Goodfood Market Corp.

Company Overview

Business Model: Salesforce, Inc. is a global leader in customer relationship management ("CRM") technology, founded in 1999. The Company enables businesses of all sizes and industries to connect with their customers through data, artificial intelligence ("AI"), CRM, and trust. Its AI-powered Salesforce Platform unifies offerings across sales, service, marketing, commerce, collaboration, integration, AI, analytics, automation, and industries by connecting customer data to create a complete customer view. This platform facilitates responsive, productive, and efficient teams, delivering intelligent, personalized, and automated experiences. Salesforce, Inc. also introduced Agentforce, an agentic layer of its platform, which deploys autonomous AI agents across business functions to enhance productivity and operational efficiency. Services are sold primarily on a subscription basis globally through direct sales and partners, with third parties also developing applications on the Salesforce Platform via AppExchange. The Company operates under core values of trust, customer success, innovation, equality, and sustainability, grounded in legal and regulatory frameworks.

Market Position: Salesforce, Inc. holds a leading position as the #1 provider of CRM software globally. It operates in a highly competitive, rapidly evolving, and fragmented market characterized by changing technology, low barriers to entry, shifting customer needs, and frequent new product introductions. The Company faces competition from traditional packaged software vendors, cloud computing application service providers, freemium software providers, niche industry-specific software vendors, productivity tool and email providers, and internal enterprise application development. No single customer accounted for more than 10% of total revenues in fiscal years 2025, 2024, or 2023. As of January 31, 2025, the Company's attrition rate, excluding Slack self-service, was approximately 8%, consistent with the prior year.

Recent Strategic Developments:

• AI Integration: Introduced Agentforce in the third quarter of fiscal 2025, an agentic layer of the Salesforce Platform for deploying autonomous AI agents across various business functions. The Company continues to invest in generative and agentic AI across all its products.
• Acquisitions: Completed three acquisitions in fiscal 2025: Spiff, Inc. (incentive compensation management platform) in February 2024, Zoomin Software Ltd. (data management company) in November 2024, and Own Data Company Ltd. (data protection and data management solutions) in November 2024.
• Restructuring Initiatives: Continued operational efficiency efforts initiated in January 2023, including workforce reductions (substantially completed in fiscal 2024) and office space reductions (expected to be completed by the end of fiscal 2026). Further targeted reductions were initiated in fiscal 2025.
• Shareholder Returns: Initiated a cash dividend program in fiscal 2025, paying approximately $1.5 billion. The Board of Directors authorized an additional $10.0 billion for the Share Repurchase Program in February 2024, bringing the aggregate total authorization to $30.0 billion.

Geographic Footprint: Salesforce, Inc. sells its services worldwide, with revenues primarily concentrated in the Americas (66% of total revenue in fiscal 2025), followed by Europe (24%), and Asia Pacific (10%). Approximately 93% of Americas revenue was attributed to the United States in fiscal 2025, 2024, and 2023. The Company operates data centers in the U.S., Europe, and Asia, and is expanding its Hyperforce infrastructure to provide global platform and application delivery with local data residency control.

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: 77.2%
• Operating Margin: 19.0%
• Net Margin: 16.4%

Investment in Growth:

• R&D Expenditure: $5.493 billion (14.5% of revenue)
• Capital Expenditures: $658 million
• Strategic Investments: Net outflows from strategic investment activity of $413 million in fiscal 2025. Acquisitions, net of cash acquired, totaled $2.734 billion in fiscal 2025. The Company manages a portfolio of strategic investments in over 400 companies, with a combined carrying value of $4.9 billion as of January 31, 2025.

Business Segment Analysis

Salesforce, Inc. operates as one operating segment. The Company provides disaggregated revenue by service offering.

Sales

Financial Performance:

• Revenue: $8.322 billion (+10% YoY)
• Key Growth Drivers: Primarily volume-driven increases from new business, including new customers, upgrades, and additional subscriptions from existing customers. The integration of Agentforce for Sales is expected to further accelerate productivity and drive growth.

Product Portfolio:

• An integrated platform that combines human and AI agent capabilities to enhance sales team efficiency, automate sales processes, and manage the entire sales lifecycle.
• Includes features for prospecting, sales engagement, team collaboration, sales analytics and AI, sales programs, sales performance, partner management, and revenue and order management.

Market Dynamics:

• Focused on enabling businesses to create lasting customer relationships by unifying data sources across their organizations.

Service

Financial Performance:

• Revenue: $9.054 billion (+10% YoY)
• Key Growth Drivers: Volume-driven increases from new business, including new customers, upgrades, and additional subscriptions from existing customers. AI technology for automated case routing, personalized customer responses, and task automation.

Product Portfolio:

• An integrated, AI-powered platform designed to manage all customer service and field service needs, delivering personalized support at scale.
• Automates routine tasks, maximizes productivity, and improves customer satisfaction.
• Agentforce for Service leverages digital labor for low-touch interactions and assists with high-touch tasks.
• Includes a field service solution that connects service agents, dispatchers, and mobile employees for intelligent scheduling, dispatch, tracking, and job management.

Market Dynamics:

• Aims to help companies in every industry deliver trusted, highly personalized customer support.

Platform and Other

Financial Performance:

• Revenue: $7.247 billion (+10% YoY)
• Key Growth Drivers: Volume-driven increases from new business, including new customers, upgrades, and additional subscriptions from existing customers. Focus on enabling customers to build business workflows, applications, and AI agents.

Product Portfolio:

• The Salesforce Platform provides a comprehensive environment for building business workflows, applications, and AI agents using no-code and low-code tools.
• Features a Trust Layer for secure data usage and AI agent guardrails, and is built on Hyperforce for global data governance and compliance.
• Includes Agentforce for deploying autonomous AI agents, Data Cloud for a unified customer data view, and Industries for purpose-built, AI-powered solutions across specific sectors (e.g., financial services, healthcare).
• Salesforce Starter offers an all-in-one solution for small and medium-size businesses.

Market Dynamics:

• Designed to boost efficiency, increase productivity and automation, and reduce information technology costs for customers.

Marketing and Commerce

Financial Performance:

• Revenue: $5.281 billion (+8% YoY)
• Key Growth Drivers: Volume-driven increases from new business, including new customers, upgrades, and additional subscriptions from existing customers. Emphasis on personalized engagement and AI-powered capabilities.

Product Portfolio:

• Marketing: A complete marketing platform that personalizes engagement across the customer lifecycle, connecting departments through actionable data, trusted AI, and autonomous AI agents. Agentforce assists marketers in generating content and optimizing campaign performance.
• Commerce: Connects all aspects of commerce on a single, AI-powered platform to deliver personalized shopping experiences. Agentforce for Commerce autonomously manages tasks like product recommendations and order lookup. Includes click-to-code tools for rapid solution deployment.

Market Dynamics:

• Focuses on building lasting customer relationships and delivering seamless, personalized shopping experiences across all customer touchpoints.

Integration and Analytics

Financial Performance:

• Revenue: $5.775 billion (+11% YoY)
• Key Growth Drivers: Volume-driven increases from new business, including new customers, upgrades, and additional subscriptions from existing customers. Driven by AI-powered, end-to-end connected experiences.
• Note: This segment is expected to experience greater revenue volatility due to the inclusion of term software licenses (recognized at point-in-time) and the ongoing transition of customers from term software licenses to subscription-based services.

Product Portfolio:

• Unified Integration, Automation, and API Management offerings, powered by MuleSoft.
• MuleSoft: Connects data across any system, automates tasks with no-code/low-code, and scales API governance. Extends Agentforce capabilities to systems outside Salesforce.
• Analytics (Tableau): Provides advanced, end-to-end solutions for business use cases, powered by agentic AI. Enables users to visualize, analyze, and act on business data from any source, enriching Agentforce with data visualizations and business context.

Market Dynamics:

• Aims to accelerate innovation by facilitating data connectivity, automation, and secure data management across diverse systems.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: In fiscal 2025, Salesforce, Inc. repurchased approximately 30 million shares of its common stock for $7.8 billion.
• Dividend Payments: The Company paid approximately $1.5 billion in dividends during fiscal 2025, with a quarterly dividend of $0.40 per share.
• Future Capital Return Commitments: As of January 31, 2025, $10.6 billion remained authorized under the Share Repurchase Program, which has an aggregate authorization of $30.0 billion (increased by $10.0 billion in February 2024). Future dividend payments are subject to Board declaration, capital availability, and market conditions.

Balance Sheet Position (as of January 31, 2025):

• Cash and Equivalents: $8.848 billion
• Total Debt: $8.500 billion (Principal Outstanding)
• Net Cash Position: $5.532 billion (Calculated as Cash, Cash Equivalents, and Marketable Securities of $14.032 billion minus Total Debt of $8.500 billion).
• Debt Maturity Profile: The Company's senior unsecured debt has maturities starting in April 2028 and extending through July 2061. No principal payments are due in fiscal years 2026-2028. $2.500 billion is due in fiscal 2029, and $6.000 billion thereafter.
• Credit Facility: A $5.0 billion unsecured revolving credit facility, maturing in October 2029, was established in October 2024. No outstanding borrowings were present as of January 31, 2025.

Cash Flow Generation (Fiscal Year Ended January 31, 2025):

• Operating Cash Flow: $13.092 billion (+28% YoY)
• Free Cash Flow: Approximately $12.434 billion (Operating Cash Flow of $13.092 billion minus Capital Expenditures of $658 million).
• Cash Conversion Metrics: Total remaining performance obligation was $63.4 billion (+11% YoY), with current remaining performance obligation at $30.2 billion (+9% YoY). Unearned revenue increased by $1.740 billion to $20.743 billion.

Operational Excellence

Production & Service Model: Salesforce, Inc. delivers its solutions primarily as highly scalable cloud computing application and platform services utilizing a multi-tenant technology architecture. This approach allows for cost distribution across its user base and faster business scaling. Services are provided through a combination of third-party cloud computing platform partners (Infrastructure-as-a-Service) and Company-designed infrastructure within third-party data centers. The Company is expanding Hyperforce to enable rapid and reliable global platform and application delivery, offering customers autonomy and control over data residency. Operational focus includes continuous improvement of features, functionality, performance, availability, and security, alongside the integration of acquired businesses and technologies. Customer support is provided globally via web, telephone, email, and social networks, with standard and premier support options. Agentforce is integrated into the Salesforce Help page to enhance customer issue resolution.

Supply Chain Architecture: The Company relies on third-party data center hosting facilities and cloud computing platform providers located in the United States and internationally. Its operations also depend on computer hardware, software, and cloud computing platforms sourced from various third-party vendors, including database software and large language models for AI offerings.

Key Suppliers & Partners:

• Cloud Computing Platform Providers: Supply Infrastructure-as-a-Service, including servers, storage, databases, and networking.
• Hardware and Software Vendors: Provide essential computer hardware, software, and data components.
• Consulting Partners: Global consulting firms and System Integrators (SIs) deliver technology solutions, expertise, and implementation services, particularly for multi-offering and complex deployments.
• Technology Partners: Independent Software Vendors (ISVs) and third-party developers create complementary applications and integrations, often marketed on the AppExchange.

Facility Network:

• Manufacturing: Not directly applicable as a software company, but relies on third-party data centers.
• Research & Development: Key R&D activities are concentrated in the San Francisco Bay Area, with additional personnel in lower-cost regions globally.
• Distribution: Operates data centers in the U.S., Europe, and Asia through co-location lease arrangements. Executive and principal offices in San Francisco comprise approximately 0.9 million square feet of leased and owned property. Additional office space is leased globally across various continents.

Operational Metrics:

• Cost of revenues headcount increased by 7% in fiscal 2025, primarily in lower cost regions.
• Research and development headcount increased by 13% in fiscal 2025, primarily in lower cost regions.
• Sales and marketing headcount increased by 1% in fiscal 2025, primarily in lower cost regions.
• General and administrative headcount increased by 3% in fiscal 2025.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: The primary channel, comprising sales personnel based in regional hubs, field sales, and self-service offerings.
• Channel Partners: A network of global consulting firms, System Integrators (SIs), and other partners refer sales leads and assist in selling to prospects, typically receiving a fee based on first-year subscription revenue.
• Digital Platforms: The AppExchange serves as an enterprise cloud marketplace for third-party applications.

Customer Portfolio: Enterprise Customers:

• Salesforce, Inc. sells to businesses of all sizes across nearly every industry worldwide, with customer subscriptions ranging from one to hundreds of thousands.
• No single customer accounted for more than 10% of total revenue in fiscal 2025, 2024, or 2023, indicating a diversified customer base.
• The Company focuses on deepening existing customer relationships through cross-selling and upselling, and increasing penetration with enterprise and international customers.
• Customer success programs, including success management resources, advisory services, technical architects, and business strategists, are provided to accelerate digital transformations.
• Free educational resources like Trailhead and a community of "Trailblazers" support customer adoption and innovation.

Geographic Revenue Distribution:

• Americas: 66% of total revenue in fiscal 2025.
• Europe: 24% of total revenue in fiscal 2025.
• Asia Pacific: 10% of total revenue in fiscal 2025.
• Growth Markets: The Company continues to invest in domestic and international operations and infrastructure to expand its global go-to-market capabilities.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The market for enterprise applications and platform services is highly competitive, rapidly evolving, and fragmented. It is characterized by changing technology, low barriers to entry, shifting customer needs, and frequent introductions of new products and services. Customers often have significant investments in existing enterprise software, making migration challenging. The increasing integration of AI technologies across the industry is a key dynamic.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Packaged Business Software Vendors: Companies offering enterprise applications, both on-premises and through cloud computing application service providers.
• Freemium Software Providers: Software companies offering products free of charge or with premium features for advanced functionality.
• Niche Solution Providers: Vendors specializing in specific services, industries, or market segments, such as business intelligence, data preparation, integration, marketing, e-commerce, or AI software and services.
• Broader Technology Companies: Productivity tool and email providers, unified communications providers, and consumer application companies that have entered the business software market.
• Platform Development Companies: Traditional and cloud computing development platform companies that enable customers to build new applications, including AI-augmented applications.
• Internal Development: Potential customers who develop enterprise applications for internal use.

Emerging Competitive Threats:

• New entrants and disruptive technologies, particularly in the rapidly evolving AI space, may introduce alternative solutions or integrate AI more efficiently.
• Smaller, more agile competitors may respond quickly to changing customer demands.

Competitive Response Strategy: Salesforce, Inc. aims to maintain its competitive advantage by:

• Driving multiple service offering adoption among existing customers.
• Increasing penetration with enterprise and international customers.
• Expanding its industry-specific reach with more vertical software solutions.
• Delivering innovative and value-driven solutions, such as Agentforce.
• Leveraging its partner ecosystem, including Independent Software Vendors (ISVs) and System Integrators (SIs), to expand into new markets and industries.
• Promoting strong customer adoption and reducing attrition through robust customer success programs and resources.
• Continuously evaluating opportunities for mergers, acquisitions, and strategic investments in complementary businesses and technologies.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics: The Company faces intense competition in a rapidly evolving and fragmented market, with potential for new entrants and disruptive technologies, particularly in AI. Failure to keep pace with technological developments or to successfully expand service offerings could harm the business. Brand and reputational harm could arise from social and ethical issues, especially concerning AI use, or from negative publicity. Strategic Investments: Risks include partial or complete loss of invested capital and significant changes in the fair value of its strategic investment portfolio, particularly in early-stage companies, and potential regulatory challenges (e.g., antitrust). Third-Party Reliance: Dependence on third-party developers and providers to embrace its technology model, and potential liability if customers seek warranties for third-party applications, integrations, data, and content. ESG Matters: The evolving landscape of ESG regulations and stakeholder expectations may expose the Company to compliance costs, increased scrutiny, and reputational harm if commitments are not met.

Operational & Execution Risks

Supply Chain Vulnerabilities: Reliance on third-party data center hosting facilities, cloud computing platform providers, and hardware/software vendors creates risks of service interruptions or delays, which could impair service delivery, lead to financial liabilities, customer losses, and reputational damage. Acquisition Integration: Acquisitions may not yield expected benefits, prove difficult to integrate, disrupt business operations, or introduce unforeseen security vulnerabilities and liabilities. Scaling Operations: Supporting a growing customer base strains personnel and infrastructure, requiring significant investments in human capital and technology. Failure to scale effectively or retain key talent could hinder business plan execution. Customer Attrition & Usage: Customers are not obligated to renew subscriptions, and attrition rates or lower-than-expected usage of consumption-based offerings could negatively impact revenue and remaining performance obligation. Sales Organization Changes: Periodic adjustments to the sales organization can be disruptive, potentially reducing productivity and growth rates. International Operations: Global sales expose the Company to risks such as regional economic/political instability, foreign currency fluctuations, complex regulatory compliance (e.g., employment, tax, anti-corruption, data privacy), and challenges in intellectual property protection and staffing. Enterprise Customer Sales: Targeting larger enterprise customers often involves longer, more expensive sales cycles, increased competition, pricing pressure, and complex implementation challenges, potentially delaying revenue recognition. Professional & Technical Support: Any failure to deliver high-quality professional and technical support services could adversely affect customer relationships and financial results.

Financial & Regulatory Risks

Market & Financial Risks: Revenue recognition over subscription terms means downturns in new business are not immediately reflected in operating results. Significant fluctuations in anticipated growth rates, coupled with an inability to balance expenses with revenue forecasts, could harm the business. Unanticipated changes in effective tax rates, additional tax liabilities from global tax developments (e.g., OECD Pillar Two), and foreign currency exchange rate fluctuations (especially USD vs. local currencies) can negatively impact financial results and cash flows. Debt & Commitments: Substantial debt service obligations, lease commitments, and other contractual obligations could adversely affect financial condition and cash flows, potentially limiting future financing or increasing vulnerability to economic downturns. Regulatory & Compliance Risks: Evolving regulations in cloud computing, AI services, and cross-border data transfers (e.g., GDPR, CCPA, EU DSA, Data Act, AI Act) may limit service adoption, increase compliance costs, and lead to significant fines or lawsuits (e.g., Privacy Collective litigation). Industry-specific regulations (e.g., DORA for financial services) can impose additional burdens. Legal Proceedings: The Company is subject to various legal matters, including alleged intellectual property infringement, claims related to customer actions (e.g., Backpage litigation), and securities class action litigation (e.g., Slack litigation). Outcomes are inherently uncertain and could result in substantial costs, reputational harm, or changes to business practices. Intellectual Property Protection: Failure to obtain or protect intellectual property rights (patents, trademarks, copyrights, trade secrets) could allow competitors access to technology, incur significant expenses, and harm the business, particularly with evolving IP laws around AI technologies. Government Contracts & Sanctions: Government contracts expose the Company to procurement regulations, audits, and potential penalties. Compliance with governmental sanctions and export/import controls is critical, with non-compliance potentially leading to substantial penalties and reputational harm, especially given geopolitical developments.

Geopolitical & External Risks

Geopolitical Exposure: Volatile and weakened global economic conditions, exacerbated by ongoing conflicts (e.g., Ukraine, Middle East) and trade policy uncertainty, can adversely affect IT spending and customer purchasing decisions. Natural Disasters & Catastrophic Events: Geopolitical crises, natural disasters (e.g., earthquakes in the San Francisco Bay Area), public health emergencies, and acts of terrorism could disrupt operations, international commerce, and decrease demand for services. Climate Change: Climate-related events (drought, heat waves, wildfires) can impact critical infrastructure, increase operational costs (e.g., data center cooling), and affect employee well-being. Failure to meet climate commitments could also result in reputational harm.

Innovation & Technology Leadership

Research & Development Focus: Core Technology Areas: Salesforce, Inc.'s R&D efforts are concentrated on enhancing its existing service offerings and developing new technologies, with a significant focus on AI. Key areas include:

• Artificial Intelligence: Extensive investment in generative and agentic AI across all products, including the development of Agentforce for deploying autonomous AI agents.
• Data Cloud: Development of a hyperscale, trusted data engine native to Salesforce, designed to unify enterprise data for comprehensive customer views and power automation, analytics, and AI agents.
• Salesforce Platform: Continuous improvement of the core platform to enable business workflows, applications, and AI agents using no-code and low-code tools, ensuring security and ease of integration.
• Hyperforce: Expansion of its infrastructure to provide global data governance and compliance capabilities.
• Security: Ongoing investment in evolving security measures to protect systems and data.

Innovation Pipeline: The Company's innovation pipeline includes the timely completion and market introduction of enhancements and new features for existing and new services. This involves adapting to rapid technological developments across various network platforms, mobile devices, operating systems, and computer hardware/software platforms. The introduction of Agentforce in Q3 fiscal 2025 exemplifies this focus.

Intellectual Property Portfolio: Salesforce, Inc. protects its proprietary technology and brands through a combination of trademarks, copyrights, trade secrets, patents, and contractual provisions. It holds numerous U.S. patents and has pending U.S. and international patent applications. The Company also licenses technology for integration into its products and services. Select intellectual property is sometimes made broadly available to promote industry standards, interoperability, open-source software, or to engage its external development community. The Company acknowledges the evolving and uncertain legal standards surrounding AI technologies, particularly regarding intellectual property ownership and licensing for AI training and output.

Technology Partnerships: The Company leverages its partner ecosystem, including Independent Software Vendors (ISVs) and third-party developers, who create applications and integrations complementary to its services. These applications are often marketed and sold on the AppExchange, the Company's enterprise cloud marketplace.

Leadership & Governance

Executive Leadership Team (as of February 28, 2025)

Leadership Continuity: Brian Millham (President and Chief Operating Officer) and Amy Weaver (President and Chief Financial Officer) are transitioning to Special Advisor roles effective March 21, 2025. The Company emphasizes the importance of effective succession planning for long-term success, noting that changes in the management team can be disruptive.

Board Composition: The Board of Directors, through its Cybersecurity and Privacy committee, provides dedicated oversight of cybersecurity-related management, strategy, initiatives, risks, threats, and remediation activities. The Committee receives regular updates from the Chief Trust Officer and other management members, as well as periodic reports from an experienced outside consultant with information security expertise.

Human Capital Strategy

Workforce Composition:

• Total Employees: As of January 31, 2025, Salesforce, Inc. had 76,453 employees.
• Geographic Distribution: While not explicitly detailed, the Company notes that employees of certain foreign subsidiaries are represented by works councils, and recent headcount increases in cost of revenues, R&D, and sales and marketing were primarily in lower cost regions.
• Skill Mix: Sales, engineering, and customer success teams are identified as critical to the Company's growth, innovation, and customer trust.

Talent Management: Acquisition & Retention:

• Hiring Strategy: The Company faces significant competition in talent recruitment and retention within the technology industry, particularly for engineers, sales executives, data scientists, and operations personnel. Evolving restrictions on immigration, travel, or visas for skilled technology workers can amplify these difficulties.
• Retention Metrics: Not explicitly disclosed, but the Company emphasizes its focus on a strong workplace environment and company culture to attract and retain talent.
• Employee Value Proposition: Salesforce, Inc. offers competitive compensation packages and robust benefits, which vary by country to meet or exceed local legal requirements and market competitiveness. This includes fixed and variable cash compensation, equity compensation (restricted stock units, performance-based restricted stock units, and stock options), and an Employee Stock Purchase Plan (15% discount). The Company also matches employee donations to eligible nonprofit organizations, with the match increasing to $10,000 per employee from February 1, 2025.

Diversity & Development:

• Diversity Metrics: The Company's approach to equality is rooted in compliance with federal and other applicable laws and regulations governing equal pay, equal opportunity, and anti-discrimination.
• Development Programs: Employees have access to various talent development programs, including Career Connect (internal talent marketplace) and Trailhead (learning platform). Yearly education reimbursement is offered for job-related education from accredited institutions.
• Culture & Engagement: Salesforce, Inc.'s core values (trust, customer success, innovation, equality, and sustainability) form the foundation of its company culture, fostering open dialogue, collaboration, recognition, and a sense of belonging. The Company utilizes an annual corporate V2MOM (Vision, Values, Methods, Obstacles, Measures) for alignment and expects employees to create their own V2MOMs. Employee engagement and satisfaction are monitored through twice-yearly confidential surveys and active leadership communication via all-company meetings and a daily newsletter.

Environmental & Social Impact

Environmental Commitments: Climate Strategy: Salesforce, Inc. is committed to creating a more sustainable and nature-positive future. Its products and services are designed to help customers meet their own sustainability and compliance priorities, guided by applicable environmental and sustainability-related laws, corporate social responsibility frameworks, and legal requirements. The Company seeks to mitigate business risks associated with climate change through established environmental programs and partnerships with organizations focused on climate risk mitigation. Supply Chain Sustainability: Information not explicitly detailed in the provided filing.

Social Impact Initiatives:

• Community Investment: Salesforce, Inc. is committed to giving back to its communities.
• Product Impact: The Company aspires to create a framework for the ethical and humane use of technology, upholding basic human rights.
• Transparency & Reporting: Salesforce, Inc. publishes an annual Stakeholder Impact Report to provide transparency on its sustainability, impact, and equality strategies, informed by relevancy assessments and third-party ESG reporting organizations, frameworks, and standards, such as the Sustainability Accounting Standards Board ("SASB") Standards.
• Equality: The Company's commitment to equality is firmly rooted in compliance with federal and other applicable laws and regulations governing equal pay, equal opportunity, and anti-discrimination protections.

Business Cyclicality & Seasonality

Demand Patterns:

• Seasonal Trends: The Company's fiscal fourth quarter has historically been its strongest for new business and renewals, driven primarily by large enterprise account buying patterns. This seasonality results in a disproportionate weighting toward annual billings in the fourth quarter, causing the value of invoices generated in Q4 to increase as a proportion of total annual billings.
• Economic Sensitivity: Overall performance is influenced by worldwide economic and geopolitical conditions. Economic downturns can adversely affect IT spending, customer purchasing decisions, and the value and duration of customer subscription contracts.
• Industry Cycles: The Company's business is sensitive to general economic conditions and industry-specific cycles, which can impact demand for its enterprise cloud computing services.

Planning & Forecasting:

• Due to the seasonality of billing patterns, the first fiscal quarter is typically the largest for collections and operating cash flow, while the third quarter has historically been the smallest.
• The unpredictability of future economic and financial market conditions, foreign currency exchange rate fluctuations, and the pace of innovation can affect the Company's ability to accurately predict future results and earnings.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations: Salesforce, Inc. operates globally and is subject to numerous U.S. federal, state, and foreign laws and regulations. Customers in highly regulated industries such as financial services, the public sector, and healthcare are subject to specific regulations regarding cloud computing, AI services, and outsourced services. Examples include guidelines for cloud use by financial services regulators and the EU's Digital Operational Resilience Act ("DORA"), effective January 2025. International Compliance: The Company navigates an evolving regulatory landscape concerning data privacy, cybersecurity, data protection, data sovereignty, and cross-border data transfers. This includes compliance with laws such as the EU General Data Protection Regulation ("GDPR"), the California Consumer Privacy Act ("CCPA") as amended by the California Privacy Rights Act ("CPRA"), India’s Digital Personal Data Protection Act 2023, and new EU laws like the Digital Services Act ("DSA"), Data Act, and AI Act. The validity of cross-border data transfer mechanisms, such as the EU-U.S. Data Privacy Framework, remains subject to uncertainty. Trade & Export Controls: The Company is subject to trade control laws and regulations, including U.S. Commerce Department’s Export Administration Regulations, U.S. customs regulations, U.S. supply chain regulations, and economic and trade sanctions administered by the U.S. Treasury Department’s Office of Foreign Assets Control. Compliance failures can lead to substantial civil or criminal penalties.

Legal Proceedings: Salesforce, Inc. is involved in various legal and regulatory proceedings, including claims of alleged infringement of third-party patents and other intellectual property rights, as well as commercial, corporate, securities, labor, employment, class actions, wage and hour, antitrust, data privacy, and cybersecurity matters.

• Slack Litigation: Ongoing securities class action litigation and related stockholder derivative claims against Slack (pre-acquisition) remain outstanding.
• Backpage Litigation: The Company is a defendant in state and federal actions alleging facilitation of sex trafficking by a former customer, Website Technologies, LLC (an affiliate of Backpage.com, LLC), through the use of Salesforce CRM Software.
• The outcome of any claims or litigation is inherently uncertain and could result in significant expenses, diversion of management attention, injunctions, monetary damages, or licensing agreements.

Tax Strategy & Considerations

Tax Profile: Salesforce, Inc. is subject to income taxes in the United States and various other jurisdictions globally. For fiscal 2025, the Company recorded an effective tax rate of 17%. The effective tax rate can fluctuate due to changes in domestic and foreign earnings, non-deductible expenses, stock-based compensation, valuation of deferred tax assets and liabilities, withholding taxes, acquisitions, accounting principles, and tax laws. The Company is subject to tax examinations in multiple jurisdictions, including the United States, Japan, Australia, Germany, France, United Kingdom, Ireland, Canada, India, and Israel. U.S. federal tax returns since fiscal 2008 and non-U.S. tax returns generally since fiscal 2019 remain open to examination.

Geographic Tax Planning: The Company's tax planning strategies, including those related to its international tax structure, are considered in the context of its deferred tax assets and liabilities. Tax Reform Impact: The implementation of the Organization for Economic Co-operation and Development’s 15% global minimum tax regime (Pillar Two) effective January 1, 2024, had no material impact on the Company's income tax provision for fiscal 2025. However, the Company continues to evaluate the impacts of such legislation, and its effective tax rate and cash tax payments could increase in future years. The Company benefited from a foreign-derived intangible income deduction in fiscal 2025, which included an adjustment for fiscal 2023 and 2024.

Insurance & Risk Transfer

Risk Management Framework:

• Insurance Coverage: Salesforce, Inc. maintains director and officer insurance coverage to mitigate costs associated with indemnifying its directors and executive officers. However, the Company does not carry earthquake insurance for direct earthquake-related losses, despite its corporate headquarters and significant operations being located near major seismic faults.
• Risk Transfer Mechanisms: The Company utilizes foreign currency forward contracts to manage foreign exchange risk associated with intercompany transactions and other monetary assets or liabilities denominated in foreign currencies. These contracts are generally short-term and are not designated as hedging instruments for accounting purposes. The Company typically enters into master netting arrangements with financial institutions for these derivatives to reduce credit risk, though these arrangements do not include collateral features.