Salesforce (CRM)

Condensed Consolidated Balance Sheets as of July 31, 2026 and January 31, 2026 3 Condensed Consolidated Statements of Operations for the three and six months ended July 31, 2026 and 2025 4 Condensed Consolidated Statements of Comprehensive Income for the three and six months ended July 31, 2026 and 2025 5 Condensed Consolidated Statements of Stockholders' Equity for the three and six months ended July 31, 2026 and 2025 6 Condensed Consolidated Statements of Cash Flows for the three and six months ended July 31, 2026 and 2025 7 Notes to Condensed Consolidated Financial Statements 9 Item 2.Management s Discussion and Analysis of Financial Condition and Results of Operations 31 Item 3.Quantitative and Qualitative Disclosures About Market Risk 43 Item 4.Controls and Procedures 46 PART II. OTHER INFORMATION Item 1.Legal Proceedings 47 Item 1A.Risk Factors 47 Item 2.Unregistered Sales of Equity Securities and Use of Proceeds 67 Item 3.Defaults Upon Senior Securities 67 Item 4.Mine Safety Disclosures 67 Item 5.Other Information 68 Item 6.Exhibits 68 Signature 69 2 Table of Contents PART I. ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Salesforce, Inc. Condensed Consolidated Balance Sheets (in millions) July 31, 2026January 31, 2026 (unaudited) Current assets: Cash and cash equivalents$8,310 $7,327 Marketable securities3,093 2,238 Accounts receivable, net 6,320 14,339 Costs capitalized to obtain revenue contracts, net 2,074 2,075 Prepaid expenses and other current assets2,286 2,243 Total current assets22,083 28,222 Property and equipment, net3,042 3,120 Operating lease right-of-use assets, net 1,787 2,003 Noncurrent costs capitalized to obtain revenue contracts, net 2,870 2,985 11,324 7,591 Goodwill59,250 57,941 Intangible assets acquired through business combinations, net6,142 6,815 Deferred tax assets and other assets, net 3,122 3,628 Total assets$109,620 $112,305 Liabilities and stockholders equity Current liabilities: Accounts payable, accrued expenses and other liabilities $7,018 $8,253 Operating lease liabilities, current 531 548 Unearned revenue 18,787 24,317 0 4,000 Total current liabilities26,336 37,118 Noncurrent debt39,288 10,439 Noncurrent operating lease liabilities1,924 2,189 Other noncurrent liabilities 3,694 3,417 Total liabilities71,242 53,163 1 1 Treasury stock, at cost(55,022)(32,228) Additional paid-in capital66,029 68,835 Accumulated other comprehensive income263 313 Retained earnings27,107 22,221 Total stockholders equity38,378 59,142 Total liabilities and stockholders equity$109,620 $112,305 See accompanying Notes. 3 Table of Contents Salesforce, Inc. Condensed Consolidated Statements of Operations (in millions, except per share data) (unaudited) Three Months Ended July 31,Six Months Ended July 31, 2026202520262025$10,820 $9,690 $21,413 $18,987 525 546 1,065 1,078 11,345 10,236 22,478 20,065 2,021 1,645 3,974 3,256 628 597 1,245 1,251 2,649 2,242 5,219 4,507 8,696 7,994 17,259 15,558 1,687 1,481 3,314 2,941 3,859 3,443 7,628 6,872 725 734 1,465 1,431 94 4 174 40 6,365 5,662 12,581 11,284 2,331 2,332 4,678 4,274 (473)(67)(790)(135)2,613 6 3,171 (57)81 135 214 298 4,552 2,406 7,273 4,380 (1,026)(519)(1,640)(952)$3,526 $1,887 $5,633 $3,428 $4.30 $1.97 $6.67 $3.58 $4.29 $1.96 $6.67 $3.55 820 956 844 958 821 962 845 966 Six Months Ended July 31, 2026202520262025$234 $150 $478 $312 288 230 605 463 Six Months Ended July 31, 2026202520262025$147 $126 $285 $277 301 280 611 555 345 293 665 578 111 94 213 182 2 0 12 15 Six Months Ended July 31, 2026202520262025$3,526 $1,887 $5,633 $3,428 (138)180 (66)290 (11)(3)(26)28 19 0 50 0 (9)0 (12)0 (139)177 (54)318 7 0 4 (5)(132)177 (50)313 $3,394 $2,064 $5,583 $3,741 Common StockTreasury StockAdditional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Retained EarningsTotal Stockholders Equity SharesAmountSharesAmount Balance at January 31, 20261,073 $1 (144)$(32,228)$68,835 $313 $22,221 $59,142 Common stock issued4 0 0 0 35 0 0 35 Common stock withheld related to net share settlement of equity awards0 0 0 0 (250)0 0 (250) Common stock repurchased0 0 (114)(22,800)(4,566)0 0 (27,366) Stock-based compensation0 0 0 0 859 0 0 859 Other comprehensive income, net of tax0 0 0 0 0 82 0 82 Cash dividends and dividend equivalents declared0 0 0 0 0 0 (374)(374) Net income0 0 0 0 0 0 2,107 2,107 Balance at April 30, 20261,077 $1 (258)$(55,028)$64,913 $395 $23,954 $34,235 Common stock issued4 0 0 0 285 0 0 285 Common stock withheld related to net share settlement of equity awards0 0 0 0 (77)0 0 (77) Common stock repurchased0 0 0 6 0 0 0 6 Stock-based compensation0 0 0 0 908 0 0 908 Other comprehensive income (loss), net of tax0 0 0 0 0 (132)0 (132) Cash dividends and dividend equivalents declared0 0 0 0 0 0 (373)(373) Net income0 0 0 0 0 0 3,526 3,526 Balance at July 31, 20261,081 1 (258)(55,022)66,029 263 27,107 38,378 Common StockTreasury StockAdditional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Retained EarningsTotal Stockholders Equity SharesAmountSharesAmount Balance at January 31, 20251,056 $1 (94)$(19,507)$64,576 $(266)$16,369 $61,173 Common stock issued6 0 0 0 97 0 0 97 Common stock repurchased0 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 declared0 0 00 0 0 (406)(406) Net income0 0 0 0 0 0 1,541 1,541 Balance at April 30, 20251,062 $1 (104)$(22,199)$65,490 $(130)$17,504 $60,666 Common stock issued5 0 0 0 427 0 0 427 Common stock withheld related to net share settlement of equity awards0 0 0 0 (12)0 0 (12) Common stock repurchased0 0 (8)(2,209)0 0 0 (2,209) Stock-based compensation0 0 0 0 796 0 0 796 Other comprehensive income, net of tax0 0 0 0 0 177 0 177 Cash dividends and dividend equivalents declared0 0 0 0 0 0 (404)(404) Net income0 0 0 0 0 0 1,887 1,887 Balance at July 31, 20251,067 $1 (112)$(24,408)$66,701 $47 $18,987 $61,328 See accompanying Notes. 6 Table of Contents Salesforce, Inc. Condensed Consolidated Statements of Cash Flows (in millions) (unaudited) Six Months Ended July 31, 2026202520262025$3,526 $1,887 $5,633 $3,428 966 817 1,951 1,660 589 544 1,173 1,089 906 793 1,763 1,607 (2,613)(6)(3,171)57 (1,396)(1,242)8,035 6,349 (548)(406)(1,057)(771)672 (32)510 (513)891 (217)(1,006)(1,224)(147)(154)(285)(278)(1,577)(1,244)(5,576)(4,188)1,269 740 7,970 7,216 (52)(54)(1,504)(54)(958)(174)(1,283)(323)179 38 594 44 (712)(1,118)(1,801)(3,204)357 1,179 709 1,584 160 1,429 221 1,865 (171)(135)(316)(314)(1,197)1,165 (3,380)(402)0 0 24,842 0 (84)(2,225)(27,332)(4,858)(77)(12)(327)(12)79 232 309 526 (176)(99)(306)(278)(364)(399)(729)(801)(622)(2,503)(3,543)(5,423)(75)35 (64)126 (625)(563)983 1,517 8,935 10,928 7,327 8,848 $8,310 $10,365 $8,310 $10,365 Six Months Ended July 31, 2026202520262025$153 $87 $240 $115 $222 $891 $461 $990 10 to 40 years Computers, equipment and software3 to 5 years Furniture and fixtures5 years Leasehold improvementsShorter of the estimated lease term or 10 years Six Months Ended July 31, 2026202520262025$7,193 $6,682 $14,102 $13,027 3,618 3,008 7,299 5,960 9 0 12 0 $10,820 $9,690 $21,413 $18,987 Six Months Ended July 31, 2026202520262025$7,404 $6,736 $14,637 $13,205 2,764 2,429 5,518 4,766 1,168 1,071 2,311 2,094 9 0 12 0 $11,345 $10,236 $22,478 $20,065 Six Months Ended July 31, 2026202520262025 Unearned revenue, beginning of period$20,363 $17,799 $24,317 $20,743 Billings and other (1)9,769 8,992 16,948 15,877 (10,877)(9,684)(21,363)(18,895) (468)(552)(1,115)(1,170) $18,787 $16,555 $18,787 $16,555 (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. 17 Table of Contents 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): CurrentNoncurrentTotal As of July 31, 2026$33.5 $32.8 $66.3 As of January 31, 2026 $35.1 $37.3 $72.4 Unrealized GainsUnrealized LossesFair Value Corporate notes and obligations$1,570 $1 $(7)$1,564 U.S. treasury securities743 0 (3)740 Mortgage-backed obligations36 0 (1)35 Asset-backed securities563 0 (1)562 Municipal securities18 0 0 18 104 0 0 104 70 0 0 70 Total marketable securities$3,104 $1 $(12)$3,093 As of January 31, 2026, marketable securities consisted of the following (in millions): Amortized CostUnrealized GainsUnrealized LossesFair Value Corporate notes and obligations$1,343 $10 $0 $1,353 U.S. treasury securities168 2 0 170 Mortgage-backed obligations32 0 (1)31 Asset-backed securities618 4 0 622 Municipal securities17 0 0 17 Commercial paper30 0 0 30 15 0 0 15 Total marketable securities$2,223 $16 $(1)$2,238 The contractual maturities of the investments classified as marketable securities were as follows (in millions): As of July 31, 2026January 31, 2026 Due within 1 year$1,202 $460 Due in 1 year through 5 years1,890 1,777 Due in 5 years through 10 years1 1 $3,093 $2,238 Interest income from marketable securities for the three months ended July 31, 2026 and 2025 was $97 million and $150 million, respectively, and $206 million and $319 million for the six months ended July 31, 2026 and 2025, respectively. The amounts are included in other income in the condensed consolidated statements of operations. 18 Table of Contents Strategic Investments Strategic investments by form and measurement category as of July 31, 2026 were as follows (in millions): Measurement Category Fair ValueMeasurement AlternativeOtherTotal Equity securities$0 $11,169 $123 $11,292 Other investments 0 0 32 32 Balance as of July 31, 2026 $0 $11,169 $155 $11,324 Strategic investments by form and measurement category as of January 31, 2026 were as follows (in millions): Measurement Category Fair ValueMeasurement AlternativeOtherTotal Equity securities$5 $7,415 $127 $7,547 Other investments0 0 44 44 Balance as of January 31, 2026 $5 $7,415 $171 $7,591 Gains (losses) on Strategic Investments, Net The components of gains (losses) on strategic investments, net were as follows (in millions): Six Months Ended July 31, 2026202520262025$0 $13 $(1)$(3)2,894 53 3,222 60 (285)(86)(404)(133)2,609 (20)2,817 (76)4 26 354 19 $2,613 $6 $3,171 $(57)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 $1,914 $0 $1,914 Money market mutual funds3,479 0 0 3,479 Cash equivalent securities 0 937 0 937 Marketable securities: Corporate notes and obligations0 1,564 0 1,564 U.S. treasury securities0 740 0 740 Mortgage-backed obligations0 35 0 35 Asset-backed securities0 562 0 562 Municipal securities0 18 0 18 0 104 0 104 0 70 0 70 Strategic investments: Equity securities0 0 0 0 0 98 0 98 Total assets$3,479 $6,042 $0 $9,521 Liabilities: Foreign currency derivative contracts0 155 0 155 Total liabilities$0 $155 $0 $155 (1) Included in cash and cash equivalents in the accompanying condensed consolidated balance sheets, in addition to $2.0 billion of cash, as of July 31, 2026. The following table presents information about the Company s assets that were measured at fair value as of January 31, 2026 and indicates the fair value hierarchy of the valuation (in millions): DescriptionQuoted 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 $1,393 $0 $1,393 Money market mutual funds3,204 0 0 3,204 Cash equivalent securities0 567 0 567 Marketable securities: Corporate notes and obligations0 1,353 0 1,353 U.S. treasury securities0 170 0 170 Mortgage-backed obligations0 31 0 31 Asset-backed securities0 622 0 622 Municipal securities0 17 0 17 Commercial paper0 30 0 30 0 15 0 15 Strategic investments: Equity securities5 0 0 5 $3,209 $4,198 $0 $7,407 (1) Included in cash and cash equivalents in the accompanying condensed consolidated balance sheets in addition to $2.2 billion of cash, as of January 31, 2026. 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, the common stock equivalent method ( CSE ), option pricing models ( OPM ), or a combination of these methods. 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. The CSE method assumes all classes of stock have an equal fair value per share on a fully diluted, as-converted basis. By contrast, an OPM may be utilized to allocate value to the various classes of securities of the investee, including classes owned by the Company, adjusted to reflect varying rights and preferences between share classes. Fair value conclusions are determined using information shared by investee companies, which may be supplemented with estimates such as volatility and expected time to liquidity. 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 approximately $11.3 billion and $7.6 billion as of July 31, 2026 and January 31, 2026, 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 $129 million and $149 million for the three months ended July 31, 2026 and 2025, respectively, and were $275 million and $296 million for the six months ended July 31, 2026 and 2025, respectively. Included in operating lease costs are amounts related to restructuring charges. As of July 31, 2026, 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 2027$290 $147 Fiscal 2028581 181 Fiscal 2029488 138 Fiscal 2030336 120 Fiscal 2031270 89 Thereafter806 9 Total minimum lease payments2,771 684 Less: Imputed interest(316)(51) Total$2,455 $633 The total lease commitment balance as of July 31, 2026, including leases not yet commenced, is $4.2 billion, of which approximately $3.5 billion is related to facilities space. The remaining commitment amount is primarily related to equipment. Other Balance Sheet Accounts Accounts payable, accrued expenses and other liabilities included approximately $2.2 billion and $3.3 billion of accrued compensation as of July 31, 2026 and January 31, 2026, respectively. 21 Table of Contents 6. Business Combinations Qualified In April 2026, the Company acquired all of the outstanding stock of Qualified.com, Inc. ("Qualified"), a leading provider of agentic artificial intelligence marketing solutions. The acquisition date fair value of the consideration transferred for Qualified was $1.2 billion, which consisted primarily of $1.1 billion in cash. The Company recorded $954 million of goodwill in connection with the acquisition, which is primarily attributed to the assembled workforce and expanded market opportunities. The goodwill associated with the acquisition of Qualified has no basis and is not deductible for U.S. income tax purposes. The Company also recorded approximately $290 million of intangible assets for developed technology and customer relationships with useful lives of five and eight years, respectively. The fair values assigned to assets acquired and liabilities assumed are based on management s estimates and assumptions and may be subject to change as additional information is received and certain tax returns are finalized. The Company expects to finalize the valuation as soon as practicable, but not later than one year from the acquisition date. The Company has included the financial results of Qualified, which were not material, in its condensed consolidated financial statements from the date of acquisition. The transaction costs associated with the acquisition were also not material. Pending Acquisitions Contentful In May 2026, the Company entered into an agreement to acquire Contentful Global, Inc. ( Contentful ), provider of a leading composable content platform, for approximately $1.5 billion in cash, net of the value of shares currently owned by Salesforce, and subject to customary purchase price adjustments. The acquisition is expected to close in the third quarter of the Company s fiscal year 2027, subject to customary closing conditions, including the receipt of required regulatory approvals. Fin In June 2026, the Company entered into an agreement to acquire Intercom, Inc. ( Fin ), a customer agent platform providing autonomous, end-to-end AI service agents, for approximately $3.6 billion in cash, and subject to customary purchase price adjustments. The acquisition is expected to close in the third quarter of the Company s fiscal year 2027, subject to customary closing conditions, including the receipt of required regulatory approvals. 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, GrossAccumulated AmortizationIntangible Assets, NetWeighted Average Remaining Useful Life (Years) January 31, 2026Additions and retirements, netJuly 31, 2026January 31, 2026Expense and retirements, netJuly 31, 2026January 31, 2026July 31, 2026July 31, 2026 Acquired developed technology$4,796 $275 $5,071 $(2,407)$(478)$(2,885)$2,389 $2,186 4.4 Customer relationships8,659 124 8,783 (4,640)(491)(5,131)4,019 3,652 6.2 Other (1)684 11 695 (277)(114)(391)407 304 1.6 Total$14,139 $410 $14,549 $(7,324)$(1,083)$(8,407)$6,815 $6,142 5.3 (1) Other includes trade names, unbilled backlog, and territory rights. Amortization of intangible assets resulting from business combinations for the three months ended July 31, 2026 and 2025 was $522 million and $380 million, respectively, and $1.1 billion and $775 million for the six months ended July 31, 2026 and 2025, respectively. 22 Table of Contents The expected future amortization expense for intangible assets as of July 31, 2026 was as follows (in millions): Fiscal Period: Remaining six months of fiscal 2027$839 Fiscal 20281,499 Fiscal 20291,189 Fiscal 2030764 Fiscal 2031497 Thereafter1,354 Total amortization expense$6,142 Goodwill Goodwill represents the excess of the purchase price in a business combination over the fair value of net assets acquired. The changes in the carrying amounts of goodwill, which is generally not deductible for tax purposes, were as follows (in millions): $57,941 954 Other acquisitions and adjustments (1)355 Balance as of July 31, 2026$59,250 (1) Includes the effect of foreign currency translation and measurement period adjustments from prior period acquisitions. 23 Table of Contents 8. Debt The components of the Company's borrowings were as follows (in millions):Date of IssuanceMaturity DateContractual Interest RateOutstanding Principal as of July 31, 2026 Carrying Value as of January 31, 2026 November 2025November 2026N/A$0 0 $4,000 March 2028 Senior NotesMarch 2026March 20284.50 %3,500 0 April 2028 Senior NotesApril 2018April 20283.70 1,500 1,497 July 2028 Senior Sustainability NotesJuly 2021July 20281.50 1,000 996 Informatica Three-year Credit Agreement November 2025November 2028N/A0 2,000 March 2029 Senior NotesMarch 2026March 20294.65 4,250 0 2026 Term Loan Credit Agreement (1) March 2026March 20314.246,000 0 July 2031 Senior NotesJuly 2021July 20311.95 1,500 1,493 September 2031 Senior NotesMarch 2026September 20314.90 3,750 0 March 2033 Senior NotesMarch 2026March 20335.20 2,750 0 March 2036 Senior NotesMarch 2026March 20365.55 4,500 0 July 2041 Senior NotesJuly 2021July 20412.70 1,250 1,237 March 2046 Senior NotesMarch 2026March 20466.40 1,500 0 July 2051 Senior NotesJuly 2021July 20512.90 2,000 1,980 March 2056 Senior NotesMarch 2026March 20566.55 3,750 0 July 2061 Senior NotesJuly 2021July 20613.05 1,250 1,236 March 2066 Senior NotesMarch 2026March 20666.70 1,000 0 Total carrying value of debt39,500 14,439 Less current portion of debt(4,000) Total noncurrent debt39,288 $10,439 (1) The contractual interest rate represents the weighted-average for the period outstanding. The Company was in compliance with all debt covenants as of July 31, 2026. The carrying amount of the Company s 2026 Term Loan Credit Agreement (as defined below) approximates fair value as it bears interest at a floating rate that resets frequently and reflects current market spreads for similar credit risk profiles. The fair value of the term loan is classified as Level 2 within the fair value hierarchy. The total estimated fair value of the Company's outstanding senior unsecured notes (the Senior Notes ) above was $30.8 billion and $6.7 billion as of July 31, 2026 and January 31, 2026, 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 2027 and the last day of trading of fiscal 2026, and are deemed Level 2 liabilities within the fair value measurement framework. The contractual future principal payments for all borrowings as of July 31, 2026 were as follows (in millions): Fiscal Period: Remaining six months of fiscal 2027$0 Fiscal 20280 Fiscal 20296,000 Fiscal 20304,250 Fiscal 20310 Thereafter29,250 Total principal outstanding$39,500 24 Table of Contents 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 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, 2026. 2026 Term Loan Credit Agreement In March 2026, the Company entered into a $6.0 billion five-year senior unsecured term loan credit agreement (the "2026 Term Loan Credit Agreement"). The Company used the 2026 Term Loan Credit Agreement to refinance and extend the maturities of the outstanding principal amounts under its existing $4.0 billion 364-day Credit Agreement and $2.0 billion Three-year Credit Agreement (collectively, the Informatica Credit Agreements ). This non-cash financing activity has been excluded from the Condensed Consolidated Statement of Cash Flows. The 2026 Term Loan Credit Agreement matures in March 2031. As of July 31, 2026, the entire $6.0 billion principal amount was outstanding under the 2026 Term Loan Credit Agreement. March 2026 Notes In March 2026, the Company issued $25.0 billion aggregate principal amount of unsecured Senior Notes (collectively, the March 2026 Notes ), with maturities ranging from 2028 to 2066. The proceeds from this offering, net of discounts and debt issuance costs, was $24.8 billion. Interest on each of the March 2026 Notes is payable semi-annually in arrears. The Company may redeem any portion of the March 2026 Notes, either in whole or in part, at any time, subject to certain early redemption provisions. The Company used the net proceeds from the March 2026 Notes to fund an accelerated share repurchase program of its common stock. For more information regarding the accelerated share repurchase program, see Note 9 Stockholders Equity. 9. Stockholders Equity Stock option activity for the six months ended July 31, 2026 was as follows: Weighted- Average Exercise PriceAggregate Intrinsic Value (in millions) Balance as of January 31, 2026$207.54 180.69 $205.71 $93 Vested or expected to vest$206.24 $90 Exercisable as of July 31, 2026$206.19 $58 Restricted stock activity for the six months ended July 31, 2026 was as follows: Restricted Stock Outstanding Outstanding (in millions)Weighted Average Grant Date Fair ValueAggregate Intrinsic Value (in millions) Balance as of January 31, 202626 $265.64 Granted - restricted stock units and awards22 191.68 Granted - performance-based restricted stock units1 204.63 Canceled(3)249.56 Vested and converted to shares(7)254.19 Balance as of July 31, 202639 $224.79 $7,144 Expected to vest33 $6,088 25 Table of Contents The aggregate expected stock-based compensation expense remaining to be recognized as of July 31, 2026 was as follows (in millions): Fiscal Period: Remaining six months of fiscal 2027$1,955 Fiscal 20282,918 Fiscal 20292,052 Fiscal 20301,235 Fiscal 2031164 $8,324 The aggregate expected stock-based compensation expense remaining to be recognized reflects only outstanding stock awards as of July 31, 2026 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. In February 2026, the Board authorized $50.0 billion in share repurchases under the Share Repurchase Program, which is inclusive of the accelerated share repurchase described below and replaces the previous remaining unpurchased authorization. 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. In March 2026, the Company entered into accelerated share repurchase agreements (the ASR Agreements ) with several financial institutions to repurchase an aggregate $25.0 billion of its common stock. Pursuant to the terms of the ASR Agreements, the Company made up-front payments totaling $25.0 billion and received an initial delivery of approximately 103 million shares of its common stock at an average price per share of $198.34. The initial share delivery represented approximately 80 percent of the total shares expected to be repurchased under the ASR Agreements. During the first quarter of fiscal 2027, the Company recorded $20.6 billion to treasury stock for the cost of the delivered shares as well as associated fees and excise taxes. A $4.6 billion reduction to additional paid-in capital was recorded for the unsettled portion of the ASR Agreements as forward contract components classified within stockholders equity. The final settlement of each transaction under the ASR agreements is expected to occur in the third quarter of fiscal 2027. In addition to share repurchases under the ASR Agreements, the Company repurchased the following shares of its common stock in the open market, (in millions, except average price per share): 2025Average price per shareAmountSharesAverage price per shareAmount11 $192.00 $2,145 10 $273.42 $2,681 0 $ $0 8 $269.96 $2,199 Payment DateDividend per ShareAmount (in millions) Fiscal 2027 Three months ended April 30, 2026April 9, 2026April 23, 2026$0.440 $374 Three months ended July 31, 2026June 11, 2026July 2, 2026$0.440 $373 Fiscal 2026 Three months ended April 30, 2025April 10, 2025April 24, 2025$0.416 $406 Three months ended July 31, 2025June 18, 2025July 10, 2025$0.416 $404 10. 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, 2026, the Company reported a tax provision of $1.6 billion on pretax income of $7.3 billion, which resulted in an effective tax rate of 23 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. 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. 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, India and Australia. 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. 11. 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):Six Months Ended July 31, 2026202520262025$3,526 $1,887 $5,633 $3,428 820 956 844 958 1 6 1 8 821 962 845 966 Six Months Ended July 31, 202620252026202540 9 35 5 42 0 39 0 Three Months Ended July 31,Six Months Ended July 31, 2026% of Total Revenues2025% of Total Revenues2026% of Total Revenues2025% of Total Revenues$10,820 95 %$9,690 95 %$21,413 95 %$18,987 95 %525 5 546 5 1,065 5 1,078 5 11,345 100 10,236 100 22,478 100 20,065 100 2,021 18 1,645 16 3,974 18 3,256 16 628 5 597 6 1,245 5 1,251 6 2,649 23 2,242 22 5,219 23 4,507 22 8,696 77 7,994 78 17,259 77 15,558 78 1,687 15 1,481 14 3,314 15 2,941 15 3,859 34 3,443 34 7,628 34 6,872 34 725 6 734 7 1,465 6 1,431 7 94 1 4 0 174 1 40 0 6,365 56 5,662 55 12,581 56 11,284 56 2,331 21 2,332 23 4,678 21 4,274 22 (473)(4)(67)0 (790)(4)(135)0 2,613 23 6 0 3,171 14 (57)(1)81 0 135 1 214 1 298 1 4,552 40 2,406 24 7,273 32 4,380 22 (1,026)(9)(519)(6)(1,640)(7)(952)(5)$3,526 31 %$1,887 18 %$5,633 25 %$3,428 17 %Six Months Ended July 31, 2026% of Total Revenues2025% of Total Revenues2026% of Total Revenues2025% of Total Revenues$234 2 %$150 2 %$478 2 %$312 2 %288 3 230 2 605 3 463 2 Six Months Ended July 31, 2026% of Total Revenues2025% of Total Revenues2026% of Total Revenues2025% of Total Revenues$147 1 %$126 1 %$285 1 %$277 1 %301 3 280 3 611 3 555 3 345 3 293 3 665 3 578 3 111 1 94 1 213 1 182 1 2 0 0 0 12 0 15 0 July 31, 2026 January 31, 2026 $11.4 $9.6 Unearned revenue18.8 24.3 Remaining performance obligation66.3 72.4 Principal due on our outstanding debt obligations (1)39.5 14.5 (1) Amounts do not include operating or financing lease obligations. Remaining performance obligation represents contracted revenue that has not yet been recognized, which includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods. Impact of Acquisitions The comparability of our operating results in the three and six months ended July 31, 2026 compared to the same period in fiscal 2026 was impacted by our recent acquisitions, including the acquisition of Informatica in November 2025. In our discussion of changes in our results of operations for the three and six months ended July 31, 2026, compared to the same period in fiscal 2026, we may quantitatively disclose the impact of our acquired products and services for the one-year period subsequent to the acquisition date to the growth in certain of our revenues where such discussions would be meaningful. Expense contributions from our recent acquisitions for each of the respective period comparisons generally were not separately identifiable due to the integration of these businesses into our existing operations or were insignificant to our results of operations during the periods presented. Revenues Three Months Ended July 31,Variance (in millions)20262025DollarsPercent Subscription and support$10,820 $9,690 $1,130 12 % Professional services and other525 546 (21)(4) Total revenues$11,345 $10,236 $1,109 11 % Six Months Ended July 31,Variance (in millions)20262025DollarsPercent Subscription and support$21,413 $18,987 $2,426 13 % Professional services and other1,065 1,078 (13)(1) Total revenues$22,478 $20,065 $2,413 12 % The increase in subscription and support revenues for the three and six months ended July 31, 2026 was primarily caused by volume-driven increases from new business, which includes new customers, upgrades, and additional subscriptions from existing customers. Pricing was not a significant driver of the increase in revenues for either period. Revenues from term software licenses, which are recognized at a point in time, represented approximately four percent and five percent of total subscription and support revenues for the three and six months ended July 31, 2026, respectively, and six percent of total subscription and support revenues for the three and six months ended July 31, 2025. Subscription and support revenues accounted for approximately 95 percent of our total revenues for the three and six months ended July 31, 2026 and 95 percent for the three and six months ended July 31, 2025. The decrease in professional services and other revenues for the three and six months ended July 31, 2026 was primarily due to less demand for larger, multi-year transformation engagements, which may continue in the near term. 36 Table of Contents The acquisition of Informatica in November 2025 contributed approximately $456 million and $900 million of total revenues for the three and six months ended July 31, 2026, respectively. Subscription and Support Revenues by Service Offering Subscription and support revenues consisted of the following (in millions): Three Months Ended July 31, 2026As a % of Total Subscription and Support Revenues2025As a % of Total Subscription and Support RevenuesGrowth Rate Agentforce Apps$7,193 67 %$6,682 69 %8 % Data 360, Headless Platform, and Other3,618 33 3,008 31 20 Hedging gains9 0 0 N/A Total$10,820 100 %$9,690 100 %12 % Six Months Ended July 31, 2026As a % of Total Subscription and Support Revenues2025As a % of Total Subscription and Support RevenuesGrowth Rate Agentforce Apps$14,102 66 %$13,027 69 %8 % Data 360, Headless Platform, and Other7,299 34 5,960 31 22 Hedging gains12 0 0 N/A Total$21,413 100 %$18,987 100 %13 % Effective as of the first quarter of fiscal year 2027, we have revised the presentation of our disaggregated revenue disclosures to reflect the evolution of our product architecture to deliver the Agentic Enterprise. Consistent with how management evaluates the performance of our business and how we develop, sell, serve, and engage customers, subscription and support revenue is now reported across two primary categories: Agentforce Apps and Data 360, Headless Platform, and Other. Agentforce Apps groups our applications with Agentforce, reflecting how Agentforce is embedded in every app, and is comprised of Agentforce Sales, Agentforce Service, Agentforce Marketing, Agentforce Commerce, Agentforce Apps Flex Credits and Slack. Data 360, Headless Platform, and Other groups our data context layer and unified platform, to reflect the foundation powering Agentforce Apps, and is comprised of Data 360, Data 360 and Platform Flex Credits, Headless Platform, Informatica, Agentforce Mulesoft, Agentforce Tableau and Other. Revenues by Geography Three Months Ended July 31, (in millions)2026As a % of Total Revenues2025As a % of Total RevenuesGrowth Rate Americas$7,404 65 %$6,736 66 %10 % Europe2,764 25 2,429 24 14 Asia Pacific1,168 10 1,071 10 9 Hedging gains9 0 0 N/A $11,345 100 %$10,236 100 %11 % Six Months Ended July 31, (in millions)2026As a % of Total Revenues2025As a % of Total RevenuesGrowth Rate Americas$14,637 65 %$13,205 66 %11 % Europe5,518 25 4,766 24 16 Asia Pacific2,311 10 2,094 10 10 Hedging gains12 0 0 N/A $22,478 100 %$20,065 100 %12 % 37 Table of Contents Revenues by geography are determined based on the region of the Salesforce contracting entity, which may be different than the region of the customer. The increase in revenues across all regions was primarily due to the continued execution of our business and growth strategy, including increasing our geographic reach primarily through extending our go-to-market capabilities globally. Total revenues were minimally impacted due to fluctuations in foreign currencies during the three months ended July 31, 2026 compared to the three months ended July 31, 2025, and were positively impacted by one percent from foreign currency fluctuations during the six months ended July 31, 2026 compared to the six months ended July 31, 2025. Cost of Revenues Three Months Ended July 31,Variance (in millions)2026As a % of Total Revenues2025As a % of Total RevenuesDollars Subscription and support$2,021 18 %$1,645 16 %$376 Professional services and other628 5 597 6 31 Total cost of revenues$2,649 23 %$2,242 22 %$407 Six Months Ended July 31,Variance (in millions)2026As a % of Total Revenues2025As a % of Total RevenuesDollars Subscription and support$3,974 18 %$3,256 16 %$718 Professional services and other1,245 5 1,251 6 (6) Total cost of revenues$5,219 23 %$4,507 22 %$712 Cost of revenues increased in absolute dollars, and by one percent as a percentage of total revenues, for the three and six months ended July 31, 2026 compared to the same period a year ago, primarily as a result of an increase in service delivery expenses, including spend on hosting services and generative AI technologies, as well as amortization of intangible assets acquired through business combinations. We intend to continue to invest additional resources in our AI, agentic and cloud services to allow us to scale with our customers and continue to evolve our security measures. The timing of these expenses may cause our cost of revenues as a percentage of revenues to fluctuate over time due to changes in demand for our service offerings. Operating Expenses Three Months Ended July 31,Variance (in millions)2026As a % of Total Revenues2025As a % of Total RevenuesDollars Research and development$1,687 15 %$1,481 14 %$206 Sales and marketing3,859 34 3,443 34 416 General and administrative725 6 734 7 (9) Restructuring94 1 4 0 90 Total operating expenses$6,365 56 %$5,662 55 %$703 Six Months Ended July 31,Variance (in millions)2026As a % of Total Revenues2025As a % of Total RevenuesDollars Research and development$3,314 15 %$2,941 15 %$373 Sales and marketing7,628 34 6,872 34 756 General and administrative1,465 6 1,431 7 34 Restructuring174 1 40 0 134 Total operating expenses$12,581 56 %$11,284 56 %$1,297 Research and development expenses as a percentage of total revenues during the three months ended July 31, 2026 increased by approximately one percent compared to the same period a year ago due to increased employee-related costs, as well as spend on hosting services and generative AI technologies. Research and development expenses as a percentage of total revenues during the six months ended July 31, 2026 were consistent compared to the same period a year ago. For the three and six months ended July 31, 2026, the increase in research and development expenses in absolute dollars was primarily attributable to these same cost drivers. We expect that research and development expenses will likely remain consistent as a percentage of revenue over time as we continue investing in new and existing technologies, including AI, agents, Data Cloud offerings, and the integration of 38 Table of Contents Informatica. We plan to reinvest savings from efficiencies realized from the rapid deployment of generative AI technologies to accelerate our product roadmap. Sales and marketing expenses as a percentage of total revenues during the three and six months ended July 31, 2026 were consistent compared to the same periods a year ago. For the three and six months ended July 31, 2026, the increase in sales and marketing expenses in absolute dollars was primarily due to an increase in employee-related costs, including stock-based compensation expense, and amortization of intangible assets acquired through business combinations. We expect that sales and marketing expenses may decrease as a percentage of revenues over time as we continue to focus on leveraging our self-serve and partner-led channels and increasing our sales productivity, which includes the use of AI and agents. General and administrative expenses as a percentage of total revenues during the three and six months ended July 31, 2026 decreased by approximately one percent compared to the same periods a year ago due to revenue growth outpacing our general and administrative expenses growth. For the three and six months ended July 31, 2026, general and administrative expenses were relatively flat in absolute dollars compared to the same period a year ago. We expect that general and administrative expenses may decrease as a percentage of revenues over time as we continue to invest in process efficiency initiatives, which includes the use of AI and agents. In the three and six months ended July 31, 2026, we incurred approximately $94 million and $174 million, respectively, of costs related to our restructuring initiatives, which were primarily related to employee transitions, severance payments and employee benefits. We do not expect to incur significant additional charges in connection with our restructuring initiatives in the near term. Other Income and Expense Three Months Ended July 31,Variance (in millions)20262025Dollars $(473)$(67)$(406) Gains on strategic investments, net2,613 6 2,607 Other income81 135 (54) Six Months Ended July 31,Variance (in millions)20262025Dollars $(790)$(135)$(655) Gains (losses) on strategic investments, net$3,171 $(57)$3,228 Other income214 298 (84) Interest expense primarily relates to our debt as well as our finance leases. Interest expense increased during the three and six months ended July 31, 2026, primarily due to incremental interest expense associated with our March 2026 debt offering. We expect this debt offering to cause interest expense to increase as compared to prior year throughout fiscal 2027. Gains (losses) on strategic investments, net consists primarily of mark-to-market adjustments related to observable price adjustments related to our privately held equity securities, our publicly held equity securities and other adjustments, including impairments. Our strategic investment portfolio continues to be affected by market conditions for companies in which we hold private securities, including the pace of technological change driven by AI and volatility in public equity markets. For the three months ended July 31, 2026, our strategic investment portfolio gains were primarily driven by unrealized gains on privately held equity investments of $2.9 billion, partially offset by impairments on privately held investments of $285 million. For the six months ended July 31, 2026, our strategic investment portfolio gains were primarily driven by unrealized gains on privately held equity investments of $3.2 billion and realized gains on sales of securities of $354 million, partially offset by impairments on privately held investments of $404 million. The unrealized gains for the three and six months ended July 31, 2026 include gains of $2.7 billion and $3.0 billion, respectively, related to the Company s investment in Anthropic. Other income primarily consists of investment income on our marketable securities portfolio. Other income decreased during the three and six months ended July 31, 2026 compared to the three and six months ended July 31, 2025, primarily due to a decrease in investment income from lower interest rates. Provision For Income Taxes Three Months Ended July 31,Variance (in millions)20262025Dollars Provision for income taxes$(1,026)$(519)$(507) Effective tax rate23 %22 % 39 Table of Contents Six Months Ended July 31,Variance (in millions)20262025Dollars Provision for income taxes$(1,640)$(952)$(688) Effective tax rate23 %22 % We recorded a tax provision of $1.0 billion and $519 million for the three months ended July 31, 2026 and 2025, respectively, and a tax provision of approximately $1.6 billion and $952 million for the six months ended July 31, 2026 and 2025, respectively. Our effective tax rates increased from a year ago primarily due to stock-based compensation. Our effective tax rate may fluctuate due to changes in our domestic and foreign earnings, material discrete tax items, or a combination of these factors resulting from transactions or events, including acquisitions, changes to our operating structure and other macroeconomic factors. Liquidity and Capital Resources As of July 31, 2026, our principal sources of liquidity were cash, cash equivalents and marketable securities totaling $11.4 billion and accounts receivable of $6.3 billion. Our cash equivalents and marketable securities are comprised primarily of corporate notes and obligations, U.S. treasury securities, U.S. agency obligations, asset-backed securities, foreign government obligations, mortgage-backed obligations, covered bonds, time deposits, money market mutual funds and municipal securities. Our Revolving Loan Credit Agreement (as defined below), which provides the ability to borrow up to $5.0 billion in unsecured financing (the Credit Facility ) as of July 31, 2026, also serves as a source of liquidity. Net cash provided by operating activities could continue to be affected by various risks and uncertainties, including, but not limited to, the risks detailed in Part II, Item 1A, Risk Factors. We believe our existing cash, cash equivalents, marketable securities, cash provided by operating activities, unbilled amounts related to contracted noncancellable subscription agreements, which are not reflected on the balance sheet, and, if necessary, our borrowing capacity under our Credit Facility will be sufficient to meet our working capital, capital expenditure and debt maintenance needs over the next 12 months and thereafter. In the future, we may enter into arrangements to acquire or invest in complementary businesses, services, technologies and intellectual property rights. To facilitate these acquisitions or investments, we may seek additional equity or debt financing, which may not be available on terms favorable to us or at all, impacting our ability to complete subsequent acquisitions or investments. For example, we entered into certain credit agreements in connection with our acquisition of Informatica. See discussion in Debt below. Cash Flows For the three and six months ended July 31, 2026 and 2025, our cash flows were as follows (in millions):Three Months Ended July 31,Six Months Ended July 31, 2026202520262025$1,269 $740 $7,970 $7,216 (1,197)1,165 (3,380)(402)(622)(2,503)(3,543)(5,423)2025Average price per shareAmountSharesAverage price per shareAmount11 $192.00 $2,145 10 $273.42 $2,681 0 $ $0 8 $269.96 $2,199 Payment DateDividend per ShareAmount (in millions) Fiscal 2027 Three months ended April 30, 2026April 9, 2026April 23, 2026$0.440 $374 Three months ended July 31, 2026June 11, 2026July 2, 2026$0.440 $373 Fiscal 2026 Three months ended April 30, 2025April 10, 2025April 24, 2025$0.416 $406 Three months ended July 31, 2025June 18, 2025July 10, 2025$0.416 $404 The declaration and payment of future cash dividends is subject to the Board continuing to determine that the declaration of dividends is in the best interests of the Company and our stockholders, after giving consideration to continued capital availability, general economic and market conditions, and applicable laws and agreements. Contractual Obligations As of July 31, 2026, there were no significant changes to our estimates of future payments under our fixed contractual obligations and commitments as presented in Management s Discussion and Analysis of Financial Condition and Results of Operations included in Item 7 of Part II of our Annual Report on Form 10-K for the fiscal year ended January 31, 2026. For more information regarding our lease obligations as of July 31, 2026, see Note 5 Leases and Other Commitments to the condensed consolidated financial statements in Item 1 of Part I of this Quarterly Report on Form 10-Q. We generally expect to satisfy these commitments with cash on hand and cash provided by operating activities. We expect to continue to make additional investments in enterprise cloud computing services to allow us to scale with our customers and continue to evolve our security measures. We plan to upgrade or replace various internal systems to scale with our overall growth. While we continue to make investments in our infrastructure service providers to provide capacity for the growth of our business, our strategy may continue to change related to these investments and we may slow the pace of our investments. Other Future Obligations In May 2026, the Company entered into an agreement to acquire Contentful Global, Inc. ( Contentful ), provider of a leading composable content platform, for approximately $1.5 billion in cash, net of the value of shares currently owned by Salesforce, and subject to customary purchase price adjustments. The acquisition is expected to close in the third quarter of the Company s fiscal year 2027, subject to customary closing conditions, including the receipt of required regulatory approvals. In June 2026, the Company entered into an agreement to acquire Intercom, Inc. ( Fin ), a customer agent platform providing autonomous, end-to-end AI service agents, for approximately $3.6 billion in cash, and subject to customary purchase price adjustments. The acquisition is expected to close in the third quarter of the Company s fiscal year 2027, subject to customary closing conditions, including the receipt of required regulatory approvals. As of July 31, 2026, we expect approximately $170 million to $190 million in future cash payments related to our restructuring initiatives, primarily related to workforce costs, such as severance payments. We generally expect to satisfy these commitments with cash on our balance sheet and cash provided by operating activities. 42 Table of Contents Stakeholder Impact We believe that business is the greatest platform for change. Guided by our values, we work to earn the trust of our stakeholders. Transparency is key to trust, which is why we have published an annual Stakeholder Impact Report for over ten years to keep our stakeholders informed and to hold ourselves accountable to our sustainability, impact and equality strategies. Our disclosures in these areas are also informed by topics identified through relevancy assessments and third-party ESG reporting organizations, frameworks and standards. Read more about these initiatives and view our Stakeholder Impact Report at https://salesforce.com/stakeholder-impact-report. Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this report. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to financial market risks, including changes in foreign currency exchange rates, interest rates and equity investment risks. This exposure has increased due to recent financial market movements and changes to our expectations of near-term possible movements caused by the impact of the macroeconomic environment as discussed in more detail below. Foreign Currency Exchange Risk We primarily conduct our business in the following locations: the United States, Europe, Canada, Latin America, and Asia Pacific. The expanding global scope of our business exposes us to the risk of fluctuations in foreign currency markets, including emerging markets. This exposure is the result of selling in multiple currencies, operating in countries where the functional currency is the local currency and growth in our international investments, including infrastructure expansion, costs associated with third-party infrastructure providers and additional headcount in foreign countries. Specifically, our results of operations and cash flows are subject to fluctuations in the following currencies: the Euro, British Pound Sterling, Japanese Yen, Canadian Dollar, Australian Dollar, Indian Rupee, and Brazilian Real against the United States Dollar ( USD ). These exposures may change over time as business practices evolve and economic conditions change. Changes in foreign currency exchange rates could have an adverse impact on our financial results and cash flows. Foreign Currency Transaction Risk Our foreign currency exposures typically arise from selling annual and multi-year subscriptions in multiple currencies, customer accounts receivable, intercompany transfer pricing arrangements and other intercompany transactions. Our foreign currency management objective is to minimize the effect of fluctuations in foreign exchange rates on selected assets or liabilities and forecasted revenue without exposing us to additional risk associated with transactions that could be regarded as speculative. We pursue our objective by utilizing foreign currency forward contracts to offset foreign exchange risk. Our foreign currency forward contracts are generally short-term in duration. We record the fair value of forward contracts used to minimize the effect of foreign exchange rates on our assets or liabilities at the end of each reporting period, with changes in fair values recorded to other income (loss) on our consolidated statements of operations. We enter into foreign currency forward contracts, which we designate as cash flow hedges, to manage the volatility in cash flows associated with forecasted revenue denominated in certain currencies other than the U.S. dollar. For contracts qualifying as cash flow hedges, the derivative s gain or loss is initially reported as a component of accumulated other comprehensive income (loss) and subsequently reclassified into earnings in the same period the forecasted transaction affects earnings. All of our foreign currency forward contracts mature within twelve months. These forward contracts reduce, but do not entirely eliminate, the impact of currency exchange rate movements in the current period. Given the short duration of the forward contracts, the amount recorded is not significant. Our ultimate realized gain or loss with respect to foreign currency exposures will generally depend on the size and type of cross-currency transactions that we enter into, the currency exchange rates associated with these exposures and changes in those rates, the net realized gain or loss on our foreign currency forward contracts and other factors. Foreign Currency Translation Risk Fluctuations in foreign currencies impact the amount of total assets, liabilities, revenues, operating expenses and cash flows that we report for our foreign subsidiaries upon the translation of these amounts into USD. Total revenue during the three months ended July 31, 2026 were minimally impacted by fluctuations in foreign currencies compared to the three months ended July 31, 2025. In addition, fluctuations in foreign currencies minimally impacted our current remaining performance obligation growth rate as of July 31, 2026 compared to what we would have reported as of July 31, 2025 using constant currency rates. Interest Rate Sensitivity As of July 31, 2026, we had cash, cash equivalents and marketable securities totaling $11.4 billion. This amount was invested primarily in money market funds, time deposits, corporate notes and bonds, government securities and other debt securities with credit ratings of BBB or better. The cash, cash equivalents and marketable securities are held for general corporate purposes, including share repurchases, dividend payments, acquisitions of, or investments in, complementary 43 Table of Contents businesses, services or technologies, working capital and capital expenditures. Our investments are made for capital preservation purposes. We do not enter into investments for trading or speculative purposes. Our cash equivalents and our portfolio of marketable securities are subject to market risk due to changes in interest rates. Fixed-rate securities may have their market value adversely impacted due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall. Due in part to these factors, our future investment income may fall short of expectations due to changes in interest rates or we may suffer losses in principal if we are forced to sell securities that decline in market value due to changes in interest rates. However, because we classify our debt securities as available for sale, no gains or losses are recognized in our condensed consolidated statements of operations due to changes in interest rates. Gains or losses recognized in our condensed consolidated statements of operations are limited to those related to either the sale of securities prior to maturity or expected credit losses. Our fixed-income portfolio is also subject to interest rate risk. An immediate increase or decrease in interest rates of 100 basis points at July 31, 2026 could result in a $36 million market value reduction or increase of the same amount. This estimate is based on a sensitivity model that measures market value changes when changes in interest rates occur. Fluctuations in the value of our investment securities caused by a change in interest rates (gains or losses on the carrying value) are recorded in comprehensive income, net, and are realized only if we sell the underlying securities. At January 31, 2026, we had cash, cash equivalents and marketable securities totaling $9.6 billion. Changes in interest rates of 100 basis points would have resulted in market value changes of $31 million. Market Risk and Market Interest Risk We deposit our cash with multiple financial institutions. Debt We maintain debt obligations that are subject to market interest risk, as follows (in millions): InstrumentMaturity DatePrincipal Outstanding as of July 31, 2026Interest TermsContractual Interest Rate March 2028$3,500 Fixed4.50% April 2028 Senior NotesApril 20281,500 Fixed3.70 July 2028 Senior Sustainability NotesJuly 20281,000 Fixed1.50 March 2029 Senior NotesMarch 20294,250 Fixed4.65 Revolving Loan Credit Agreement October 20290 FloatingN/A 2026 Term Loan Credit Agreement (1)March 20316,000 Floating4.24 July 2031 Senior NotesJuly 20311,500 Fixed1.95 September 2031 Senior NotesSeptember 20313,750 Fixed4.90 March 2033 Senior NotesMarch 20332,750 Fixed5.20 March 2036 Senior NotesMarch 20364,500 Fixed5.55 July 2041 Senior NotesJuly 20411,250 Fixed2.70 March 2046 Senior NotesMarch 20461,500 Fixed6.40 July 2051 Senior NotesJuly 20512,000 Fixed2.90 March 2056 Senior NotesMarch 20563,750 Fixed6.55 July 2061 Senior NotesJuly 20611,250 Fixed3.05 March 2066 Senior NotesMarch 20661,000 Fixed6.70 Capital Invested Unrealized Gains (Cumulative) Unrealized Losses (Cumulative)Carrying Value as of July 31, 2026 Publicly held equity securities $3 $1 $(1)$3 Privately held equity securities 7,167 5,395 (1,273)11,289 Total equity securities$7,170 $5,396 $(1,274)$11,292 Fluctuations in the value of our privately held equity securities are only recorded when there is an observable transaction for a same or similar security of the same issuer, or in the event of impairment. These investments are in various classes of equity with varying rights and preferences. The particular securities we hold, and their rights and preferences relative to other securities within the capital structure of a company, may impact the magnitude by which our investment value moves in relation to changes in the total fair value of that company. Our five largest privately held equity securities represent $7.0 billion in total strategic investments as of July 31, 2026. If the enterprise value of the companies in which we hold those securities decreased by ten percent, the carrying value of our investment portfolio would decline by approximately $641 million. We anticipate future volatility in our condensed consolidated statements of operations due to changes in market prices, observable price changes, and impairments of our strategic investments. The resulting gains or losses could be material depending on market conditions and events, particularly in periods with economic uncertainty, inflation, volatile public equity markets, or unsettled global market conditions. We continually evaluate our investments in privately held and publicly traded companies. In certain cases, our ability to sell these investments may be impacted by contractual obligations to hold the securities for a set period of time after a public offering. In addition, the financial success of our investment in any company is typically dependent on a liquidity event, such as a public offering, acquisition or other favorable market event reflecting appreciation to the cost of our initial investment. All of our investments, particularly those in privately held companies, are therefore subject to a risk of partial or total loss of invested capital. 45 Table of Contents ITEM 4. CONTROLS AND PROCEDURES (a) Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act ), as of the end of the period covered by this report. In designing and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Based on management s evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are designed to, and are effective to, provide assurance at a reasonable level, that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission ( SEC ) rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. (b) Management s Report on Internal Control Over Financial Reporting Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our most recently completed fiscal quarter. Based on that evaluation, our principal executive officer and principal financial officer concluded that there has not been any material change in our internal control over financial reporting during the quarter covered by this report that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 46 Table of Contents PART II. ITEM 1. LEGAL PROCEEDINGS We evaluate all claims and lawsuits with respect to their potential merits, our potential defenses and counterclaims, settlement or litigation potential and the expected effect on us. Our technologies may be subject to an injunction if they are found to infringe the rights of a third party. In addition, many of our subscription agreements require us to indemnify our customers for third-party intellectual property infringement claims, which could increase the cost to us of an adverse ruling on such a claim. The outcome of any claims or litigation, regardless of the merits, is inherently uncertain. Any claims and other lawsuits, and the disposition of such claims and lawsuits, whether through settlement or litigation, could be time-consuming and expensive to resolve, divert our attention from executing our business plan, result in efforts to enjoin our activities, lead to attempts by third parties to seek similar claims and, in the case of intellectual property claims, require us to change our technology, change our business practices, pay monetary damages or enter into short- or long-term royalty or licensing agreements. For more information regarding legal proceedings see Note 12 Legal Proceedings and Claims to the condensed consolidated financial statements in Item 1 of Part I. ITEM 1A. RISK FACTORS In evaluating our business, you should carefully consider the following discussion of material risks, events and uncertainties that make an investment in us speculative or risky in addition to the other information included in this Quarterly Report. A manifestation of any of the following risks and uncertainties could, in circumstances we may or may not be able to accurately predict, materially and adversely affect our business and operations, growth, reputation, prospects, operating and financial results, financial condition, cash flows, liquidity and stock price. Some of the factors, events and contingencies discussed below may have occurred in the past, but the disclosures below are not representations as to whether or not the factors, events or contingencies have occurred in the past and instead reflect our beliefs and opinions as to the factors, events or contingencies that could materially and adversely affect us in the future. The risks and uncertainties described below are not the only ones we face. Other events, factors or uncertainties that we do not currently anticipate or that we currently deem immaterial also may affect our business, financial condition, results of operations, cash flows, other key metrics and the trading price of our common stock. Therefore, you should not consider the following risks to be a complete statement of all the potential risks or uncertainties that we face. Risk Factor Summary Operational and Execution Risks Any breaches in our security measures or those of our third-party data center providers, cloud computing platform providers, customers, partners, or other third-party vendors, or the underlying Internet infrastructure that cause unauthorized access to, disclosure, alteration, corruption, destruction or loss of customer data, our data or our IT systems, or disruption of authorized access thereto. Any defects or disruptions in our services that diminish demand for our services. Any interruptions or delays in services from third parties, including data center hosting facilities, cloud computing platform providers and other hardware and software vendors, as well as Internet infrastructure, or from our inability to adequately plan for and manage service interruptions or infrastructure capacity requirements. An inability to realize the expected business or financial benefits of company and technology acquisitions. Strain on our personnel resources and infrastructure from supporting our existing and growing customer base or an inability to scale our operations and increase productivity. Customer attrition, or our inability to accurately predict subscription renewals, customer usage of consumption-based offerings, and upgrade rates. Disruptions caused by periodic changes to our sales organization. Exposure to risks inherent in international operations from sales to customers outside the United States. A more time-consuming and expensive sales cycle, pricing pressure and implementation and configuration challenges for sales efforts to larger enterprise customers. Any loss of key members of our management team or development and operations personnel, or inability to attract and retain employees necessary to support our operations and growth. Any failure in the delivery of high-quality professional and technical support services related to our online applications. 47 Table of Contents Strategic and Industry Risks An inability to compete effectively in the intensely competitive markets in which we participate. Any failure to expand our services and to develop and integrate our existing services in order to keep pace with technological developments. An inability to maintain and enhance our brands. Partial or complete loss of invested capital, or significant changes in the fair value, of our strategic investment portfolio. Any discontinuance by third-party developers and vendors in embracing our technology delivery model and enterprise cloud computing services, or customers asking us for warranties for third-party applications, integrations, data and content. Social, ethical, and regulatory issues, including the development, deployment, use or capabilities of AI in our offerings. The evolving landscape related to environmental, social and governance matters. Legal and Regulatory Risks Privacy concerns and laws as well as evolving regulation of cloud computing, AI services, increased restriction of cross-border data transfers and other regulatory developments. Evolving industry-specific regulations, requirements, interpretive positions or standards. Lawsuits against us by third parties for various claims, including alleged infringement of proprietary rights. Any failure to obtain registration or protection of our intellectual property rights. Risks related to government contracts and related procurement regulations. Governmental sanctions and export and import controls that could impair our ability to compete in international markets and may subject us to liability. Financial Risks Downturns or upturns in new business, which may not be immediately reflected in our operating results because we generally recognize revenue from subscriptions for our services over the term of the subscription. Significant fluctuations in our rate of anticipated growth and any failure to balance our expenses with our revenue forecasts. Unanticipated changes in our effective tax rate and additional tax liabilities and global tax developments. Fluctuations in currency exchange rates, particularly the U.S. Dollar versus local currencies. Our debt service obligations, lease commitments and other contractual obligations. Risks Related to Owning Our Common Stock Fluctuations in our quarterly results. Volatility in our stock price and associated litigation. Provisions in our governing documents and Delaware law that might discourage, delay or prevent a change of control of the Company or changes in our management. General Risks Volatile and significantly weakened global economic conditions. The occurrence of natural disasters and other catastrophic events beyond our control. The long-term impact of climate change on our business. Operational and Execution Risks If our security measures, or those of our third-party data center providers, cloud computing platform providers, customers, partners, other third-party vendors or the underlying Internet infrastructure, are breached or otherwise compromised, resulting in the unauthorized access to, disclosure, alteration, corruption, destruction or loss of customer data, our data or our IT systems, or disruption of authorized access thereto, our services may be perceived as insecure, customers may reduce or terminate their use of our services, and we may incur significant reputational harm, legal liability, regulatory scrutiny or a negative financial impact. 48 Table of Contents Our services involve the storage and transmission of our customers and our customers customers proprietary and other sensitive data, including financial, health and other personal information. Our services and underlying infrastructure have in the past and may in the future be breached or compromised, including, for example, as a result of the following: attempts to fraudulently induce our employees, customers, partners, or third-party vendors to disclose sensitive information to gain unauthorized access to our or our customers data or IT systems; efforts by threat actors, including criminal organizations, state-sponsored actors and nation-states, to launch coordinated cyberattacks or supply chain attacks on our infrastructure or that of our third-party vendors, including through ransomware, destructive malware, distributed denial-of-service attacks or exploitation of previously unknown zero-day vulnerabilities, which may be discovered and weaponized by autonomous AI agents and through new frontier AI models; attempts to misuse our marketing, advertising, messaging or social products and functionalities to impersonate persons or organizations and disseminate information that is false, misleading or malicious; vulnerabilities arising from new technologies and infrastructures, including those from acquisitions, enhancements and updates to our existing products, and the adoption and deployment of AI technologies within our products, services, and internal systems, which may introduce novel security, data governance, or operational risks; vulnerabilities in products or components within the broad ecosystem in which our services operate and upon which they depend; attacks on, or vulnerabilities in, the underlying networks and services that power the Internet on which our products depend, most of which are not under our control or the control of our third-party vendors, partners or customers; and employee or contractor errors, omissions, unauthorized use or input of sensitive data, or intentional acts that compromise our security systems or lead to inadvertent exposure or loss of sensitive information. Although we devote significant resources to protecting our data and IT systems, we can provide no assurances that our security measures, including systems and processes designed to protect the confidentiality, integrity and availability of our customers and our customers customers proprietary and sensitive data, will be effective or that a material cybersecurity incident will not occur. Our ability to mitigate these risks may be impacted by the following: evolving and increasingly sophisticated techniques used to breach or disrupt IT systems and infrastructure, including the use or exploitation of AI technologies by threat actors to identify previously unknown vulnerabilities and accelerate, scale or personalize cyberattacks, which may significantly reduce the time available for us to remediate vulnerabilities before they are exploited; the increasing complexity of our internal IT systems as we integrate acquired businesses and adopt new technologies and data-sharing models; and our limited control over our customers, partners, and third-party vendors (including those authorized by customers to access their data), or over the processing of data by such third parties, which may limit our ability to maintain the integrity or security of such transmissions or processing. In the normal course of business, we and our customers are and have been the target of malicious cyberattacks and other security threats. Although to date we have not identified any security incidents involving our systems that have had a material financial impact on us, there can be no assurance that future incidents will not be material or significant. As our market presence grows, we may face increased risks of cyberattacks and other security threats. Additionally, as AI technologies, including generative and agentic AI, continue to evolve, threat actors are using and exploiting these technologies to enhance the sophistication, scale, speed and effectiveness of security threats that may be more difficult to detect and defend against, including future capabilities to identify previously unknown vulnerabilities and automate complex, multi-stage attack chains. Any delay in detecting, containing, or remediating a cybersecurity incident may result in additional harm, and in certain cases the full scope and impact of any such incident may not be immediately apparent. A cybersecurity incident could result in unauthorized access to, or the loss or denial of authorized access to, our IT systems or data, or those of our customers, including intellectual property and other proprietary, sensitive or confidential information. We are subject to contractual, regulatory and other legal obligations to notify relevant stakeholders of certain security incidents. For example, SEC rules require disclosure on Form 8-K of the nature, scope and timing of any material cybersecurity incident and the reasonably likely impact of such incident. As data protection, cybersecurity, and privacy laws continue to evolve, we may face additional reporting requirements to regulatory authorities. Assessing whether an incident is material or reportable to one or more external parties may require complex judgment and investigation, and disclosure of an incident may itself adversely affect our reputation, customer relationships and exposure to legal or regulatory proceedings. A security incident or related disclosure could result in loss of confidence in the security of our services, harm our reputation, negatively impact future sales, disrupt our business operations, increase insurance premiums and result in legal, regulatory and financial liability. Additionally, it may take considerable time for us to investigate and evaluate the full impact of cybersecurity attacks, particularly for sophisticated attacks, which may inhibit our ability to provide prompt, full and reliable information 49 Table of Contents about the incident to our customers, regulators and the public. Further, there can be no assurance that our insurance coverage will be sufficient in type or amount to cover the losses arising from a cybersecurity incident. In addition, prevention, detection, investigation and remediation of actual or suspected vulnerabilities or incidents, including determining whether notification or disclosure is required, may not be straightforward, may result in significant direct and indirect costs, including increased infrastructure and security spending and the diversion of resources from development activities. Defects or disruptions in our services could diminish demand for our services and subject us to substantial liability. We have in the past and may in the future identify defects in or experience disruptions to our services. Such issues may arise in a variety of circumstances, including from customers using our services in unanticipated ways that disrupt access for other customers; from employee, contractor or other third-party action or inaction; or from the complexity of our services, which incorporate a variety of hardware, proprietary software and third-party and open-source software and AI models. Across the industry, cloud services frequently contain undetected errors when first introduced or when new versions or enhancements are released. Although we benchmark AI model performance on metrics relevant to our services and test new models introduced into our services prior to deployment, AI models are probabilistic in nature and we cannot predict model output and subsequent AI agent behavior with complete accuracy. The use of agentic AI by us, our third-party service providers or customers may result in unanticipated outcomes that disrupt our systems or those of our customers, which may be difficult to anticipate, detect, or reverse. We have experienced and may in the future experience defects in our, our customers , or third-party vendors products and components, which may create vulnerabilities that inadvertently permit unauthorized access to protected customer data. We can provide no assurance that such defects or vulnerabilities will not occur in the future, have a material adverse effect on our business or subject us to substantial liability. Vulnerabilities in open-source, proprietary or third-party products and components can persist even after security patches have been issued if updates are not timely implemented or if threat actors exploit vulnerabilities before remediation is complete. As frontier AI models enhance the ability of threat actors to rapidly identify previously unknown vulnerabilities and automate complex, multi-stage attack chains, the time available to develop and deploy countermeasures is likely to be significantly compressed. Consequently, we may be required to undertake more frequent emergency patching and remediation efforts, which could increase our operational costs and heighten the risk of service disruptions caused by the patching process itself. Additionally, in some cases, vulnerabilities may not be immediately detected, which may make it difficult to recover critical services and lead to damaged assets. Since our customers rely on our products and services for important aspects of their operations, errors, defects, service disruptions or other performance issues have in the past adversely impacted our customers and could do so in the future. As a result, customers could elect to not renew their services, delay or withhold payment or make warranty or other claims against us. Such outcomes could reduce future sales, increase our allowance for doubtful accounts, increase collection cycles and expose us to litigation and related expenses. Any interruptions or delays in services from third parties, including data center hosting facilities, cloud computing platform providers and other hardware and software vendors, as well as Internet infrastructure, or from our inability to adequately plan for and manage service interruptions or infrastructure capacity requirements, could impair the delivery of our services and harm our business. We rely on third-party data center hosting facilities and cloud computing platform providers located in the United States and other countries, as well as the many different underlying networks and services that power the Internet, to deliver our products and services and operate critical business systems. We also rely on hardware purchased or leased from, software licensed from, and cloud computing platforms provided by third parties in order to offer our products and services, including database software, hardware and data from multiple vendors. Any disruption, degradation or failure of our systems, or those of the third parties on which we rely, regardless of cause, could result in service interruptions and harm our business. We have experienced service interruptions caused by technological and geopolitical incidents, and interruptions may occur in the future. As our reliance on these third-party systems increases, and particularly on third-party cloud computing platforms, our exposure to service interruptions and performance or quality issues may also increase. Service interruptions or other performance or quality issues may cause us to issue credits or pay penalties, cause customers to assert warranty or other claims or terminate their subscriptions, and adversely affect attrition rates and our ability to attract new customers, which could reduce revenue. Our business and reputation would also be harmed if our customers and potential customers perceive our services as unreliable. In certain jurisdictions, government-imposed data residency requirements may negatively impact our resiliency options. Requirements to seek pre-approval before backing up, migrating or transferring customer data to alternate infrastructure, even as an emergency mitigation measure, or to condition exemptions from residency obligations on commitments to additional local infrastructure investment, could increase our costs or constrain our operational flexibility. For many of our offerings, our production environment and customer data are replicated at geographically separate facilities. Certain offerings, including those added through acquisitions, may be delivered through alternate facilities or arrangements. We do not control the operation of any of these facilities, and they may be vulnerable to damage or interruption 50 Table of Contents from events outside of our control, such as natural disasters, supply chain disruptions, or geopolitical events. Despite precautions taken at these facilities, such as disaster recovery and business continuity arrangements, unanticipated events, problems, operational failures or other disruptions could result in prolonged service interruptions, and there can be no assurance that such interruptions would be remediated without significant cost, in a timely manner or at all. The hardware, software, data and cloud computing platforms that we rely on, including, for example, the large language models leveraged in our AI offerings, may not continue to be available at reasonable prices, on commercially reasonable terms or at all. Access to certain frontier AI models may also be subject to sudden suspension or restriction by providers or by governments due to safety concerns, regulatory mandates, or shifting priorities among cloud platforms. Any loss of the right to use such hardware, software, data or cloud computing platforms could significantly increase our expenses and disrupt or delay the provision of our services until equivalent technology is either developed internally or obtained from third parties and integrated into our systems. There can be no assurance that such replacement technology would be available or implemented in a timely manner or at all. As we scale our operations, the volume and nature of data processed by our offerings continue to evolve, including as a result of the deployment of AI technologies, and our infrastructure capacity requirements, including network capacity, computing power and energy requirements, may increase as a result. Additionally, increased energy consumption, including as a result of AI adoption, climate-related events, energy market volatility, and power grid disruptions may increase the operational costs related to inputs across our value chain, including for data centers. Increasing constraints on data center power, land, and water availability could limit our ability to expand data center capacity in affected regions, increase operational costs, or require us to modify our infrastructure plans in ways that could impair the delivery of our services. If we experience significant strains on our data center capacity, whether due to insufficient infrastructure capacity, public or governmental opposition to data centers or the unavailability of or limitations on suitable sites, or for other reasons outside of our control, our ability to migrate or scale operations could be constrained and our customers could experience performance degradation or service outages that may subject us to financial liabilities, result in customer losses, subject us to litigation and harm our reputation and business. As we add data centers and capacity and continue to move to cloud computing platform providers, we move or transfer our data and our customers data from time to time. Despite precautions taken during this process, any unsuccessful data transfers may impair the delivery of our services, which may damage our business. As we acquire companies or technologies, we may not realize the expected business or financial benefits and the acquisitions could prove difficult to integrate, disrupt our operations, dilute stockholder value and adversely affect our operating results and the market value of our common stock. As part of our business strategy, we periodically acquire complementary businesses, joint ventures, services and technologies and intellectual property rights. We continue to evaluate such opportunities and expect to make such acquisitions and other transactions and arrangements in the future, which may involve numerous risks and could create unforeseen operating difficulties and expenditures, including: potential failure to achieve the expected benefits on a timely basis or at all; potential identified or unknown security vulnerabilities in acquired products or technologies that expose us to additional cybersecurity risks, delay integration into our service offerings, or create challenges in increasing or maintaining the security standards of the acquired technologies; difficulty of transitioning the acquired technology onto our existing platforms; brand or reputational harm associated with our acquired companies; challenges converting the acquired company s revenue recognition policies and forecasting the related revenues, including both consumption- and subscription-based revenues and term software license revenue; in the case of foreign acquisitions, challenges with integrating operations across different cultures and languages and addressing the particular economic, currency, political, cybersecurity, regulatory and market risks associated with certain countries; operational and financial difficulties and strains on resources in integrating acquired operations, technologies, services, platforms and personnel (including cultural integration and retention of employees); regulatory challenges from antitrust or other regulatory authorities that may block, delay or impose conditions on the completion of transactions or the integration of acquired operations; challenges with maintaining the acquired company s customers, partners and third-party service providers; known and potential unknown liabilities associated with the acquired businesses, including due to litigation; difficulties in managing, or potential write-offs of, acquired assets, and potential financial and credit risks associated with acquired customers; negative impact to our results of operations because of the depreciation and amortization of acquired intangible assets, fixed assets and operating lease right-of-use assets; 51 Table of Contents additional stock-based compensation issued or assumed in connection with the acquisition, including the impact on stockholder dilution and our results of operations; ineffective or inadequate controls, procedures and policies at the acquired company; and the tax effects related to integration and business operation changes, realizability of our deferred tax assets, and uncertain tax liabilities. Any of these risks could harm our business or negatively impact our results of operations. In addition, to facilitate acquisitions, we may seek additional equity or debt financing, which may not be available on terms favorable to us or at all, which may affect our ability to complete subsequent acquisitions, and which may affect the risks of owning our common stock. If we finance acquisitions by issuing equity or convertible or other debt securities or taking out loans, our existing stockholders may be diluted, or we could face constraints related to the terms of, and repayment obligation related to, the incurrence of indebtedness that could affect our stock price. For example, in connection with our acquisition of Informatica, we entered into the Informatica Credit Agreements on an unsecured basis. In November 2025, the Company borrowed the full $6.0 billion available under the Informatica Credit Agreements to finance a portion of the cash consideration for the acquisition, repay existing indebtedness of Informatica and its subsidiaries, and pay related fees, costs, and expenses. For more information, see Note 8 Debt to the consolidated financial statements in Item 1 of Part I. Our ability to acquire other businesses or technologies, or integrate acquired businesses effectively, may be impaired by trade tensions and increased global scrutiny of foreign investments and acquisitions in the technology sector. Governments may continue to adopt or tighten restrictions of this nature, some of which may apply to acquisitions or integrations of businesses by us, and such restrictions or government actions could negatively impact our business and financial results. Supporting our existing and growing customer base could strain our personnel resources and infrastructure, and if we are unable to scale our operations, refine our operating model, and increase productivity, we may not be able to successfully implement our business plan. We continue to experience significant growth in our customer base, including through acquisitions, which has placed a strain on our management, administrative, operational and financial infrastructure. We anticipate that significant additional investments, including in human capital software, agentic AI and other technologies, will be required to scale our operations and increase productivity, address the needs of our customers, develop and enhance our services, expand into new geographic areas and support continued growth. These investments will increase our cost base, making it more difficult to offset any future revenue shortfalls by reducing expenses in the short term. We may not be able to make these investments as quickly or effectively as necessary to successfully scale our operations. We regularly upgrade or replace our software systems and processes. If the implementations of these new applications are delayed, or if we encounter problems with our new systems and processes or in migrating away from our existing systems and processes, our operations could be negatively impacted. For example, in the second quarter of fiscal 2026, we implemented a new enterprise resource planning system ( ERP ). Among other things, our ERP is essential to our financial planning, reporting, and compliance programs, and any unforeseen problems with our new ERP or in migrating away from previous systems and processes could harm our ability to manage our business. Our success will depend in part upon the ability of our senior management to plan and manage our projected growth effectively. We must continue to increase the productivity of our existing employees and to hire, train and manage employees as needed. Additionally, changes in our work environment and workforce may not meet the needs and expectations of our workforce or may create operational and workplace culture challenges, which could negatively impact our ability to increase employee productivity or attract and retain our employees and could adversely affect our operations. Furthermore, new AI offerings and technologies, which are integrated into our operations, may disrupt workforce needs and could adversely affect our operations if not managed properly. To manage the expected growth of our operations and personnel, we will need to continue to improve our operational, financial and management controls, our reporting systems and procedures and our utilization of real estate. If we fail to successfully scale our operations, refine our operating model, maintain effective governance and accountability, execute cross-functionally, and increase productivity across our organization, we may be unable to execute our business plan and the value of our common stock could decline. If our customers do not renew their subscriptions or if they reduce subscriptions at renewal, or if customer usage of consumption-based offerings is below expected levels, our revenue and current remaining performance obligation could decline and our business may suffer. If we cannot accurately predict subscription renewals or upgrade rates or optimal pricing for consumption-based contracts, we may not meet our revenue targets, which may adversely affect our stock price. Our customers have no obligation to renew their subscriptions after the expiration of their contractual subscription period, which is typically 12 to 36 months, and in the normal course of business, some customers have elected not to renew. Our customers may renew for fewer subscriptions, renew for shorter contract lengths or switch to lower cost offerings of our services. It is difficult to predict attrition rates given our varied customer base, the number of multi-year subscription contracts, and our shift toward consumption-based pricing models. Our attrition rates may increase or fluctuate as a result of various 52 Table of Contents factors, including customer dissatisfaction, customers spending levels, mix of customer base, decreases in the number of users at our customers, customer mergers and acquisitions, competition, pricing increases or changes, such as the increased prevalence of consumption-based pricing models and economic downturns. Additionally, our transition toward more complex pricing structures, including AI-driven consumption models, may make it more difficult to optimize our pricing, predict attrition rates, and accurately forecast revenue. Our future success depends in part on our ability to sell additional features and services, more subscriptions or enhanced editions of our services to our current customers. This may also require increasingly sophisticated and costly sales efforts that are targeted at senior management. Similarly, the rate at which our customers purchase new or enhanced services depends on a number of factors, including general economic conditions and customer receptiveness to price changes related to these additional features and services. In addition, the markets and monetization strategies for certain offerings, including Agentforce and Data 360, remain relatively new and uncertain and may present additional risks and challenges. If customer usage for these offerings is below expected levels, we may not be able to adequately forecast renewals or optimize pricing, which may prevent us from meeting our revenue targets and adversely affect our stock price. Periodic changes to our sales organization can be disruptive and may reduce our rate of growth. We periodically change and make adjustments to our sales organization in response to market opportunities, competitive threats, management changes, product introductions or enhancements, acquisitions, sales performance, increases in sales headcount, cost levels and other internal and external considerations. Such changes have in some periods resulted in, and may in the future result in, a reduction of productivity, which could negatively impact our operating results. Further, any significant change to our sales organization s compensation structure may be disruptive and negatively affect our operating results. Sales to customers outside the United States expose us to risks inherent in international operations. We sell our services throughout the world and are subject to risks and challenges associated with international business. The risks and challenges associated with sales to customers outside the United States or those that can affect international operations generally, include: regional economic and political conditions, natural disasters, acts of war, terrorism and actual or threatened public health emergencies, or other geopolitical events, including the evolving relations between the United States and China, the United States and Russia, and ongoing conflicts, such as the war in Ukraine and conflicts in the Middle East; localization of our services, including translation into foreign languages and associated expenses; regulatory frameworks or business practices favoring local competitors; pressure on the creditworthiness of sovereign nations, where we have customers and a balance of our cash, cash equivalents and marketable securities; foreign currency fluctuations and controls, which may make our services more expensive for international customers and could add volatility to or negatively impact our operating results; compliance with complex and evolving governmental laws and regulations, such as those governing AI; liquidity issues or political actions by sovereign nations, including nations with a controlled currency environment, could result in decreased values of these balances or potential difficulties protecting our foreign assets or satisfying local obligations; vetting and monitoring our third-party resellers in new and evolving markets to confirm they maintain standards consistent with our brand and reputation; treatment of revenue from international sources, evolving domestic and international tax environments and changes to tax codes, including being subject to and paying withholding taxes under foreign tax laws; uncertainty regarding changes in trade policies, including trade wars, the threat or imposition of tariffs or other trade restrictions, as well as any retaliatory actions; perceptions of U.S.-based companies in the regions where we operate or plan to operate; perceptions of regions or governments in the regions where we operate or plan to operate, resulting in negative publicity or reputational harm; different pricing environments; difficulties in staffing and managing foreign operations; different or lesser protection of our intellectual property, including increased risk of theft of our proprietary technology and other intellectual property, and more prevalent cybersecurity risks, particularly in jurisdictions in which we have historically chosen not to operate; and longer accounts receivable payment cycles and other collection difficulties. 53 Table of Contents Any of these factors could negatively impact our business and results of operations. The above factors may also negatively impact our ability to successfully expand into emerging market countries, where we have little or no operating experience, where it can be costly and challenging to establish and maintain operations, including hiring and managing required personnel, and difficult to promote our brand, and where we may not benefit from any first-to-market advantage or otherwise succeed. Sales to larger enterprise customers may involve more time-consuming and expensive sales cycles, pricing pressure and implementation and configuration challenges, and, for some complex transactions, delayed revenue recognition, all of which could harm our business and operating results. We may face greater costs, longer sales cycles, greater competition and less predictability in completing some of our sales to large enterprise customers, including governmental entities and customers in regulated industries. In these market segments, the customer s decision to use our services particularly our newer AI and data-related offerings such as Agentforce and Data 360 may require us to provide extensive implementation planning, education regarding the use and benefits of our services, as well as address other concerns, such as heightened privacy and data protection requirements. In addition, larger enterprise customers and governmental entities often demand significant pricing and packaging flexibility, as well as complex configuration and integration services and features. These opportunities often require us to devote greater sales support and professional services resources to individual customers, driving up costs and time required to complete sales and diverting our own sales and professional services resources to a smaller number of larger transactions, while potentially requiring us to delay revenue recognition on some of these transactions until the technical or implementation requirements have been met. Additionally, the pricing and packaging strategies for enterprise and other customers for our offerings, including Agentforce and Data 360, may not be widely accepted. Our adoption of or failure to adopt changes to our pricing and packaging models, or failure to otherwise execute our go-to-market strategies for large, complex transactions, may harm our business. We may lose key members of our management team or development and operations personnel, and may be unable to attract and retain employees we need to support our operations and growth. Our success depends substantially upon the continued services of our executive officers and other key members of management, particularly our chief executive officer. We are also substantially dependent on existing development and operations personnel because of the complexity of our services and technologies. Our executive officers, key management, and development and operations personnel could terminate their employment with us at any time. Effective succession planning is important to our long-term success, and changes in our management team or the loss of one or more of our key employees or groups of employees could seriously harm our business. The technology industry is subject to substantial and continuous competition for engineers with high levels of experience in designing, developing and managing software and technology services, as well as competition for sales executives, data scientists and development and operations personnel. We have experienced challenges with significant competition in talent recruitment and retention, particularly for engineers with experience in AI, and may not be successful in recruiting or retaining such talent. We have experienced and expect to continue to experience difficulty in hiring, developing, integrating and retaining highly skilled employees with appropriate qualifications. These difficulties may be amplified by evolving restrictions on immigration, travel, or availability of visas for skilled technology workers. Additionally, our compensation arrangements and benefits may not always be successful in attracting new employees or retaining and motivating our existing personnel. If we fail to attract new personnel or fail to retain current personnel, our business and future growth prospects could be severely harmed. We have undertaken various restructuring initiatives intended to improve operating margins and continue advancing our ongoing commitment to profitable growth, which have included a workforce reduction, select data center exits, and office space reductions within certain markets. These restructuring actions, or any similar actions taken in the future, could negatively impact our ability to attract, integrate, retain and motivate key employees. In addition, we believe in the importance of our corporate culture, which fosters dialogue, collaboration, recognition, equality and a sense of family. As our organization has grown and expanded globally, and as our workplace plans have developed, including workforce and office space reductions related to our restructuring actions, we have experienced and may continue to experience difficulties maintaining our corporate culture globally, including managing the complexities of communicating with all employees. Any inability to maintain our corporate culture could negatively impact our ability to attract and retain employees, harm our reputation with customers or negatively impact our future growth. Any failure in the delivery of high-quality professional, training, and technical support services related to our online applications may adversely affect our relationships with our customers and our financial results. Our customers sometimes require highly skilled and trained service professionals to successfully onboard and implement our applications. Customers depend on our customer success and support organizations to provide coaching, resolve technical issues, and offer proactive guidance relating to our applications. Implementation, training, and advisory services may be 54 Table of Contents performed by us, our customers, a third party, or a combination thereof. Our strategy is to work with third parties to increase the breadth of capability and depth of capacity for delivery of these services to our customers. If customers are not satisfied with the quality and timing of work or with the type of services or solutions delivered, we could incur additional costs to address the situation, the profitability of that work might be impaired, our revenue recognition could be impacted and the customer s dissatisfaction with the services received could negatively impact our ability to sell our other offerings to that customer or retain existing customers. In addition, negative publicity related to our customer relationships, regardless of its accuracy, may further damage our business by affecting our ability to compete for new business with current or prospective customers. We may be unable to respond quickly enough to accommodate short-term increases in customer demand for customer success and support services across our varying and diverse offerings. In addition, our sales process is highly dependent on our applications and business reputation and on positive recommendations from our existing customers. Any failure or perceived failure to maintain high-quality professional, onboarding, training, and technical support services could adversely affect our reputation, our ability to sell our service offerings to existing and prospective customers, and our business, operating results and financial position. Strategic and Industry Risks The markets in which we participate are intensely competitive, and if we do not compete effectively, our operating results could be harmed. The market for enterprise applications and platform services is highly competitive, rapidly evolving, fragmented and subject to changing technology, low barriers to entry, shifting customer needs and frequent introductions of new products and services. Many prospective customers have invested substantial personnel and financial resources to implement and integrate their current enterprise software into their businesses and therefore may be reluctant or unwilling to migrate away from their current solution to a different enterprise software service. Additionally, third-party developers may be reluctant to build application services on our platform since they have invested in other competing technology platforms. Our current competitors include: vendors of packaged business software, as well as companies offering enterprise applications delivered through on-premises offerings from enterprise software application vendors and cloud computing application service providers, either individually or with others; AI-native companies and emerging startups that leverage generative AI and large language models as the core foundation of their architecture, offering highly specialized, autonomous, or automated solutions that may bypass traditional business process workflows or displace established user interfaces; software companies that provide their product or service free of charge as a single product or when bundled with other offerings, or only charge a premium for advanced features and functionality, as well as companies that offer solutions that are sold without a direct sales organization; vendors who offer software tailored to specific services, industries or market segments, as opposed to our full suite of service offerings, including suppliers of traditional business intelligence and data preparation products, integration software vendors, marketing vendors, e-commerce solutions vendors or AI software and service vendors; productivity tool and email providers, unified communications providers and consumer application companies that have entered the business software market; and traditional platform development environment companies and cloud computing development platform companies who may develop toolsets and products that allow customers to build new applications, including AI-augmented applications, that run on the customers current infrastructure or as hosted services, as well as would-be customers who may develop enterprise applications for internal use. In addition, we may face more competition as we expand our service offerings. Some of our current and potential competitors may have competitive advantages, such as greater name recognition, longer operating histories, more significant installed bases, broader geographic scope, broader suites of service offerings and larger marketing budgets, as well as substantially greater financial, technical, personnel and other resources. In addition, many of our current and potential competitors have established marketing relationships and access to larger customer bases, and have major distribution agreements with consultants, system integrators and resellers. We also experience competition from smaller competitors that may be more agile in responding to customers demands and offer more targeted and simplified solutions. Our competitors may be able to respond more quickly and effectively than we can to new or changing opportunities, technologies, standards or customer requirements, or provide competitive pricing, more flexible contracts or faster implementations. Additionally, as we continue to increasingly build AI into many of our offerings, we face more competition as AI technologies are increasingly integrated into the markets in which we compete. New AI offerings may disrupt our service offerings or transform workforce needs and negatively impact demand for our offerings, or our competitors may be able to incorporate AI into their offerings more efficiently or successfully than we are able to and achieve greater and faster adoption. Even if our products and services are more effective than the products and services that our competitors offer, potential customers might select competitive 55 Table of Contents products and services in lieu of purchasing our products and services. For all of these reasons, we may not be able to compete successfully against our competitors, which could negatively impact our future sales and harm our business. Our efforts to expand our service offerings and to develop and integrate our existing services in order to keep pace with technological developments may not succeed and may reduce our revenue growth rate and harm our business. Our efforts to expand our current service offerings may not succeed and may reduce our revenue growth rate. In addition, the markets and monetization strategies for certain offerings, including Agentforce and Data 360, remain relatively new and uncertain and our expansion into such offerings, and related investments, may present additional risks and challenges. For example, we offer certain products, including Agentforce and Data 360, through a consumption-based business model and may increase the number of products through which we do so. We have limited experience with determining optimal pricing for our consumption-based contracts and may have lower levels of customer consumption of our products than we expect which may result in suboptimal pricing. Further, the introduction of future platform changes and upgrades may not result in long term revenue growth. If we are unable to develop enhancements to, and new features for, our existing or new services that keep pace with rapid technological developments, our business could be harmed. The success of enhancements, new features and services depends on several factors, including its timely completion and introduction and market acceptance, as well as our ability to integrate all our product and service offerings and develop adequate selling capabilities in new markets. Failure in this regard may significantly impair our revenue growth as well as negatively impact our operating results if the additional costs are not offset by additional revenues. In addition, because our services are designed to operate over various network technologies and on a variety of mobile devices, operating systems and computer hardware and software platforms, we need to continuously modify and enhance our services to keep pace with changes in these technologies, as well as continue to maintain and support our services on legacy systems. We may not be successful in developing these modifications and enhancements or in bringing them to market timely. Additionally, if we fail to timely anticipate or identify significant technology trends and developments, or if we do not devote appropriate resources to adapting to such trends and developments, our business could be harmed. Uncertainties about the timing and nature of new network platforms or technologies, modifications to existing platforms or technologies, including text messaging capabilities within these platforms, or changes in customer usage patterns thereof could increase our research and development or service delivery expenses or lead to our increased reliance on certain vendors. Any failure of our services to operate effectively with future network platforms and technologies could reduce the demand for our services, result in customer dissatisfaction and harm our business. Our continued success depends on our ability to maintain and enhance our brands. We believe that the brand identities we have developed, including associations with trust, customer success, innovation, equality and sustainability have significantly contributed to the success of our business. Maintaining and enhancing the Salesforce brand and our other brands is critical to expanding our base of customers, partners and employees. Our brand strength depends largely on our ability to remain a technology leader and provide high-quality innovative products, services and features in a secure, reliable manner that enhances our customers success even as we scale and expand our services. In order to maintain and enhance the strength of our brands, we have made and may in the future make substantial investments to expand or improve our product offerings and services, including our investments in data and AI technologies, or we may enter new markets that may be accompanied by initial complications or ultimately prove to be unsuccessful. Further, entry into markets with weaker protection of brands or changes in the legal systems in countries where we operate may impact our ability to protect our brands. If we fail to maintain, enhance or protect our brands, or if we incur excessive expenses in our efforts to do so, our business, operating results and financial condition may be materially and adversely affected. We are subject to risks associated with our strategic investments, including partial or complete loss of invested capital. Significant changes in the fair value of this portfolio could negatively impact our financial results. We manage a portfolio of strategic investments in both privately held and publicly traded companies focused primarily on enterprise technology and AI companies, as well as systems integrators. While we invest in companies that we believe are digitally transforming their industries, advancing responsible AI, improving customer experiences, helping us expand our solution ecosystem or supporting other corporate initiatives, we may still experience unforeseen reputational harm associated with our investments. Our investments range from early- to late-stage companies, including investments made concurrent with a company s initial public offering. Investments in early-stage companies are inherently speculative, as these companies may not yet be revenue-generating and could still be in the process of developing their products and services at the time of our investment. The financial success of our investment in any company is typically dependent on a liquidity event, such as a public offering, acquisition or other favorable market event reflecting appreciation to the cost of our initial investment. Our investments may face challenges from regulatory authorities potentially resulting in unexpected costs, delays, or unfavorable conditions imposed on transactions involving our investment portfolio. In certain cases, our ability to sell these investments 56 Table of Contents may be impacted by contractual obligations to hold the securities for a set period of time after a public offering. All of our investments are subject to a risk of partial or total loss of invested capital. We are exposed to volatility in our operating results due to changes in market prices, observable price changes and impairments of our strategic investments. Concentrations of portfolio value in specific industry sectors, such as emerging technology and AI, or in one or more specific companies, could increase our exposure to such volatility in the event of industry-wide or company-specific downturns. The measurement of our non-marketable equity securities at fair value is inherently subjective and requires management judgment and estimation. The resulting gains or losses have been and could be material depending on market conditions and events, particularly in periods with economic uncertainty, inflation, geopolitical conflict, volatile public equity markets or unsettled global market conditions. If third-party developers and vendors do not continue to embrace our technology delivery model and enterprise cloud computing services, or if our customers seek warranties from us for third-party applications, integrations, data and content, our business could be harmed. Our success depends on the willingness of a growing community of third-party developers and vendors to build applications and provide integrations, data and content that are complementary to our services. Without the continued development of these applications and provision of such integrations, data and content, both current and potential customers may not find our services sufficiently attractive, which could impact future sales. In addition, for those customers who authorize a third-party technology partner to access their data, we do not provide any warranty related to the functionality, security or integrity of the data access, transmission or processing. Despite contract provisions to protect us, customers may look to us to support and provide warranties for the third-party applications, integrations, data and content, even though not developed or sold by us, which may expose us to potential claims, liabilities and obligations, all of which could harm our reputation and our business. Social, ethical, and regulatory issues, including the development, deployment, use or capabilities of AI in our offerings, may result in reputational harm, legal liability and increased compliance costs. Policies we adopt or choose not to adopt, on social and ethical issues, particularly regarding the development, deployment or use of our products, may be viewed as controversial by employees, customers, potential customers, or regulators who have varied, evolving and oftentimes conflicting expectations. These perceptions have in the past, and may in the future, impact our ability to attract or retain employees and customers and may result in negative publicity or reputational harm. Our decisions about whether to conduct business with potential customers, or whether to continue or expand relationships with existing customers, may also impact our stakeholder relationships and reputation. Actions taken by our customers or employees, including through the use or misuse of our products or technologies for unlawful activities, improper information sharing or other harmful purposes, may result in reputational harm, regulatory scrutiny or legal liability. Regulatory frameworks such as the EU Digital Services Act ( DSA ), the EU AI Act and other rapidly evolving and sometimes conflicting global laws and regulations related to AI, privacy and consumer protection could increase compliance costs, restrict features or data flows, delay launches and expose us to penalties or litigation. We are increasingly building AI into many of our offerings, including generative and agentic AI. As with many technical innovations, AI offerings, such as Agentforce, and our Agentforce 360 Platform present additional risks and challenges that could affect customer adoption and therefore our business. For example, the development and deployment of AI offerings, including those involving information regarding our customers customers, raise emerging ethical, legal and operational considerations. If we enable or offer solutions that draw controversy due to their perceived or actual impact on human rights, privacy, employment or other social concerns, we may experience new or heightened governmental or regulatory scrutiny, investigations, enforcement actions, fines or penalties and reputational or competitive harm. As we develop and deploy AI applications in our products and services, including in customer-facing contexts, the speed, scale and complexity of related data processing may increase. AI applications may be targeted or misused, or may perform in ways that are inaccurate, biased, unreliable or otherwise harmful, or that implicate personal or proprietary data in ways that may be difficult to anticipate, detect or control. Such issues could result in regulatory scrutiny, litigation, contractual disputes, loss of customer trust or reputational harm. Inadequate or ineffective AI development, testing, deployment, content labeling, governance, monitoring or oversight, whether by us or others, could result in our AI applications not operating as intended or with reduced functionality, reduced acceptance of our products and services or diminished confidence in the decisions, predictions, analysis or other content that our AI applications produce. Such risks may be heightened as AI applications are integrated into a broader range of our products and services, or as coding assistants increase the pace of development. This could subject us to regulatory scrutiny, competitive harm, legal liability and reputational damage. We may rely in part on third-party models, datasets, cloud infrastructure or other technologies in developing or offering certain AI applications. Our reliance on such third parties exposes us to risks relating to performance, availability, security vulnerabilities, intellectual property claims, licensing restrictions, cost increases or changes in terms of service. If a third-party 57 Table of Contents provider modifies, suspends or terminates access to its models, data or infrastructure, or if such technologies fail to perform as expected, our ability to offer, scale or support certain AI applications may be adversely affected, and we may incur additional costs to mitigate such impacts. The rapid evolution of AI technologies and related regulatory requirements will require the allocation of significant resources to develop, test, monitor and maintain our products and services in order to comply with applicable laws and regulations and to address concerns relating to accuracy, bias, transparency, explainability, security and data provenance. Uncertainty surrounding new and emerging AI applications, including generative AI content creation, AI agents, and multi-organization and multi-agent interoperability considerations may require additional investment in compliance programs, governance frameworks, licensing arrangements, documentation, auditing and risk mitigation processes, which may be complex, costly and could impact our profit margins. Moreover, expansion of our AI capabilities to content generation, including through Agentforce and other generative AI offerings, introduces additional risks and responsibilities. AI technologies may produce content that is inaccurate, misleading, biased, offensive or unsafe, and may implicate privacy, security or intellectual property rights, including through the generation of copyrighted or other protected material. If our customers or others rely on such content to their detriment, or if regulators or rights holders assert claims relating to AI-generated content, we may be exposed to litigation, regulatory investigations, enforcement actions, indemnification obligations, monetary penalties or other liabilities, or reputational harm. Developing, testing and deploying AI technologies may also increase the cost profile of our offerings due to the computing costs required. If we are unable to effectively mitigate these risks, or if our mitigation efforts result in excessive costs, our reputation, business, operating results and financial condition may be adversely affected. The evolving landscape related to environmental, social and governance matters may expose us to risks that could adversely affect our reputation and performance. Equality and sustainability are core values of the Company. In furtherance of these values, we have in the past and may in the future establish and disclose quantitative and qualitative statements related to equality and sustainability matters, which are subject to numerous risks and dependencies. The proliferation of regulations and guidance addressing climate, human capital and other topics at the regional, state and national levels has required and may continue to require significant effort and resources, and our practices, processes and controls may not ensure compliance with evolving standards. Further, various regulations or guidance may conflict with each other, making universal compliance challenging as a multinational company, and our status as a government contractor in various jurisdictions, including but not limited to the U.S. where we are headquartered, may also result in greater exposure or differentiated obligations or requirements with which we would seek to comply. The standards and frameworks for tracking and reporting on these matters continue to evolve, and our use, interpretation or application of such frameworks and standards may change from time to time or differ from those of other companies, which may result in a lack of consistent or meaningful comparative data from period to period or between Salesforce and other companies. Furthermore, the integration and use of AI in our products and operations introduces operational risks and complexities, which may impact our ability to accurately track, benchmark, or report on these matters. In addition, our practices and disclosures may not satisfy, appropriately respond to the concerns of or be supported by all investors, customers, partners, regulators, enforcement authorities or other stakeholders, whose expectations and requirements are evolving, varied, and oftentimes conflicting. Any violation of, non-compliance with or failure to meet such expectations or requirements, or negative publicity related to our practices or disclosures, could result in harm to our reputation, our ability to attract or retain employees, and our attractiveness as an investment, business partner, acquiror or service provider, could expose us to increased scrutiny or to regulatory or enforcement actions or litigation, and could cause us to incur increased costs to address or defend against such actions. Legal and Regulatory Risks Privacy concerns and laws as well as evolving regulation of cloud computing, AI services, cross-border data transfers and other domestic or foreign regulations may limit the use and adoption of our services and adversely affect our business. Regulation related to the provision of services over the Internet continues to evolve, as federal, state and foreign governments adopt new, or modify existing, laws and regulations addressing data privacy, cybersecurity, data protection, data sovereignty and the collection, storage, hosting, transfer, use and other processing of data. The volume, complexity and scope of these regulatory requirements may continue to increase, including in response to heightened geopolitical tensions and the rapid advancement of frontier AI capabilities. In some cases, data privacy laws and regulations, such as the EU s General Data Protection Regulation ( GDPR ), impose obligations directly on us as both a data controller and a data processor, as well as on many of our customers. In addition, domestic data privacy laws, such as the California Consumer Privacy Act, as amended by the California Privacy Rights Act ( CCPA ), and similar laws that have passed, gone into effect or are being considered in numerous other U.S. states, impose obligations on us and many of our customers, potentially as both a covered business and service provider. 58 Table of Contents These laws continue to evolve and expand, including through the adoption of new comprehensive data protection regimes such as India s Digital Personal Data Protection Act 2023, and through the introduction of additional implementing rules and regulations in various jurisdictions. As a result, we and our customers may become subject to additional regulatory burdens. New EU laws, including the DSA, the Data Act and the EU AI Act, have also been adopted and, depending on how they are implemented, interpreted and enforced, may impose additional rules, restrictions or compliance requirements on the development, deployment or use of our products and services, including AI-enabled features. Historically, certain legal frameworks have provided safe harbors to companies that host or transmit content provided by others, including limitations on liability for monetary damages arising from copyright infringement or defamation based on customer-provided content. There is increasing legislative, regulatory and judicial scrutiny of these safe harbors, and ongoing legal efforts to repeal, narrow or limit these protections that were previously available to us. The loss or further erosion of these protections may require us to alter, limit or discontinue certain of our services, or may impose additional contractual terms on customers to mitigate potential liability for customer misconduct. Compliance with these laws and regulations may require us to make changes to our practices, products or services to enable us or our customers to meet applicable legal requirements, and may increase our potential liability exposure through new or higher potential penalties, fines, investigations or litigation, including in connection with data breaches. Privacy and data protection laws and regulations are also subject to differing interpretations and may be inconsistent or conflicting across jurisdictions. These factors have increased scrutiny from customers, particularly those in the public sector and highly regulated industries and may be perceived differently from customer to customer. In addition, we may be subject to increased liability exposure or regulatory scrutiny related to the use of certain technologies associated with the collection, management or processing of data, including the use of cookies, automated AI processing, and similar technologies. These developments could reduce demand for our services, require us to take on more onerous contractual obligations, restrict our ability to store, transfer and otherwise process data or, in some cases, limit our or our customers ability to offer our services in certain locations, deploy our solutions, reach current or prospective customers, or derive insights from customer data on a global basis. For example, statutory damages available through a private right of action for certain data breaches under the CCPA may increase our and our customers potential liability exposure and the demands customers place on us. In July 2020, the Court of Justice of the European Union ( CJEU ) invalidated the EU-U.S. Privacy Shield Framework, one of the mechanisms that previously permitted transfers of personal data from the European Economic Area ( EEA ) to the United States. Even though the CJEU decision upheld the use of Standard Contractual Clauses ( SCCs ) as a lawful transfer mechanism, the decision created ongoing uncertainty regarding EU-to-U.S. data transfers. While the EU and U.S. governments have since adopted the EU-U.S. Data Privacy Framework to facilitate such transfers and address the concerns raised by the CJEU, it remains uncertain whether this framework will withstand future legal challenges. As a result, regulators may continue to interpret the CJEU s decision and the reasoning underlying it as significantly restricting certain cross-border data transfers increasing the cost and complexity of providing our services in certain markets. Certain countries outside of the EEA have enacted or are considering enacting laws that require varying degrees of local data residency or localization. Additionally, recent governmental actions and geopolitical developments have increased the perceived risk that our services, particularly in the EU, could be disrupted, suspended or terminated. Customers operating across jurisdictions with overlapping or conflicting data regulations may face compliance complexity that affects their adoption, use, or renewal of our services and may generate contractual demands that are difficult to standardize across our product and service offerings. The costs of compliance with, and other burdens imposed by, privacy laws, regulations and standards may limit the use and adoption of our services, reduce overall demand for our services, make it more difficult to meet expectations from our commitments to customers and our customers customers, lead to significant fines, penalties or liabilities for noncompliance, impact our reputation or slow the pace at which we close sales transactions particularly where customers request specific warranties or broad indemnities for noncompliance with privacy laws, any of which could harm our business. In addition to government activity, privacy advocates and industry groups have established or may establish new self-regulatory standards or voluntary certification requirements that customers may expect us to meet. If we are unable to maintain required certifications or comply with such standards, our ability to provide our services to certain customers could be adversely affected. We have also observed increased private enforcement of data protection obligations, including through private actions for alleged noncompliance, which could result in litigation, harm to our business, reputational harm or liability. For example, in 2020 we were named as a defendant in a legal proceeding brought by a Dutch privacy advocacy group (the Privacy Collective) on behalf of certain Dutch citizens alleging violations of the GDPR and Dutch Telecommunications Act. Although the claims were initially dismissed, that decision was later reversed on appeal, and that matter remains pending before the Dutch Supreme Court. Although we believe we have strong defenses in these or similar matters, current or future claims of this nature could cause reputational harm or liability. In addition, a shift in consumers data privacy expectations or other social, economic or political developments could impact regulatory enforcement priorities, require our cooperation with regulators and increase the cost of compliance with applicable privacy regulations. 59 Table of Contents Furthermore, the uncertain and evolving regulatory environment and broader trust climate may heighten concerns regarding data privacy, cybersecurity, and AI, particularly where advanced analytics or automated functionality is involved, which could cause our customers or their end users to limit the data they provide or their use of our products and services. Even the perception that personal data is not adequately protected or that our products or services do not comply with applicable regulatory requirements could inhibit sales, reduce adoption of our offerings or otherwise adversely affect our business. Industry-specific regulations and other requirements and standards are evolving and industry-specific laws, regulations, interpretive positions or standards could harm our business. Our customers and potential customers conduct business in a variety of industries, including financial services, the public sector, healthcare and telecommunications. Regulators in certain industries have adopted and may in the future adopt regulations or interpretive positions regarding the use of cloud computing, AI services and other outsourced services. The costs of compliance with, and other burdens imposed by, industry-specific laws, regulations and interpretive positions may limit our customers use and adoption of our services and reduce overall demand for our services. Compliance with these regulations may also require us to devote greater resources to support certain customers, which may increase costs and lengthen sales cycles. For example, some financial services regulators have imposed guidelines for use of cloud computing services that mandate specific controls or require financial services enterprises to obtain regulatory approval prior to outsourcing certain functions. If we are unable to comply with these guidelines or controls, or if our customers are unable to obtain regulatory approval to use our services where required, our business may be harmed. In addition, an inability to satisfy the standards of certain voluntary third-party certification bodies that our customers may expect may have an adverse impact on our business and results. Any inability in the future to achieve or maintain industry-specific certifications or other requirements or standards relevant to our customers may harm our business and adversely affect our results. Further, in some cases, industry-specific, regionally-specific or product-specific laws, regulations or interpretive positions may impact our ability, as well as the ability of our customers, partners and data providers, to collect, augment, analyze, use, transfer and share personal and other information that is integral to certain services we provide. The interpretation of many of these statutes, regulations and rulings is evolving in the courts and administrative agencies and an inability to comply may have an adverse impact on our business and results. This impact may be particularly acute in countries that have passed or are considering passing legislation that requires data to remain localized in country, as this may impose financial costs on companies required to store data in jurisdictions not of their choosing and to use nonstandard operational processes that add complexity and are difficult and costly to integrate with global processes. This is also true with respect to the global proliferation of laws regulating the financial services industry, including its use of cloud services. In Europe, the Digital Operational Resilience Act ( DORA ) aims to ensure the resilience of the EU financial sectors, including through mandatory risk management, incident reporting, resilience testing and third-party outsourcing restrictions. The UK has implemented similar legislation and other countries may follow. Further, jurisdictions are increasingly applying existing data privacy, consumer protection and other laws to AI, including emerging AI technologies such as generative AI. Additionally, AI-specific legal frameworks, such as the EU AI Act, the Utah Artificial Intelligence Policy Act, Colorado' s law governing the use of automated decision-making technology (SB 26-189), the Texas Responsible Artificial Intelligence Governance Act, regulations issued under the CCPA governing automated decision-making technology, and similar laws and regulations that have passed, gone into effect or are being considered in other jurisdictions, can impose obligations on us or third-party providers on which we rely. As these laws and regulations are implemented, interpreted and enforced, they may impose new or additional compliance obligations or restrictions on our products, services or business practices, and requirements may vary or conflict across jurisdictions. Any failure, or perceived failure, by us to comply with applicable AI-related legal requirements could have an adverse impact on our business. Data privacy and other related regulations may also seek to impose additional direct security and enforcement obligations on us as a service provider or potentially require us to mandate specific security configurations for our customers. These requirements may impact the flexibility of our service offerings, increase our operational oversight costs, and potentially subject us to administrative sanctions. There are also various statutes, regulations and regulatory rulings governing direct email marketing and text messaging, including the Telephone Consumer Protection Act ( TCPA ) and related Federal Communication Commission orders, which impose significant restrictions on the use of telephone calls and text messages to mobile telephone numbers without prior consent. We have been, and may in the future be, subject to class action and individual lawsuits alleging that one of our businesses or customers violated the TCPA or similar communications-based laws. A determination that we or our customers failed to comply with such requirements could expose us to significant statutory damages or other liabilities that could, individually or in the aggregate, materially harm our business. In addition, many jurisdictions across the world are considering, or have begun implementing, changes to antitrust and competition laws, regulations or interpretative positions intended to enhance competition in digital markets or address practices perceived to be anticompetitive. These developments may result in new or expanded legal or regulatory obligations that require changes to our business practices, increased compliance costs, or other measures that could adversely affect our business and operating results. 60 Table of Contents We have been and may in the future be sued by third parties for various claims, including alleged infringement of proprietary rights. We are involved in various legal matters arising from the normal course of business activities. These include claims, suits, government investigations and other proceedings involving alleged infringement of third-party patents and other intellectual property rights, as well as commercial, corporate and securities, labor and employment, class actions, wage and hour, antitrust, data privacy, cybersecurity and other matters. The software and Internet industries are characterized by the existence of many patents, trademarks, trade secrets and copyrights and by frequent litigation based on allegations of infringement or other violations of intellectual property rights. We have received in the past and may receive in the future communications from third parties, including practicing entities and non-practicing entities, claiming that we have infringed their intellectual property rights. We have also been, and may in the future be, sued by third parties for alleged infringement of their claimed proprietary rights. Our technologies may be subject to injunction if they are found to infringe the rights of a third party or we may be required to pay damages, or both. Further, many of our subscription agreements require us to indemnify our customers for third-party intellectual property infringement claims, which would increase the cost to us of an adverse ruling on such a claim. In addition, we have in the past been, and may in the future be, sued by third parties who seek to target us for actions taken by our customers, including through the use or misuse of our products. For example, we are subject to allegations in legal proceedings that we should be liable for the use of certain of our products by third parties. Although we believe we have a strong defense for these claims, such claims could result in liability and, regardless of outcome, could cause reputational harm to our brand or be costly to defend. Our exposure to risks associated with various claims may be increased as a result of acquisitions of other companies. For example, we are subject to ongoing securities class action litigation and related stockholder derivative claims brought against Slack that remain outstanding, and as to which we may ultimately be subject to liability or settlement costs. Additionally, we may have a lower level of visibility into the development process with respect to intellectual property or the care taken to safeguard against infringement risks with respect to acquired companies or technologies. In addition, third parties have made claims in connection with our acquisitions and may do so in the future, and they may also make infringement and similar or related claims after we have acquired technology that had not been asserted prior to our acquisition. The outcome of any claims or litigation, regardless of the merits, is inherently uncertain. Any claims or lawsuits, and the disposition of such claims and lawsuits, whether through settlement or licensing discussions, or litigation, could be time-consuming and expensive to resolve, divert management attention from executing our business plan, result in efforts to enjoin our activities, lead to attempts on the part of other parties to pursue similar claims and, in the case of intellectual property claims, require us to change our technology, change our business practices, pay monetary damages or enter into short- or long-term royalty or licensing agreements. Any adverse determination or settlement could prevent us from offering our services to others, could be material to our financial condition or cash flows, or both, or could otherwise adversely affect our current or future operating results, including our results of operations or cash flows in a particular period. Any failure to obtain registration or protection of our intellectual property rights could impair our ability to protect our proprietary technology and our brand, causing us to incur significant expenses and harm our business. If we fail to protect our intellectual property rights adequately, our competitors may gain access to our technology, affecting our brand, causing us to incur significant expenses and harming our business. Any of our patents, trademarks or other intellectual property rights may be challenged by others or invalidated through administrative process or litigation. While we have many U.S. patents and pending U.S. and international patent applications, we may be unable to obtain patent protection for the technology covered in our patent applications or the patent protection may not be obtained quickly enough to meet our business needs. In addition, our existing patents and any patents issued in the future may not provide us with competitive advantages, or may be successfully challenged by third parties. Similar uncertainty applies to our U.S. and international trademark registrations and applications. Furthermore, legal standards relating to the validity, enforceability and scope of protection of intellectual property rights are uncertain, and we also may face proposals to change the scope of protection for some intellectual property rights in the U.S. and elsewhere. Additionally, the intellectual property ownership and license rights, including copyright, surrounding AI technologies, which we are increasingly building into our product offerings, has not been fully addressed by U.S. courts or other federal or state laws or regulations, and some U.S. governmental entities and courts have expressed the view that U.S. copyright and patent protection should be limited to protecting inventions and works of authorship created by humans. If this position becomes widely accepted, intellectual property ownership and license rights, including copyright, may be limited, or not available at all, for inventions or works developed in part or wholly by AI technologies. Furthermore, the use or adoption of AI technologies in our products and services may expose us to copyright infringement or other intellectual property misappropriation claims related to AI training or output. Effective patent, trademark, copyright and trade secret protection may not be available to us in every country in which our services are available and legal changes and 61 Table of Contents uncertainty in various countries intellectual property regimes may result in making conduct that we believe is lawful to be deemed violative of others rights. The laws of some foreign countries may not be as protective of intellectual property rights as those in the U.S., and mechanisms for enforcement of intellectual property rights may be inadequate. Also, our involvement in standard-setting activity, our contribution to open source projects, various competition law regimes or the need to obtain licenses from others may require us to license our intellectual property in certain circumstances. Accordingly, despite our efforts, we may be unable to prevent third parties from using our intellectual property. We may be required to spend significant resources and expense to monitor and protect our intellectual property rights. We may initiate claims or litigation against third parties for infringement of our proprietary rights or to establish the validity of our proprietary rights. If we fail to protect our intellectual property rights, it could impact our ability to protect our technology and brand. Furthermore, any litigation, whether or not it is resolved in our favor, could result in significant expense to us, cause us to divert time and resources from our core business, and harm our business. We may be subject to risks related to government contracts and related procurement regulations. Our business depends, in part, on sales to government organizations, and significant changes in the contracting or fiscal policies of such government organizations could adversely affect our business and operating results. Contracting with federal, state, local and foreign governments or state-owned entities subjects us to various regulations and other requirements relating to these contracts formation, administration and performance, as well as broader compliance obligations regarding our corporate activities and how we engage with government officials. Government contracts may also at times be modified or terminated for convenience. We are from time to time subject to audits, inquiries and investigations relating to our government contracts, which may result in adverse perceptions of our business, reductions in utilization of our services or termination of our contracts without cause and at any time. Additionally, any violations could result in various civil and criminal penalties and administrative sanctions, including termination of contracts, refunding or suspending of payments, forfeiture of profits, payment of fines and suspension or debarment from future government business, as well as reputational harm. Additionally, our relationships with certain government entities may result in negative publicity or reputational harm. Furthermore, pressures on and uncertainty regarding the U.S. federal government s budget and potential changes in budgetary priorities could adversely affect the funding for and purchases of our services by government organizations. The occurrence of any of the foregoing could adversely impact our future sales, costs of doing business and operating results. We may be subject to risks from governmental sanctions and export and import controls that could impair our ability to compete in international markets and subject us to liability if we are not in full compliance with applicable laws. Our solutions are subject to trade control laws and regulations where we conduct our business activities, including the U.S. Commerce Department s Export Administration Regulations, U.S. customs regulations, U.S. supply chain regulations and various economic and trade sanctions regulations administered by the U.S. Treasury Department s Office of Foreign Assets Control. If we fail to comply with applicable trade control laws and regulations, we and certain of our employees could be subject to substantial civil or criminal penalties, including the possible loss of trade privileges; fines, which may be imposed on us and responsible employees or managers; and, in extreme cases, the incarceration of responsible employees or managers. Obtaining necessary authorizations, including any required licenses, may be time-consuming, requires expenditure of corporate resources, is not guaranteed, and may result in the delay or loss of sales opportunities or the ability to realize value from certain acquisitions or engagements. Acquisitions may also subject us to successor liability and other integration compliance risks. Furthermore, export control and economic sanctions laws and regulations may prohibit or limit the transfer of certain products and services to embargoed or sanctioned countries, governments and parties. We can provide no assurance that any of the precautions we take to prevent our solutions from being provisioned or provided to sanctions targets in violation of applicable regulations will be effective, and, accordingly, our solutions could be provisioned or provided to those targets, including by our resellers or other third parties, which could have negative consequences for our business, including government investigations, penalties and reputational harm. Changes in our solutions or trade control laws and regulations may create delays in the introduction, sale and deployment of our solutions in international markets or prevent the export or import of our solutions to certain countries, governments or persons altogether. Any decreased use of our solutions or limitation on our ability to export or sell our solutions may adversely affect our business, financial condition and results of operations. Sanctions and export and import control regulations in the United States and other countries are subject to change and uncertainty, including as a result of tariff policy changes, rapidly evolving technology, increased government regulation of AI and cloud service solutions, and geopolitical developments such as events affecting relations between the United States and China, multi-jurisdictional sanctions on Russia, the war in Ukraine and conflicts in the Middle East. Regulators in the United States and elsewhere have signaled an increased emphasis on sanctions and export control enforcement, including efforts to combat diversion of services to sanctioned countries and parties, several recent high-profile enforcement actions and increased pressure for companies to self-disclose potential violations. 62 Table of Contents Financial Risks Because we generally recognize revenue from subscriptions for our services over the term of the subscription, downturns or upturns in new business may not be immediately reflected in our operating results. We generally recognize revenue from customers ratably over the terms of their subscription and support agreements, which are typically 12 to 36 months. As a result, most of the revenue we report in each quarter is the result of subscription and support agreements entered into during previous quarters. Consequently, a decline in new or renewed subscriptions in any one quarter may not be reflected in our revenue results for that quarter but will negatively impact our revenue in future quarters. Accordingly, the effect of significant downturns in sales and market acceptance of our services, and changes in our attrition rate, may not be fully reflected in our results of operations until future periods. Our subscription model also makes it difficult for us to rapidly increase our revenue through additional sales in any period, as revenue from new customers must be recognized over the applicable subscription and support term. If we experience significant fluctuations in our rate of anticipated growth and fail to balance our expenses with our revenue forecasts, our business could be harmed and our stock price could decline. Due to the unpredictability of future general economic and financial market conditions, we may not be able to realize our projected revenue growth plans. We plan our expense and investment levels based on estimates of future revenue and future anticipated rate of growth. We may not be able to adjust our spending appropriately if the addition of new subscriptions or the renewals of existing subscriptions fall short of our expectations, and unanticipated events may cause us to incur expenses beyond what we anticipated. A portion of our expenses may also be fixed in nature for some minimum amount of time, such as with costs capitalized to obtain revenue contracts, data center and infrastructure service contracts or office leases, so it may not be possible to reduce costs in a timely manner, or at all, without the payment of fees to exit certain obligations early. Additionally, if sales through indirect channels or for consumption-based product offerings increase, this may lead to greater difficulty in forecasting revenue and anticipated rate of growth. As a result, our revenues, operating results and cash flows may fluctuate significantly on a quarterly basis and revenue growth rates may not be sustainable and may decline in the future. If we are not able to provide continued operating margin expansion, our business could be harmed and our stock price could decline. Unanticipated changes in our effective tax rate and additional tax liabilities and global tax developments may impact our financial results. We are subject to income taxes in the United States and various other jurisdictions. Significant judgment is often required in the determination of our worldwide provision for income taxes. Our effective tax rate could be impacted by changes in our earnings and losses in countries with differing statutory tax rates, changes in operations, changes in non-deductible expenses, changes in the tax effects of stock-based compensation expense, changes in the valuation of deferred tax assets and liabilities and our ability to utilize them, the applicability of withholding taxes, effects from acquisitions and changes in accounting principles and tax laws. Any changes, ambiguity or uncertainty in taxing jurisdictions administrative interpretations, decisions, policies and positions could also materially impact our income tax liabilities. For example, as a result of the One Big Beautiful Bill Act ( OBBBA ), we could be subject to Corporate Alternative Minimum Tax ( CAMT ). Our tax provision may be adversely impacted to the extent additional clarification or interpretive guidance related to the OBBBA is released, or if there are changes to our valuation allowance assessment related to CAMT. We may also be subject to additional tax liabilities and penalties due to changes in non-income based taxes resulting from changes in federal, state, local or international tax laws, changes in taxing jurisdictions administrative interpretations, decisions, policies and positions, results of tax examinations, settlements or judicial decisions, changes in accounting principles, or changes to our business operations, including as a result of acquisitions. Any resulting increase in our tax obligation or cash taxes paid could adversely affect our cash flows and financial results. We are also subject to tax examinations or engaged in alternative resolutions in multiple jurisdictions. While we regularly evaluate new information that may change our judgment resulting in recognition, derecognition or changes in measurement of a tax position taken, there can be no assurance that the final determination of any examinations will not have an adverse effect on our operating results or financial position. As our business continues to grow, increasing our brand recognition and profitability, we may be subject to increased scrutiny and corresponding tax disputes, which may impact our cash flows and financial results. Furthermore, our growing prominence may bring public attention to our tax profile, and if perceived negatively, may cause brand or reputational harm. Global tax developments may have a material impact on our business, cash flows, or financial results. For example, heightened interest in multinationals participating in the digital economy led many countries to adopt Pillar Two, a 15% corporate minimum tax proposed by the Organization for Economic Cooperation and Development ( OECD ). In January 2026, the OECD introduced new guidance including a "side-by-side safe harbor" which, if elected, exempts U.S. parented groups from certain provisions of Pillar Two. However, the election does not relieve foreign subsidiaries from certain jurisdiction specific minimum taxes. The guidance will need to be incorporated into local tax legislation to be effective. 63 Table of Contents We are exposed to fluctuations in currency exchange rates that have in the past and could in the future negatively impact our financial results and cash flows from changes in the value of the U.S. Dollar versus local currencies. We primarily conduct our business in the following regions: the Americas, Europe and Asia Pacific. The expanding global scope of our business exposes us to risk of fluctuations in foreign currency markets, including in emerging markets. This exposure is the result of selling in multiple currencies, growth in our international investments, additional headcount in foreign locations, and operating in countries where the functional currency is the local currency. Specifically, our results of operations and cash flows are subject to currency fluctuations primarily in Euro, British Pound Sterling, Japanese Yen, Canadian Dollar, Australian Dollar, Brazilian Real and Indian Rupee against the U.S. Dollar. These exposures may change over time as business practices evolve, economic and political conditions change and evolving tax regulations come into effect. The fluctuations of currencies in which we conduct business can both increase and decrease our overall revenue and expenses for any given fiscal period. Furthermore, fluctuations in foreign currency exchange rates, combined with the seasonality of our business, could affect our ability to accurately predict our future results and earnings. Additionally, global events as well as geopolitical developments, including the war in Ukraine and conflicts in the Middle East, fluctuating commodity prices, uncertainty regarding changes in trade policy and inflation, have caused, and may in the future cause, global economic uncertainty and uncertainty about the interest rate environment, which has and could in the future amplify the volatility of currency fluctuations. We attempt to mitigate some of this volatility by using derivative instruments, such as foreign currency forward contracts, to hedge exposures to changes in foreign currency exchange rates. Our hedging activities are limited in scope and may not effectively offset the adverse financial impacts that may result from unfavorable movements in foreign currency exchange rates, which could adversely impact our financial condition or results of operations. Our debt service obligations, lease commitments and other contractual obligations may adversely affect our financial condition, results of operations and cash flows. As of July 31, 2026, we had a substantial level of outstanding debt, including our Senior Notes. We are also party to the Revolving Loan Credit Agreement, which provides for our $5.0 billion Credit Facility, as well as the 2026 Term Loan Credit Agreement. Although there were no outstanding borrowings under the Credit Facility as of July 31, 2026, we may use the proceeds of future borrowings under the Credit Facility for general corporate purposes. In March 2026, we borrowed $6.0 billion under the 2026 Term Loan Credit Agreement to repay in full the outstanding principal under the Informatica Credit Agreements and to pay related fees and expenses. In March 2026, we also issued the March 2026 Notes with an aggregate principal amount of $25.0 billion, with maturities ranging from 2028 to 2066. We used the net proceeds from the March 2026 Notes to fund an accelerated share repurchase program of our common stock. In addition to the outstanding and potential debt obligations above, we have also recorded substantial liabilities associated with noncancellable future payments on our long-term lease agreements. We also have significant other contractual commitments, including leases that have not yet commenced and commitments with infrastructure service providers, which are not reflected on our condensed consolidated balance sheets. Additionally, under the ASR Agreements, volatility in our stock price may obligate us to deliver shares of our common stock or make a cash payment to the counterparty upon final settlement. Maintenance of our indebtedness and contractual commitments and any additional issuances of indebtedness could: impair our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions, general corporate or other purposes; cause us to dedicate a substantial portion of our cash flows from operations toward debt service obligations and principal repayments; and make us more vulnerable to downturns in our business, our industry or the economy in general. Our ability to meet our expense and debt obligations will depend on our future performance, which will be affected by financial, business, economic, regulatory and other factors. We will not be able to control many of these factors, such as economic conditions and governmental regulations. Further, our operations may not generate sufficient cash to enable us to service our debt or contractual obligations resulting from our leases. If we fail to make a payment on our debt, we could be in default on such debt. If we are at any time unable to generate sufficient cash flows from operations to service our indebtedness when payment is due, we may be required to attempt to renegotiate the terms of the instruments relating to the indebtedness, seek to refinance all or a portion of the indebtedness or obtain additional financing. There can be no assurance that we would be able to successfully renegotiate such terms, that any such refinancing would be possible or that any additional financing could be obtained on terms that are favorable or acceptable to us. Any new or refinanced debt may be subject to substantially higher interest rates, which could adversely affect our financial condition and impact our business. In addition, adverse changes by any rating agency to our credit ratings may negatively impact our reputation, the value and liquidity of both our debt and equity securities, as well as the potential costs associated with a refinancing of our debt. Downgrades in our credit ratings could also affect the terms of any such refinancing or future financing or restrict our ability to obtain additional financing in the future. 64 Table of Contents The indentures governing our Senior Notes and the Revolving Loan Credit Agreement impose restrictions on us and require us to maintain compliance with specified covenants. Our ability to comply with these covenants may be affected by events beyond our control. A failure to comply with the covenants and other provisions of our outstanding debt could result in events of default under such instruments, which could permit acceleration of all of our debt and borrowings. Any required repayment of our debt as a result of a fundamental change or other acceleration would lower our current cash on our balance sheet such that we would not have those funds available for use in our business. Lease accounting guidance requires that we record a liability for operating lease activity on our condensed consolidated balance sheet, which increases both our assets and liabilities and therefore may impact our ability to obtain the necessary financing from financial institutions at commercially viable rates or at all. Our 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 and associated asset only when it is reasonably certain that we will exercise the associated extension option or waive the termination option. We reassess the lease term if and when a significant event or change in circumstances occurs within our control. The potential impact of these options to extend could be material to our financial position and financial results. Risks Related to Owning Our Common Stock Our quarterly results are likely to fluctuate, which may cause the value of our common stock to decline substantially. Our quarterly results have fluctuated, and are likely to fluctuate in the future, as a result of a number of known and unknown factors, including: the factors described in this Part II, Item 1A of this Quarterly Report; the cyclical nature and seasonality of our sales cycle and our customers businesses, especially our Commerce service offering customers; the global economic impact of geopolitical events, including ongoing conflicts and uncertainty about the interest rate environment; the timing of contract execution and term software license sales; the amount and timing of operating costs and capital expenditures related to the operations and expansion of our business; the timing of commission, bonus and other compensation payments to employees; expenses related to our real estate or changes in the nature or extent of our use of existing real estate, including our office leases and data centers; expenses related to significant, unusual or discrete events, which are recorded in the period in which the events occur, including litigation or other dispute-related settlement payments; and equity or debt issuances, including as consideration in or in conjunction with acquisitions. In addition, our fiscal fourth quarter has historically been our strongest quarter for new business and renewals, and the year-over-year compounding effect of this seasonality in billing patterns and overall new business and renewal activity causes the value of invoices that we generate in the fourth quarter to continually increase in proportion to our billings in the other three quarters of our fiscal year. As a result, our fiscal first quarter has typically been our largest collections and operating cash flow quarter. Many of these factors are outside of our control, and the occurrence of one or more of them might negatively and materially impact our operating results. Our stock price is likely to be volatile and could subject us to litigation. The stock market in general, and the market for technology companies in particular, has historically been highly volatile. Accordingly, our stock price has been and is likely to continue to be subject to wide fluctuations. Our stock price could be affected by many factors, some of which are beyond our control, including: the factors described in this Part II, Item 1A of this Quarterly Report; announcements or rumors by us or our competitors regarding technological innovations, new services or service enhancements, strategic alliances, mergers, other strategic acquisitions or significant agreements, customer additions, customer cancellations or delays in customer purchases; investor sentiment regarding AI-related business models, our competitors, and our industry in general; variations in our financial results and how those results compare to analyst expectations; changes to guidance or long-range targets, in the estimates of our operating results or in recommendations by securities analysts that follow our stock; variations in investors or analysts valuation metrics and modeling for our business; the issuance of, changes to, or our ability to meet or exceed, our forward-looking guidance and long-range targets, estimates or recommendations by analysts, or expectations of investors, analysts or others; the coverage of our business in the press, social media, and analyst community; the economy as a whole, geopolitical conditions, including global trade and health concerns, market conditions in our and our customers industries, and financial institution instability; trading activity by our stockholders, including institutional or activist investors; changes in the amounts and frequency of share repurchases or dividends; issuance of equity, debt or other convertible securities; changes to our credit ratings; and issues impacting our brand and reputation. Some companies that have experienced volatility in their stock price have been the subject of securities class action litigation, such as the securities litigation brought against Slack before our acquisition. Such litigation, whether against us or an acquired subsidiary, could result in substantial costs and a diversion of management s attention and resources and any liability resulting from or the settlement of such litigation could result in material adverse impacts to our operating cash flows or results of operations for a given period. 65 Table of Contents Provisions in our governing documents and Delaware law might discourage, delay or prevent a change of control of the Company or changes in our management and, therefore, depress our stock price. Our certificate of incorporation and bylaws contain provisions that could depress our stock price by acting to discourage, delay or prevent a change in control of the Company or changes in our management that our stockholders may deem advantageous. These provisions among other things: permit the Board to establish the number of directors; authorize the issuance of blank check preferred stock that our Board could use to implement a stockholder rights plan (also known as a poison pill ); prohibit stockholder action by written consent, requiring all stockholder actions to be taken at a stockholder meeting; permit the Board to make, alter or repeal our bylaws; and establish advance notice requirements for nominations for election to our Board or for proposing matters that can be acted upon by stockholders at annual stockholder meetings. In addition, Section 203 of the Delaware General Corporation Law may discourage, delay or prevent a change in control of our company. Section 203 imposes certain restrictions on merger, business combinations and other transactions between us and holders of 15 percent or more of our common stock. There can be no assurance that we will continue to declare cash dividends in any particular amounts, or at all. Whether we continue to pay cash dividends, as well as the rate at which we pay cash dividends, in the future is subject to continued capital availability, general economic and market conditions, applicable laws and agreements and our Board continuing to determine that the declaration of dividends is in the best interests of the Company and its stockholders. The declaration and payment of any dividend may be discontinued at any time and dividend amounts may be reduced at any time. A discontinuation of or reduction in our dividend payments could have a negative effect on our stock price. General Risks Volatile and significantly weakened global economic conditions have in the past and may in the future adversely affect our industry, business and results of operations. Our overall performance depends in part on worldwide economic and geopolitical conditions. The United States and other key international economies have experienced significant economic and market downturns in the past, and are likely to experience additional cyclical downturns from time to time in which economic activity is impacted by falling demand for a variety of goods and services, restricted credit, poor liquidity, reduced corporate profitability, volatility in credit, equity and foreign exchange markets, inflation, bankruptcies and overall uncertainty with respect to the economy. These economic conditions can arise suddenly and the full impact of such conditions can be difficult to predict. In addition, geopolitical and domestic political developments, such as uncertainty regarding changes in trade policy, including the threat or imposition of tariffs or other trade restrictions and related retaliatory actions, as well as other events beyond our control, such as war in Ukraine and conflicts in the Middle East, have increased and may continue to increase levels of political and economic unpredictability globally and the volatility of global financial markets. Moreover, these conditions have affected and may continue to affect the rate of IT spending; could adversely affect our customers ability or willingness to attend our events or to purchase our enterprise cloud computing services; have delayed and may delay customer purchasing decisions; and have reduced and may in the future reduce the value and duration of customer subscription contracts or cause our customers to seek to modify their existing subscription contracts. All of these risks and conditions could materially adversely affect our future sales, attrition rates and operating results. Geopolitical crises, natural disasters and other catastrophic events beyond our control have in the past and may in the future materially adversely affect us. Geopolitical crises, natural disasters or other catastrophic events have in the past and may in the future cause damage or disruption to our people, operations, international commerce and the global economy, and thus could have a strong negative effect on us. Our business operations, as well as the business operations of our customers and third-party providers or suppliers that we rely on, are subject to interruption or disruption by geopolitical crises (including tensions between governments of markets where we operate), natural disasters, fire, power or water shutoffs or shortages, telecommunications failures, terrorist attacks, acts of violence, political and/or civil unrest, acts of war or other military actions, actual or threatened public health emergencies and other events beyond our control. For example, the occurrence of regional conflicts, epidemics or a global pandemic have in the past and may in the future materially affect how we and our customers operate our businesses, as well as our operating results and cash flows. Although we maintain crisis management and disaster response plans, if such catastrophic events occur it could make it difficult or impossible for us to deliver our services to our customers or negatively impact demand for our services, which could materially and adversely affect our financial condition and operating results. 66 Table of Contents Climate change may have an impact on our business. While we seek to mitigate our business risks associated with climate change by establishing appropriate environmental programs and partnering with organizations who are focused on mitigating their own climate-related risks, there are inherent climate-related risks to our business. In particular, increased energy consumption, including as a result of AI-related growth, climate-related events, energy market volatility, and power grid disruptions, may increase the operational costs related to inputs across our value chain, including for data centers. Any of our primary locations may be vulnerable to the adverse effects of climate change. For example, our offices globally are projected to continue to experience climate-related events at increased frequency, including drought, water scarcity, heat waves, cold waves, flooding, wildfires and resultant air quality impacts and power shutoffs. These events in turn have impacts on inflation risks, the cost and availability of insurance, food security, water security (including for water availability for data center cooling), energy security and on our employees health, productivity and well-being. Changing market dynamics, global policy developments and the increasing frequency and impact of extreme weather events on critical infrastructure have the potential to disrupt our business, as well as the business of the companies we invest in, third-party providers or suppliers that we rely on, and our customers, and may cause us to experience higher attrition, losses and additional costs to maintain or resume operations. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Recent Sales of Unregistered Securities In connection with acquisitions made during the three months ended July 31, 2026, the Company issued 31,429 shares of its common stock on July 1, 2026. These issuances were made in reliance on one or more of the following exemptions or exclusions from the registration requirements of the Securities Act: Section 4(a)(2) of the Securities Act, Regulation D promulgated under the Securities Act and Regulation S promulgated under the Securities Act. Issuer Purchases of Equity Securities Share repurchases of the Company s common stock for the three months ended July 31, 2026 were as follows (in millions, except for average price paid per share): Period Total Number of Shares Purchased (1)Average Price Paid Per ShareTotal Number of Shares Purchased as Part of Publicly Announced Program (1)Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (2) May 20260$ 0$22,855 June 20260 0$22,855 July 20260 0$22,855 Total00 (1) The Board authorized the Share Repurchase Program, which commenced in fiscal 2023. In February 2026, the Board authorized $50.0 billion in share repurchases under the Share Repurchase Program that replaced the previous remaining unpurchased authorization. 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 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. Any repurchases disclosed in the table were made pursuant to the publicly announced Share Repurchase Program. (2) The remaining authorized amount under the Share Repurchase Program was reduced by the full $25.0 billion in up-front payments made as part of the March 2026 accelerated share repurchase. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 67 Table of Contents ITEM 5. OTHER INFORMATION During the three months ended July 31, 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) informed us of the adoption or termination of a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as defined in Item 408 of Regulation S-K).