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Item 1. Financial Statements

2025-05-29 compared with 2024-12-04 · 187 added, 234 removed, 675 unchanged (38% of the section changed)

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Salesforce, Inc.

1 unchanged sentence

(in millions)

October 31, 2024 January 31, 2024

April 30, 2025 January 31, 2025

Assets (unaudited)

21 unchanged sentences

17,799 20,743

Debt, current 0 999

Total current liabilities 24,196 27,980

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(in millions, except per share data)

3 Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

1 Three Months Ended April 30,

Subscription and support $ 9,297 $ 8,585

13 unchanged sentences

Income from operations 1,942 1,709

Losses on strategic investments, net ( 217 ) ( 72 ) ( 217 ) ( 242 )

Gains (losses) on strategic investments, net ( 63 ) 37

Other income 95 121

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

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

Three Months Ended April 30,

Cost of revenues $ 162 $ 238

1 unchanged sentence

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

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

Three Months Ended April 30,

Cost of revenues $ 151 $ 119

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(in millions)

3 Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

1 Three Months Ended April 30,

Net income $ 1,541 $ 1,533

Other comprehensive income (loss), net of reclassification adjustments:

Foreign currency translation and other gains (losses) 4 ( 65 ) ( 23 ) ( 54 )

Unrealized gains (losses) on marketable securities and privately held debt securities 9 ( 9 ) 27 2

Foreign currency translation and other losses 110 ( 23 )

Unrealized gains (losses) on marketable securities 31 ( 30 )

Other comprehensive income (loss), before tax 141 ( 53 )

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(in millions)

Three and Nine Months Ended October 31, 2024

Three Months Ended April 30, 2025

Common Stock Treasury Stock Additional

6 unchanged sentences

Stock-based compensation 0 0 0 0 817 0 0 817

Other comprehensive loss, net of tax 0 0 0 0 0 ( 45 ) 0 ( 45 )

Cash dividends declared 0 0 0 0 0 0 ( 388 ) ( 388 )

Other comprehensive gain, net of tax 0 0 0 0 0 136 0 136

Cash dividends and dividend equivalents declared 0 0 0 0 0 0 ( 406 ) ( 406 )

Net income 0 0 0 0 0 0 1,541 1,541

Balance at April 30, 2025 1,062 $ 1 ( 104 ) $ ( 22,199 ) $ 65,490 $ ( 130 ) $ 17,504 $ 60,666

Common stock issued 5 0 0 0 384 0 0 384

Common stock repurchased 0 0 ( 18 ) ( 4,322 ) 0 0 0 ( 4,322 )

Stock-based compensation 0 0 0 0 813 0 0 813

Other comprehensive income, net of tax 0 0 0 0 0 34 0 34

Cash dividends declared 0 0 0 0 0 0 ( 388 ) ( 388 )

Net income 0 0 0 0 0 0 1,429 1,429

Balance at July 31, 2024 1,047 1 ( 89 ) ( 18,182 ) 62,143 ( 236 ) 13,907 57,633

Common stock issued 3 0 0 0 148 0 0 148

Common stock repurchased 0 0 ( 5 ) ( 1,232 ) 0 0 0 ( 1,232 )

Stock-based compensation 0 0 0 0 823 0 0 823

Other comprehensive income, net of tax 0 0 0 0 0 11 0 11

Cash dividends declared 0 0 0 0 0 0 ( 385 ) ( 385 )

Net income 0 0 0 0 0 0 1,527 1,527

Balance at October 31, 2024 1,050 $ 1 ( 94 ) $ ( 19,414 ) $ 63,114 $ ( 225 ) $ 15,049 $ 58,525

Three and Nine Months Ended October 31, 2023

Three Months Ended April 30, 2024

Common Stock Treasury Stock Additional

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Stock-based compensation 0 0 0 0 753 0 0 753

Other comprehensive income, net of tax 0 0 0 0 0 19 0 19

Net income 0 0 0 0 0 0 199 199

Balance at April 30, 2023 1,016 $ 1 ( 39 ) $ ( 6,144 ) $ 56,026 $ ( 255 ) $ 7,784 $ 57,412

Common stock issued 7 0 0 0 595 0 0 595

Common stock repurchased 0 0 ( 9 ) ( 1,913 ) 0 0 0 ( 1,913 )

Stock-based compensation 0 0 0 0 724 0 0 724

Other comprehensive loss, net of tax 0 0 0 0 0 ( 45 ) 0 ( 45 )

Net income 0 0 0 0 0 0 1,267 1,267

Balance at July 31, 2023 1,023 1 ( 48 ) ( 8,057 ) 57,345 ( 258 ) 9,051 58,082

Common stock issued 3 0 0 0 111 0 0 111

Common stock repurchased 0 0 ( 9 ) ( 1,947 ) 0 0 0 ( 1,947 )

Stock-based compensation expense 0 0 0 0 693 0 0 693

Other comprehensive loss, net of tax 0 0 0 0 0 ( 73 ) 0 ( 73 )

Cash dividends declared 0 0 0 0 0 0 ( 388 ) ( 388 )

Net income 0 0 0 0 0 0 1,533 1,533

Balance at October 31, 2023 1,026 1 ( 57 ) ( 10,004 ) 58,149 ( 331 ) 10,275 58,090

Balance at April 30, 2024 1,042 $ 1 ( 71 ) $ ( 13,860 ) $ 60,946 $ ( 270 ) $ 12,866 $ 59,683

See accompanying Notes.

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(in millions)

3 Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

1 Three Months Ended April 30,

Operating activities:

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Stock-based compensation expense 814 750

Losses on strategic investments, net 217 72 217 242

(Gains) losses on strategic investments, net 63 ( 37 )

Changes in assets and liabilities, net of business combinations:

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Principal payments on financing obligations ( 179 ) ( 120 )

Repayments of debt 0 0 ( 1,000 ) ( 1,182 )

Payments of dividends ( 382 ) 0 ( 1,154 ) 0

Payments of dividends and dividend equivalents ( 402 ) ( 388 )

Net cash used in financing activities ( 2,920 ) ( 2,108 )

Effect of exchange rate changes 91 ( 2 )

Net increase (decrease) in cash and cash equivalents 315 ( 319 ) ( 475 ) ( 563 )

Net increase in cash and cash equivalents 2,080 1,486

Cash and cash equivalents, beginning of period 8,848 8,472

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(in millions)

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

Three Months Ended April 30,

Supplemental cash flow disclosure:

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(the “Company”) is a global leader in customer relationship management technology that brings companies and customers together.

With the Salesforce platform, the Company delivers a single source of truth, connecting customer data with integrated artificial intelligence (“AI”) across systems, apps and devices to help companies sell, service, market and conduct commerce from anywhere.

With the deeply unified Salesforce Platform, the Company delivers a single source of truth, connecting customer data with integrated artificial intelligence (“AI”) across systems, apps and devices to help companies sell, service, market and conduct commerce from anywhere.

During the third quarter of fiscal 2025, the Company introduced Agentforce, a new layer of the trusted Salesforce Platform that enables companies to build and deploy AI agents that can respond to inputs, make decisions and take action autonomously across business functions.

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Basis of Presentation

The accompanying condensed consolidated balance sheet as of October 31, 2024 and the condensed consolidated statements of operations, comprehensive income, stockholders' equity and cash flows for the three and nine months ended October 31, 2024 and 2023, respectively, are unaudited.

The accompanying condensed consolidated balance sheet as of April 30, 2025 and the condensed consolidated statements of operations, comprehensive income, stockholders' equity and cash flows for the three months ended April 30, 2025 and 2024, are unaudited.

These financial statements have been prepared in accordance with U.S.

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GAAP for complete financial statements.

In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s balance sheet as of October 31, 2024 and its results of operations, including its comprehensive income, stockholders' equity and cash flows for the three and nine months ended October 31, 2024 and 2023.

In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s balance sheet as of April 30, 2025 and its results of operations, including its comprehensive income, stockholders' equity and cash flows for the three months ended April 30, 2025 and 2024.

All adjustments are of a normal recurring nature.

The results for the three and nine months ended October 31, 2024 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending January 31, 2025.

The results for the three months ended April 30, 2025 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending January 31, 2026.

These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on March 5, 2025.

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The Company operates as one operating segment.

Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance.

Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”), who is the Company’s Chief Executive Officer, in deciding how to allocate resources and assess performance.

Over the past few years, the Company has completed a number of acquisitions which have allowed the Company to expand its offerings, presence and reach in various market segments of the enterprise cloud computing market.

While the Company has offerings in multiple enterprise cloud computing market segments, including as a result of the Company's acquisitions, and operates in multiple countries, the Company’s business operates in one operating segment because most of the Company's service offerings operate on the Salesforce platform and are deployed in a nearly identical manner, and the Company’s CODM evaluates the Company’s financial information and resources, and assesses the performance of these resources, on a consolidated basis.

While the Company has offerings in multiple enterprise cloud computing market segments, including as a result of the Company's acquisitions, and operates in multiple countries, the Company’s business operates in one operating segment because most of the Company's service offerings operate on the Salesforce Platform and are deployed in a nearly identical manner, and the Company’s CODM evaluates the Company’s financial information and resources, and assesses the performance of these resources, on a consolidated net income basis.

Additionally, the measure of segment assets is reported on the condensed consolidated balance sheet as total consolidated assets.

The Company’s significant segment expenses, which are the expenses included in operating income as well as gains (losses) on strategic investments, and other segment items, which includes other income and provision for income taxes, are included in the Company’s condensed consolidated statement of operations.

Additionally, further components of the Company’s measure of profit or loss, which is net income, are included throughout the Company’s financial statements.

Concentrations of Credit Risk, Significant Customers and Investments

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Receivables are written off and charged against the recorded allowance when the Company has exhausted collection efforts without success.

No single customer accounted for ten percent or more of accounts receivable as of October 31, 2024 and January 31, 2024.

No single customer accounted for ten percent or more of total revenue during the three and nine months ended October 31, 2024 and 2023.

As of October 31, 2024 and January 31, 2024, assets located outside the Americas were 13 percent and 16 percent of total assets, respectively.

As of October 31, 2024 and January 31, 2024, assets located in the United States were 85 percent and 82 percent of total assets, respectively.

No single customer accounted for ten percent or more of accounts receivable as of April 30, 2025 and January 31, 2025.

No single customer accounted for ten percent or more of total revenue during the three months ended April 30, 2025 and 2024.

As of April 30, 2025 and January 31, 2025, assets located outside the Americas were 19 percent and 17 percent of total assets, respectively.

As of April 30, 2025 and January 31, 2025, assets located in the United States were 80 percent and 81 percent of total assets, respectively.

The Company is also exposed to concentrations of risk in its strategic investment portfolio, including within specific industries, as the Company primarily invests in enterprise cloud companies, technology st artups and system integrators.

As of October 31, 2024, the Company held two investments, both privately held, with carrying values that were individually greater than five percent of its total strategic investments portfolio and represented approximately 13 percent of the portfolio in the aggregate.

As of January 31, 2024 , the Company held two investments, both privately held, with carrying values that were individually greater than five percent of its strategic investments portfolio and represented approximately 16 percent of the portfolio in the aggregate.

As of April 30, 2025, the Company held four investments, all privately held, with carrying values that were individually greater than five percent of its total strategic investments portfolio and represented approximately 24 percent o f the portfolio in the aggregate.

As of January 31, 2025 , the Company held four investments, all privately held, with carrying values that were individually greater than five percent of its strategic investments portfolio and represented approximately 24 percent of the portfolio in the aggregate.

Revenue Recognition

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(1) subscription and support revenues and (2) professional services and other revenues.

Subscription and support revenues include subscription fees from customers accessing the Company’s enterprise cloud computing services (collectively, “Cloud Services”), software license revenues from the sales of term software licenses and support revenues from the sales of support and updates beyond the basic subscription or software license sales.

Subscription and support revenues primarily include subscription fees from customers accessing the Company’s enterprise cloud computing services (collectively, “Cloud Services”), software license revenues from the sales of term software licenses and support revenues from the sales of support and updates beyond the basic subscription or software license sales.

Professional services and other revenues include professional and advisory services for process mapping, project management and implementation services and training services.

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Capitalized amounts consist primarily of sales commissions paid to the Company’s direct sales force.

Capitalized amounts also include (1) amounts paid to employees other than the direct sales force who earn incentive

payouts under annual compensation plans that are tied to the value of contracts acquired, (2) commissions paid to employees upon renewals of subscription and support contracts, (3) the associated payroll taxes and fringe benefit costs associated with the payments to the Company’s employees and (4) to a lesser extent, success fees paid to partners in emerging markets where the Company has a limited presence.

Capitalized amounts also include (1) amounts paid to employees other than the direct sales force who earn incentive payouts under annual compensation plans that are tied to the value of contracts acquired, (2) commissions paid to employees upon renewals of subscription and support contracts, (3) the associated payroll taxes and fringe benefit costs associated with the payments to the Company’s employees and (4) to a lesser extent, success fees paid to partners in emerging markets where the Company has a limited presence.

Costs capitalized related to new revenue contracts are amortized on a straight-line basis over four years , which is longer than the typical initial contract period, but reflects the estimated average period of benefit, including expected contract renewals.

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Amortization of capitalized costs to obtain revenue contracts is included in sales and marketing expense in the accompanying condensed consolidated statements of operations.

There were no impairments of costs to obtain revenue contracts for the three and nine months ended October 31, 2024 and 2023.

There were no impairments of costs to obtain revenue contracts for the three months ended April 30, 2025 and 2024.

Cash and Cash Equivalents

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Strategic Investments

The Company holds strategic investments in privately held debt and equity securities and publicly held equity securities in which the Company does not have a controlling interest.

The Company holds strategic investments in publicly held equity securities, privately held equity securities and other investments in which the Company does not have a controlling interest.

Privately held equity securities where the Company lacks a controlling financial interest but does exercise significant influence are accounted for under the equity method.

Privately held equity securities not accounted for under the equity method are recorded at cost and adjusted only for observable transactions for same or similar investments of the same issuer or impairment events (referred to as the measurement alternative).

All gains and losses on privately held equity securities, realized and unrealized, are recorded through losses on strategic investments, net on the condensed consolidated statements of operations.

Privately held debt securities are recorded at fair value with changes in fair value recorded through accumulated other comprehensive loss on the condensed consolidated balance sheets.

Other privately held investments not classified as debt or equity securities are recorded at cost and adjusted for impairment events, with any associated gains and losses recorded through losses on strategic investments, net on the consolidated statements of operations.

All gains and losses on privately held equity securities, realized and unrealized, are recorded through gains (losses) on strategic investments, net on the condensed consolidated statements of operations.

Other privately held investments not classified as debt or equity securities are recorded at cost and adjusted for impairment events, with any associated gains and losses recorded through gains (losses) on strategic investments, net on the condensed consolidated statements of operations.

Valuations of privately held securities are inherently complex and require judgment due to the lack of readily available market data.

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The Company assesses its privately held strategic investments quarterly for impairment.

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.

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.

If the investment is considered impaired, the Company estimates the fair value of the investment and recognizes any resulting impairment through the condensed consolidated statements of operations.

Publicly held equity securities are measured at fair value with changes recorded through losses on strategic investments, net on the condensed consolidated statements of operations.

Publicly held equity securities are measured at fair value with changes recorded through gains (losses) on strategic investments, net on the condensed consolidated statements of operations.

Fair Value Measurement

The Company measures its cash and cash equivalents, marketable securities, publicly held equity securities and foreign currency derivative contracts at fair value.

In addition, the Company measures certain of its strategic investments, including its privately held debt and equity securities, at fair value on a nonrecurring basis when there has been an observable price change in a same or similar security or an impairment event.

In addition, the Company measures certain of its strategic investments, including its privately held equity securities, at fair value on a nonrecurring basis when there has been an observable price change in a same or similar security or an impairment event.

The additional disclosures regarding the Company’s fair value measurements are included in Note 4 “Fair Value Measurement.”

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While the contract or notional amount is often used to express the volume of foreign currency derivative contracts, the amounts potentially subject to credit risk are generally limited to the amounts, if any, by which the counterparties’ obligations under the agreements exceed the obligations of the Company to the counterparties.

The notional amount of outstanding foreign currency derivative contracts as of October 31, 2024 and January 31, 2024 was $ 9.4 billion and $ 8.6 billion, respectively.

The notional amount of outstanding foreign currency derivative contracts as of April 30, 2025 and January 31, 2025 was $ 9.0 billion and $ 10.7 billion, respectively.

Outstanding foreign currency derivative contracts are recorded at fair value on the condensed consolidated balance sheets.

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When assets are retired or otherwise disposed of, the cost and accumulated depreciation and amortization are removed from their respective accounts and any loss on such retirement is reflected in operating expenses.

The Company has entered into operating and finance leases for corporate offices, data centers, and equipment.

The Company determines if an arrangement is a lease at inception and classifies its leases at commencement.

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Periods beyond the noncancellable term of the lease are included in the measurement of the lease liability only when it is reasonably certain that the Company will exercise the associated extension option or waive the termination option.

The Company reassesses the lease term if and when a significant

event or change in circumstances occurs within the control of the Company.

The Company reassesses the lease term if and when a significant event or change in circumstances occurs within the control of the Company.

As most of the Company’s leases do not provide an implicit rate, the net present value of future minimum lease payments is determined using the Company’s incremental borrowing rate.

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Such assets are included in property and equipment, net and are amortized over the lease term.

The Company has entered into subleases or has made decisions and taken actions to exit and sublease certain unoccupied leased office space.

The Company has entered into subleases or has made decisions and taken actions to exit and sublease certain unoccupied leased facilities.

Similar to other long-lived assets discussed below, management tests ROU assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

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Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s condensed consolidated statements of operations.

In the event the Company acquires an entity with which the Company has a preexisting relationship, the Company will generally recognize a gain or loss to settle that relationship as of the acquisition date within operating income on the condensed consolidated statements of operations.

In the event that the Company acquires an entity in which the Company previously held a strategic investment, the difference between the fair value of the shares as of the date of the acquisition and the carrying value of the strategic investment is recorded as a gain or loss and recorded within losses on strategic investments, net in the condensed consolidated statements of operations.

consolidated statements of operations.

In the event that the Company acquires an entity in which the Company previously held a strategic investment, the difference between the fair value of the shares as of the date of the acquisition and the carrying value of the strategic investment is recorded as a gain or loss and recorded within gains (losses) on strategic investments, net in the condensed consolidated statements of operations.

Restructuring

The Company generally recognizes employee severance costs when payments are probable and amounts are estimable or when notification occurs, depending on the region an employee works.

The Company generally recognizes employee severance costs when payments are probable and amounts are estimable or when notification occurs, depending on the region where an employee works.

Costs related to contracts without future benefit or contract termination are recognized at the earlier of the contract termination or the cease-use dates.

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Stock-Based Compensation Expense

Stock-based compensation expense is measured based on grant date at fair value using the grant date closing stock price for restricted stock units and restricted stock awards and using the Black-Scholes option pricing model for stock options.

The Company recognizes stock-based compensation expense related to restricted stock units, restricted stock awards, and stock options on a straight-line basis, net of estimated forfeitures, over the requisite service period of the awards, which is generally the vesting term of four years .

The Company recognizes stock-based compensation expense related to restricted stock units, restricted stock awards, stock options and shares issued pursuant to the ESPP on a straight-line basis, net of estimated forfeitures, over the requisite service period of the awards, which is generally the vesting term of four years for restricted stock units, restricted stock awards, and stock options, and the 12-month offering period for shares issued pursuant to the ESPP.

The estimated forfeiture rate applied is based on historical forfeiture rates.

The Company grants performance share awards to executive officers and other members of senior management, which may include a market condition, a performance condition, or both.

The Company grants performance-based restricted stock units and performance-based stock options to executive officers and other members of senior management, which may include a market condition, a performance condition, or both, in addition to a service condition.

Stock-based compensation expense related to awards with a market condition are measured at fair value using a Monte Carlo simulation model and the expense related to these awards is recognized on a graded-vesting basis, net of estimated forfeitures, over the requisite service period of the awards, which is generally the vesting term.

Stock-based compensation expense related to awards with a performance condition are measured based on the grant date closing stock price and the expense related to these awards is recognized based on the requisite service period elapsed, as well as the probability of achievement and estimated attainment of the performance condition as of the end of our reporting period.

Stock-based compensation expense related to the Company’s Amended and Restated 2004 Employee Stock Purchase Plan (“ESPP” or “2004 Employee Stock Purchase Plan”) is measured based on grant date at fair value using the Black-Scholes option pricing model.

The Company recognizes stock-based compensation expense related to shares issued pursuant to the 2004 Employee Stock Purchase Plan on a straight-line basis over the offering period, which is 12 months.

The ESPP allows employees to purchase shares of the Company's common stock at a 15 percent discount from the lower of the Company’s stock price on (i) the first day of the offering period or on (ii) the last day of the purchase period.

The ESPP also allows employees to reduce their percentage election once during a six-month purchase period (December 15 and June 15 of each fiscal year), but not to increase that election until the next one-year offering period.

The ESPP includes a reset provision for the purchase price if the stock price on the purchase date is less than the stock price on the offering date.

The Company, at times, grants unvested restricted shares to employee stockholders of certain acquired companies in lieu of cash consideration.

These awards are generally subject to continued post-acquisition employment.

Therefore, the Company accounts for them as post-acquisition stock-based compensation expense.

The Company recognizes stock-based compensation expense equal to the grant date fair value of the restricted stock awards, based on the closing stock price on grant date, on a straight-line basis over the requisite service period of the awards, which is generally four years .

The Company uses the asset and liability method of accounting for income taxes.

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New Accounting Pronouncements Pending Adoption

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No.

2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which requires additional operating segment disclosures in annual and interim consolidated financial statements.

ASU 2023-07 is effective for annual periods beginning after December 15, 2023 and for interim periods beginning after December 15, 2024 on a retrospective basis, with early adoption permitted.

The Company will adopt ASU 2023-07 in the fourth quarter of fiscal year 2025 and does not expect the additional required disclosures to have a material impact on its financial statements.

In December 2023, the FASB issued Accounting Standards Update No.

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Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which requires disaggregation of certain costs in a separate note to the financial statements, such as the amounts of employee compensation, depreciation and intangible asset amortization, included in each relevant expense caption in annual and interim consolidated financial statements.

ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and for interim periods beginning after December 15, 2027 on a retrospective or prospective basis, with early adoption permitted.

ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027 on a retrospective or prospective basis, with early adoption permitted.

The Company is evaluating the effect that ASU 2024-03 will have on its financial statement disclosures.

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Subscription and support revenues consisted of the following (in millions):

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

Three Months Ended April 30,

Sales $ 2,131 $ 1,998

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$ 9,297 $ 8,585

(1) In the fourth quarter of fiscal 2024, the Company renamed the service offering previously referred to as Data to Integration and Analytics, which includes Mulesoft and Tableau.

Total Revenue by Geographic Locations

Revenues by geographical region consisted of the following (in millions):

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

Three Months Ended April 30,

Americas $ 6,469 $ 6,062

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Revenues by geography are determined based on the region of the Company's contracting entity, which may be different than the region of the customer.

Americas revenue attributed to the United States was approximately 93 percent during the three and nine months ended October 31, 2024 and 2023.

No other country represented more than ten percent of total revenue during the three and nine months ended October 31, 2024 and 2023.

Americas revenue attributed to the United States was approximately 93 percent during the three

months ended April 30, 2025 and 2024, respectively.

No other country represented more than ten percent of total revenue during the three months ended April 30, 2025 and 2024.

Contract Balances

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The Company records a contract asset when revenue recognized on a contract exceeds the billings.

Contract assets were $ 948 million as of October 31, 2024 as compared to $ 758 million as of January 31, 2024, and are included in prepaid expenses and other current assets and deferred tax assets and other assets, net on the condensed consolidated balance sheets.

Contract assets were $ 836 million as of April 30, 2025 as compared to $ 724 million as of January 31, 2025, and are included in prepaid expenses and other current assets and deferred tax assets and other assets, net on the condensed consolidated balance sheets.

Unearned Revenue

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The change in unearned revenue was as follows (in millions):

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

Three Months Ended April 30,

Unearned revenue, beginning of period $ 20,743 $ 19,003

Billings and other (1) 6,885 6,191

Contribution from contract asset 63 167 189 218

Revenue recognized over time ( 9,211 ) ( 8,571 )

Revenue recognized at a point in time ( 618 ) ( 562 )

Unearned revenue from business combinations 11 4 24 4

Unearned revenue, end of period $ 17,799 $ 16,061

(1) Other includes, for example, the impact of foreign currency translation.

(1) Other includes, for example, the impact of foreign currency translation as well as contributions from contract assets and business combinations.

The majority of revenue recognized for these services is from the beginning of period unearned revenue balance.

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Current Noncurrent Total

As of October 31, 2024 $ 26.4 $ 26.7 $ 53.1

As of April 30, 2025 $ 29.6 $ 31.3 $ 60.9

As of January 31, 2025 $ 30.2 $ 33.2 $ 63.4

Marketable Securities

At October 31, 2024, marketable securities consisted of the following (in millions):

At April 30, 2025, marketable securities consisted of the following (in millions):

Cost Unrealized

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The contractual maturities of the investments classified as marketable securities were as follows (in millions):

October 31, 2024 January 31, 2024

April 30, 2025 January 31, 2025

Due within 1 year $ 3,197 $ 2,081

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$ 6,480 $ 5,184

Interest income from marketable securities for the three months ended April 30, 2025 and 2024 was $ 169 million, and $ 196 million, respectively, and is included in other income in the condensed consolidated statements of operations.

Strategic Investments

Strategic investments by form and measurement category as of October 31, 2024 were as follows (in millions):

Strategic investments by form and measurement category as of April 30, 2025 were as follows (in millions):

Measurement Category

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Equity securities $ 53 $ 4,715 $ 137 $ 4,905

Debt securities and other investments 0 0 93 93

Balance as of October 31, 2024

Other investments 0 0 36 36

Balance as of April 30, 2025

$ 53 $ 4,715 $ 173 $ 4,941

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Equity securities $ 69 $ 4,617 $ 125 $ 4,811

Debt securities and other investments 0 0 81 81

Other investments 0 0 41 41

Balance as of January 31, 2025

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The Company holds investments in, or management agreements with, variable interest entities (“VIEs”) which the Company does not consolidate because it is not considered the primary beneficiary of these entities.

The carrying value of VIEs within strategic investments was $ 439 million and $ 382 million, as of October 31, 2024 and January 31, 2024, respectively.

Losses on Strategic Investments, Net

The components of losses on strategic investments, net were as follows (in millions):

3 Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

The carrying value of VIEs within strategic investments was $ 476 million and $ 484 million, as of April 30, 2025 and January 31, 2025, respectively.

Gains (losses) on Strategic Investments, Net

The components of gains (losses) on strategic investments, net were as follows (in millions):

1 Three Months Ended April 30,

Unrealized gains (losses) recognized on publicly traded equity securities, net $ ( 16 ) $ 3

Unrealized gains recognized on privately held equity securities, net 7 105

Impairments on privately held equity and debt securities ( 242 ) ( 98 ) ( 432 ) ( 355 )

Impairments on privately held equity securities and other investments ( 47 ) ( 130 )

Unrealized losses, net ( 56 ) ( 22 )

Realized gains (losses) on sales of securities, net ( 7 ) 59

Losses on strategic investments, net $ ( 217 ) $ ( 72 ) $ ( 217 ) $ ( 242 )

Gains (losses) on strategic investments, net $ ( 63 ) $ 37

Unrealized gains and losses recognized on privately held equity securities, net includes upward and downward adjustments from equity securities accounted for under the measurement alternative, as well as gains and losses from private equity securities in other measurement categories.

For privately held securities accounted for under the measurement alternative, the Company recorded upward adjustments of $ 22 million and $ 14 million and impairments and downward adjustments of $ 245 million and $ 98 million for the three months ended October 31, 2024 and 2023 , respectively, and upward adjustments of $ 182 million and $ 65 million and impairments and downward adjustments of $ 435 million and $ 354 million for the nine months ended October 31, 2024 , and 2023 , respectively.

Realized gains (losses) on sales of securities, net reflects the difference between the sale proceeds and the carrying value of the security at the beginning of the period or the purchase date, if later.

For privately held securities accounted for under the measurement alternative, the Company recorded upward adjustments of $ 21 million and $ 116 million and impairments and downward adjustments of $ 60 million and $ 139 million for the three months ended April 30, 2025 and 2024 , respectively.

Realized gains on sales of securities, net reflects the difference between the sale proceeds and the carrying value of the security at the beginning of the period or the purchase date, if later.

Fair Value Measurement

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All of the Company’s cash equivalents, marketable securities and foreign currency derivative contracts are classified within Level 1 or Level 2 because these assets are valued using quoted market prices or alternative pricing sources and models utilizing observable market inputs.

The following table presents information about the Company’s assets that were measured at fair value as of October 31, 2024 and indicates the fair value hierarchy of the valuation (in millions):

The following table presents information about the Company’s assets that were measured at fair value as of April 30, 2025 and indicates the fair value hierarchy of the valuation (in millions):

Description Quoted Prices in

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Total assets $ 6,562 $ 8,516 $ 0 $ 15,078

(1) Included in “cash and cash equivalents” in the accompanying condensed consolidated balance sheets in addition to $ 2.2 billion of cash, as of October 31, 2024.

(1) Included in “cash and cash equivalents” in the accompanying condensed consolidated balance sheets in addition to $ 2.4 billion of cash, as of April 30, 2025.

The following table presents information about the Company’s assets that were measured at fair value as of January 31, 2025 and indicates the fair value hierarchy of the valuation (in millions):

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Strategic Investments Measured and Recorded at Fair Value on a Non-Recurring Basis

Substantially all of the Company's privately held debt and equity securities and other investments are recorded at fair value on a non-recurring basis.

Substantially all of the Company's privately held equity securities and other investments are recorded at fair value on a non-recurring basis.

The estimation of fair value for these investments requires the use of significant unobservable inputs, and as a result, the Company deems these assets as Level 3 within the fair value measurement framework.

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When indicators of impairment are observed for privately held equity securities, the Company generally uses the market approach to estimate the fair value of its investment, giving consideration to the latest observable transactions, as well as the investee's current and projected financial performance and other significant inputs and assumptions, including estimated time to exit, selection and analysis of guideline public companies and the rights and obligations of the securities the Company holds.

The Company's privately held debt and equity securities and other investments amounted to $ 4.8 billion as of October 31, 2024 and January 31, 2024.

The Company's privately held equity securities and other investments amounted to $ 4.9 billion and $ 4.8 billion as of April 30, 2025 and January 31, 2025, respectively.

Leases and Other Commitments

The Company has leases for corporate offices, data centers and equipment under noncancellable operating and finance leases with various expiration dates.

Total operating lease costs were $ 162 million and $ 163 million for the three months ended October 31, 2024 and 2023, respectively, and were $ 513 million and $ 823 million for the nine months ended October 31, 2024 and 2023, respectively.

Total operating lease costs were $ 147 million and $ 158 million for the three months ended April 30, 2025 and 2024, respectively.

Included in operating lease costs are amounts related to restructuring charges, which are discussed in Note 8 “Restructuring.”

As of October 31, 2024, the maturities of lease liabilities under noncancellable operating and finance leases were as follows (in millions):

As of April 30, 2025, the maturities of lease liabilities under noncancellable operating and finance leases were as follows (in millions):

Operating Leases Finance Leases

Fiscal Period:

Remaining three months of fiscal 2025 $ 167 $ 91

Remaining nine months of fiscal 2026 $ 502 $ 263

Fiscal 2027 595 265

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Other Balance Sheet Accounts

Accounts payable, accrued expenses and other liabilities as of October 31, 2024 included approximately $ 2.0 billion of accrued compensation as compared to $ 2.5 billion as of January 31, 2024.

Business Combinations

In February 2024, the Company acquired all outstanding stock of Spiff, Inc.

(“Spiff”), an incentive compensation management platform company.

The acquisition date fair value of the consideration transferred for Spiff was $ 419 million, which consisted primarily of $ 374 million in cash.

The Company recorded $ 323 million of goodwill which is primarily attributed to the assembled workforce and expanded market opportunities.

The goodwill associated with the acquisition of Spiff has no basis and is not deductible for U.S.

income tax purposes.

The Company also recorded approximately $ 52 million of intangible assets for developed technology and customer relationships with useful lives of nine and five years , respectively.

The fair values assigned to assets acquired and liabilities assumed are based on management’s estimates and assumptions and may be subject to change as additional information is received and certain tax returns are finalized.

The Company expects to finalize the valuation as soon as practicable, but not later than one year from the acquisition date.

The Company has included the financial results of Spiff, which were not material, in its condensed consolidated financial statements from the date of acquisition.

The transaction costs associated with the acquisition were also not material.

Accounts payable, accrued expenses and other liabilities included approximately $ 1.8 billion and $ 2.8 billion of accrued compensation as of April 30, 2025 and January 31, 2025, respectively.

Intangible Assets Acquired Through Business Combinations and Goodwill

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Remaining Useful Life (Years)

January 31, 2024 Additions and retirements, net October 31, 2024 January 31, 2024 Expense and retirements, net October 31, 2024 January 31, 2024 October 31, 2024 October 31, 2024

January 31, 2025 Additions and retirements, net April 30, 2025 January 31, 2025 Expense and retirements, net April 30, 2025 January 31, 2025 April 30, 2025 April 30, 2025

Acquired developed technology $ 2,958 $ 0 $ 2,958 $ ( 1,753 ) $ ( 162 ) $ ( 1,915 ) $ 1,205 $ 1,043 0.7

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(1) Included in Other are in-place leases, trade names, trademarks and territory rights.

Amortization of intangible assets resulting from business combinations for the three months ended October 31, 2024 and 2023 was $ 354 million and $ 468 million, respectively, and for the nine months ended October 31, 2024 and 2023 was $ 1.3 billion, and $ 1.4 billion, respectively.

The expected future amortization expense for intangible assets as of October 31, 2024 was as follows (in millions):

Amortization of intangible assets resulting from business combinations for the three months ended April 30, 2025 and 2024 was $ 395 million and $ 461 million, respectively.

The expected future amortization expense for intangible assets as of April 30, 2025 was as follows (in millions):

Fiscal Period:

Remaining three months of fiscal 2025 $ 353

Remaining nine months of fiscal 2026 $ 1,134

Fiscal 2027 1,143

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Balance as of January 31, 2025 $ 51,283

Acquisition of Spiff 323

Other acquisitions and adjustments (1) 150

Balance as of October 31, 2024 $ 49,093

(1) Adjustments include the effect of foreign currency translation .

Adjustments (1) ( 2 )

Balance as of April 30, 2025 $ 51,281

(1) Includes the effect of foreign currency translation and measurement period adjustments from prior period acquisitions.

The components of the Company's borrowings were as follows (in millions):

Instrument Date of Issuance Maturity Date Contractual Interest Rate Outstanding Principal as of October 31, 2024

Carrying Value as of October 31, 2024 Carrying Value as of January 31, 2024

2024 Senior Notes (1) July 2021 July 2024 0.625 % 0 0 999

Instrument Date of Issuance Maturity Date Contractual Interest Rate Outstanding Principal as of April 30, 2025

Carrying Value as of April 30, 2025 Carrying Value as of January 31, 2025

2028 Senior Notes April 2018 April 2028 3.70 1,500 1,496 1,496

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Total noncurrent debt $ 8,435 $ 8,433

(1) The Company repaid in full the 2024 Senior Notes in the second quarter of fiscal 2025.

The Company was in compliance with all debt covenants as of October 31, 2024.

The total estimated fair value of the Company's outstanding senior unsecured notes (the “Senior Notes”) above was $ 6.7 billion and $ 7.8 billion as of October 31, 2024 and January 31, 2024 , respectively.

The fair value was determined based on the closing trading price per $ 100 of the Senior Notes as of the last day of trading of the third quarter of fiscal 2025 and the last day of trading of fiscal 2024, respectively, and are deemed Level 2 liabilities within the fair value measurement framework.

The contractual future principal payments for all borrowings as of October 31, 2024 were as follows (in millions):

The Company was in compliance with all debt covenants as of April 30, 2025.

The total estimated fair value of the Company's outstanding senior unsecured notes (the “Senior Notes”) above was $ 6.6 billion as of April 30, 2025 and January 31, 2025 .

The fair value was determined based on the closing trading price per $ 100 of the Senior Notes as of the last day of trading of the first quarter of fiscal 2026 and the last day of trading of fiscal 2025, and are deemed Level 2 liabilities within the fair value measurement framework.

The contractual future principal payments for all borrowings as of April 30, 2025 were as follows (in millions):

Fiscal Period:

Remaining three months of fiscal 2025 $ 0

Remaining nine months of fiscal 2026 $ 0

Fiscal 2027 0

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Total principal outstanding $ 8,500

Interest expense primarily from the Company’s debt instruments for the three months ended April 30, 2025 and 2024 was $ 68 million and $ 69 million, respectively, and is included in other income in the condensed consolidated statements of operations.

Revolving Credit Facility

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The Company may use the proceeds of future borrowings under the Credit Facility for general corporate purposes.

There were no outstanding borrowings under the Credit Facility as of October 31, 2024.

There were no outstanding borrowings under the Credit Facility as of April 30, 2025.

Restructuring

In January 2023, the Company announced a restructuring plan (the “Restructuring Plan”) intended to reduce operating costs, improve operating margins and continue advancing the Company’s ongoing commitment to profitable growth.

This plan included a reduction of the Company’s workforce and select real estate exits and office space reductions within certain markets.

The actions associated with the employee restructuring under the Restructuring Plan were substantially completed in fiscal 2024 and the actions associated with the real estate portion of the Restructuring Plan are expected to be substantially complete in fiscal 2026.

In the first nine months of fiscal 2025, the Company approved restructuring initiatives focused on driving further operational efficiencies, optimizing our management structure and increasing cost optimization efforts to realize long-term

sustainable growth through a targeted workforce reduction.

The actions associated with these initiatives are expected to be substantially complete in fiscal 2025.

The following tables summarize the activities related to the Company’s restructuring initiatives for the three and nine months ended October 31, 2024 and 2023 (in millions):

Three Months Ended October 31, 2024 Nine Months Ended October 31, 2024

Workforce Reduction Office Space Reductions Total Workforce Reduction Office Space Reductions Total

Liability, beginning of the period $ 69 $ 0 $ 69 $ 118 $ 2 $ 120

Charges 47 9 56 117 46 163

Payments ( 39 ) 0 ( 39 ) ( 156 ) ( 2 ) ( 158 )

Non-cash items 0 ( 9 ) ( 9 ) ( 2 ) ( 46 ) ( 48 )

Liability, end of the period $ 77 $ 0 $ 77 $ 77 $ 0 $ 77

Three Months Ended October 31, 2023 Nine Months Ended October 31, 2023

Workforce Reduction Office Space Reductions Total Workforce Reduction Office Space Reductions Total

Liability, beginning of the period $ 117 $ 0 $ 117 $ 607 $ 0 $ 607

Charges 47 8 55 436 379 815

Payments ( 103 ) ( 25 ) ( 128 ) ( 963 ) ( 27 ) ( 990 )

Non-cash items 0 20 20 ( 19 ) ( 349 ) ( 368 )

Liability, end of the period $ 61 $ 3 $ 64 $ 61 $ 3 $ 64

The liability for restructuring charges, which is related to workforce and office space reductions, is included in accounts payable, accrued expenses and other liabilities on the condensed consolidated balance sheets.

The charges reflected in the tables above related to workforce reduction included charges for employee transition, severance payments, employee benefits and share-based compensation.

The charges reflected in the tables above related to office space reductions included exit charges associated with those reductions.

Beginning in fiscal 2023, the Company has undertaken various restructuring initiatives to improve operating margins and continue advancing its ongoing commitment to profitable growth, which have included a reduction of the Company’s workforce and office space reductions within certain markets.

The Company continues to evaluate and operationalize future programs to drive further operational efficiencies, optimize its management structure and increase cost optimization efforts to realize long-term sustainable growth.

During the three months ended April 30, 2025 and 2024, the Company recognized $ 36 million and $ 8 million in restructuring charges, respectively, which was substantially related to workforce reductions that include charges for employee transition, severance payments, employee benefits and stock-based compensation.

Stockholders’ Equity

Stock option activity for the nine months ended October 31, 2024 was as follows:

Stock option activity for the three months ended April 30, 2025 was as follows:

Options Outstanding

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Exercised ( 1 ) 179.79

Balance as of October 31, 2024 9 $ 192.60 $ 965

Balance as of April 30, 2025 7 $ 204.09 $ 527

Vested or expected to vest 7 $ 203.33 $ 522

Exercisable as of October 31, 2024 7 $ 181.72 $ 762

Restricted stock activity for the nine months ended October 31, 2024 was as follows:

Exercisable as of April 30, 2025 6 $ 192.81 $ 441

Restricted stock activity for the three months ended April 30, 2025 was as follows:

Restricted Stock Outstanding

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Granted - restricted stock units and awards 9 280.81

Granted - performance-based stock units 1 290.64

Granted - performance-based restricted stock units 2 273.56

Canceled ( 1 ) 246.06

Vested and converted to shares ( 6 ) 256.18

Balance as of October 31, 2024 28 $ 245.96 $ 8,181

Balance as of April 30, 2025 30 $ 260.00 $ 8,102

Expected to vest 26 $ 6,870

The aggregate expected stock-based compensation expense remaining to be recognized as of October 31, 2024 was as follows (in millions):

The aggregate expected stock-based compensation expense remaining to be recognized as of April 30, 2025 was as follows (in millions):

Fiscal Period:

Remaining three months of fiscal 2025 $ 844

Remaining nine months of fiscal 2026 $ 2,409

Fiscal 2027 2,435

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Total stock-based compensation expense $ 7,599

The aggregate expected stock-based compensation expense remaining to be recognized reflects only outstanding stock awards as of October 31, 2024 and assumes no forfeiture activity and no changes in the expected level of attainment of performance share grants based on the Company’s financial performance relative to certain targets.

The aggregate expected stock-based compensation expense remaining to be recognized reflects only outstanding stock awards as of April 30, 2025 and assumes no forfeiture activity and no changes in the expected level of attainment of performance share grants based on the Company’s financial performance relative to certain targets.

Share Repurchase Program

In August 2022, the Board of Directors authorized a program to repurchase up to $ 10.0 billion of the Company’s common stock (the “Share Repurchase Program”).

In February 2023, the Board of Directors authorized an additional $ 10.0 billion in repurchases under the Share Repurchase Program.

In February 2024, the Board of Directors authorized an additional $ 10.0 billion in repurchases under the Share Repurchase Program for an aggregate total authorization of $ 30.0 billion.

The Company’s Board of Directors (the “Board”) authorized a program to repurchase shares of the Company's common stock (the "Share Repurchase Program"), which commenced in August 2022 and had additional authorizations approved by the Board in February 2023 and February 2024, for an aggregate total authorization of $ 30.0 billion.

The Share Repurchase Program does not have a fixed expiration date and does not obligate the Company to acquire any specific number of shares.

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Three months ended April 30 10 $ 273.42 $ 2,681 7 $ 293.00 $ 2,168

Three months ended July 31 18 $ 246.14 $ 4,288 9 $ 211.83 $ 1,913

Three months ended October 31 5 $ 257.00 $ 1,228 9 $ 209.33 $ 1,924

All repurchases were made in open market transactions.

As of October 31, 2024, the Company was authorized to purchase a remaining $ 10.6 billion of its common stock under the Share Repurchase Program.

The Company announced the following dividends (in millions, except dividend per share):

As of April 30, 2025, the Company was authorized to purchase a remaining $ 7.9 billion of its common stock under the Share Repurchase Program.

The Company announced the following dividends:

Record Date Payment Date Dividend per Share Amount

March 14, 2024 April 11, 2024 $ 0.40 $ 388

July 9, 2024 July 25, 2024 $ 0.40 $ 388

September 18, 2024 October 8, 2024 $ 0.40 $ 385

(in millions)

Three months ended April 30, 2025 April 10, 2025 April 24, 2025 $ 0.416 $ 406

Three months ended April 30, 2024 March 14, 2024 April 11, 2024 $ 0.40 $ 388

Effective Tax Rate

The Company computes its year-to-date provision for income taxes by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusts the provision for discrete tax items recorded in the period.

For the nine months ended October 31, 2024, the Company reported a tax provision of $ 961 million on pretax income of $ 5.5 billion, which resulted in an effective tax rate of 18 percent.

For the three months ended April 30, 2025, the Company reported a tax provision of $ 433 million on pretax income of $ 2.0 billion, which resulted in an effective tax rate of 22 percent.

The Company’s effective tax rate differed from the U.S.

statutory rate of 21 percent primarily due to research and development credits, the foreign-derived intangible income deduction, and excess tax benefits from stock-based compensation.

For the nine months ended October 31, 2023, the Company reported a tax provision of $ 615 million on pretax income of $ 3.3 billion, which resulted in an effective tax rate of 19 percent.

statutory rate of 21 percent primarily due to state and local taxes and non-deductible items, partially offset by research and development credits.

For the three months ended April 30, 2024, the Company reported a tax provision of $ 334 million on pretax income of $ 1.9 billion, which resulted in an effective tax rate of 18 percent.

The Company’s effective tax rate differed from the U.S.

statutory rate of 21 percent primarily due to discrete benefits from research and development credits, foreign tax credits attributable to the IRS Notice 2023-55, and certain adjustments resulted from a transfer pricing agreement in a foreign tax jurisdiction, partially offset by profitable jurisdictions outside of the United States subject to tax rates greater than 21 percent and withholding taxes.

statutory rate of 21 percent primarily due to research and development credits and excess tax benefits from stock-based compensation.

Unrecognized Tax Benefits and Other Considerations

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Tax positions for the Company and its subsidiaries are subject to income tax audits by multiple tax jurisdictions throughout the world.

Certain prior year tax returns are currently being examined by various taxing authorities in countries including the United States, Germany, France, Israel, and India.

Certain prior year tax returns are currently being examined by various taxing authorities in countries including the United States, Germany, Israel, and India.

The Company believes that it has provided adequate reserves for its income tax uncertainties in all open tax years.

As the outcome of the tax audits cannot be predicted with certainty, if any issues arising in the Company’s tax audits progress in a manner inconsistent with management's expectations, the Company could adjust its provision for income taxes in the future.

In addition, the Company anticipates it is reasonably possible that an insignificant decrease of its unrecognized tax benefits may occur in the next 12 months, as the applicable statutes of limitations lapse, ongoing examinations are completed, or tax positions meet the conditions of being effectively settled.

As the outcome of the tax audits cannot be predicted with certainty, if any issues addressed in the Company’s tax audits are resolved in a manner inconsistent with management's expectations, the Company could adjust its provision for income taxes in the future.

The Company anticipates it is reasonably possible that an insignificant decrease of its unrecognized tax benefits may occur in the next 12 months, as the applicable statutes of limitations lapse, ongoing examinations are completed, or tax positions meet the conditions of being effectively settled.

Net Income Per Share

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A reconciliation of the denominator used in the calculation of basic and diluted net income per share is as follows (in millions):

3 Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

1 Three Months Ended April 30,

Net income $ 1,541 $ 1,533

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The effects of these potentially outstanding shares were not included in the calculation of diluted net income per share because the effect would have been anti-dilutive (in millions):

Three Months Ended October 31, Nine Months Ended October 31,

2024 2023 2024 2023

Three Months Ended April 30,

Employee stock awards 2 5

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Oral argument was heard in May 2021.

On September 20, 2021, the

Ninth Circuit affirmed the district court’s ruling.

On September 20, 2021, the Ninth Circuit affirmed the district court’s ruling.

Slack filed a petition for rehearing with the Ninth Circuit on November 3, 2021, which was denied on May 2, 2022.

Slack filed a petition for a writ of certiorari with the U.S.

Supreme Court on August 31, 2022, which was granted on December 13, 2022.

Supreme Court on August

31, 2022, which was granted on December 13, 2022.

On June 1, 2023, the Supreme Court issued a unanimous decision vacating the Ninth Circuit’s decision and remanded for further proceedings.

The Ninth Circuit ordered the parties to submit additional briefing in light of the Supreme Court’s decision.

That briefing has concluded, and the parties await rulings from the Ninth Circuit.

On February 10, 2025, the Ninth Circuit issued an opinion reversing the district court’s order and instructing the district court to dismiss the complaint with prejudice.

The plaintiff indicated that he intends to file a petition for a writ of certiorari with the U.S.

Supreme Court, which is due July 10, 2025.

The state court actions were consolidated in November 2019, and the consolidated action is captioned In re Slack Technologies, Inc.

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The Federal Action and the State Court Action seek unspecified monetary damages and other relief on behalf of investors who purchased Slack’s Class A common stock issued pursuant and/or traceable to the Registration Statement.

Backpage Litigation

The Company has been named as a defendant in a number of state and federal actions relating to the activities of one of its former customers, Website Technologies, LLC (“Website Technologies”), an affiliate of Backpage.com, LLC (“Backpage”).

Plaintiffs in these actions generally allege that they were victims of sex trafficking by individuals who advertised them on backpage.com, a website operated by Backpage, and assert various claims and theories premised on the Company’s provision to Website Technologies of Salesforce CRM Software and related products, which the plaintiffs allege facilitated the operation and growth of Backpage’s business.

The initial action, filed in the Superior Court of California for the County of San Francisco on behalf of numerous plaintiffs, was dismissed with prejudice under Section 230 of the Communications Decency Act (“Section 230”), and that dismissal was affirmed by the California Court of Appeal in December 2021.

In April 2020, an action was filed on behalf of a single plaintiff in the U.S.

District Court for the Northern District of Illinois.

The district court granted the Company’s motion to dismiss the action, and the Seventh Circuit Court of Appeals reversed that ruling in August 2023.

The court has scheduled trial in that matter for June 2026.

Beginning in April 2020, five actions involving six plaintiffs were filed and consolidated in the U.S.

District Court for the Southern District of Texas as A.B.

Salesforce, Inc., Case No.

4:20-CV-01254.

The Company moved for summary judgment on the basis that the claims were barred by Section 230.

In November 2023, the court denied the Company’s motion and in December 2024, the Fifth Circuit Court of Appeals affirmed that ruling.

Beginning in May 2023, a number of similar actions have been filed in Texas federal and state courts, including principally:

(1) 30 actions filed in the U.S.

District Court for the Northern District of Texas, which were consolidated as S.M.A.

Salesforce, Inc., Case No.

3:23-CV-0915-B (“S.M.A”);

(2) 21 actions filed in Texas state court in Dallas County, which were removed by the Company to the Northern District of Texas, and consolidated as A.S.

Salesforce, Inc., Case No.

3:23-CV-1039-B (“A.S.”);

and (3) one action filed in Texas state court in Harris County, which was removed to the U.S.

District Court for the Southern District of Texas as T.S.

Salesforce, Inc., Case No.

4:23-CV-01792 (“T.S.”).

Separately, 19 actions have been filed in Texas state court, which are proceeding in a Texas state court multidistrict litigation in Harris County District Court, captioned In re Jane Doe Cases, MDL 2020-28545.

In March 2024, the district court in S.M.A.

granted the Company’s consolidated motion to dismiss the complaint on the ground that plaintiffs had not alleged the requisite intent element under the federal trafficking statute, and in April 2024 an amended complaint was filed amending the federal law claim and adding a Texas state law claim.

In May 2024, the Company moved to dismiss the amended complaint.

In March 2025, the district court granted the motion as to the Texas state law claims and denied the motion as to the federal law claims.

The Company has filed a motion for reconsideration of the latter ruling as it relates to 29 of the 30 plaintiffs, and that motion remains pending.

In September 2024, the district court in A.S.

denied the Company’s motion to dismiss and then scheduled trial for January 2026.

In November 2024, the Company moved for judgment on the pleadings in A.S.

In May 2025, the district court granted that motion with leave to amend the complaint.

In June 2023, the Company moved to dismiss the T.S.

action, and that motion remains pending.

Plaintiffs’ counsel in these actions have stated that they represent several hundred additional possible claimants.

All of the foregoing actions seek unspecified monetary damages, attorneys’ fees, and costs.

The Company intends to defend its interests in these proceedings vigorously.

Subsequent Events

In November 2024, the Company acquired all outstanding stock of Zoomin Software Ltd.

(“Zoomin”), a data management company.

Prior to the acquisition, the Company owned less than ten percent of the outstanding stock of Zoomin.

The total consideration for the remaining shares of Zoomin was approximately $ 344 million in cash, subject to customary purchase price adjustments.

In November 2024, the Company acquired all outstanding stock of Own Data Company Ltd.

(“Own”), a leading provider of data protection and data management solutions.

Prior to the acquisition, the Company owned approximately ten percent of the outstanding stock of Own.

The total consideration for the remaining shares of Own was approximately $ 1.9 billion in cash, subject to customary purchase price adjustments.

In May 2025, the Company entered into a definitive agreement to acquire Informatica Inc.

(“Informatica”), an AI-powered enterprise cloud data management platform.

Under the terms of the agreement, holders of Informatica’s Class A and Class B-1 common stock will receive $ 25 in cash per share and the Company will acquire all outstanding shares of common stock of Informatica that it does not already own.

The transaction represents an equity value of approximately $ 8 billion, net of the Company’s current investment in Informatica.

The agreement also provides for the Company’s assumption of unvested equity awards held by Informatica employees.

The Company expects to fund the transaction with a combination of new debt and cash on the Company’s balance sheet.

The transaction is expected to close early in fiscal 2027, subject to the receipt of required regulatory clearances and satisfaction of other customary closing conditions.

Stockholders holding in aggregate approximately 63 percent of the voting power of Informatica Class A and Class B-1 common stock have delivered a written consent approving the transaction.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements