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(Mark One)

☒			Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

OR

☐			Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

 

Delaware			94-3320693
(State or other jurisdiction of incorporation or organization)			(IRS Employer Identification No.)

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Common Stock, par value $0.001 per share			CRM			New York Stock Exchange

“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer			☒			Accelerated filer			☐
Non-accelerated filer			☐			Smaller reporting company			☐
						Emerging growth company			☐

Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report ☒

INDEX

						Page No.
			PART I
Item 1.			Business			5
Item 1A.			Risk Factors			11
Item 1B.			Unresolved Staff Comments			34
Item 2.			Properties			34
Item 3.			Legal Proceedings			34
Item 4.			Mine Safety Disclosures			34
Item 4A.			Information About Our Executive Officers			35
			PART II
Item 5.			Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			37
Item 6.			Reserved			38
Item 7.			Management's Discussion and Analysis of Financial Condition and Results of Operations			38
Item 7A.			Quantitative and Qualitative Disclosures about Market Risk			52
Item 8.			Financial Statements			55
Item 9.			Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			93
Item 9A.			Controls and Procedures			93
Item 9B.			Other Information			94
Item 9C.			Disclosure Regarding Foreign Jurisdictions that Prevent Inspections			94
			PART III
Item 10.			Directors, Executive Officers and Corporate Governance			95
Item 11.			Executive Compensation			95
Item 12.			Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			95
Item 13.			Certain Relationships and Related Transactions and Director Independence			95
Item 14.			Principal Accountant Fees and Services			95
			PART IV
Item 15.			Exhibits and Financial Statement Schedules			96
Item 16.			10-K Summary			96
			Index to Exhibits			96
			Signatures			99

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). Words such as “expects,” “anticipates,” “aims,” “projects,” “intends,” “plans,” “believes,” “estimates,” “seeks,” “assumes,” “may,” “should,” “could,” “would,” “foresees,” “forecasts,” “predicts,” “targets,” “commitments,” variations of such words and similar expressions are intended to identify such forward-looking statements, which may consist of, among other things, trend analyses and statements regarding future events, future financial performance, anticipated growth, industry prospects, our business plans and growth strategy, our commitments, goals, aims or aspirations regarding environmental, social and governance matters, including climate change and diversity and inclusion, our strategies, expectations or plans regarding our investments, including strategic investments or future acquisitions, our beliefs or expectations regarding our competition, our intentions regarding use of future earnings or dividends, our expectations regarding attrition rates, our expectations regarding the Restructuring Plan, including with respect to timing or costs, our expectations regarding investing in human capital and technology or our beliefs or expectations regarding working capital, capital expenditures, debt maintenance or commitments. These forward-looking statements are based on current expectations, estimates and forecasts, as well as the beliefs and assumptions of our management, and are subject to risks and uncertainties that are difficult to predict, including: the impact of, and actions we may take in response to, the COVID-19 pandemic, related public health measures and resulting economic downturn and market volatility; our ability to maintain security levels and service performance meeting the expectations of our customers, and the resources and costs required to avoid unanticipated downtime and prevent, detect and remediate performance degradation and security breaches; the expenses associated with our data centers and third-party infrastructure providers; our ability to secure additional data center capacity; our reliance on third-party hardware, software and platform providers; the effect of evolving domestic and foreign government regulations, including those related to the provision of services on the Internet, those related to accessing the Internet, and those addressing data privacy, cross-border data transfers and import and export controls; current and potential litigation involving us or our industry, including litigation involving acquired entities such as Tableau Software, Inc. and Slack Technologies, Inc., and the resolution or settlement thereof; regulatory developments and regulatory investigations involving us or affecting our industry; our ability to successfully introduce new services and product features, including any efforts to expand our services; the success of our strategy of acquiring or making investments in complementary businesses, joint ventures, services, technologies and intellectual property rights; our ability to complete, on a timely basis or at all, announced transactions; our ability to realize the benefits from acquisitions, strategic partnerships, joint ventures and investments, and successfully integrate acquired businesses and technologies; our ability to compete in the markets in which we participate; the success of our business strategy and our plan to build our business, including our strategy to be a leading provider of enterprise cloud computing applications and platforms; our ability to execute our business plans; our ability to continue to grow unearned revenue and remaining performance obligation; the pace of change and innovation in enterprise cloud computing services; the seasonal nature of our sales cycles; our ability to limit customer attrition and costs related to those efforts; the success of our international expansion strategy; the demands on our personnel and infrastructure resulting from significant growth in our customer base and operations, including as a result of acquisitions; our ability to preserve our workplace culture, including as a result of our decisions regarding our current and future office environments or work-from-home policies; our dependency on the development and maintenance of the infrastructure of the Internet; our real estate and office facilities strategy and related costs and uncertainties; fluctuations in, and our ability to predict, our operating results and cash flows; the variability in our results arising from the accounting for term license revenue products; the performance and fluctuations in the fair value of our investments in complementary businesses through our strategic investment portfolio; the impact of future gains or losses from our strategic investment portfolio, including gains or losses from overall market conditions that may affect the publicly traded companies within our strategic investment portfolio; our ability to protect our intellectual property rights; our ability to maintain and enhance our brands; the impact of foreign currency exchange rate and interest rate fluctuations on our results; the valuation of our deferred tax assets and the release of related valuation allowances; the potential availability of additional tax assets in the future; the impact of new accounting pronouncements and tax laws; uncertainties affecting our ability to estimate our tax rate; uncertainties regarding our tax obligations in connection with potential jurisdictional transfers of intellectual property, including the tax rate, the timing of the transfer and the value of such transferred intellectual property; uncertainties regarding the effect of general economic, business and market conditions, including inflationary pressures, general economic downturn or recession, market volatility, increasing interest rates and changes in monetary policy; the impact of geopolitical events, including the recent conflict in Europe; uncertainties regarding the impact of expensing stock options and other equity awards; the sufficiency of our capital resources; our ability to execute our Share Repurchase Program; our ability to comply with our debt covenants and lease obligations; the impact of climate change, natural disasters and actual or threatened public health emergencies; the expected benefits of and timing of completion of the Restructuring Plan and the expected costs and charges of the Restructuring Plan, including, among other things, the risk that the restructuring costs and charges may be greater than we anticipate, the risk that the Company’s restructuring efforts may adversely affect the Company’s internal programs and the Company’s ability to recruit and retain skilled and motivated personnel and may be distracting to employees and management, the risk that the Company’s restructuring efforts may negatively impact the Company’s business operations and reputation with or ability to serve customers, and the risk that the Company’s restructuring efforts may not generate their intended benefits to the extent or as quickly as anticipated; and our ability to achieve our aspirations, goals and projections related to our environmental, social and governance initiatives. These and other risks and

Sales. Our Sales offering empowers sales teams of companies to efficiently manage and automate their entire sales process from leads to opportunities to billing, allowing them to sell faster, smarter and in the way they want. Our customers use our Sales offering to store data, monitor leads and progress, forecast opportunities, gain insights through analytics and relationship intelligence and deliver quotes, contracts and invoices. Our Sales offerings enable teams to work from anywhere in the office, on the go or at home and support the changing expectations of customers in a digital-first world.

Service. Our Service offering enables companies to deliver trusted and highly personalized customer service and support at scale. Organizations use our Service offering to connect their service agents with customers anytime and across multiple channels — from the phone and email to self-service portals and social media — allowing customers to engage with companies in the ways that best suit them. Our Service offering also helps our customers’ customers resolve routine issues by engaging with AI-powered chatbots that provide informed recommendations and suggested next steps. In addition, Service offers a field

Platform. Our Platform offering is an easy, flexible platform that enables companies of all sizes, locations and industries to build business apps that bring them closer to their customers, with drag-and-drop tools that boost efficiency, increase productivity and save on IT costs. It is an agile and trusted way for enterprises to innovate and deliver digital transformation at scale. Platform offers industry-leading trust, security and availability, built-in compliance and automatic upgrades. Integrated platform services, such as automation, AI and real-time data processing, make it easier for customers to utilize those capabilities in their Salesforce applications. Platform also includes Trailhead, our free online learning platform that allows anyone to learn in-demand Salesforce skills, including administering our services and developing on Platform. With myTrailhead, customers can personalize Trailhead for their business to empower learning and enablement at their company.

Slack. Our Slack offering is a system of engagement that digitally connects employees, customers, partners and systems with every application and every workflow. Slack enables organizations to build a digital headquarters and work more efficiently by supporting the way people naturally work together, in real-time or asynchronously, in-person or remote and structured or informal. We continue to innovate and integrate Slack across our Customer 360 platform.

Marketing. Our Marketing offering enables companies to plan, personalize and optimize one-to-one customer marketing journeys, including interactions across email, mobile, social, web, Web3 and connected products. Marketing enables our customers to provide an integrated customer experience across their customers' journey with real-time personalization, and optimize overall marketing impact with integrated analytics. With our Marketing offering, customer data can also be integrated with our Sales offering and our Service offering in the form of leads, contacts and customer service cases to give companies a single source of truth for their customers.

Commerce. Our Commerce offering empowers brands to unify the shopping experience across many points of commerce, including mobile, web, social and store. Through personalized, connected shopping experiences and a robust partner ecosystem, our Commerce offering helps companies drive increased engagement, conversion, loyalty and revenue from their customers. Our Commerce offering also delivers click-to-code tools that provide customers with the ability to choose how they build and deploy our solutions quickly around their customers as markets, industries and customers change.

Integration. Our Integration offering, powered by MuleSoft, makes it easy to connect data from any system to deliver truly connected experiences. MuleSoft helps our customers unlock, unify and secure their data, use discoverable, reusable APIs and integrations and increase their speed and agility to quickly create connected experiences. MuleSoft allows our customers to unlock data across their enterprise, which can create new revenue opportunities, increase operational efficiency and create differentiated customer experiences.

Customer Data Cloud. At Dreamforce 2022, we announced the Genie Customer Data Cloud (“Genie”), a hyperscale real-time data platform that powers the entire Salesforce Customer 360 platform. With Genie, companies can power seamless, highly personalized experiences across sales, service, marketing and commerce that continuously adapt to changing customer information and needs in real time. Genie ingests and stores real-time data streams at scale and combines it with Salesforce transactional data and includes built-in connectors that bring in data from every channel, legacy data through MuleSoft, and historical data from proprietary data lakes. With Tableau for Genie, customers in every business can visualize, automate, explore and act on data in real time.

Industry Verticals. Our industry vertical service offerings are suited to meet the needs of our customers in specific industries, such as financial services, healthcare and life sciences, manufacturing and more. They include out-of-the-box capabilities that provide the speed and flexibility to keep up with changing times and customer demands, accelerating time to value.

Salesforce Easy. We offer Salesforce Easy, which is designed and priced for small and medium-sized businesses and offers a purpose-built Customer 360 solution. With ease of purchase through self serve and customized out-of-the-box features, Easy helps customers increase productivity, save time and cut costs.

Expand relationships with existing customers. We see significant opportunities to deepen existing customer relationships through cross-selling and upselling our service offerings. For example, we continue to focus on driving multiple service offering adoption, which provides our customers with a one-stop-shop for their front-office business technology needs. As our customers realize the benefits of our entire suite of service offerings, we aim to upgrade the customers’ experience with new products and features, and gain additional subscriptions by targeting new functional areas and business units. Finally, we aim to expand our relationships with existing customers through our additional support offerings.

Increase geographic reach. By extending our go-to-market capabilities globally, we aim to grow our business by selling to new customers in new regions. We will continue to pursue businesses of all sizes in most major markets globally, primarily through our direct sales force. We also plan to continue to develop indirect distribution channels for our solutions around the globe and new go-to-market strategies. We continue to invest in our domestic and international operations and infrastructure to deliver the highest-quality service to our customers around the world.

Focus on industries and new products. As part of our growth strategy, we are delivering innovative and value-driven solutions in new categories based on our existing and potential customers’ needs. For example, we provide out-of-the-box solutions specifically built for customers in certain industries, such as financial services, healthcare and life sciences, manufacturing and more. In addition, through direct discussions and strategic engagements with our customers, we are able to deliver the innovations and enhancements that align with the needs of our customers. As a result of customer feedback, in fiscal 2023 we developed Genie, which allows our customers to ingest, transform, harmonize, unify and visualize data across all of our industry solutions in real time.

Leverage our partner ecosystem. The Customer 360 Platform enables customers, independent software vendors (“ISVs”) and third-party developers to create, test and deliver cloud-based apps. These apps can be marketed and sold on the AppExchange, our enterprise cloud marketplace, or sold directly by software vendors. In addition, we rely on our consulting partners to deliver technology solutions and expertise to customers, from large-scale implementations to more limited solutions that help businesses run more efficiently. We continue to work with and invest in our partner ecosystem, including these ISVs and system integrators (“SIs”), to accelerate our reach into new markets and industries.

Promote strong customer adoption and reduce customer attrition. We believe that we have the people, processes and proven innovation to help companies transform successfully. Our customer success programs, including success management resources, advisory services, technical architects and business strategists, help enable and accelerate our customers’ digital transformations. In addition, we have free, curated resources such as Trailhead to help companies learn our systems and a

•We aspired to have 50 percent of our U.S. workforce made up of underrepresented groups for the U.S. technology industry (“underrepresented groups”), which we define as employees who identify as Women, Black, Latinx, Indigenous, Multiracial, Lesbian, Gay, Bi-Sexual, Trans, Queer, People with Disabilities and Veterans, by fiscal 2024. As of January 31, 2023, we achieved that goal as approximately 52 percent of our U.S. workforce was made up of these underrepresented groups.

ITEM 1A. RISK FACTORS

•Any breaches in our security measures or those of our third-party data center hosting facilities, cloud computing platform providers or third-party service partners, or the underlying infrastructure of the Internet that cause unauthorized access to a customer’s data, our data or our IT systems, or the blockage or disablement of authorized access to our services.

•Any defects or disruptions in our services that diminish demand for our services.

•Any interruptions or delays in services from third parties, including data center hosting facilities, cloud computing platform providers and other hardware and software vendors, or from our inability to adequately plan for and manage service interruptions or infrastructure capacity requirements.

•An inability to realize the expected business or financial benefits of company and technology acquisitions and investments.

•Strain on our personnel resources and infrastructure from supporting our existing and growing customer base or an inability to scale our operations and increase productivity.

•Customer attrition, or our inability to accurately predict subscription renewals and upgrade rates.

•Disruptions caused by periodic changes to our sales organization.

•Dependency of our services on the development and maintenance of the infrastructure of the Internet by third parties.

•Exposure to risks inherent in international operations from sales to customers outside the United States.

•A more time-consuming and expensive sales cycle, pricing pressure and implementation and configuration challenges as we target more of our sales efforts at larger enterprise customers.

•Any loss of key members of our management team or development and operations personnel, or inability to attract and retain employees necessary to support our operations and growth.

•Any failure in our delivery of high-quality professional and technical support services.

•An inability to compete effectively in the intensely competitive markets in which we participate.

•Any failure to expand our services and to develop and integrate our existing services in order to keep pace with technological developments.

•An inability to maintain and enhance our brands.

•Partial or complete loss of invested capital, or significant changes in the fair value, of our strategic investment portfolio.

•Any discontinuance by third-party developers and providers in embracing our technology delivery model and enterprise cloud computing services, or customers asking us for warranties for third-party applications, integrations, data and content.

•Social and ethical issues, including the use or capabilities of AI in our offerings.

•Risks related to our aspirations and disclosures related to environmental, social and governance (“ESG”) matters.

•Privacy concerns and laws as well as evolving regulation of cloud computing, increased restriction of cross-border data transfers and other regulatory developments.

•Evolving or unfavorable industry-specific regulations, requirements, interpretive positions or standards.

•Lawsuits against us by third parties for various claims, including alleged infringement of proprietary rights.

•Any failure to obtain registration or protection of our intellectual property rights.

•Risks related to government contracts and related procurement regulations.

•Governmental sanctions and export and import controls that could impair our ability to compete in international markets and may subject us to liability.

•Downturns or upturns in new business may not be immediately reflected in our operating results because we generally recognize revenue from subscriptions for our services over the term of the subscription.

•Significant fluctuations in our rate of anticipated growth and any failure to balance our expenses with our revenue forecasts.

•Unanticipated changes in our effective tax rate and additional tax liabilities and global tax developments.

•Fluctuations in currency exchange rates, particularly the U.S. Dollar versus local currencies.

•Our debt service obligations, lease commitments and other contractual obligations.

•Accounting pronouncements and changes in other financial and non-financial reporting standards.

•Fluctuations in our quarterly results.

•Volatility in the market price of our common stock and associated litigation.

•Provisions in our certificate of incorporation and bylaws and Delaware law that might discourage, delay or prevent a change of control of the Company or changes in our management.

•The effects of the COVID-19 pandemic and related public health measures on how we and our customers are operating our businesses.

•Volatile and significantly weakened global economic conditions.

•The occurrence of natural disasters and other events beyond our control.

•The long-term impact of climate change on our business.

•third-party attempts to fraudulently induce our employees, partners or customers to disclose sensitive information such as user names, passwords or other information to gain access to our customers’ data or IT systems, or our data or our IT systems;

•efforts by individuals or groups of hackers and sophisticated organizations, such as state-sponsored organizations or nation-states, to launch coordinated attacks, including ransomware, destructive malware and distributed denial-of-service attacks;

•third-party attempts to abuse our marketing, advertising, messaging or social products and functionalities to impersonate persons or organizations and disseminate information that is false, misleading or malicious;

•cyberattacks on our internally built infrastructure on which many of our service offerings operate, or on third-party cloud-computing platform providers;

•vulnerabilities resulting from enhancements and updates to our existing service offerings;

•vulnerabilities in the products or components across the broad ecosystem that our services operate in conjunction with and are dependent on;

•vulnerabilities existing within new technologies and infrastructures, including those from acquired companies;

•attacks on, or vulnerabilities in, the many different underlying networks and services that power the Internet that our products depend on, most of which are not under our control or the control of our vendors, partners or customers; and

•employee or contractor errors or intentional acts that compromise our security systems.

•frequent changes to, and growth in complexity of, the techniques used to breach, obtain unauthorized access to, or sabotage IT systems and infrastructure, which are generally not recognized until launched against a target, and could result in our being unable to anticipate or implement adequate measures to prevent such techniques;

•the continued evolution of our internal IT systems as we early adopt new technologies and new ways of sharing data and communicating internally and with partners and customers, which increases the complexity of our IT systems;

•the acquisition of new companies, requiring us to incorporate and secure different or more complex IT environments;

•authorization by our customers to third-party technology providers to access their customer data, which may lead to our customers’ inability to protect their data that is stored on our servers; and

•our limited control over our customers or third-party technology providers, or the processing of data by third-party technology providers, which may not allow us to maintain the integrity or security of such transmissions or processing.

•potential failure to achieve the expected benefits on a timely basis or at all;

•potential identified or unknown security vulnerabilities in acquired products that expose us to additional security risks or delay our ability to integrate the product into our service offerings;

•difficulties in increasing or maintaining the security standards for acquired technology consistent with our other services, and related costs;

•difficulty of transitioning the acquired technology onto our existing platforms and customer acceptance of multiple platforms on a temporary or permanent basis;

•augmenting the acquired technologies and platforms to the levels that are consistent with our brand and reputation;

•brand or reputational harm associated with our strategic investments or acquired companies;

•challenges converting the acquired company’s revenue recognition policies and forecasting the related revenues, including subscription-based revenues and software license revenue, as well as appropriate allocation of the customer consideration to the individual deliverables;

•division of financial and managerial resources from existing operations;

•challenges entering into new markets in which we have little or no experience or where competitors may have stronger market positions;

•currency and regulatory risks associated with foreign countries and potential additional cybersecurity and compliance risks resulting from entry into new markets;

•difficulties and strain on resources in integrating acquired operations, technologies, services, platforms and personnel;

•regulatory challenges from antitrust or other regulatory authorities that may block, delay or impose conditions (such as divestitures, ownership or operational restrictions or other structural or behavioral remedies) on the completion of transactions or the integration of acquired operations;

•failure to fully assimilate, integrate or retrain acquired employees, which may lead to retention risk with respect to both key acquired employees and our existing key employees or disruption to existing teams;

•differences between our values and those of our acquired companies, as well as disruptions to our workplace culture;

•inability to generate sufficient revenue to offset acquisition or investment costs;

•challenges with the acquired company’s customers and partners, including the inability to maintain such relationships and changes to perception of the acquired business as a result of the acquisition;

•challenges with the acquired company’s third-party service providers, including those that are required for ongoing access to third-party data;

•potential for acquired products to impact the profitability of existing products;

•unanticipated expenses related to acquired technology and its integration into our existing technology;

•known and potential unknown liabilities associated with the acquired businesses, including due to litigation;

•difficulties in managing, or potential write-offs of, acquired assets or investments, and potential financial and credit risks associated with acquired customers;

•negative impact to our results of operations because of the depreciation and amortization of acquired intangible assets , fixed assets and operating lease right-of-use assets;

•the loss of acquired unearned revenue and unbilled unearned revenue;

•challenges relating to the structure of an investment, such as governance, accountability and decision-making conflicts that may arise in the context of a joint venture or other majority ownership investments;

•difficulties in and financial costs of addressing acquired compensation structures inconsistent with our compensation structure;

•additional stock-based compensation issued or assumed in connection with the acquisition, including the impact on stockholder dilution and our results of operations;

•delays in customer purchases due to uncertainty related to any acquisition;

•ineffective or inadequate controls, procedures and policies at the acquired company;

•in the case of foreign acquisitions, challenges caused by integrating operations over distance, and across different languages, cultures and political environments; and

•the tax effects of any such acquisitions including related integration and business operation changes, and assessment of the impact on the realizability of our future tax assets or liabilities.

•regional economic and political conditions, natural disasters, acts of war, terrorism and actual or threatened public health emergencies, including the COVID-19 pandemic;

•localization of our services, including translation into foreign languages and associated expenses;

•regulatory frameworks or business practices favoring local competitors;

•pressure on the creditworthiness of sovereign nations, where we have customers and a balance of our cash, cash equivalents and marketable securities;

•foreign currency fluctuations and controls, which may make our services more expensive for international customers and could add volatility to our operating results;

•compliance with multiple, conflicting, ambiguous or evolving governmental laws and regulations, including employment, tax, privacy, anti-corruption, import/export, customs, anti-boycott, sanctions and embargoes, antitrust, data transfer, storage and protection and industry-specific laws and regulations, including rules related to compliance by our third-party resellers and our ability to identify and respond timely to compliance issues when they occur;

•liquidity issues or political actions by sovereign nations, including nations with a controlled currency environment, which could result in decreased values of these balances or potential difficulties protecting our foreign assets or satisfying local obligations;

•vetting and monitoring our third-party resellers in new and evolving markets to confirm they maintain standards consistent with our brand and reputation;

•treatment of revenue from international sources, evolving domestic and international tax environments, and changes to tax codes, including being subject to foreign tax laws and being liable for paying withholding taxes in foreign jurisdictions;

•impacts of or uncertainties regarding the United Kingdom’s exit from the EU (“Brexit”) on regulations, currencies, taxes and operations, including possible disruptions to the sale of our services or the movement of our people between the United Kingdom, EU and other locations;

•uncertainty regarding the imposition of and changes in the United States’ and other governments’ trade regulations, trade wars, tariffs, other restrictions or other geopolitical events, including the evolving relations between the United States and China, the United States and Russia and conflict in Europe;

•changes in the public perception of governments in the regions where we operate or plan to operate;

•regional data privacy laws and other regulatory requirements that apply to outsourced service providers and to the transmission of our customers’ data across international borders, which grow more complex as we scale, expand into new markets and enhance the breadth of our service offerings;

•different pricing environments;

•difficulties in staffing and managing foreign operations;

•different or lesser protection of our intellectual property, including increased risk of theft of our proprietary technology and other intellectual property, and more prevalent cybersecurity risks, particularly in jurisdictions in which we have historically chosen not to operate; and

•longer accounts receivable payment cycles and other collection difficulties.

•internally developed enterprise applications by our potential customers’ IT departments;

•vendors of packaged business software, as well as companies offering enterprise apps delivered through on-premises offerings from enterprise software application vendors and cloud computing application service providers, either individually or with others;

•software companies that provide their product or service free of charge as a single product or when bundled with other offerings, or only charge a premium for advanced features and functionality, as well as companies that offer solutions that are sold without a direct sales organization;

•vendors who offer software tailored to specific services as opposed to our full suite of service offerings, including suppliers of traditional business intelligence and data preparation products, integration software vendors, marketing vendors or e-commerce solutions vendors;

•productivity tool and email providers, unified communications providers and consumer application companies that have entered the business software market;

•traditional platform development environment companies and cloud computing development platform companies who may develop toolsets and products that allow customers to build new apps that run on the customers’ current infrastructure or as hosted services.

•the availability and cost of low- or non-carbon-based energy sources;

•the evolving regulatory requirements affecting ESG standards or disclosures;

•the availability of suppliers that can meet our sustainability, diversity and other ESG standards;

•our ability to recruit, develop and retain diverse talent in our labor markets; and

•the success of our organic growth and acquisitions or dispositions of businesses or operations.

•impair our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate or other purposes;

•cause us to dedicate a substantial portion of our cash flows from operations toward debt service obligations and principal repayments; and

•make us more vulnerable to downturns in our business, our industry or the economy in general.

•general economic or geopolitical conditions, including the impacts of the conflict in Europe, financial market conditions, increasing costs of operation and foreign currency exchange rates, any of which can adversely affect either our customers’ ability or willingness to purchase additional subscriptions or upgrade their services, or delay prospective customers’ purchasing decisions, reduce the value of new subscription contracts, or affect attrition rates;

•our ability to retain and increase sales to existing customers, attract new customers and satisfy our customers’ requirements;

•the attrition rates for our services;

•the rate of expansion and productivity of our sales force;

•the length of the sales cycle for our services;

•new product and service introductions by our competitors;

•our success in selling our services to large enterprises;

•changes in unearned revenue and remaining performance obligation, due to seasonality, the timing of and compounding effects of renewals, invoice duration, size and timing, new business linearity between quarters and within a quarter, average contract term, the collectability of invoices related to multi-year agreements, the timing of license software revenue recognition, or fluctuations due to foreign currency movements, all of which may impact implied growth rates;

•our ability to realize benefits from strategic partnerships, acquisitions or investments;

•variations in the revenue mix of our services and growth rates of our subscription and support offerings, including the timing of software license sales and sales offerings that include an on-premise software element for which the revenue allocated to that deliverable is recognized upfront;

•the seasonality of our sales cycle, including software license sales, and timing of contract execution and the corresponding impact on revenue recognized at a point in time;

•changes in our pricing policies and terms of contracts, whether initiated by us or as a result of competition, customer preference or other factors;

•expenses associated with our pricing policies and terms of contracts, such as the costs of customer SMS text usage paid by us and the related impacts to our gross margin;

•the seasonality of our customers’ businesses, especially our Commerce service offering customers, including retailers and branded manufacturers;

•fluctuations in foreign currency exchange rates such as with respect to the U.S. Dollar against the Euro and British Pound Sterling;

•the amount and timing of operating costs and capital expenditures related to the operations and expansion of our business;

•the number of new employees, including the cost to recruit and train such employees;

•the timing of commission, bonus and other compensation payments to employees, including decisions to guarantee some portion of commissions payments in connection with extraordinary events;

•the cost, timing and management effort required for the introduction of new features to our services;

•the costs associated with acquiring new businesses and technologies and the follow-on costs of integration and consolidating the results of acquired businesses;

•expenses related to our real estate or changes in the nature or extent of our use of existing real estate, including our office leases and our data center capacity and expansion;

•timing of additional investments in our enterprise cloud computing application and platform services and in our consulting services;

•expenses related to significant, unusual or discrete events, which are recorded in the period in which the events occur;

•extraordinary expenses such as litigation or other dispute-related settlement payments;

•income tax effects resulting from, but not limited to, tax law changes, court decisions on tax matters, global tax developments applicable to multinational corporations, changes in operations or business structures and acquisition activity;

•the timing of payroll and other withholding tax expenses, which are triggered by the payment of bonuses and when employees exercise their vested stock options;

•technical difficulties or interruptions in our services;

•changes in interest rates and our mix of investments, which impact the return on our investments in cash and marketable securities;

•conditions, and particularly sudden changes, in the financial markets, which have impacted and may continue to impact the value and liquidity of our investment portfolio;

•changes in the fair value of our strategic investments in early-to-late-stage privately held and public companies, including temporary impairments, which could negatively and materially impact our financial results, particularly in periods of significant market fluctuations;

•equity or debt issuances, including as consideration in or in conjunction with acquisitions;

•the timing of stock awards to employees and the related adverse financial statement impact of having to expense those stock awards on a straight-line basis over their vesting schedules;

•evolving regulations of cloud computing and cross-border data transfer restrictions and similar regulations;

•regulatory compliance and acquisition costs; and

•the impact of new accounting pronouncements and associated system implementations.

•variations in our operating results, earnings per share, cash flows from operating activities, unearned revenue, remaining performance obligation, year-over-year growth rates for individual service offerings and other financial and non-financial metrics, and how those results compare to analyst expectations;

•variations in, and limitations of, the various financial and other metrics and modeling used by analysts in their research and reports about our business;

•forward-looking guidance to industry and financial analysts related to, for example, future revenue, current remaining performance obligation, cash flows from operating activities and earnings per share, the accuracy of which may be impacted by various factors, many of which are beyond our control, including general economic and market conditions and unanticipated delays in the integration of acquired companies as a result of regulatory review;

•our ability to meet or exceed forward-looking guidance we have given or to meet or exceed the expectations of investors, analysts or others; our ability to give forward-looking guidance consistent with past practices; and changes to or withdrawal of previous guidance or long-range targets;

•changes in the estimates of our operating results or changes in recommendations by securities analysts that elect to follow our common stock;

•announcements of technological innovations, new services or service enhancements, strategic alliances or significant agreements by us or by our competitors;

•announcements by us or by our competitors of mergers or other strategic acquisitions, or rumors of such transactions involving us or our competitors;

•announcements of customer additions and customer cancellations or delays in customer purchases;

•the coverage of our common stock by the financial media, including television, radio and press reports and blogs;

•recruitment or departure of key personnel, such as the recent departure of our former co-CEO;

•disruptions in our service due to computer hardware, software, network or data center problems;

•the economy as a whole, geopolitical conditions, including global trade and health concerns, market conditions in our industry and the industries of our customers;

•trading activity or positions by a limited number of stockholders who together beneficially own a significant portion of our outstanding common stock, as well as other institutional or activist investors;

•the issuance of shares of common stock by us, whether in connection with an acquisition or a capital-raising transaction;

•issuance of debt or other convertible securities;

•the inability to conclude that our internal controls over financial reporting are effective;

•changes to our credit ratings; and

•ESG and other issues impacting our reputation.

•permit the board of directors to establish the number of directors;

•authorize the issuance of “blank check” preferred stock that our board could use to implement a stockholder rights plan (also known as a “poison pill”);

•prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;

•provide that the board of directors is expressly authorized to make, alter or repeal our bylaws; and

•establish advance notice requirements for nominations for election to our board or for proposing matters that can be acted upon by stockholders at annual stockholder meetings.

ITEM 3.    LEGAL PROCEEDINGS

ITEM 4.    MINE SAFETY DISCLOSURES

ITEM 4A.    INFORMATION ABOUT OUR EXECUTIVE OFFICERS

The following sets forth certain information regarding our current executive officers as of February 28, 2023 (in alphabetical order):

Name

Age

Position

Marc Benioff

58

Chair of the Board, CEO and co-Founder

Parker Harris

56

Director, Chief Technology Officer and co-Founder

Brent Hyder

58

President and Chief People Officer

Brian Millham

53

President and Chief Operating Officer

Sundeep Reddy

50

Executive Vice President and Chief Accounting Officer

Srinivas Tallapragada

53

President and Chief Engineering Officer

Amy Weaver

55

President and Chief Financial Officer

Marc Benioff is Chair of the Board, Chief Executive Officer and co-Founder of Salesforce and a pioneer of cloud computing. Mr. Benioff has served as Chief Executive Officer since 2001 and under his leadership, Salesforce has become the #1 provider of CRM software globally. Mr. Benioff was named Innovator of the Decade by Forbes and recognized as one of the World’s 50 Greatest Leaders by Fortune and 10 Best-Performing CEOs by Harvard Business Review. As a member of the World Economic Forum (WEF) Board of Trustees, Mr. Benioff serves as the inaugural chair of WEF’s Forum Center for the Fourth Industrial Revolution in San Francisco. Mr. Benioff currently serves as Chair of the Salesforce Foundation. Mr. Benioff received his B.S. in Business Administration from the University of Southern California, where he also serves on the Board of Trustees.

Parker Harris has served as a Director since August 2018 and as our Chief Technology Officer since September 2016. Mr. Harris co-founded Salesforce in February 1999 and has served in senior technical positions since inception, including Executive Vice President, Technology from December 2004 to February 2013. Prior to Salesforce, Mr. Harris co-founded Left Coast Software, a Java consulting firm, and served as its Vice President from October 1996 to February 1999. Mr. Harris received his B.A. in English Literature from Middlebury College.

Brent Hyder has served as our President and Chief People Officer since September 2019. Prior to joining Salesforce, Mr. Hyder served in several senior management roles at Gap Inc., a global clothing and accessories retailer, from 2004 to 2019, including Executive Vice President and Chief People Officer from February 2018 to September 2019, Executive Vice President, Global Talent and Sustainability from May 2017 to February 2018, Executive Vice President and Chief Operating Officer, Gap from June 2016 to May 2017 and Senior Vice President, Human Resources, Gap from September 2014 to June 2016. Mr. Hyder holds a B.A. in Retail Management from Brigham Young University.

Brian Millham has served as our President and Chief Operating Officer since August 2022. Mr. Millham has been with Salesforce since its inception in 1999, most recently serving as Chief Customer Success Officer and Chief Operating Officer, Global Distribution from February 2022 to August 2022. From February 2021 to February 2022, he served as President, Customer Success Group and Chief Operating Officer, Worldwide Distribution. From August 2018 to February 2021, Mr. Millham served as President, Customer Success Group. From June 2017 to August 2018, Mr. Millham served as Executive Vice President, Americas Commercial, and B-to-C Sales, Global Strategy. Previously, Mr. Millham served in various leadership roles in business development, account management and sales. Mr. Millham received his B.A. from the University of California, Berkeley.

Sundeep Reddy has served as our Chief Accounting Officer since September 2021. Prior to joining Salesforce, Mr. Reddy served in a variety of corporate finance leadership roles at McKesson Corporation, a pharmaceutical distribution company, from 2013 to 2021, including Senior Vice President, Controller and Chief Accounting Officer from July 2018 to September 2021, Senior Vice President, Assistant Controller from June 2017 to July 2018, Senior Vice President, McKesson Technology Solutions Finance and Accounting from March 2017 to June 2017 and Vice President, Controller of McKesson Technology Solutions from December 2013 to February 2017. Mr. Reddy is a Certified Public Accountant and received his B.B.A. from Georgia State University and M.B.A. from Emory University.

Srinivas Tallapragada has served as our President and Chief Engineering Officer since December 2019. Prior to this, he served as our President, Technology from June 2018 to December 2019, Executive Vice President, Engineering from March 2014 to June 2018 and Senior Vice President, Engineering from May 2012 to February 2014. Prior to Salesforce, Mr. Tallapragada served as Senior Vice President at Oracle Corporation from April 2011 to June 2012 and as Senior Vice President at SAP Labs from February 2009 to April 2011. Previously, Mr. Tallapragada held various technical management roles at Oracle, Infosys and Asian Paints. Mr. Tallapragada currently serves on the Board of Directors of GoDaddy Inc. Mr. Tallapragada received his masters degree from the School of Human Resources at XLRI, Jamshedpur and B.T. in Computer Science from the National Institute of Technology, Warangal.

Amy Weaver has served as our President and Chief Financial Officer since February 2021. Prior to this, she served as our President and Chief Legal Officer from January 2020 to January 2021, President, Legal & Corporate Affairs and General

ITEM 5.     MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

			1/31/2018						1/31/2019						1/31/2020						1/31/2021						1/31/2022						1/31/2023
Salesforce			$	100					$	133					$	160					$	198					$	204					$	147
S&P 500 Index			100						96						114						132						160						144
Nasdaq Computer			100						98						141						206						258						200
Nasdaq 100 Index			100						99						129						186						215						174
Dow Jones Industrial Average			100						96						108						120						134						130

Share repurchases of the Company’s common stock for the three months ended January 31, 2023 were as follows (in millions, except for average price paid per share):

Period			Total Number of Shares Purchased (1)			Average Price Paid Per Share (2)			Total Number of Shares Purchased as Part of Publicly Announced Program (1)			Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
November 2022			6			$150.48			6			$7,400
December 2022			9			132.11			9			6,273
January 2023			2			139.76			2			6,000
Total			17						17

ITEM 6.    RESERVED

•Revenue: For fiscal 2023, revenue was $31.4 billion, an increase of 18 percent year-over-year.

•Earnings per Share: For fiscal 2023, diluted earnings per share was $0.21 as compared to diluted earnings per share of $1.48 from a year ago.

•Cash: Cash provided by operations for fiscal 2023 was $7.1 billion, an increase of 19 percent year-over-year. Total cash, cash equivalents and marketable securities as of January 31, 2023 was $12.5 billion.

•Remaining Performance Obligation: Total remaining performance obligation as of January 31, 2023 was approximately $48.6 billion, an increase of 11 percent year-over-year. Current remaining performance obligation as of January 31, 2023 was approximately $24.6 billion, an increase of 12 percent year-over-year.

•Share Repurchase Program: In August 2022, our Board of Directors authorized a program to repurchase up to $10.0 billion of our common stock. During the fiscal year ended January 31, 2023, we repurchased approximately 28 million shares of our common stock for approximately $4.0 billion. As of January 31, 2023, we were authorized to purchase a remaining $6.0 billion of our common stock under the Share Repurchase Program. In February 2023, the Board of Directors authorized an additional $10.0 billion in repurchases under the Share Repurchase Program, for an aggregate total authorized of $20.0 billion.

•Restructuring: In January 2023, we announced a restructuring plan (the “Plan”) intended to reduce operating costs, improve operating margins, and continue advancing our ongoing commitment to profitable growth. The Plan includes a reduction of our workforce and select real estate exits and office space reductions within certain markets. For fiscal 2023, we incurred approximately $828 million related to the Plan.

We derive our revenues from two sources: subscription and support revenues and professional services and other revenues. Subscription and support revenues accounted for approximately 93 percent of our total revenues for fiscal 2023.

Unearned revenue primarily consists of billings to customers for our subscription service. Over 90 percent of the value of our billings to customers is for our subscription and support service. We generally invoice our customers in advance, in annual installments, and typical payment terms provide that our customers pay us within 30 days of invoice. Amounts that have been invoiced are recorded in accounts receivable and in unearned revenue or in revenue depending on whether transfer of control to customers has occurred. In general, we collect our billings in advance of the subscription service period. We typically issue renewal invoices in advance of the renewal service period, and depending on timing, the initial invoice for the subscription and services contract and the subsequent renewal invoice may occur in different quarters. There is a disproportionate weighting toward annual billings in the fourth quarter, primarily as a result of large enterprise account buying patterns. Our fourth quarter has historically been our strongest quarter for new business and renewals. The year-on-year compounding effect of this seasonality in both billing patterns and overall new and renewal business causes the value of invoices that we generate in the fourth quarter for both new business and renewals to increase as a proportion of our total annual billings. Accordingly, because of this billing activity, our first quarter is typically our largest collections and operating cash flow quarter. Generally, our third quarter has historically been our smallest operating cash flow quarter. Unearned revenues, accounts receivable and operating

Revenue Recognition - Contracts with Multiple Performance Obligations. We enter into contracts with our customers that may include promises to transfer multiple Cloud Services, software licenses, premium support and professional services. A performance obligation is a promise in a contract with a customer to transfer products or services that are distinct. Determining whether products and services are distinct performance obligations that should be accounted for separately or combined as one unit of accounting may require significant judgment.

•future expected cash flows from subscription and support contracts, professional services contracts, other customer contracts and acquired developed technologies and patents;

Strategic Investments. Accounting for strategic investments in privately held debt and equity securities in which we do not have a controlling interest or significant influence requires us to make significant estimates and assumptions.

The following tables set forth selected data for each of the periods indicated (in millions):

4									Fiscal Year Ended January 31,
																											2023						% of Total Revenues						2022						% of Total Revenues						2021						% of Total Revenues
Revenues:
Subscription and support																											$	29,021					93		%				$	24,657					93		%				$	19,976					94		%
Professional services and other																											2,331						7						1,835						7						1,276						6
Total revenues																											31,352						100						26,492						100						21,252						100
Cost of revenues (1)(2):
Subscription and support																											5,821						19						5,059						19						4,154						20
Professional services and other																											2,539						8						1,967						8						1,284						6
Total cost of revenues																											8,360						27						7,026						27						5,438						26
Gross profit																											22,992						73						19,466						73						15,814						74
Operating expenses (1)(2):
Research and development																											5,055						16						4,465						17						3,598						17
Marketing and sales																											13,526						43						11,855						44						9,674						45
General and administrative																											2,553						8						2,598						10						2,087						10
Restructuring																											828						3						0						0						0						0
Total operating expenses																											21,962						70						18,918						71						15,359						72
Income from operations																											1,030						3						548						2						455						2
Gains (losses) on strategic investments, net																											(239)						(1)						1,211						5						2,170						10
Other expense																											(131)						0						(227)						(1)						(64)						0
Income before benefit from (provision for) income taxes																											660						2						1,532						6						2,561						12
Benefit from (provision for) income taxes																											(452)						(1)						(88)						(1)						1,511						7
Net income																											$	208					1		%				$	1,444					5		%				$	4,072					19		%

(1) Amounts related to amortization of intangible assets acquired through business combinations, as follows (in millions):

									Fiscal Year Ended January 31,
																											2023						% of Total Revenues						2022						% of Total Revenues						2021						% of Total Revenues
Cost of revenues																											$	1,035					3		%				$	897					3		%				$	662					3		%
Marketing and sales																											916						3						727						3						459						2

(2) Amounts related to stock-based compensation expense, as follows (in millions):

									Fiscal Year Ended January 31,
																											2023						% of Total Revenues						2022						% of Total Revenues						2021						% of Total Revenues
Cost of revenues																											$	499					2		%				$	386					1		%				$	241					1		%
Research and development																											1,136						3						918						4						703						4
Marketing and sales																											1,256						4						1,104						4						941						4
General and administrative																											368						1						371						1						305						1
Restructuring																											20						0						0						0						0						0

The following table sets forth selected balance sheet data and other metrics for each of the periods indicated (in millions, except remaining performance obligation, which is presented in billions):

			As of
			January 31, 2023						January 31, 2022
Cash, cash equivalents and marketable securities			$	12,508					$	10,537
Unearned revenue			17,376						15,628
Remaining performance obligation			48.6						43.7
Principal due on our outstanding debt obligations (1)			10,682						10,686

			Fiscal Year Ended January 31,												Variance
(in millions)			2023						2022						Dollars						Percent
Subscription and support			$	29,021					$	24,657					$	4,364					18		%
Professional services and other			2,331						1,835						496						27
Total revenues			$	31,352					$	26,492					$	4,860					18		%

For business combinations prior to fiscal 2023, we recorded unearned revenue related to acquired contracts from acquired entities at fair value on the date of acquisition. As a result, we did not recognize certain revenues related to these acquired contracts that the acquired entities would have otherwise recorded as an independent entity. In fiscal 2023, we adopted Accounting Standards Update No. 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers” (“ASU 2021-08”) which requires contract liabilities (i.e., unearned revenue) acquired in a business combination to be recognized and measured in accordance with ASC 606, Revenue from Contracts with Customers, thereby eliminating the previously unrecognized would-be revenue. The adoption of ASU 2021-08 did not materially impact our results of operations in fiscal 2023.

			Fiscal Year Ended January 31,
			2023						As a % of Total Subscription and Support Revenues						2022						As a % of Total Subscription and Support Revenues						Growth Rate
Sales			$	6,831					24		%				$	5,989					24		%				14		%
Service			7,369						25						6,474						26						14
Platform and Other			5,967						20						4,509						19						32
Marketing and Commerce			4,516						16						3,902						16						16
Data			4,338						15						3,783						15						15
Total			$	29,021					100		%				$	24,657					100		%				18		%

Revenues by Geography

			Fiscal Year Ended January 31,
(in millions)			2023						As a % of Total Revenues						2022						As a % of Total Revenues						Growth Rate
Americas			$	21,250					68		%				$	17,983					68		%				18		%
Europe			7,163						23						6,016						23						19
Asia Pacific			2,939						9						2,493						9						18
Total			$	31,352					100		%				$	26,492					100		%				18		%

Revenues by geography are determined based on the region of the Salesforce contracting entity, which may be different than the region of the customer. The increase in revenues across all regions was due primarily to the continued execution of our business and growth strategy, including increasing our geographic reach primarily through extending our go-to-market capabilities globally. During fiscal 2023, revenues outside of the Americas were negatively impacted by foreign currency fluctuations by approximately ten percent compared to fiscal 2022.

			Fiscal Year Ended January 31,																								Variance Dollars
(in millions)			2023						As a % of Total Revenues						2022						As a % of Total Revenues
Subscription and support			$	5,821					19		%				$	5,059					19		%				$	762
Professional services and other			2,539						8		%				1,967						8		%				572
Total cost of revenues			$	8,360					27		%				$	7,026					27		%				$	1,334

			Fiscal Year Ended January 31,																								Variance Dollars
(in millions)			2023						As a % of Total Revenues						2022						As a % of Total Revenues
Research and development			$	5,055					16		%				$	4,465					17		%				$	590
Marketing and sales			13,526						43						11,855						44						1,671
General and administrative			2,553						8						2,598						10						(45)
Restructuring			828						3						0						0						828
Total operating expenses			$	21,962					70		%				$	18,918					71		%				$	3,044

Other Income and Expenses

			Fiscal Year Ended January 31,												Variance Dollars
(in millions)			2023						2022
Gains (losses) on strategic investments, net			$	(239)					$	1,211					$	(1,450)
Other expense			(131)						(227)						96

			Fiscal Year Ended January 31,												Variance Dollars
(in millions)			2023						2022
Provision for income taxes			$	(452)					$	(88)					$	(364)
Effective tax rate			68		%				6		%

Cash Flows

For fiscal 2023, 2022 and 2021 our cash flows were as follows (in millions):

4									Fiscal Year Ended January 31,
															2023						2022						2021
Net cash provided by operating activities															$	7,111					$	6,000					$	4,801
Net cash used in investing activities															(1,989)						(14,536)						(3,971)
Net cash provided by (used in) financing activities															(3,562)						7,838						1,194

The net cash provided by operating activities during fiscal 2023 was related to net income of $208 million, adjusted for non-cash items including $3.8 billion of depreciation and amortization and $3.3 billion related to stock-based compensation expense. Cash provided by operating activities can be significantly impacted by factors such as growth in new business, timing of cash receipts from customers, vendor payment terms and timing of payments to vendors. Cash provided by operating activities during fiscal 2023 was further benefited by the change in unearned revenue of $1.7 billion, partially offset by the change in costs capitalized to obtain revenue contracts, net of $2.3 billion and accounts receivable, net of $1.0 billion due to cash collections. Cash provided by operating activities was impacted by the provision from the Tax Cuts and Jobs Act of 2017 which became effective in fiscal 2023 and requires the capitalization and amortization of research and development costs. The change increased our cash taxes paid in fiscal 2023. As our business continues to grow and our expenses remain in line with or less than our revenue growth, we expect to continue to see growth in net cash provided by operating activities.

Contractual Obligations

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We maintain debt obligations that are subject to market interest risk, as follows (in millions):

Instrument

Maturity Date

Principal Outstanding as of January 31, 2023

Interest Terms

Contractual Interest Rate

2023 Senior Notes

April 2023

$

1,000

Fixed

3.25%

Loan assumed on 50 Fremont

June 2023

182

Fixed

3.75

2024 Senior Notes

July 2024

1,000

Fixed

0.625

Credit Facility

December 2025

0

Floating

N/A

2028 Senior Notes

April 2028

1,500

Fixed

3.70

2028 Senior Sustainability Notes

July 2028

1,000

Fixed

1.50

2031 Senior Notes

July 2031

1,500

Fixed

1.95

2041 Senior Notes

July 2041

1,250

Fixed

2.70

2051 Senior Notes

July 2051

2,000

Fixed

2.90

2061 Senior Notes

July 2061

1,250

Fixed

3.05

The following table sets forth additional information regarding active equity investments within our strategic investment portfolio as of January 31, 2023 and excludes exited investments (in millions):

Investment Type						Capital Invested						Unrealized Gains (Cumulative)						Unrealized Losses (Cumulative)						Carrying Value as of January 31, 2023
Publicly held equity securities						$	2					$	2					$	(1)					$	3
Privately held equity securities						3,611						1,310						(321)						4,600
Total equity securities						$	3,613					$	1,312					$	(322)					$	4,603

The following financial statements are filed as part of this Annual Report on Form 10-K:

			Page No.
Reports of Independent Registered Public Accounting Firm (PCAOB ID: 42)			56
Consolidated Balance Sheets			59
Consolidated Statements of Operations			60
Consolidated Statements of Comprehensive Income			61
Consolidated Statements of Stockholders’ Equity			62
Consolidated Statements of Cash Flows			63
Notes to Consolidated Financial Statements			65

						Revenue Recognition
Description of the Matter						As described in Note 1 to the consolidated financial statements, the Company recognizes revenue primarily from subscription and support services and professional services contracts in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts with its customers that may include promises to transfer multiple cloud services, software licenses, premium support and professional services. Significant judgment may be required by the Company in determining revenue recognition for these customer agreements, including the determination of whether products and services are considered distinct performance obligations and the determination of standalone selling prices, particularly for products and services that are not sold separately. Auditing the Company’s accounting for revenue contracts with customers required significant judgment to assess management’s determination of performance obligations and standalone selling prices.
How We Addressed the Matter in Our Audit						We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process to identify performance obligations and allocate the transaction price to those performance obligations, including controls over determining standalone selling prices. To test the Company’s judgments and conclusions related to the identification of performance obligations and determination of standalone selling prices, our audit procedures included, among others, obtaining an understanding of the Company’s various service offerings and evaluating management’s conclusions regarding which were distinct. We read a sample of executed contracts to assess management’s evaluation of significant terms, including the determination of distinct performance obligations, and the related standalone selling price. We evaluated the information utilized to determine standalone selling price and we tested the mathematical accuracy of the Company’s calculations.
						Impairment of Strategic Investments
Description of the Matter						As described in Note 1 to the consolidated financial statements, the Company holds investments in privately held equity securities, which are assessed for impairment at least quarterly. The Company’s impairment analysis encompasses an assessment of both qualitative and quantitative factors, including the investee's financial metrics, market acceptance of the investee's product or technology and the rate at which the investee is using its cash. Significant judgment may be required by the Company in determining if an investment is impaired based on the information available about the investee. Auditing the Company’s accounting for impairment of privately held equity securities required significant judgment to evaluate management’s assessment of impairment indicators to evaluate whether investments are impaired considering the current economic environment.
How We Addressed the Matter in Our Audit						We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process to identify impaired privately held equity securities, including controls over assessing impairment indicators. To test the Company’s judgments and conclusions related to impairment of privately held equity securities, our audit procedures included, among others, obtaining an understanding of the nature of the privately held equity securities and evaluating the Company’s assessment of both qualitative and quantitative factors. We read the Company’s analysis of a sample of investments and available information including financial metrics and cash usage. We evaluated the information available to determine the appropriateness of the Company’s conclusions of whether the investments are impaired.

			January 31, 2023						January 31, 2022
Assets
Current assets:
Cash and cash equivalents			$	7,016					$	5,464
Marketable securities			5,492						5,073
Accounts receivable, net			10,755						9,739
Costs capitalized to obtain revenue contracts, net			1,776						1,454
Prepaid expenses and other current assets			1,356						1,120
Total current assets			26,395						22,850
Property and equipment, net			3,702						2,815
Operating lease right-of-use assets, net			2,890						2,880
Noncurrent costs capitalized to obtain revenue contracts, net			2,697						2,342
Strategic investments			4,672						4,784
Goodwill			48,568						47,937
Intangible assets acquired through business combinations, net			7,125						8,978
Deferred tax assets and other assets, net			2,800						2,623
Total assets			$	98,849					$	95,209
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable, accrued expenses and other liabilities			$	6,743					$	5,470
Operating lease liabilities, current			590						686
Unearned revenue			17,376						15,628
Debt, current			1,182						4
Total current liabilities			25,891						21,788
Noncurrent debt			9,419						10,592
Noncurrent operating lease liabilities			2,897						2,703
Other noncurrent liabilities			2,283						1,995
Total liabilities			40,490						37,078
Commitments and contingencies (See Notes 6 and 14)
Stockholders’ equity:
Preferred stock, $0.001 par value; 5 shares authorized and none issued and outstanding			0						0
Common stock, $0.001 par value; 1,600 shares authorized, 1,009 and 989 issued and outstanding at January 31, 2023 and 2022, respectively			1						1
Treasury stock, at cost			(4,000)						0
Additional paid-in capital			55,047						50,919
Accumulated other comprehensive loss			(274)						(166)
Retained earnings			7,585						7,377
Total stockholders’ equity			58,359						58,131
Total liabilities and stockholders’ equity			$	98,849					$	95,209

4									Fiscal Year Ended January 31,
															2023						2022						2021
Revenues:
Subscription and support															$	29,021					$	24,657					$	19,976
Professional services and other															2,331						1,835						1,276
Total revenues															31,352						26,492						21,252
Cost of revenues (1)(2):
Subscription and support															5,821						5,059						4,154
Professional services and other															2,539						1,967						1,284
Total cost of revenues															8,360						7,026						5,438
Gross profit															22,992						19,466						15,814
Operating expenses (1)(2):
Research and development															5,055						4,465						3,598
Marketing and sales															13,526						11,855						9,674
General and administrative															2,553						2,598						2,087
Restructuring (Note 10)															828						0						0
Total operating expenses															21,962						18,918						15,359
Income from operations															1,030						548						455
Gains (losses) on strategic investments, net															(239)						1,211						2,170
Other expense															(131)						(227)						(64)
Income before benefit from (provision for) income taxes															660						1,532						2,561
Benefit from (provision for) income taxes (3)															(452)						(88)						1,511
Net income															$	208					$	1,444					$	4,072
Basic net income per share															$	0.21					$	1.51					$	4.48
Diluted net income per share															$	0.21					$	1.48					$	4.38
Shares used in computing basic net income per share															992						955						908
Shares used in computing diluted net income per share															997						974						930

(1) Amounts include amortization of intangible assets acquired through business combinations, as follows:

									Fiscal Year Ended January 31,
															2023						2022						2021
Cost of revenues															$	1,035					$	897					$	662
Marketing and sales															916						727						459

(2) Amounts include stock-based compensation expense, as follows:

									Fiscal Year Ended January 31,
															2023						2022						2021
Cost of revenues															$	499					$	386					$	241
Research and development															1,136						918						703
Marketing and sales															1,256						1,104						941
General and administrative															368						371						305
Restructuring															20						0						0

(3) During fiscal 2021, the Company recorded approximately $2.0 billion of a one-time benefit from a discrete tax item related to the recognition of deferred tax assets resulting from an intra-entity transfer of intangible property.