By coinnews 
00:00 Josh Lipton
Rishi, always good to see you on the show. So, Salesforce reports, at least initially here, Rishi, investors like what they see. But let me get your, your instant reaction to these results. What do you make of them?
00:15 Rishi Jaluria
Yeah, absolutely. And Josh, always a pleasure. Thanks so much for having me. Look, I, I think the, the numbers are better than feared, right? That is, I think the right way that I would think about it. Obviously there was kind of the concern with the Informatica deal that, are they buying growth? Are they trying to hide or slow down? But, you know, you saw a, a slight beat, you saw CRPO coming ahead of expectations, you know, the guide seems completely fine. And so that’s kind of what, what I think is going on here. Why you’re seeing the stock up. Now I think what’s going to be really important on the earnings call itself, is defending this Informatica deal, you know, why it’s necessary for them to own the asset and own the full data stack.
00:59 Emily McCormick
Rishi, I’m gonna take a brief pause here to ask you to do a little jargon busting. CRPO, current remaining performance obligations, for people who are not intimately familiar with this company as you are, what does that mean? And why is it important?
01:17 Rishi Jaluria
Absolutely. So thanks so much for keeping me honest. I, I get caught up in the Silicon Valley and Wall Street bubble, but at the end of the day, the thing is with all these SaaS companies, right, it’s on a subscription model. And so you bill upfront for a year or, or however long, and then the revenue is recognized, you know, basically on a daily basis over the course of the contract. And so because of that, revenue is actually a backwards looking indicator to the point that in any given quarter, about 80% of your revenue was already booked ahead of time. It’s not new business. And so current remaining performance obligations is a more forward looking indicator. It’s what is kind of future business that’s expected to be recognized. And that’s the thing is with all these companies, you want to think about what’s happening in the future, not what’s happened in the past. And that’s why we look more towards metrics like CRPO or billings or whatever have you, rather than just the reported revenue number.
02:24 Josh Lipton
Rishi, listen, Salesforce is acquiring Informatica for about $8 billion. In your opinion, Rishi, is that a smart move by Mr. Benioff strategically and financially?
02:39 Rishi Jaluria
I’m a little skeptical on it. Uh, you know, and I’ve wrote about this publicly. I think there’s, there’s a couple concerns I have. Number one is, you know, Informatica has gone through a little bit of a rough patch of their own. And yeah, they’re getting it at a cheaper price, but it also feels like a different financial profile than what they were talking about a year ago. Number two is, I don’t know that they need to own it. I, I get the thesis around, you know, having Informatica plus data cloud and MuleSoft, and what does that do to Agent Force, but what does this tell us about how the technology at Data, uh, Data Cloud is going if they felt that they needed to own Informatica? And maybe lastly, you know, unfortunately, Salesforce’s recent track record with acquisitions hasn’t been that strong. If we think about Slack and Tableau, you know, sure, a decade ago, when they were buying ExactTarget and Demandware, they’ve done well with those acquisitions. So I think there’s just too many open questions on my mind right now to get fully behind the acquisition. I would love to be proven wrong.
03:58 Emily McCormick
Rishi, I mentioned agentic AI as something that they obviously with Agent Force and everything else, they really are emphasizing here. How much of their business is related to that at this point? And then looking out, if you look a year from now, five years from now, how much of their business will be related to that?
04:22 Rishi Jaluria
Yeah. So today, they gave a metric that somewhere near a billion dollars of ARR is coming from the entire AI and data solutions. So that would include Data Cloud, that would include some of their co-pilots, everything like that. Agent Force today is a de minimus part of revenue, right, as a standalone. And that’s not surprising. One point that we’ve always said is as, even though we’re huge bulls on generative AI and agentic AI, it is going to take years before this translates into real revenue. Right now we’re all going through use case discovery, trying to figure out how to get the most value out of this, what efficiency does it drive? What cost savings do we have? But also what new revenue can we generate as a result of this? And so the hope is if Agent Force is as successful as our friend Mark wants it to be, it can be a meaningful part of the business. Like we could be talking double digits percent part of the business. And it should have indirect benefits on the rest of Salesforce as well, you know, including competitive win rates, expansions and customers. So altogether, that should, if it works as planned, lead to a better growth outlook and brighter growth algorithm than what we’re seeing today.
05:51 Josh Lipton
Rishi, always great to see you and to have you on the show. Thanks for joining us.
06:00 Rishi Jaluria
Thank you so much.