focus on efficiencies and discipline around the company.
Operator: Our next question comes from Brent Thill with Jefferies. Your line is open.
Brent Thill: Maybe a question for Gavin. The Americas saw an acceleration, but Europe and APAC saw a slight deceleration. And I know that's reported revenue, but I'm just curious if you could talk to what you're seeing outside the US and recovering. Obviously, the lag would make sense there but what you're seeing in pipeline beyond the US?
Gavin Patterson: Look, the recovery from the pandemic is not at the same stage in every market. I think that's fair to say. But our business is strong. The new business has been strong across the board. There might be one point or two difference region by region, but there are no, what I would call, weaknesses across our global organization. So we do see strength across the board, and we see a strong pipeline importantly across the board. So I wouldn't read into anything. I'll point difference here or there. I'm very confident that this growth in the US but also outside the US and around the world.
Marc Benioff: And I'll give you a point of evidence on that, which is that Gavin and I brought our top distribution leaders together in person last week with Bret. And we can't bring them all in person. So some of them are just not allowed in the United States. We just can't get them here. But for the ones that can come in like Gavin, for example, or others, we even were able to bring in some of our European executives. Wow, I mean, it was really a position of confidence. It was feeling like there is a tremendous market that has built over last year that I think people realize that they must be digital, but they must be digital with their customers. It's not just digital transformation. It's digital customer transformation. That's where the power is, I believe, in the market, especially right now. And I love that Sonos story because it's point of evidence on that. Would you agree?
Gavin Patterson: Yeah, absolutely. The Sonos story is a perfect case study in many ways. And I think it demonstrates the ability for us to help customers transform quickly. I mean, this was a pivot that Sonos needed to make right at the height of the pandemic, and we were able to help them transform their business and manage through the pandemic and come out a stronger business, closer to their customers and be extremely well placed to continue to grow in the next few quarters.
Operator: Our next question comes from Alex Zukin with Wolfe Research. Your line is open. Alex, your line is open.
Alex Zukin: Hey. Sorry, I was on mute, guys. Thanks for taking the question, and congrats on a great quarter. Maybe, Amy, first for you. You re-imagined the operating model and rebuilt it from the ground up, as Marc said, where have you found the lowest hanging fruit from an operational efficiency perspective that you're looking to leverage going forward? And for Marc, you've been through recoveries before you've been through downturns before. How strong is the demand right now versus the past recoveries you've seen and your best guess looking on a global basis, how long it lasts?
Amy Weaver: So thanks for the question. I think the lowest-hanging fruit is -- clearly are different in how we are working right now. It's this all-digital work from anywhere. Probably the easiest part on that is the difference in T&E. That clearly has gone way down. We are assuming, for purposes of guidance, some modest return of travel in the second half of this year. But it will be nowhere near where we were pre-pandemic. We've simply learned how to work effectively and how to serve our customers effectively without being on a plane every day.
Marc Benioff: Well, I'll tell you that you're right. I mean, this was the best quarter we've ever had, and I can tell you from bringing these distribution leaders in, I've never seen a pipeline like this or the ability in every market to execute with such robustness. And I think the CEOs -- I mean, I'll tell you from my own. Obviously, we invested last year. We didn't pull back. We knew we had to go for it. And we had to go all out. And it's counterintuitive. The world is ending, and you have to say, well, you got to go all out and realize that the world is not going to be ending in a year from now. And it's hard when you're in it because people start to panic. It's a normal human reaction. I mean, we even had executives in Salesforce who came in and said, "Oh, we've got to cut. We got to do this. We have to do that." We reshaped. There's no question, we did some slight reshaping, but we didn't do any massive layoffs or anything like that of any consequence that I would say, oh, we really tried to cut dramatically in some area or whatever. It was like, no, we need to reshape to grow. We need to invest to grow. We need to do the things that we need to do as a company, and that's a year ago. So a year ago, it was a decision based on experience that is we have seen it, whether it was the recession of 2001 or the financial disasters of 2008. Those are just moments. They're moments in time, but in the history of the company, or if you look at the history of the equity from 2004 when we went public, you got to keep going. And that moment is the time to go because, in many cases, your competitors are pulling back because they're afraid. And when your competitors are afraid, that's when you need to invest, and that's where you really need to grow. And I'll tell you, I think that that's what Gavin did, that Gavin came in and he reshaped. He took out some cost. He advanced certain areas. He rebalanced his org and was able to provide greater market coverage and expanding his capacity, capability and I think at levels I haven't seen in a long time. So do you want to just fill in the details?
Gavin Patterson: Well, anyways, I think you've made the point very well there, Marc. I mean, it was probably the most difficult point in the last 12 months, where everybody else was making cuts, we reshaped the business and created more capacity knowing that the demand would come back, and it takes a few months for new capacity to come online and become productive. But what that decision allowed us to do was enter the year with a really strong market coverage up significantly year on year. And I think it's helped us get off to a really strong start and take advantage of the demand that is undoubtedly there for the Customer 360.
Marc Benioff: Well, I'll tell you, I think to add to that, I mean, you look at what Bret has done this year. I mean, Bret really led and executed this amazing reshaping plan. He rebuilt the kind of the company overall, really looking at where are we balancing our resource and also architecting our Slack acquisition. Bret was at the tip of the spear on both of those, making sure that we're prepared for the future with the business plan and the reshaping plan that we needed and the technology plan and the technology vision. Then Amy came in and she said, no, we're going to rebuild the fundamental financial plan as well, and we're going to couple that financial plan from the bottom up and build a new revenue plan and a new cash flow and margin plan. And you see that now. And then we had Gavin come in and say this is how we're going to rebuild the distribution organization. And I think these three tiers all coming together really are what you see today. And when you look at these numbers, when you look at a company that's going to do now over $26 billion in revenue this year, look, there's only been a couple of enterprise software companies in history have done that. You know that. And this is a big moment for us, $26 billion. But you know, because you have your models and you have your spreadsheets and you have your formulas and you see our growth rates, you can start to project out and see where we're going not only this year and next year but as we're projecting out to our $50 billion number, which obviously we're excited about and we're thrilled.
Operator: Ladies and gentlemen, we have reached the end of the allotted time for questions and answers. I will turn the call back over to Evan Goldstein for closing remarks.
Evan Goldstein: Thank you for joining us on the call today. If you have any follow-up questions, please email us at investor@salesforce.com. Look forward to speaking with you next quarter. Thank you.
A - Marc Benioff: And see you at Dreamforce, everyone. Bye-bye.
Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
