Financial Analysis

Business Combinations Regrello Corp. In October 2025, the Company acquired all of the outstanding stock of Regrello Corp. (Regrello), the developer of an AI-native business process automation solution. The acquisition date fair value of the consideration transferred for Regrello was $818 million, which consisted primarily of $815 million in cash. The Company recorded $704 million of goodwill in its condensed consolidated balance sheets which is primarily attributed to Regrellos assembled workforce and expanded market opportunities. The goodwill associated with the acquisition of Regrello has no tax basis and is not deductible for U.S. income tax purposes. The Company also recorded approximately $140 million of intangible assets in its condensed consolidated balance sheets for developed technology with a useful life of four years. The fair values assigned to assets acquired and liabilities assumed are based on managements 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 Regrello, which were not material, in its consolidated financial statements from the date of acquisition. The transaction costs associated with the acquisition were not material. …

BusinessCombinationDisclosureTextBlock · excerpt; the full note is in the filing

Debt The components of the Company's borrowings were as follows (in millions): Instrument Date of Issuance Maturity Date Contractual Interest Rate Outstanding Principal as of October 31, 2025 Carrying Value as of October 31, 2025 Carrying Value as of January 31, 2025 2028 Senior Notes April 2018 April 2028 3.70 % 1,500 1,497 1,496 2028 Senior Sustainability Notes July 2021 July 2028 1.50 1,000 996 995 2031 Senior Notes July 2021 July 2031 1.95 1,500 1,493 1,491 2041 Senior Notes July 2021 July 2041 2.70 1,250 1,237 1,236 2051 Senior Notes July 2021 July 2051 2.90 2,000 1,979 1,979 2061 Senior Notes July 2021 July 2061 3.05 1,250 1,236 1,236 Total carrying value of debt 8,500 8,438 8,433 Less current portion of debt 0 0 Total noncurrent debt $ 8,438 $ 8,433 The Company was in compliance with all debt covenants as of October 31, 2025. The total estimated fair value of the Company's outstanding senior unsecured notes (the Senior Notes) above was $6.8 billion and $6.6 billion as of October 31, 2025 and January 31, 2025, respectively . The fair value was determined based on the closing trading price per $100 of the Senior Notes as of the last day of trading of the third quarter of fiscal 2026 and the last day of trading of fiscal 2025, and are deemed Level 2 liabilities within the fair value measurement framework. The contractual future principal payments for all borrowings as of October 31, 2025 were as follows (in millions): Fiscal Period: Remaining three months of fiscal 2026 $ …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Subscription and support revenues consisted of the following (in millions): Three Months Ended October 31, Nine Months Ended October 31, 2025 2024 2025 2024 Agentforce Sales $ 2,297 $ 2,119 $ 6,695 $ 6,188 Agentforce Service 2,495 2,288 7,287 6,727 Agentforce 360 Platform, Slack and Other 2,180 1,825 6,227 5,329 Agentforce Marketing and Agentforce Commerce 1,361 1,334 4,051 3,924 Agentforce Integration and Agentforce Analytics 1,393 1,313 4,453 4,060 $ 9,726 $ 8,879 $ 28,713 $ 26,228 (1) In the third quarter of fiscal 2026, the Company renamed its service offerings to reference Agentforce. There were no changes in the allocation of revenue between these service offerings coming from this change. Revenues by geographical region consisted of the following (in millions): Three Months Ended October 31, Nine Months Ended October 31, 2025 2024 2025 2024 Americas $ 6,703 $ 6,220 $ 19,908 $ 18,483 Europe 2,470 2,228 7,236 6,557 Asia Pacific 1,086 996 3,180 2,862 $ 10,259 $ 9,444 $ 30,324 $ 27,902

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Fair Value Measurement The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2. Significant other inputs that are directly or indirectly observable in the marketplace. Level 3. Significant unobservable inputs which are supported by little or no market activity. All of the Companys cash equivalents, marketable securities and foreign currency derivative contracts are classified within Level 1 or Level 2 because these assets are valued using quoted market prices or alternative pricing sources and models utilizing observable market inputs. The following table presents information about the Companys assets that were measured at fair value as of October 31, 2025 and indicates the fair value hierarchy of the valuation (in millions): Description Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value Cash equivalents (1): Time deposits $ 0 $ 1,780 $ 0 $ 1,780 Money market mutual funds 5,592 0 0 5,592 Cash equivalent securities 0 40 0 40 Marketable securities: Corporate notes and obligations 0 1,441 0 1,441 U.S. treasury securities 0 170 0 170 Mortgage-backed obligations 0 32 0 32 Asset-backed securities 0 645 0 645 Municipal securities 0 26 0 26 Commercial paper 0 18 0 18 Covered bonds 0 1 0 1 Othe …

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Intangible Assets Acquired Through Business Combinations and Goodwill Intangible Assets Acquired Through Business Combinations Intangible assets acquired through business combinations were as follows (in millions): Intangible Assets, Gross Accumulated Amortization Intangible Assets, Net Weighted Average Remaining Useful Life (Years) January 31, 2025 Additions and retirements, net October 31, 2025 January 31, 2025 Expense and retirements, net October 31, 2025 January 31, 2025 October 31, 2025 October 31, 2025 Acquired developed technology $ 2,958 $ 224 $ 3,182 $ (1,753) $ (467) $ (2,220) $ 1,205 $ 962 1.0 Customer relationships 6,894 0 6,894 (3,820) (643) (4,463) 3,074 2,431 3.0 Other (1) 331 0 331 (182) (51) (233) 149 98 1.5 Total $ 10,183 $ 224 $ 10,407 $ (5,755) $ (1,161) $ (6,916) $ 4,428 $ 3,491 2.4 (1) Included in Other are in-place leases, trade names, trademarks and territory rights. Amortization of intangible assets resulting from business combinations for the three months ended October 31, 2025 and 2024 was $386 million and $354 million, respectively, and for the nine months ended October 31, 2025 and 2024 was $1.2 billion, and $1.3 billion, respectively. The expected future amortization expense for intangible assets as of October 31, 2025 was as follows (in millions): Fiscal Period: Remaining three months of fiscal 2026 $ 393 Fiscal 2027 1,205 Fiscal 2028 805 Fiscal 2029 628 Fiscal 2030 318 Thereafter 142 Total amortization expense $ 3,491 Goodwill Goodwill represen …

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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 nine months ended October 31, 2025, the Company reported a tax provision of $1.4 billion on pretax income of $6.9 billion, which resulted in an effective tax rate of 20 percent. The Companys effective tax rate differed from the U.S. statutory rate of 21 percent primarily due to research and development credits, partially offset by state and local taxes. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted into law. The OBBBA includes significant changes to US corporate tax provisions of the Tax Cuts and Jobs Act. Notably, it allows an immediate deduction for domestic research and development expenditures, reinstates 100% bonus depreciation, and modifies the international tax framework. The legislation has multiple effective dates, with certain provisions effective in fiscal 2026 and others in the subsequent years. The changes had an immaterial impact to the Companys tax provision for the period ended October 31, 2025. For the nine months ended October 31, 2024, the Company reported a tax provision of $961 million on pretax income of $5.5 billion, which resulted in an effective tax rate of 18 percent. The Companys effective tax rate differed from the U.S. statutory rate of 21 percent primarily due t …

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Legal Proceedings and Claims In the ordinary course of business, the Company is or may be involved in various legal or regulatory proceedings, claims or purported class actions related to alleged infringement of third-party patents and other intellectual property rights, commercial, corporate and securities, labor and employment, wage and hour and other claims. The Company has been, and may in the future be, put on notice or sued by third parties for alleged infringement of their proprietary rights, including patent infringement. In general, the resolution of a legal matter could prevent the Company from offering its service to others, could be material to the Companys financial condition or cash flows, or both, or could otherwise adversely affect the Companys reputation and future operating results. The Company makes a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. The outcomes of legal proceedings and other contingencies are, however, inherently unpredictable and subject to significant uncertainties. At this time, the Company is not able to reasonably estimate the amount or range of possible losses in excess of any amounts accr …

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New Accounting Pronouncements Pending Adoption In December 2023, the Financial Accounting Standards Board (the FASB) issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation and modifies other income tax-related disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a retrospective or prospective basis. The Company is evaluating the effect that ASU 2023-09 will have on its financial statement disclosures. In November 2024, the FASB issued Accounting Standards Update No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03), which requires disaggregation of certain costs in a separate note to the financial statements, such as the amounts of employee compensation, depreciation and intangible asset amortization, included in each relevant expense caption in annual and interim consolidated financial statements. ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027 on a retrospective or prospective basis, with early adoption permitted. The Company is evaluating the effect that ASU 2024-03 will have on its f …

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Restructuring Beginning in fiscal 2023, the Company has undertaken various restructuring initiatives to improve operating margins and continue advancing its ongoing commitment to profitable growth, which have included a reduction of the Companys workforce and office space reductions within certain markets. The Company continues to evaluate and operationalize future programs to drive further operational efficiencies, optimize its management structure and increase cost optimization efforts to realize long-term sustainable growth. The Company recognized $260 million and $56 million in restructuring charges during the three months ended October 31, 2025 and 2024, respectively, and $300 million and $163 million during the nine months ended October 31, 2025 and 2024, respectively, which were substantially related to workforce reductions that include charges for employee transition, severance payments, employee benefits and stock-based compensation. …

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Revenues Disaggregation of Revenue Subscription and Support Revenue by the Company's Service Offerings (1) Subscription and support revenues consisted of the following (in millions): Three Months Ended October 31, Nine Months Ended October 31, 2025 2024 2025 2024 Agentforce Sales $ 2,297 $ 2,119 $ 6,695 $ 6,188 Agentforce Service 2,495 2,288 7,287 6,727 Agentforce 360 Platform, Slack and Other 2,180 1,825 6,227 5,329 Agentforce Marketing and Agentforce Commerce 1,361 1,334 4,051 3,924 Agentforce Integration and Agentforce Analytics 1,393 1,313 4,453 4,060 $ 9,726 $ 8,879 $ 28,713 $ 26,228 (1) In the third quarter of fiscal 2026, the Company renamed its service offerings to reference Agentforce. There were no changes in the allocation of revenue between these service offerings coming from this change. Total Revenue by Geographic Locations Revenues by geographical region consisted of the following (in millions): Three Months Ended October 31, Nine Months Ended October 31, 2025 2024 2025 2024 Americas $ 6,703 $ 6,220 $ 19,908 $ 18,483 Europe 2,470 2,228 7,236 6,557 Asia Pacific 1,086 996 3,180 2,862 $ 10,259 $ 9,444 $ 30,324 $ 27,902 Revenues by geography are determined based on the region of the Company's contracting entity, which may be different than the region of the customer. Americas revenue attributed to the United States was approximately 93 percent during the three and nine months ended October 31, 2025 and 2024, respectively. No other country represented more than ten …

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Subsequent Events Informatica Inc. In November 2025, the Company acquired all outstanding stock of Informatica, an AI-powered enterprise cloud data management platform. The preliminary acquisition date fair value of the consideration transferred for Informatica is estimated to be approximately $9.6 billion, comprised primarily of $9.5 billion in cash. The cash portion included the full $6.0 billion available under the credit facilities associated with the Informatica Credit Agreements (see Note 8 Debt). …

SubsequentEventsTextBlock · excerpt; the full note is in the filing