Salesforce Inc

Previous wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, which may consist of, among other things, trend analyses and statements regarding future events, future financial performance, anticipated growth, and industry prospects, are forward-looking. Words such as “aims,” “anticipates,” “assumes,” “believes,” “commitments,” “could,” “estimates,” “expects,” “forecasts,” “foresees,” “goals,” “intends,” “may,” “plans,” “predicts,” “projects,” “seeks,” “should,” “targets” and “would,” and variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are inherently uncertain and based on management’s current expectations and assumptions, which are subject to risks and uncertainties that are difficult to predict, including those described in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Part I, Item 3, “Quantitative and Qualitative Disclosures About Market Risk,” Part II, Item 1A, “Risk Factors,” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results or outcomes to differ materially from those contained in any forward-looking statements.

Current wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, which may consist of, among other things, trend analyses and statements regarding future events, future financial performance, anticipated growth, and industry prospects, are forward-looking. Words such as “aims,” “anticipates,” “assumes,” “believes,” “commitments,” “could,” “estimates,” “expects,” “forecasts,” “foresees,” “goals,” “intends,” “may,” “plans,” “predicts,” “projects,” “seeks,” “should,” “targets” and “would,” and variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are inherently uncertain and based on management’s current expectations and assumptions, which are subject to risks and uncertainties that are difficult to predict, including those related to the Company’s proposed acquisition of Informatica Inc. and those described in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Part I, Item 3, “Quantitative and Qualitative Disclosures About Market Risk,” Part II, Item 1A, “Risk Factors,” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results or outcomes to differ materially from those contained in any forward-looking statements.

Previous wording

Salesforce is a global leader in customer relationship management (“CRM”) technology that brings humans together with artificial intelligence (“AI”) agents to drive customer success on one integrated platform. Founded in 1999, we enable companies of every size and industry to take advantage of powerful technologies to connect to their customers in a whole new way and help them transform their businesses around the customer in this digital-first world.

Current wording

Salesforce is a global leader in customer relationship management (“CRM”) technology, enabling companies of every size and industry to connect with their customers through the power of data, artificial intelligence (“AI”), CRM and trust. Founded in 1999, we bring humans together with AI agents to drive customer success on one deeply unified platform.

Previous wording

Our platform unites sales, service, marketing, commerce and IT teams by connecting customer data across systems, apps and devices to create a complete view of customers. With this single source of customer truth and integrated artificial intelligence (“AI”), teams can be more responsive, productive and efficient, deliver intelligent, personalized experiences across every channel and increase productivity. During the third quarter of fiscal 2025, we introduced Agentforce, a new layer of our trusted platform that enables companies to build and deploy AI agents that can respond to inputs, make decisions and take action autonomously across business functions. Agentforce includes a suite of customizable agents for use across sales, service, marketing and commerce. We continue to invest for growth, including investing in generative and agentic AI across all products, which we believe will change how our customers help their customers, and continuously look to expand our leadership role in the cloud computing industry.

Current wording

Our platform unites sales, service, marketing, commerce and IT teams by connecting customer data across systems, apps and devices to create a complete view of customers. With this single source of customer truth and integrated AI, teams can be more responsive, productive and efficient, deliver intelligent, personalized experiences across every channel and increase productivity. During the third quarter of fiscal 2025, we introduced Agentforce, a new layer of our trusted platform that enables companies to build and deploy AI agents that can respond to inputs, make decisions and take action autonomously across business functions. Agentforce includes a suite of customizable agents for use across sales, service, marketing and commerce. We continue to invest for growth, including investing in generative and agentic AI across all products, which we believe will change how our customers help their customers, and continuously look to expand our leadership role in the cloud computing industry.

Previous wording

In addition to our focus on top line growth levers, we are also focused on reducing our operating expenses to improve our operating margin. For example, in January 2023, we announced a restructuring plan (the “Restructuring Plan”) intended to reduce operating costs, improve operating margins and continue advancing our ongoing commitment to profitable growth which included a reduction of our workforce by approximately ten percent and office space reductions within certain markets. The employee actions associated with the Restructuring Plan were substantially completed in fiscal 2024 and the real estate actions associated with the Restructuring Plan are expected to be fully complete in fiscal 2026. In addition to the Restructuring Plan, we continued to evaluate and operationalize future programs to drive further operational efficiencies, optimize our management structure and increase cost optimization efforts to realize long-term sustainable growth, including targeted workforce and office space reductions that were initiated in the first half of fiscal 2025 and are expected to be substantially complete in fiscal 2025. We have started to see improvements in our operating expenses across all operating categories, with the most opportunity in sales and marketing expense and general and administrative expenses. Over the long term, we expect to see additional operating expense improvements, which could include various restructuring initiatives or measured hiring initiatives to drive operational efficiencies.

Current wording

In addition to our focus on top line growth levers, we are also focused on reducing our operating expenses to improve our operating margin. We have undertaken various restructuring initiatives to improve operating margins and continue advancing our ongoing commitment to profitable growth which included a reduction of our workforce and office space reductions within certain markets. We continue to evaluate and operationalize future programs to drive further operational efficiencies, optimize our management structure and increase cost optimization efforts to realize long-term sustainable growth. We expect to continue to experience improvements in our operating expenses, which could include various restructuring initiatives or measured hiring initiatives to drive operational efficiencies.

Previous wording

•Revenue: For the nine months ended October 31, 2024, revenue was$27.9 billion, an increase of 9 percent year-over-year.

Current wording

•Revenue: For the three months ended April 30, 2025, revenue was$9.8 billion, an increase ofeight percent year-over-year.

Previous wording

•Income from Operations: For the nine months ended October 31, 2024, income from operations was$5.4 billion as compared to$3.4 billion from a year ago. Operating margin, which represents income from operations as a percentage of total revenue, increased to approximately 19 percent for the nine months ended October 31, 2024 compared to approximately 13 percent for the same period in the prior year.

Current wording

•Income from Operations: For the three months ended April 30, 2025, income from operations was$1.9 billion as compared to$1.7 billion from a year ago. Operating margin, which represents income from operations as a percentage of total revenue, increased to approximately 20 percent for the three months ended April 30, 2025 compared to approximately 19 percent in the prior year period.

Previous wording

•Net Income per Share: Forthe nine months ended October 31, 2024, diluted net income per share was$4.60 as compared to diluted net income per share of $2.73 from a year ago.

Current wording

•Net Income per Share: Forthe three months ended April 30, 2025, diluted net income per share was$1.59 as compared to diluted net income per share of $1.56 from a year ago.

Previous wording

•Cash: Cash provided by operations for the nine months ended October 31, 2024 was $9.1 billion, an increase of 34 percent year-over-year. Total cash, cash equivalents and marketable securities as of October 31, 2024 was$12.8 billion.

Current wording

•Cash: Cash provided by operations for the three months ended April 30, 2025 was $6.5 billion, an increase of 4 percent year-over-year. Total cash, cash equivalents and marketable securities as of April 30, 2025 was$17.4 billion.

Previous wording

•Remaining Performance Obligation: Total remaining performance obligation, which represents all future revenue under contract yet to be recognized, as of October 31, 2024 was approximately$53.1 billion, an increase of 10 percent year-over-year. Current remaining performance obligation as of October 31, 2024 was approximately$26.4 billion, an increase of 10 percent year-over-year.

Current wording

•Remaining Performance Obligation: Total remaining performance obligation, which represents all future revenue under contract yet to be recognized, as of April 30, 2025 was approximately$60.9 billion, an increase of 13 percent year-over-year. Current remaining performance obligation as of April 30, 2025 was approximately$29.6 billion, an increase of 12 percent year-over-year.

Previous wording

•Share Repurchase Program: During the nine months ended October 31, 2024, we repurchased approximately 30 million shares of our common stock for approximately $7.7 billion.

Current wording

•Share Repurchase Program: During the three months ended April 30, 2025, we repurchased approximately 10 million shares of our common stock for approximately $2.7 billion.

Previous wording

•Dividend Program: During the nine months ended October 31, 2024, we paid approximately $1.2 billion in dividends.

Current wording

•Dividend Program: During the three months ended April 30, 2025, we paid approximately $402 million in dividends and dividend equivalents.

Previous wording

In the third quarter of fiscal 2025, we continued seeing increasing momentum for Agentforce and other AI service offerings. Outside of the demand for AI, the buying environment trends seen over the past two fiscal years have stabilized. A reemergence of slower growth in new and renewal business could impact our remaining performance obligation, revenues and our ability to meet financial guidance and long-term targets.

Current wording

In the first quarter of fiscal 2026, we continued seeing momentum for Data Cloud, Agentforce and other AI service offerings. In general, the buying environment trends seen over the past two fiscal years have stabilized. Unpredictability around economic policies or international trade, including tariffs, could result in consumer and economic uncertainty which may lead to slower growth in new and renewal business, potentially impacting our financial results.

Previous wording

In addition, the expanding global scope of our business and the heightened volatility of global markets expose us to the risk of fluctuations in foreign currency markets. Total revenues in thenine months ended October 31, 2024 were minimally impacted by foreign currency fluctuations compared to thenine months ended October 31, 2023. Our current remaining performance obligation as of October 31, 2024 was minimally impacted by foreign currency fluctuations compared to our remaining performance obligation as of October 31, 2023. The impact of foreign currency fluctuations could impact our near-term results and ability to accurately predict our future results and earnings. The impact of these fluctuations can also be compounded by the seasonality of our business in which our fourth quarter has historically been our strongest quarter for new business and renewals.

Current wording

In addition, the expanding global scope of our business and the heightened volatility of global markets expose us to the risk of fluctuations in foreign currency markets. Total revenues in the three months ended April 30, 2025 were minimally impacted by foreign currency fluctuations compared to the three months ended April 30, 2024. Our current remaining performance obligation growth as of April 30, 2025 compared to April 30, 2024 was positively impacted by one percent compared to what would have been reported using constant currency rates. The impact of foreign currency fluctuations could impact our near-term results and ability to accurately predict our future results and earnings. The impact of these fluctuations can also be compounded by the seasonality of our business in which our fourth quarter has historically been our strongest quarter for new business and renewals.

Previous wording

We derive our revenues from two sources: (1) subscription and support revenues and (2) professional services and other revenues. Subscription and support revenues accounted for approximately 94 percent of our total revenues for the nine months ended October 31, 2024.

Current wording

We derive our revenues from two sources: (1) subscription and support revenues and (2) professional services and other revenues. Subscription and support revenues accounted for approximately 95 percent of our total revenues for the three months ended April 30, 2025.

Previous wording

Subscription and support revenues include subscription fees from customers accessing our enterprise cloud computing services (collectively, “Cloud Services”), software license revenues from the sales of term software licenses, and support revenues from the sale of support and updates beyond the basic subscription fees or related to the sales of software licenses. Our Cloud Services allow customers to use our multi-tenant software without taking possession of the software. Revenue is generally recognized ratably over the contract term. Subscription and support revenues also include revenues associated with term software licenses that provide the customer with a right to use the software as it exists when made available. Revenues from term software licenses are generally recognized at the point in time when the software is made available to the customer. Revenue from support and updates is recognized as such support and updates are provided, which is generally ratably over the contract term. Changes in contract duration for multi-year term software licenses can impact the amount of revenues recognized upfront. Revenues from term software licenses represent less than ten percent of total subscription and support revenue for the three and nine months ended October 31, 2024.

Current wording

Subscription and support revenues primarily include subscription fees from customers accessing our enterprise cloud computing services (collectively, “Cloud Services”), software license revenues from the sales of term software licenses, and support revenues from the sale of support and updates beyond the basic subscription fees or related to the sales of software licenses. Our Cloud Services allow customers to use our multi-tenant software without taking possession of the software. Revenue is generally recognized ratably over the contract term. Subscription and support revenues also include revenues associated with term software licenses that provide the customer with a right to use the software as it exists when made available. Revenues from term software licenses are generally recognized at the point in time when the software is made available to the customer. Revenue from support and updates is recognized as such support and updates are provided, which is generally ratably over the contract term. Changes in contract duration for multi-year term software licenses can impact the amount of revenues recognized upfront. Revenues from term software licenses represent less than ten percent of total subscription and support revenue for the three months ended April 30, 2025.

Previous wording

Our growth in revenues is also impacted by attrition. Attrition represents the reduction or loss of the annualized value of our contracts with customers. We calculate our attrition rate at a point in time on a trailing twelve-month basis as of the end of each month. As of October 31, 2024, our attrition rate, excluding Slack self service, was approximately eight percent.

Current wording

Our growth in revenues is also impacted by attrition. Attrition represents the reduction or loss of the annualized value of our contracts with customers. We calculate our attrition rate at a point in time on a trailing twelve-month basis as of the end of each month. In general, we exclude service offerings from acquisitions from our attrition calculation until they are fully integrated into our customer success organization. As of April 30, 2025, our attrition rate, excluding Slack self-service, was approximately eight percent.

Previous wording

Cost of subscription and support revenues primarily consists of expenses related to delivering our service and providing support, including the costs of data center capacity, certain fees paid to various third parties for the use of their technology, services and data, allocated overhead and our employee-related costs, which includes salaries, benefits and stock-based compensation expense. Our cost of subscription and support revenues also includes amortization of certain acquisition-related intangible assets, such as the amortization of the cost associated with an acquired company’s research and development efforts. Also included in the cost of subscription and support revenues are expenses incurred supporting the free user base of Slack, including third-party hosting costs and employee-related costs specific to customer experience and technical operations.

Current wording

Cost of subscription and support revenues primarily consists of expenses related to our employee-related costs, which includes salaries, benefits and stock-based compensation expense, delivering our service and providing support, including the costs of data center capacity, certain fees paid to various third parties for the use of their technology, services and data, and allocated overhead. Our cost of subscription and support revenues also includes amortization of certain acquisition-related intangible assets, such as the amortization of the cost associated with an acquired company’s research and development efforts. Also included in the cost of subscription and support revenues are expenses incurred supporting the free user base of Slack, including third-party hosting costs and employee-related costs specific to customer experience and technical operations.

Previous wording

Restructuring consists of charges related to employee transition, severance payments, employee benefits and stock-based compensation as well as exit charges associated with office space reductions. The employee actions associated with the Restructuring Plan were substantially completed in fiscal 2024 and the targeted workforce and office space reductions initiated in the first nine months of fiscal 2025 are expected to be substantially complete in fiscal 2025. The real estate actions associated with the Restructuring Plan are expected to be fully complete in fiscal 2026. Restructuring excludes allocated overhead.

Current wording

Restructuring consists of charges related to employee transition, severance payments, employee benefits and stock-based compensation as well as exit charges associated with office space reductions. Restructuring excludes allocated overhead.

Previous wording

Theincrease in subscription and support revenues for the three and nine months ended October 31, 2024 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 five percent and six percent of total subscription and support revenues for the three and nine months ended October 31, 2024, respectively, and six percent for the three and nine months ended October 31, 2023. Subscription and support revenues accounted for approximately 94 percent of our total revenues for the three and nine months ended October 31, 2024 and 93 percent for the three and nine months ended October 31, 2023.

Current wording

The increase in subscription and support revenues for the three months ended April 30, 2025 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 the period. Revenues from term software licenses, which are recognized at a point in time, represented approximately seven percent of total subscription and support revenues for the three months ended April 30, 2025 and 2024. Subscription and support revenues accounted for approximately 95 percent and 94 percent of our total revenues for the three months ended April 30, 2025 and 2024, respectively.

Previous wording

The decrease in professional services and other revenues for the three and nine months ended October 31, 2024 was due primarily to less demand for larger, multi-year transformation engagements and, in some cases, delayed projects. These trends may continue in the near term.

Current wording

The decrease in professional services and other revenues for the three months ended April 30, 2025 was primarily due to less demand for larger, multi-year transformation engagements, which may continue in the near term.

Previous wording

Revenues by geography are determined based on the region of our contracting entity, which may be different than the

Current wording

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. Foreign currency did not contribute materially to the year over year fluctuations in revenue.

Previous wording

For the three months ended October 31, 2024, the decrease in cost of revenues in absolute dollars was primarily due to a decrease in service delivery expenses and a decrease in amortization of intangible assets acquired through business combinations, partially offset by an increase in employee-related costs, primarily in lower cost regions. For the nine months ended October 31, 2024, the increase in cost of revenues in absolute dollars was primarilydue to an increase in employee-related costs, primarily in lower cost regions, partially offset by a decrease in service delivery expenses and reduced amortization of intangible assets acquired through business combinations. Cost of revenue as a percentage of total revenue during the three and nine months ended October 31, 2024 decreased by threeand two percent, respectively, from the same periods a year ago primarily as a result of reduced service delivery expenses and a decrease in amortization of intangible assets acquired through business combinations.

Current wording

For the three months ended April 30, 2025, the increase in cost of revenues in absolute dollars was primarily due to an increase in employee-related costs, including stock-based compensation expense, and an increase in service delivery expenses partially offset by a decrease in amortization of purchased intangibles. Our cost of revenues headcount increased by three percent during the three months ended April 30, 2025, primarily in lower cost regions. Cost of revenues as a percentage of total revenues during the three months ended April 30, 2025 decreased by one percent from the same period a year ago due to our total revenues growth outpacing our cost of revenues growth, which was primarily attributable to a decrease in the amortization of purchased intangibles.

Previous wording

We intend to continue to invest additional resources in enterprise cloud computing 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.

Current wording

We intend to continue to invest additional resources in enterprise cloud computing services to allow us to scale with our customers and continue to evolve our security measures. The timing of these expenses, which also includes the use of AI and agents, may cause our cost of revenues as a percentage of revenues to fluctuate over time due to changes in demand for our service offerings.

Previous wording

For the three and nine months ended October 31, 2024, the increase in research and development expenses in absolute dollars was primarily due to an increase in employee-related costs, primarily in lower cost regions. Research and development expenses as a percentage of total revenues during the three months ended October 31, 2024 was consistent with the same period a year ago. For the nine months ended October 31, 2024, the one percent increase as a percentage of total revenues compared to the same period a year ago was primarily due to increased employee-related costs, primarily in lower cost regions.

Current wording

For the three months ended April 30, 2025, the increase in research and development expenses in absolute dollars was primarily due to an increase in employee-related costs, including stock-based compensation expense. Research and development expenses as a percentage of total revenues during the three months ended April 30, 2025 was consistent with the same period a year ago. Our research and development headcount increased by ten percent during the three months ended April 30, 2025, primarily in lower cost regions.

Previous wording

We expect that research and development expenses will likely remain consistent as a percentage of revenues over time as we continue to invest in the development of new, and improve existing, technologies, including our AI and Data Cloud service offerings, and support the integration of acquired technologies, at a pace consistent with our anticipated revenue growth.

Current wording

We expect that research and development expenses will likely remain consistent as a percentage of revenue over time as we continue to invest in the development of new, and improve existing, technologies, including AI, agents and our Data Cloud service offerings, and the integration of acquired technologies.

Previous wording

For the three and nine months ended October 31, 2024, the increase in sales and marketing expenses in absolute dollars was primarily due to an increase in employee-related costs. Sales and marketing expenses as a percentage of total revenues during the three and nine months ended October 31, 2024 decreased by one and two percent, respectively, from the same periods a year ago due to a decrease in relative employee-related costs and a decrease in absolute advertising expenses.

Current wording

For the three months ended April 30, 2025, 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 increased advertising expenses. Sales and marketing expenses as a percentage of total revenues during the three months ended April 30, 2025 was consistent with the same period a year ago. Our sales and marketing headcount increased by one percent during the three months ended April 30, 2025, primarily in lower cost regions.

Previous wording

For the three and nine months ended October 31, 2024, the increase in general and administrative expenses in absolute dollars was primarily due to an increase in employee-related costs and professional services expenses. General and administrative expenses as a percentage of total revenues during the three and nine months ended October 31, 2024 were materially consistent compared to the same periods a year ago.

Current wording

For the three months ended April 30, 2025, the increase in general and administrative expenses in absolute dollars was primarily due to an increase in employee-related costs, including stock-based compensation expense, and professional services expenses. General and administrative expenses as a percentage of total revenues during the three months ended April 30, 2025 was consistent with the same period a year ago. Our general and administrative headcount decreased by one percent during the three months ended April 30, 2025.

Previous wording

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.

Current wording

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.

Previous wording

In the three and nine months ended October 31, 2024, approximately $56 million and $163 million, respectively, of costs were incurred related to our restructuring initiatives, primarily related to employee transition, severance payments and employee benefits.

Current wording

In the three months ended April 30, 2025, approximately $36 million of costs were incurred related to our restructuring initiatives, which was 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.

Previous wording

Losses on strategic investments, net consists primarily of mark-to-market adjustments related to our publicly held equity securities, observable price adjustments related to our privately held equity securities, impairments and other adjustments. Our strategic investment portfolio continues to be affected by challenging market conditions for companies in which we hold private equity or debt investments as well as high public equity market volatility. For the three months ended October 31, 2024, our strategic investment portfolio losses were primarily driven by impairments on privately held equity investments of $242 million. For the nine months ended October 31, 2024, our strategic investment portfolio losses were primarily driven by impairments on privately held equity investments of $432 million, partially offset by unrealized gains on privately held equity securities of $167 million and realized gains on sales of securities of $59 million.

Current wording

Gains (losses) on strategic investments, net consists primarily of mark-to-market adjustments related to our publicly held equity securities, observable price adjustments related to our privately held equity securities and other adjustments including impairments. Our strategic investment portfolio continues to be affected by challenging market conditions for companies in which we hold private equity, debt or other investments, as well as high public equity market volatility. For the three months ended April 30, 2025, the loss on our strategic investment portfolio was primarily driven by impairments of $47 million and losses on public securities of $16 million. For the three months ended April 30, 2024, the gain on our strategic investment portfolio was primarily driven by unrealized gains on privately held equity investments of $105 million and realized gains on sales of securities of $59 million, partially offset by impairments of $130 million.

Previous wording

We recorded a tax provision of $219 million and $263 million for the three months ended October 31, 2024 and 2023, respectively, and a tax provision of $961 million and $615 million for the nine months ended October 31, 2024 and 2023, respectively. The year-to-date tax provision increased from the same period a year ago due to higher pretax income partially offset by a tax benefit from the foreign-derived intangible income deduction. Our quarter-to-date tax provision was lower compared to the same period a year ago due to the tax benefit from the foreign-derived intangible income deduction. Our effective tax rate may fluctuate due to changes in our domestic and foreign earnings, or material discrete tax items, or a combination of these factors resulting from transactions or events, including, for example, acquisitions, changes to our operating structure, and other macroeconomic factors.

Current wording

We recorded a tax provision of $433 million on pretax income of $2.0 billion for the three months ended April 30, 2025. Our effective tax rate increased from a year ago primarily due to lower excess tax benefits from stock-based compensation. Our effective tax rate may fluctuate due to changes in our domestic and foreign earnings, or 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.

Previous wording

At October 31, 2024, our principal sources of liquidity were cash, cash equivalents and marketable securities totaling $12.8 billion and accounts receivable of $4.7 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 October 31, 2024, also serves as a source of liquidity.

Current wording

At April 30, 2025, our principal sources of liquidity were cash, cash equivalents and marketable securities totaling $17.4 billion and accounts receivable of $4.4 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 April 30, 2025, also serves as a source of liquidity.

Previous wording

For the three and nine months ended October 31, 2024 and 2023, our cash flows were as follows (in millions):

Current wording

For the three months ended April 30, 2025, 2024, and 2023 our cash flows were as follows (in millions):

Previous wording

The net cash provided by operating activities during the nine months ended October 31, 2024 was primarily comprised of net income of $4.5 billion, adjusted for non-cash items, including $2.6 billion of depreciation and amortization and $2.4 billion of stock-based compensation expense. Net cash provided by operating activities can be significantly impacted by factors such as growth in new business, timing of cash receipts from customers, vendor payment terms and timing of payments to vendors. Net cash provided by operating activities during the nine months ended October 31, 2024 was further benefited by the changes inaccounts receivable, net of $6.7 billion partially offset bythe change inunearned revenue of $5.6 billion and the change in accounts payable and accrued expenses and other liabilities of $503 million. As our business continues to grow, and assuming our expenses remain in line with or less than our revenue growth, we expect to continue to see growth in net cash provided by operating activities.

Current wording

The net cash provided by operating activities during the three months ended April 30, 2025 was primarily comprised of net income of $1.5 billion, adjusted for non-cash items, including $843 million of depreciation and amortization and $814 million of stock-based compensation expense. Net cash provided by operating activities can be significantly impacted by factors such as growth in new business, timing of cash receipts from customers, vendor payment terms and timing of payments to vendors. Net cash provided by operating activities during the three months ended April 30, 2025 was further benefited bythe changes in accounts receivable, net of$7.6 billion, partially offset by the change in unearned revenue of $2.9 billion and the change in accounts payable and accrued expenses and other liabilities of $1.0 billion. As our business continues to grow, and assuming our expenses remain in line with or less than our revenue growth, we expect to continue to see growth in net cash provided by operating activities.

Previous wording

The net cash provided by operating activities during the nine months ended October 31, 2023 was primarily comprised of net income of $2.7 billion, adjusted for non-cash items including $3.0 billion of depreciation and amortization and $2.1 billion of stock-based compensation expense. Net cash provided by operating activities can be significantly impacted by factors such as growth in new business, timing of cash receipts from customers, vendor payment terms and timing of payments to vendors. Net cash provided by operating activities during the nine months ended October 31, 2023 was further benefited by the change in accounts receivable, net of $5.9 billion due to cash collections and was partially offset by the change in unearned revenue of $4.8 billion and the change in accounts payable and accrued expenses and other liabilities of $1.6 billion.

Current wording

The net cash provided by operating activities during the three months ended April 30, 2024 was primarily comprised of net income of $1.5 billion, adjusted for non-cash items, including $879 million of depreciation and amortization and $750 million of stock-based compensation expense. Cash provided by operating activities during the three months ended April 30, 2024 was further benefited by the changes in accounts receivable, net of $7.2 billion, partially offset by the change in unearned revenue of $3.0 billion and the change in accounts payable and accrued expenses and other liabilities of $755 million.

Previous wording

The net cash used in investing activities during the nine months ended October 31, 2024 was primarily related to net outflows for acquisitions of $517 million, net outflows from strategic investment activity of $256 million and capital expenditures of $504 million, partially offset by net inflows from marketable securities activity of $1.1 billion.

Current wording

The net cash used in investing activities during the three months ended April 30, 2025 was primarily related to net outflows from marketable securities activity of $1.2 billion, net outflows from strategic investment activity of $143 million and capital expenditures of $179 million.

Previous wording

The net cash used in investing activities during the nine months ended October 31, 2023 was primarily related to capital expenditures of $589 million and net outflows from strategic investment activity of $288 million, partially offset by net inflows related to marketable securities activity of $100 million.

Current wording

The net cash used in investing activities during the three months ended April 30, 2024 was primarily related to net outflows from marketable securities activity of $2.0 billion, net outflows for the acquisition of Spiff of $338 million, net outflows from strategic investment activity of $150 million and capital expenditures of $163 million.

Previous wording

The net cash used in financing activities during the nine months ended October 31, 2024 was primarily related to $7.8 billion used for repurchases of common stock, $1.0 billion related to repayments of debt and $1.2 billion related to payments of dividends, partially offset by $1.1 billion from proceeds from equity plans.

Current wording

The net cash used in financing activities during the three months ended April 30, 2025 was primarily related to $2.6 billion used for repurchases of common stock and $402 million related to payments of dividends, partially offset by $294 million of proceeds from equity plans.

Previous wording

The net cash used in financing activities during the nine months ended October 31, 2023 was primarily related to $5.9 billion used for repurchases of common stock and $1.2 billion related to repayments of debt, partially offset by $1.1 billion from proceeds from equity plans.

Current wording

Net cash used in financing activities during the three months ended April 30, 2024 consisted primarily of $2.1 billion from repurchases of common stock and $388 million related to payments of dividends, partially offset by $533 million of proceeds from equity plans.

Previous wording

The Revolving Loan Credit Agreement provides for a $5.0 billion unsecured revolving credit facility (“Credit Facility”) and matures in October 2029. We may use the proceeds of future borrowings under the Credit Facility for general corporate purposes. There were no outstanding borrowings under the Credit Facility as of October 31, 2024.

Current wording

The Revolving Loan Credit Agreement provides for a $5.0 billion Credit Facility and matures in October 2029. We 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 April 30, 2025.