Salesforce, Inc. 10-Q

ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Salesforce, Inc. Condensed Consolidated Balance Sheets (in millions) July 31, 2025 January 31, 2025 Assets (unaudited) Current assets: Cash and cash equivalents $ 10,365 $ 8,848 Marketable securities 5,007 5,184 Accounts receivable, net 5,596 11,945 Costs capitalized to obtain revenue contracts, net 1,862 1,971 Prepaid expenses and other current assets 2,501 1,779 Total current assets 25,331 29,727 Property and equipment, net 3,154 3,236 Operating lease right-of-use assets, net 2,028 2,157 Noncurrent costs capitalized to obtain revenue contracts, net 2,266 2,475 Strategic investments 5,085 4,852 Goodwill 51,438 51,283 Intangible assets acquired through business combinations, net 3,669 4,428 Deferred tax assets and other assets, net 4,602 4,770 Total assets $ 97,573 $ 102,928 Liabilities and stockholders’ equity Current liabilities: Accounts payable, accrued expenses and other liabilities $ 5,397 $ 6,658 Operating lease liabilities, current 580 579 Unearned revenue 16,555 20,743 Total current liabilities 22,532 27,980 Noncurrent debt 8,436 8,433 Noncurrent operating lease liabilities 2,221 2,380 Other noncurrent liabilities 3,056 2,962 Total liabilities 36,245 41,755 Stockholders’ equity: Common stock 1 1 Treasury stock, at cost ( 24,408 ) ( 19,507 ) Additional paid-in capital 66,701 64,576 Accumulated other comprehensive income (loss) 47 ( 266 ) Retained earnings 18,987 16,369 Total stockholders’ equity 61,328 61,173 Total liabilities and stockholders’ equity $ 97,573 $ 102,928 See accompanying Notes. 3 Table of Contents Salesforce, Inc. Condensed Consolidated Statements of Operations (in millions, except per share data) (unaudited) 2 Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 Revenues: Subscription and support $ 9,690 $ 8,764 $ 18,987 $ 17,349 Professional services and other 546 561 1,078 1,109 Total revenues 10,236 9,325 20,065 18,458 Cost of revenues (1)(2): Subscription and support 1,645 1,556 3,256 3,116 Professional services and other 597 603 1,251 1,205 Total cost of revenues 2,242 2,159 4,507 4,321 Gross profit 7,994 7,166 15,558 14,137 Operating expenses (1)(2): Research and development 1,481 1,349 2,941 2,717 Sales and marketing 3,443 3,224 6,872 6,463 General and administrative 734 711 1,431 1,358 Restructuring 4 99 40 107 Total operating expenses 5,662 5,383 11,284 10,645 Income from operations 2,332 1,783 4,274 3,492 Gains (losses) on strategic investments, net 6 ( 37 ) ( 57 ) 0 Other income 68 91 163 212 Income before provision for income taxes 2,406 1,837 4,380 3,704 Provision for income taxes ( 519 ) ( 408 ) ( 952 ) ( 742 ) Net income $ 1,887 $ 1,429 $ 3,428 $ 2,962 Basic net income per share $ 1.97 $ 1.48 $ 3.58 $ 3.06 Diluted net income per share $ 1.96 $ 1.47 $ 3.55 $ 3.03 Shares used in computing basic net income per share 956 964 958 967 Shares used in computing diluted net income per share 962 973 966 979 (1) Amounts include amortization of intangible assets acquired through business combinations, as follows: Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 Cost of revenues $ 150 $ 231 $ 312 $ 469 Sales and marketing 230 223 463 446 (2) Amounts include stock-based compensation expense, as follows: Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 Cost of revenues $ 126 $ 132 $ 277 $ 251 Research and development 280 276 555 536 Sales and marketing 293 309 578 599 General and administrative 94 91 182 172 Restructuring 0 2 15 2 See accompanying Notes. 4 Table of Contents Salesforce, Inc. Condensed Consolidated Statements of Comprehensive Income (in millions) (unaudited) 2 Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 Net income $ 1,887 $ 1,429 $ 3,428 $ 2,962 Other comprehensive income (loss), net of reclassification adjustments: Foreign currency translation and other gains (losses) 180 ( 4 ) 290 ( 27 ) Unrealized gains (losses) on marketable securities ( 3 ) 48 28 18 Other comprehensive income (loss), before tax 177 44 318 ( 9 ) Tax effect 0 ( 10 ) ( 5 ) ( 2 ) Other comprehensive income (loss), net 177 34 313 ( 11 ) Comprehensive income $ 2,064 $ 1,463 $ 3,741 $ 2,951 See accompanying Notes. 5 Table of Contents Salesforce, Inc. Condensed Consolidated Statements of Stockholders’ Equity (in millions) (unaudited) Three and Six Months Ended July 31, 2025 Common Stock Treasury Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Total Stockholders’ Equity Shares Amount Shares Amount Balance at January 31, 2025 1,056 $ 1 ( 94 ) $ ( 19,507 ) $ 64,576 $ ( 266 ) $ 16,369 $ 61,173 Common stock issued 6 0 0 0 97 0 0 97 Common stock repurchased 0 0 ( 10 ) ( 2,692 ) 0 0 0 ( 2,692 ) Stock-based compensation 0 0 0 0 817 0 0 817 Other comprehensive income, 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 0 427 0 0 427 Common stock withheld related to net share settlement of equity awards 0 0 0 0 ( 12 ) 0 0 ( 12 ) Common stock repurchased 0 0 ( 8 ) ( 2,209 ) 0 0 0 ( 2,209 ) Stock-based compensation 0 0 0 0 796 0 0 796 Other comprehensive income, net of tax 0 0 0 0 0 177 0 177 Cash dividends and dividend equivalents declared 0 0 0 0 0 0 ( 404 ) ( 404 ) Net income 0 0 0 0 0 0 1,887 1,887 Balance at July 31, 2025 1,067 1 ( 112 ) ( 24,408 ) 66,701 47 18,987 61,328 Three and Six Months Ended July 31, 2024 Common Stock Treasury Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Retained Earnings Total Stockholders’ Equity Shares Amount Shares Amount Balance at January 31, 2024 1,035 $ 1 ( 64 ) $ ( 11,692 ) $ 59,841 $ ( 225 ) $ 11,721 $ 59,646 Common stock issued 7 0 0 0 352 0 0 352 Common stock repurchased 0 0 ( 7 ) ( 2,168 ) 0 0 0 ( 2,168 ) Stock-based compensation 0 0 0 0 753 0 0 753 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 ) Net income 0 0 0 0 0 0 1,533 1,533 Balance at April 30, 2024 1,042 $ 1 ( 71 ) $ ( 13,860 ) $ 60,946 $ ( 270 ) $ 12,866 $ 59,683 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 See accompanying Notes. 6 Table of Contents Salesforce, Inc. Condensed Consolidated Statements of Cash Flows (in millions) (unaudited) 2 Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 Operating activities: Net income $ 1,887 $ 1,429 $ 3,428 $ 2,962 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization (1) 817 907 1,660 1,786 Amortization of costs capitalized to obtain revenue contracts, net 544 526 1,089 1,043 Stock-based compensation expense 793 810 1,607 1,560 (Gains) losses on strategic investments, net ( 6 ) 37 57 0 Changes in assets and liabilities, net of business combinations: Accounts receivable, net ( 1,242 ) ( 1,136 ) 6,349 6,026 Costs capitalized to obtain revenue contracts, net ( 406 ) ( 427 ) ( 771 ) ( 675 ) Prepaid expenses and other current assets and other assets ( 32 ) ( 477 ) ( 513 ) ( 991 ) Accounts payable and accrued expenses and other liabilities ( 217 ) 220 ( 1,224 ) ( 535 ) Operating lease liabilities ( 154 ) ( 158 ) ( 278 ) ( 243 ) Unearned revenue ( 1,244 ) ( 839 ) ( 4,188 ) ( 3,794 ) Net cash provided by operating activities 740 892 7,216 7,139 Investing activities: Business combinations, net of cash acquired ( 54 ) 0 ( 54 ) ( 338 ) Purchases of strategic investments ( 174 ) ( 104 ) ( 323 ) ( 307 ) Sales of strategic investments 38 52 44 105 Purchases of marketable securities ( 1,118 ) ( 550 ) ( 3,204 ) ( 3,802 ) Sales of marketable securities 1,179 2,482 1,584 3,098 Maturities of marketable securities 1,429 898 1,865 1,534 Capital expenditures ( 135 ) ( 137 ) ( 314 ) ( 300 ) Net cash provided by (used in) investing activities 1,165 2,641 ( 402 ) ( 10 ) Financing activities: Repurchases of common stock ( 2,225 ) ( 4,335 ) ( 4,858 ) ( 6,468 ) Payments for taxes related to net share settlement of equity awards ( 12 ) 0 ( 12 ) 0 Proceeds from employee stock plans 232 202 526 735 Principal payments on financing obligations ( 99 ) ( 285 ) ( 278 ) ( 405 ) Repayments of debt 0 ( 1,000 ) 0 ( 1,000 ) Payments of dividends and dividend equivalents ( 399 ) ( 384 ) ( 801 ) ( 772 ) Net cash used in financing activities ( 2,503 ) ( 5,802 ) ( 5,423 ) ( 7,910 ) Effect of exchange rate changes 35 ( 7 ) 126 ( 9 ) Net increase (decrease) in cash and cash equivalents ( 563 ) ( 2,276 ) 1,517 ( 790 ) Cash and cash equivalents, beginning of period 10,928 9,958 8,848 8,472 Cash and cash equivalents, end of period $ 10,365 $ 7,682 $ 10,365 $ 7,682 (1) Includes amortization of intangible assets acquired through business combinations, depreciation of fixed assets and amortization and impairment of right-of-use assets. See accompanying Notes. 7 Table of Contents Salesforce, Inc. Condensed Consolidated Statements of Cash Flows Supplemental Cash Flow Disclosure (in millions) (unaudited) Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 Supplemental cash flow disclosure: Cash paid during the period for: Interest $ 87 $ 90 $ 115 $ 118 Income taxes, net of tax refunds $ 891 $ 823 $ 990 $ 917 See accompanying Notes. 8 Table of Contents Salesforce, Inc. Notes to Condensed Consolidated Financial Statements 1. Summary of Business and Significant Accounting Policies Description of Business Salesforce, Inc. (the “Company”) is a global leader in customer relationship management technology that brings companies and customers together. 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. Agentforce includes a suite of customizable agents for use across sales, service, marketing and commerce. Since its founding in 1999, the Company has pioneered innovations in cloud, mobile, social, analytics and AI, enabling companies of every size and industry to transform their businesses in the digital-first world. Fiscal Year The Company’s fiscal year ends on January 31. References to fiscal 2026, for example, refer to the fiscal year ending January 31, 2026. Basis of Presentation The accompanying condensed consolidated balance sheet as of July 31, 2025 and the condensed consolidated statements of operations, comprehensive income, stockholders' equity and cash flows for the three and six months ended July 31, 2025 and 2024, are unaudited. These financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the financial information and footnotes required by U.S. 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 July 31, 2025 and its results of operations, including its comprehensive income, stockholders' equity and cash flows for the three and six months ended July 31, 2025 and 2024. All adjustments are of a normal recurring nature. The results for the three and six months ended July 31, 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. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions in the Company’s condensed consolidated financial statements and notes thereto. Significant estimates and assumptions made by management include the determination of: • the standalone selling price (“SSP”) of performance obligations for revenue contracts with multiple performance obligations; • the valuation of privately-held strategic investments; • the fair value of assets acquired and liabilities assumed for business combinations; • the recognition, measurement and valuation of current and deferred income taxes and uncertain tax positions; • the useful lives of intangible assets; and • the fair value of certain stock awards issued. Actual results could differ materially from these estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, which forms the basis for making judgments about the carrying values of assets and liabilities as well as income and expenses to be recognized. Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. 9 Table of Contents Segments 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”), 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 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 The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities and accounts receivable. The Company monitors and manages the overall exposure of its cash balances to individual financial institutions on an ongoing basis. The Company’s marketable securities portfolio consists primarily of investment-grade securities and the Company’s policies limit the amount of credit exposure to any one issuer. The Company does not require collateral for accounts receivable. The Company maintains an allowance for its doubtful accounts receivable for estimated credit losses. This allowance is based upon historical loss patterns, the number of days that billings are past due, an evaluation of the potential risk of loss associated with delinquent accounts and current market conditions and reasonable and supportable forecasts of future economic conditions to inform adjustments to historical loss patterns. The Company records the allowance against bad debt expense through the condensed consolidated statements of operations, included in general and administrative expense, up to the amount of revenues recognized to date. Any incremental allowance is recorded as an offset to unearned revenue on the condensed consolidated balance sheets. 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 July 31, 2025 and January 31, 2025. No single customer accounted for ten percent or more of total revenue during the three and six months ended July 31, 2025 and 2024. As of July 31, 2025 and January 31, 2025, assets located outside the Americas were 15 percent and 17 percent of total assets, respectively. As of July 31, 2025 and January 31, 2025, assets located in the United States were 84 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 July 31, 2025, the Company held three investments, all privately held, with carrying values that were individually greater than five percent of its total strategic investments portfolio and represented approximately 18 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 The Company derives its revenues from two sources: (1) subscription and support revenues and (2) professional services and other revenues. 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. Revenue is recognized upon transfer of control of promised products and services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. If the consideration promised in a contract includes a variable amount, for example, overage fees, contingent fees or service level penalties, the Company includes an estimate of the amount it expects to receive for the total transaction price if it is probable that a significant reversal of cumulative revenue recognized will not occur. The Company determines the amount of revenue to be recognized through the application of the following steps: 10 Table of Contents • identification of the contract, or contracts, with a customer; • identification of the performance obligations in the contract; • determination of the transaction price; • allocation of the transaction price to the performance obligations in the contract; and • recognition of revenue when or as the Company satisfies the performance obligations. Subscription and Support Revenues Subscription and support revenues are comprised of fees that provide customers with access to Cloud Services, software licenses and related support and updates during the term of the arrangement. Cloud Services allow customers to use the Company's multi-tenant software without taking possession of the software. Revenue is generally recognized ratably over the contract term. Substantially all of the Company’s subscription service arrangements are noncancellable and do not contain refund-type provisions. Subscription and support revenues also include revenues associated with term software licenses that provide the customer with a right to use the software as it exists when made available. Revenues from term software licenses are generally recognized at the point in time when the software is made available to the customer. Revenue from software support and updates is recognized as the support and updates are provided, which is generally ratably over the contract term. The Company typically invoices its customers annually and its payment terms provide that customers pay within 30 days of invoice. Amounts that have been invoiced are recorded in accounts receivable and in unearned revenue or revenue, depending on whether transfer of control to customers has occurred. Professional Services and Other Revenues The Company’s professional services contracts are either on a time and materials, fixed price or subscription basis. These revenues are recognized as the services are rendered for time and materials contracts, on a proportional performance basis for fixed price contracts or ratably over the contract term for subscription professional services contracts. Other revenues consist primarily of training revenues recognized as such services are performed. Significant Judgments - Contracts with Multiple Performance Obligations The Company enters into contracts with its customers that may include promises to transfer multiple performance obligations such as Cloud Services, software licenses, support and updates and professional services. A performance obligation is a promise in a contract with a customer to transfer products or services that are concluded to be 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. Cloud Services, software licenses and support and updates services are generally concluded to be distinct because such offerings are often sold separately. In determining whether professional services are distinct, the Company considers the following factors for each professional services agreement: availability of the services from other vendors, the nature of the professional services, the timing of when the professional services contract was signed in comparison to the subscription start date and the contractual dependence of the service on the customer’s satisfaction with the professional services work. To date, the Company has concluded that professional services included in contracts with multiple performance obligations are distinct. The Company allocates the transaction price to each performance obligation on a relative SSP basis. The SSP is the price at which the Company would sell a promised product or service separately to a customer. Judgment is required to determine the SSP for each distinct performance obligation. The Company determines SSP by considering its overall pricing objectives and market conditions. Significant pricing practices taken into consideration include the Company’s discounting practices, the size and volume of the Company’s transactions, the customer demographic, the geographic area where services are sold, price lists, the Company's go-to-market strategy, historical and current sales and contract prices. In instances where the Company does not sell or price a product or service separately, the Company maximizes the use of observable inputs by using information that may include market conditions. As the Company’s go-to-market strategies evolve, the Company may modify its pricing practices in the future, which could result in changes to SSP. In certain cases, the Company is able to establish SSP based on observable prices of products or services sold or priced separately in comparable circumstances to similar customers. The Company uses a single amount to estimate SSP when indicated by the distribution of its observable prices. Alternatively, the Company uses a range of amounts to estimate SSP when the pricing practices or distribution of the observable prices are highly variable. The Company typically has more than one SSP for individual products and services due to the stratification of those products and services by customer size and geography. 11 Table of Contents Costs Capitalized to Obtain Revenue Contracts The Company capitalizes incremental costs of obtaining revenue contracts related to noncancellable Cloud Services subscription, ongoing Cloud Services support and license support and updates. For contracts with term software licenses where revenue is recognized upfront when the software is made available to the customer, costs allocable to those licenses are expensed as they are incurred. 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. 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. In arriving at this average period of benefit, the Company evaluates both qualitative and quantitative factors which included the estimated life cycles of its offerings and its customer attrition. Additionally, the Company amortizes capitalized costs for renewals and success fees paid to partners over two years . The capitalized amounts are recoverable through future revenue streams under all noncancellable customer contracts. The Company periodically evaluates whether there have been any changes in its business, the market conditions in which it operates or other events which would indicate that its amortization period should be changed or if there are potential indicators of impairment. 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 six months ended July 31, 2025 and 2024. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are stated at fair value. Marketable Securities The Company considers all of its marketable debt securities as available for use in current operations, including those with maturity dates beyond one year, and therefore classifies these securities within current assets on the condensed consolidated balance sheets. Securities are classified as available for sale and are carried at fair value, with the change in unrealized gains and losses, net of tax, reported as a separate component on the condensed consolidated statements of comprehensive income until realized. Fair value is determined based on quoted market rates when observable or utilizing data points that are observable, such as quoted prices, interest rates and yield curves. Securities with an amortized cost basis in excess of estimated fair value are assessed to determine what amount of the excess, if any, is caused by expected credit losses. Expected credit losses on securities are recognized in other income on the condensed consolidated statements of operations and any remaining unrealized losses, net of taxes, are included in accumulated other comprehensive income (loss) in stockholders' equity. For the purposes of computing realized and unrealized gains and losses, the cost of securities sold is based on the specific-identification method. Interest on securities classified as available for sale is included as a component of investment income within other income on the condensed consolidated statements of operations. Strategic Investments 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 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. In determining the estimated fair value of its strategic investments in privately held companies, the Company utilizes the most recent data available to the Company. 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, 12 Table of Contents 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 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 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.” Derivative Financial Instruments The Company enters into foreign currency derivative contracts with financial institutions to reduce foreign exchange risk associated with intercompany transactions and other monetary assets or liabilities denominated in currencies other than the functional currency of a subsidiary. The Company uses forward currency derivative contracts, which are not designated as hedging instruments, to minimize the Company’s exposure to balances primarily denominated in the Euro, British Pound Sterling, Canadian Dollar, Australian Dollar, Brazilian Real and Japanese Yen. The Company’s derivative financial instruments program is not designated for trading or speculative purposes. The Company generally enters into master netting arrangements with the financial institutions with which it contracts for such derivatives, which permit net settlement of transactions with the same counterparty, thereby reducing risk of credit-related losses from a financial institutions' nonperformance. 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 July 31, 2025 and January 31, 2025 was $ 12.7 billion and $ 10.7 billion, respectively. Outstanding foreign currency derivative contracts are recorded at fair value on the condensed consolidated balance sheets. Unrealized gains or losses due to changes in the fair value of these derivative contracts, as well as realized gains or losses from their net settlement, are recognized as other income in the condensed consolidated statements of operations consistent with the offsetting gains or losses resulting from the remeasurement or settlement of the underlying foreign currency denominated receivables and payables. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated on a straight-line basis over the estimated useful lives of those assets as follows: Buildings and building improvements 10 to 40 years Computers, equipment and software 3 to 5 years Furniture and fixtures 5 years Leasehold improvements Shorter of the estimated lease term or 10 years The Company estimates the useful lives of property and equipment upon initial recognition and periodically evaluates the useful lives and whether events or changes in circumstances warrant a revision to the useful lives. 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. Leases 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. Operating leases are included in operating lease right-of-use (“ROU”) assets and current and noncurrent operating lease liabilities on the Company’s condensed consolidated balance sheets. Assets (also referred to as ROU assets) and liabilities recognized from finance leases are included in property and equipment, accrued expenses and other liabilities and other noncurrent liabilities, respectively, on the Company’s condensed consolidated balance sheets. ROU assets represent the Company's right to use an underlying asset for the lease term. The corresponding lease liabilities represent its obligation to make lease payments arising from the lease. The Company does not recognize ROU assets or lease liabilities for leases with a term of 12 months or less for any asset classes. 13 Table of Contents Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement, net of any future tenant incentives. The Company has lease agreements which contain both lease and non-lease components, which it has elected to combine for all asset classes. As such, minimum lease payments include fixed payments for non-lease components within a lease agreement but exclude variable lease payments not dependent on an index or rate, such as common area maintenance, operating expenses, utilities, or other costs that are subject to fluctuation from period to period. The Company’s lease terms may include options to extend or terminate the lease. 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. 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. The Company's incremental borrowing rate is an estimate of the interest rate the Company would have to pay to borrow on a collateralized basis with similar terms and payments, in the economic environment where the leased asset is located. The lease ROU asset is recognized based on the lease liability, adjusted for any rent payments or initial direct costs incurred or tenant incentives received prior to commencement. Lease expense for operating leases, which includes amortization expense of ROU assets, is recognized on a straight-line basis over the lease term. Amortization expense of finance lease ROU assets is recognized on a straight-line basis over the lease term and interest expense for finance lease liabilities is recognized based on the incremental borrowing rate. Expense for variable lease payments is recognized as incurred. On the lease commencement date, the Company also establishes assets and liabilities for the present value of estimated future costs to retire long-lived assets at the termination or expiration of a lease. 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 sublease or discontinue use of certain leased assets. 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. For leased assets, such circumstances would include the decision to discontinue use prior to the end of the minimum lease term or subleases for which estimated cash flows do not fully cover the costs of the associated lease. Intangible Assets Acquired through Business Combinations Intangible assets are amortized over their estimated useful lives. Each period, the Company evaluates the estimated remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. Impairment Assessment The Company evaluates intangible assets and other long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable, including, but not limited to, significant adverse changes in business climate, market conditions or other events that indicate an asset's carrying amount may not be recoverable. Recoverability of these assets is measured by comparing the carrying amount of each asset group to the future undiscounted cash flows the asset is expected to generate. If the undiscounted cash flows used in the test for recoverability are less than the carrying amount of these assets, the carrying amount of such assets is reduced to fair value. The Company evaluates and tests the recoverability of its goodwill for impairment annually during its fourth quarter of each fiscal year or more often if and when circumstances indicate that goodwill may not be recoverable. Business Combinations The Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions, tax-related valuation allowances and pre-acquisition contingencies are initially recorded in connection with a business combination as of the acquisition date. The Company continues to collect information and reevaluates these estimates and assumptions quarterly and records any adjustments to the Company’s preliminary estimates to goodwill provided that the Company is within the measurement period. 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 14 Table of Contents 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 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. Other exit-related costs are recognized as incurred. 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 and shares issued pursuant to the Amended and Restated 2004 Employee Stock Purchase Plan (“ESPP”). 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-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. Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax laws is recognized in the condensed consolidated statements of operations in the period that includes the enactment date. The Company’s tax positions are subject to income tax audits by multiple tax jurisdictions throughout the world. The Company recognizes the tax benefit of an uncertain tax position only if it is more likely than not that the position is sustainable upon examination by the taxing authority, solely based on its technical merits. The tax benefit recognized is measured as the largest amount of benefit which is greater than 50 percent likely to be realized upon settlement with the taxing authority. The Company recognizes interest accrued and penalties related to unrecognized tax benefits in the income tax provision. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized based on the weighting of positive and negative evidence. Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character (for example, ordinary income or capital gain) within the carryback or carryforward periods available under the applicable tax law. The Company regularly reviews the deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. The Company’s judgments regarding future profitability may change due to many factors, including future market conditions and the ability to successfully execute its business plans. Should there be a change in the ability to recover deferred tax assets, the tax provision would increase or decrease in the period in which the assessment is changed. Foreign Currency Translation The functional currency of the Company’s major foreign subsidiaries is generally the local currency. All assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenues and expenses are translated at the average exchange rate during the period. Equity transactions are translated using historical exchange rates. Adjustments resulting from translating foreign functional currency financial statements into U.S. dollars are recorded as a separate component on the condensed consolidated statements of comprehensive income. Foreign currency transaction gains and losses are included in other income in the condensed consolidated statements of operations. 15 Table of Contents Warranties and Indemnification The Company’s arrangements generally include certain provisions for indemnifying customers against liabilities if its products or services infringe on a third party’s intellectual property rights. To date, the Company has not incurred any material costs as a result of such obligations and has not accrued any material liabilities related to such obligations in the accompanying condensed consolidated financial statements. The Company has also agreed to indemnify its directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by the Company, arising out of that person’s services as the Company’s director or officer or that person’s services provided to any other company or enterprise at the Company’s request. The Company maintains director and officer insurance coverage that would generally enable the Company to recover a portion of any future amounts paid. The Company may also be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions. New Accounting Pronouncements Pending Adoption In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation and modifies other income tax-related disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a retrospective or prospective basis. The Company is evaluating the effect that ASU 2023-09 will have on its financial statement disclosures. In November 2024, the FASB issued Accounting Standards Update No. 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): 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 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. 2. Revenues Disaggregation of Revenue Subscription and Support Revenue by the Company's Service Offerings Subscription and support revenues consisted of the following (in millions): Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 Sales $ 2,267 $ 2,071 $ 4,398 $ 4,069 Service 2,458 2,257 4,792 4,439 Platform and Other 2,084 1,786 4,047 3,504 Marketing and Commerce 1,365 1,308 2,690 2,590 Integration and Analytics 1,516 1,342 3,060 2,747 $ 9,690 $ 8,764 $ 18,987 $ 17,349 Total Revenue by Geographic Locations Revenues by geographical region consisted of the following (in millions): Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 Americas $ 6,736 $ 6,201 $ 13,205 $ 12,263 Europe 2,429 2,184 4,766 4,329 Asia Pacific 1,071 940 2,094 1,866 $ 10,236 $ 9,325 $ 20,065 $ 18,458 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 16 Table of Contents and six months ended July 31, 2025 and 2024, respectively. No other country represented more than ten percent of total revenue during the three and six months ended July 31, 2025 and 2024. Contract Balances Contract Assets The Company records a contract asset when revenue recognized on a contract exceeds the billings. Contract assets were $ 873 million as of July 31, 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 Unearned revenue represents amounts that have been invoiced in advance of revenue recognition and is recognized as revenue when transfer of control to customers has occurred or services have been provided. The unearned revenue balance does not represent the total contract value of annual or multi-year, noncancellable subscription agreements. The unearned revenue balance is influenced by several factors, including seasonality, the compounding effects of renewals, invoice duration, invoice timing, dollar size and new business linearity within the quarter. The change in unearned revenue was as follows (in millions): Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 Unearned revenue, beginning of period $ 17,799 $ 16,061 $ 20,743 $ 19,003 Billings and other (1) 8,992 8,486 15,877 14,677 Revenue recognized over time ( 9,684 ) ( 8,852 ) ( 18,895 ) ( 17,423 ) Revenue recognized at a point in time ( 552 ) ( 473 ) ( 1,170 ) ( 1,035 ) Unearned revenue, end of period $ 16,555 $ 15,222 $ 16,555 $ 15,222 (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. Revenue recognized over time primarily includes Cloud Services subscription and support revenue, which is generally recognized ratably over time, and professional services and other revenue, which is generally recognized ratably or as delivered. Revenue recognized at a point in time substantially consists of term software licenses. Remaining Performance Obligation Remaining performance obligation represents contracted revenue that has not yet been recognized and includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods. The transaction price allocated to the remaining performance obligation is based on SSP. Remaining performance obligation is influenced by several factors, including seasonality, the timing of renewals, the timing of term license deliveries, average contract terms and foreign currency exchange rates. Remaining performance obligation is also impacted by acquisitions. Unbilled portions of the remaining performance obligation denominated in foreign currencies are revalued each period based on the period end exchange rates. Remaining performance obligation is subject to future economic risks, including bankruptcies, regulatory changes and other market factors. The Company excludes amounts related to performance obligations from professional services contracts that are billed and recognized on a time and materials basis. The majority of the Company's noncurrent remaining performance obligation is expected to be recognized in the next 13 to 36 months. Remaining performance obligation consisted of the following (in billions): Current Noncurrent Total As of July 31, 2025 $ 29.4 $ 30.5 $ 59.9 As of January 31, 2025 $ 30.2 $ 33.2 $ 63.4 17 Table of Contents 3. Investments Marketable Securities At July 31, 2025, marketable securities consisted of the following (in millions): Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate notes and obligations $ 2,671 $ 8 $ ( 6 ) $ 2,673 U.S. treasury securities 527 1 ( 2 ) 526 Mortgage-backed obligations 145 0 ( 4 ) 141 Asset-backed securities 1,190 3 ( 1 ) 1,192 Municipal securities 68 0 0 68 Commercial paper 255 0 0 255 Covered bonds 20 0 ( 1 ) 19 Other 133 0 0 133 Total marketable securities $ 5,009 $ 12 $ ( 14 ) $ 5,007 At January 31, 2025, marketable securities consisted of the following (in millions): Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate notes and obligations $ 2,574 $ 6 $ ( 23 ) $ 2,557 U.S. treasury securities 546 0 ( 4 ) 542 Mortgage-backed obligations 128 0 ( 6 ) 122 Asset-backed securities 1,218 3 ( 4 ) 1,217 Municipal securities 108 0 ( 1 ) 107 Commercial paper 506 0 0 506 Covered bonds 29 0 ( 2 ) 27 Other 106 0 0 106 Total marketable securities $ 5,215 $ 9 $ ( 40 ) $ 5,184 The contractual maturities of the investments classified as marketable securities were as follows (in millions): As of July 31, 2025 January 31, 2025 Due within 1 year $ 1,527 $ 2,081 Due in 1 year through 5 years 3,471 3,098 Due in 5 years through 10 years 9 5 $ 5,007 $ 5,184 Interest income from marketable securities was $ 150 million and $ 181 million for the three months ended July 31, 2025 and 2024, respectively, and $ 319 million and $ 377 million for the six months ended July 31, 2025 and 2024, 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 July 31, 2025 were as follows (in millions): Measurement Category Fair Value Measurement Alternative Other Total Equity securities $ 84 $ 4,775 $ 181 $ 5,040 Other investments 0 0 45 45 Balance as of July 31, 2025 $ 84 $ 4,775 $ 226 $ 5,085 18 Table of Contents Strategic investments by form and measurement category as of January 31, 2025 were as follows (in millions): Measurement Category Fair Value Measurement Alternative Other Total Equity securities $ 69 $ 4,617 $ 125 $ 4,811 Other investments 0 0 41 41 Balance as of January 31, 2025 $ 69 $ 4,617 $ 166 $ 4,852 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 $ 571 million and $ 484 million, as of July 31, 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): 2 Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 Unrealized gains (losses) recognized on publicly traded equity securities, net $ 13 $ ( 22 ) $ ( 3 ) $ ( 19 ) Unrealized gains recognized on privately held equity securities, net 53 44 60 149 Impairments on privately held equity securities and other investments ( 86 ) ( 60 ) ( 133 ) ( 190 ) Unrealized losses, net ( 20 ) ( 38 ) ( 76 ) ( 60 ) Realized gains on sales of securities, net 26 1 19 60 Gains (losses) on strategic investments, net $ 6 $ ( 37 ) $ ( 57 ) $ 0 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 $ 13 million and $ 44 million and impairments and downward adjustments of $ 85 million and $ 51 million for the three months ended July 31, 2025 and 2024 , respectively, and upward adjustments of $ 34 million and $ 160 million and impairments of $ 145 million and $ 190 million for the six months ended July 31, 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. 4. Fair Value Measurement The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2. Significant other inputs that are directly or indirectly observable in the marketplace. Level 3. Significant unobservable inputs which are supported by little or no market activity. 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. 19 Table of Contents The following table presents information about the Company’s assets that were measured at fair value as of July 31, 2025 and indicates the fair value hierarchy of the valuation (in millions): Description Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value Cash equivalents (1): Time deposits $ 0 $ 2,013 $ 0 $ 2,013 Money market mutual funds 5,800 0 0 5,800 Cash equivalent securities 0 274 0 274 Marketable securities: Corporate notes and obligations 0 2,673 0 2,673 U.S. treasury securities 0 526 0 526 Mortgage-backed obligations 0 141 0 141 Asset-backed securities 0 1,192 0 1,192 Municipal securities 0 68 0 68 Commercial paper 0 255 0 255 Covered bonds 0 19 0 19 Other 0 133 0 133 Strategic investments: Equity securities 84 0 0 84 Total assets $ 5,884 $ 7,294 $ 0 $ 13,178 (1) Included in “cash and cash equivalents” in the accompanying condensed consolidated balance sheets in addition to $ 2.3 billion of cash, as of July 31, 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): Description Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value Cash equivalents (1): Time deposits $ 0 $ 1,698 $ 0 $ 1,698 Money market mutual funds 4,373 0 0 4,373 Cash equivalent securities 0 686 0 686 Marketable securities: Corporate notes and obligations 0 2,557 0 2,557 U.S. treasury securities 0 542 0 542 Mortgage-backed obligations 0 122 0 122 Asset-backed securities 0 1,217 0 1,217 Municipal securities 0 107 0 107 Commercial paper 0 506 0 506 Covered bonds 0 27 0 27 Other 0 106 0 106 Strategic investments: Equity securities 69 0 0 69 Total assets $ 4,442 $ 7,568 $ 0 $ 12,010 (1) Included in “cash and cash equivalents” in the accompanying condensed consolidated balance sheets in addition to $ 2.1 billion of cash, as of January 31, 2025. 20 Table of Contents Strategic Investments Measured and 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. For privately held equity investments without a readily determinable fair value, the Company applies valuation methods based on information available, including the market approach and option pricing models (“OPM”). Observable transactions, such as the issuance of new equity by an investee, are indicators of investee enterprise value and are used to estimate the fair value of the privately held equity investments. An OPM may be utilized to allocate value to the various classes of securities of the investee, including classes owned by the Company. Such information, available to the Company from investee companies, is supplemented with estimates such as volatility, expected time to liquidity and the rights and obligations of the securities the Company holds. 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 equity securities and other investments amounted to $ 5.0 billion and $ 4.8 billion as of July 31, 2025 and January 31, 2025, respectively. 5. Leases and Other Commitments Leases 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 $ 149 million and $ 193 million for the three months ended July 31, 2025 and 2024, respectively, and were $ 296 million and $ 351 million for the six months ended July 31, 2025 and 2024, respectively. Included in operating lease costs are amounts related to restructuring charges, which are discussed in Note 9 “Restructuring.” As of July 31, 2025, the maturities of lease liabilities under noncancellable operating and finance leases were as follows (in millions): Operating Leases Finance Leases Fiscal Period: Remaining six months of fiscal 2026 $ 333 $ 170 Fiscal 2027 609 271 Fiscal 2028 557 91 Fiscal 2029 468 45 Fiscal 2030 316 28 Thereafter 867 2 Total minimum lease payments 3,150 607 Less: Imputed interest ( 349 ) ( 35 ) Total $ 2,801 $ 572 Other Balance Sheet Accounts Accounts payable, accrued expenses and other liabilities included approximately $ 1.8 billion and $ 2.8 billion of accrued compensation as of July 31, 2025 and January 31, 2025, respectively. 21 Table of Contents 6. Business Combinations Pending Acquisition Informatica Inc. 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 the Company 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. See Note 8 “Debt” for further information related to new debt. The transaction is expected to close in the fourth quarter of fiscal 2026 or early 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. 7. Intangible Assets Acquired Through Business Combinations and Goodwill Intangible Assets Acquired Through Business Combinations Intangible assets acquired through business combinations were as follows (in millions): Intangible Assets, Gross Accumulated Amortization Intangible Assets, Net Weighted Average Remaining Useful Life (Years) January 31, 2025 Additions and retirements, net July 31, 2025 January 31, 2025 Expense and retirements, net July 31, 2025 January 31, 2025 July 31, 2025 July 31, 2025 Acquired developed technology $ 2,958 $ 16 $ 2,974 $ ( 1,753 ) $ ( 312 ) $ ( 2,065 ) $ 1,205 $ 909 0.5 Customer relationships 6,894 0 6,894 ( 3,820 ) ( 429 ) ( 4,249 ) 3,074 2,645 3.2 Other (1) 331 0 331 ( 182 ) ( 34 ) ( 216 ) 149 115 1.7 Total $ 10,183 $ 16 $ 10,199 $ ( 5,755 ) $ ( 775 ) $ ( 6,530 ) $ 4,428 $ 3,669 2.5 (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 July 31, 2025 and 2024 was $ 380 million and $ 454 million, respectively, and for the six months ended July 31, 2025 and 2024 was $ 775 million, and $ 915 million, respectively. The expected future amortization expense for intangible assets as of July 31, 2025 was as follows (in millions): Fiscal Period: Remaining six months of fiscal 2026 $ 758 Fiscal 2027 1,148 Fiscal 2028 747 Fiscal 2029 580 Fiscal 2030 294 Thereafter 142 Total amortization expense $ 3,669 Goodwill Goodwill represents the excess of the purchase price in a business combination over the fair value of net assets acquired. 22 Table of Contents The changes in the carrying amounts of goodwill, which is generally not deductible for tax purposes, were as follows (in millions): Balance as of January 31, 2025 $ 51,283 Acquisitions and adjustments (1) 155 Balance as of July 31, 2025 $ 51,438 (1) Includes the effect of foreign currency translation and measurement period adjustments from prior period acquisitions. 8. Debt 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 July 31, 2025 Carrying Value as of July 31, 2025 Carrying Value as of January 31, 2025 2028 Senior Notes April 2018 April 2028 3.70 % 1,500 1,496 1,496 2028 Senior Sustainability Notes July 2021 July 2028 1.50 1,000 996 995 2031 Senior Notes July 2021 July 2031 1.95 1,500 1,492 1,491 2041 Senior Notes July 2021 July 2041 2.70 1,250 1,237 1,236 2051 Senior Notes July 2021 July 2051 2.90 2,000 1,979 1,979 2061 Senior Notes July 2021 July 2061 3.05 1,250 1,236 1,236 Total carrying value of debt 8,500 8,436 8,433 Less current portion of debt 0 0 Total noncurrent debt $ 8,436 $ 8,433 The Company was in compliance with all debt covenants as of July 31, 2025. The total estimated fair value of the Company's outstanding senior unsecured notes (the “Senior Notes”) above was $ 6.7 billion and $ 6.6 billion as of July 31, 2025 and January 31, 2025, 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 second 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 July 31, 2025 were as follows (in millions): Fiscal Period: Remaining six months of fiscal 2026 $ 0 Fiscal 2027 0 Fiscal 2028 0 Fiscal 2029 2,500 Fiscal 2030 0 Thereafter 6,000 Total principal outstanding $ 8,500 Interest expense, primarily from the Company’s debt instruments, was $ 67 million and $ 68 million for the three months ended July 31, 2025 and 2024, respectively, and $ 135 million and $ 137 million for the six months ended July 31, 2025 and 2024, respectively, and is included in other income in the condensed consolidated statements of operations. Revolving Credit Facility In October 2024, the Company entered into a Credit Agreement with the lenders and issuing lenders party thereto, and Bank of America, N.A., as administrative agent (the “Revolving Loan Credit Agreement”). The Revolving Loan Credit Agreement replaced the Credit Agreement, dated December 23, 2020 (as amended, the “Prior Credit Agreement”), among the Company, the lenders and the issuing lenders party thereto, and Citibank, N.A., as administrative agent, which provided for a $ 3.0 billion unsecured revolving credit facility that was scheduled to mature on December 23, 2025. There were no outstanding borrowings under the Prior Credit Agreement. The Revolving Loan Credit Agreement provides for a $ 5.0 billion unsecured revolving credit facility (“Credit Facility”) and matures in October 2029. 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 July 31, 2025. Informatica-Related Financing 23 Table of Contents In June 2025, the Company entered into a 364 -Day Credit Agreement that provides the Company with the ability to borrow up to $ 4.0 billion and a three-year Credit Agreement that provides the Company with the ability to borrow up to $ 2.0 billion, both on an unsecured basis, to finance a portion of the cash consideration for the Company’s pending acquisition of Informatica, the repayment of certain debt of Informatica and the payment of fees, costs and expenses related thereto. The availability and funding of each credit agreement is conditioned on the consummation of the acquisition of Informatica in accordance with the terms of the merger agreement and is subject to certain exceptions, qualifications and certain other conditions. There were no outstanding borrowings on the Informatica credit agreements as of July 31, 2025. For more information regarding the acquisition of Informatica, see Note 6 “Business Combinations.” 9. Restructuring 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. The Company recognized $ 4 million and $ 99 million in restructuring charges during the three months ended July 31, 2025 and 2024, respectively, and $ 40 million and $ 107 million during the six months ended July 31, 2025 and 2024, respectively, which were substantially related to workforce reductions that include charges for employee transition, severance payments, employee benefits and stock-based compensation. 10. Stockholders’ Equity Stock option activity for the six months ended July 31, 2025 was as follows: Options Outstanding Outstanding Stock Options (in millions) Weighted- Average Exercise Price Aggregate Intrinsic Value (in millions) Balance as of January 31, 2025 8 $ 198.89 Exercised ( 1 ) 181.56 Balance as of July 31, 2025 7 $ 205.08 $ 696 Vested or expected to vest 7 $ 204.35 $ 692 Exercisable as of July 31, 2025 6 $ 194.65 $ 598 Restricted stock activity for the six months ended July 31, 2025 was as follows: Restricted Stock Outstanding Outstanding (in millions) Weighted Average Grant Date Fair Value Aggregate Intrinsic Value (in millions) Balance as of January 31, 2025 26 $ 250.50 Granted - restricted stock units and awards 10 279.96 Granted - performance-based restricted stock units 2 272.68 Canceled ( 2 ) 251.03 Vested and converted to shares ( 8 ) 248.36 Balance as of July 31, 2025 28 $ 262.84 $ 7,161 Expected to vest 24 $ 6,147 24 Table of Contents The aggregate expected stock-based compensation expense remaining to be recognized as of July 31, 2025 was as follows (in millions): Fiscal Period: Remaining six months of fiscal 2026 $ 1,701 Fiscal 2027 2,514 Fiscal 2028 1,807 Fiscal 2029 905 Fiscal 2030 110 Total stock-based compensation expense $ 7,037 The aggregate expected stock-based compensation expense remaining to be recognized reflects only outstanding stock awards as of July 31, 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 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. Under the Share Repurchase Program, shares of common stock may be repurchased using a variety of methods, including privately negotiated and or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as part of accelerated share repurchases and other methods. The timing, manner, price and amount of any repurchases are determined by the Company in its discretion and depend on a variety of factors, including legal requirements, price and economic and market conditions. The Company accounts for treasury stock under the cost method. The Company repurchased the following under its Share Repurchase Program (in millions, except average price per share): 2025 2024 Shares Average price per share Amount Shares Average price per share Amount Three months ended April 30, 10 $ 273.42 $ 2,681 7 $ 293.00 $ 2,168 Three months ended July 31, 8 $ 269.96 $ 2,199 18 $ 246.14 $ 4,288 All repurchases were made in open market transactions. As of July 31, 2025, the Company was authorized to purchase a remaining $ 5.7 billion of its common stock under the Share Repurchase Program. In September 2025, the Board authorized an additional $ 20.0 billion in repurchases under the Share Repurchase Program for an aggregate total authorization of $ 50.0 billion. Dividends The Company announced the following dividends: Quarter Ended Record Date Payment Date Dividend per Share Amount (in millions) Fiscal 2026 April 30, 2025 April 10, 2025 April 24, 2025 $ 0.416 $ 406 July 31, 2025 June 18, 2025 July 10, 2025 $ 0.416 $ 404 Fiscal 2025 April 30, 2024 March 14, 2024 April 11, 2024 $ 0.40 $ 388 July 31, 2024 July 9, 2024 July 25, 2024 $ 0.40 $ 388 25 Table of Contents 11. Income Taxes 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 six months ended July 31, 2025, the Company reported a tax provision of $ 952 million on pretax income of $ 4.4 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 state and local taxes and non-deductible items, partially offset by research and development credits. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law. The OBBBA includes significant changes to US corporate tax provisions of the Tax Cuts and Jobs Act. Notably, it allows an immediate deduction for domestic research and development expenditures, reinstates 100% bonus depreciation, and modifies the international tax framework. The legislation has multiple effective dates, with certain provisions effective in fiscal 2026 and others in the subsequent years. The changes had an immaterial impact to the Company’s tax provision for the period ended July 31, 2025. For the six months ended July 31, 2024, the Company reported a tax provision of $ 742 million on pretax income of $ 3.7 billion, which resulted in an effective tax rate of 20 percent. The Company’s effective tax rate differed from the U.S. 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 The Company records liabilities related to its uncertain tax positions. 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, 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 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. 12. Net Income Per Share Basic net income per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding for the fiscal period. Diluted net income per share is computed by giving effect to all potential weighted average dilutive common stock, including options and restricted stock units. The dilutive effect of outstanding awards is reflected in diluted net income per share by application of the treasury stock method. A reconciliation of the denominator used in the calculation of basic and diluted net income per share is as follows (in millions): 2 Three Months Ended July 31, Six Months Ended July 31, 2025 2024 2025 2024 Numerator: Net income $ 1,887 $ 1,429 $ 3,428 $ 2,962 Denominator: Weighted-average shares outstanding for basic net income per share 956 964 958 967 Effect of dilutive securities: Employee stock awards 6 9 8 12 Weighted-average shares outstanding for diluted net income per share 962 973 966 979 The weighted-average number of shares outstanding used in the computation of diluted net income per share does not include the effect of the following potentially outstanding common stock. 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 July 31, Six Months Ended July 31, 2025 2024 2025 2024 Employee stock awards 9 13 5 9 26 Table of Contents 13. Legal Proceedings and Claims In the ordinary course of business, the Company is or may be involved in various legal or regulatory proceedings, claims or purported class actions related to alleged infringement of third-party patents and other intellectual property rights, commercial, corporate and securities, labor and employment, wage and hour and other claims. The Company has been, and may in the future be, put on notice or sued by third parties for alleged infringement of their proprietary rights, including patent infringement. In general, the resolution of a legal matter could prevent the Company from offering its service to others, could be material to the Company’s financial condition or cash flows, or both, or could otherwise adversely affect the Company’s reputation and future operating results. The Company makes a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. The outcomes of legal proceedings and other contingencies are, however, inherently unpredictable and subject to significant uncertainties. At this time, the Company is not able to reasonably estimate the amount or range of possible losses in excess of any amounts accrued, including losses that could arise as a result of application of non-monetary remedies, with respect to the contingencies it faces, and the Company’s estimates may not prove to be accurate. In management’s opinion, resolution of all current matters, including those described below, is not expected to have a material adverse impact on the Company’s financial statements. However, depending on the nature and timing of any such dispute, payment or other contingency, the resolution of a matter could materially affect the Company’s current or future results of operations or cash flows, or both, in a particular quarter. Slack Litigation Beginning in September 2019, seven purported class action lawsuits were filed against Slack, its directors, certain of its officers and certain investment funds associated with certain of its directors, each alleging violations of securities laws in connection with Slack’s registration statement on Form S-1 (the “Registration Statement”) filed with the SEC. All but one of these actions were filed in the Superior Court of California for the County of San Mateo, though one plaintiff originally filed in the County of San Francisco before refiling in the County of San Mateo (and the original San Francisco action was dismissed). The remaining action was filed in the U.S. District Court for the Northern District of California (the “Federal Action”). In the Federal Action, captioned Dennee v. Slack Technologies, Inc., Case No. 3:19-CV-05857-SI, Slack and the other defendants filed a motion to dismiss the complaint in January 2020. In April 2020, the court granted in part and denied in part the motion to dismiss. In May 2020, Slack and the other defendants filed a motion to certify the court’s order for interlocutory appeal, which the court granted. Slack and the other defendants filed a petition for permission to appeal the district court’s order to the Ninth Circuit Court of Appeals, which was granted in July 2020. Oral argument was heard in May 2021. 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. 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. 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. On July 10, 2025, the plaintiff filed a petition for a writ of certiorari with the U.S. Supreme Court. The state court actions were consolidated in November 2019, and the consolidated action is captioned In re Slack Technologies, Inc. Shareholder Litigation, Lead Case No. 19CIV05370 (the “State Court Action”). An additional state court action was filed in San Mateo County in June 2020 but was consolidated with the State Court Action in July 2020. Slack and the other defendants filed demurrers to the complaint in the State Court Action in February 2020. In August 2020, the court sustained in part and overruled in part the demurrers, and granted plaintiffs leave to file an amended complaint, which they filed in October 2020. Slack and the other defendants answered the complaint in November 2020. Plaintiffs filed a motion for class certification on October 21, 2021, which remains pending. On October 26, 2022, the court stayed the State Court Action pending resolution of Slack’s petition for a writ of certiorari in the Federal Action. The State Court Action remains stayed pending resolution of the appellate proceedings in the Federal Action. 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 27 Table of Contents 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, G.G. v. Salesforce, Inc., Case No. No. 1:20-CV-2335. 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. On June 12, 2025, after discovery had commenced, Plaintiff filed a substantially amended complaint. On July 9, 2025, the Company filed a motion to dismiss that complaint. The court has scheduled trial in the Northern District of Illinois 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. v. 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. v. 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. v. 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. v. Salesforce, Inc., Case No. 4:23-CV-01792 (“T.S.”). In June 2023, the Company moved to dismiss the T.S. action, and that motion remains pending. 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, dismissed the Texas claims with prejudice, and denied the motion as to the federal law claims. 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. Plaintiffs then filed a consolidated amended complaint, and on June 20, 2025, the Company moved to dismiss that complaint. That motion remains pending. In June 2025, Plaintiff’s counsel in A.S. and S.M.A. filed six new actions in the Northern District of Illinois on behalf of a total of 244 new Plaintiffs. On August 26, 2025, the six new actions were consolidated before the Northern District of Illinois judge who is presiding over the G.G. action. All of the foregoing actions seek unspecified monetary damages, attorneys’ fees, and costs. The Company intends to defend its interests in these proceedings vigorously. 14. Subsequent Events In August 2025, the Company entered into an agreement to acquire Regrello Corp. (“Regrello”), a developer of an AI-native business process automation solution. Under the terms of the agreement, the Company will acquire Regrello for approximately $ 900 million in cash, subject to customary purchase price adjustments. The agreement also provides for the Company’s assumption of unvested outstanding equity awards held by Regrello employees. The acquisition is expected to close in the third quarter of fiscal 2026, subject to customary closing conditions. 28 Table of Contents