Good afternoon. My name is Shinal, and I will be your conference operator today. At this time, I would like to welcome everyone to the Salesforce.com’s Fiscal First Quarter Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions) I will now turn the call over to John Cummings, Director of Investor Relations.

Thank you, Shinal, and good afternoon everyone and thank you for joining us today to discuss our fiscal first quarter 2014 results. Access to the first quarter results press release, our SEC filings and a webcast replay of today’s call can be found on our Investor Relations website at www.salesforce.com/investor. And as a reminder, we’ll also be posting the highlights of our call on Twitter at the handle @Salesforce_IR. With me today to discuss our Q1 results are Marc Benioff, Chief Executive Officer; and Graham Smith, Chief Financial Officer. Marc and Graham will open with a few prepared remarks and then we’ll turn the call to over to answer questions. Please note that our commentary today will be primarily in non-GAAP terms. Reconciliations between GAAP and non-GAAP metrics for both reported results and our forward guidance can be found in our earnings press release issued an hour ago. In addition, we may offer incremental metrics to provide greater insight into our business or our quarterly results. Please be advised that the additional detail may be one-time in nature and may or may not be provided in the future. It’s also possible we may reference certain unreleased services or features not yet available, because we cannot guarantee the future timing or availability of these services or features. We recommend customers listening today make their purchase decisions based on services and features that are currently available. The primary purpose of today’s call is to provide you with information regarding our fiscal first quarter 2014 performance. Some of our discussion and responses to your questions may contain forward-looking statements, which are subject to risks, uncertainties and assumptions. Should any of these risks or uncertainties materialize or should our assumptions prove to be incorrect, actual Company results could differ materially from these forward-looking statements. All these risks, uncertainties, and assumptions, as well as other information on potential risk factors that could affect our financial results are included in our forms filed with the SEC, including our most recent report on Form 10-K, particularly under the heading, ‘Risk Factors.’ So with that, let me turn the call over to Marc.

Thanks, John. And I’m thrilled to kick-off our fiscal 2014 to be another great quarter at Salesforce.com. Revenue for the first quarter rose 28% from year ago to more than $890 million. At constant currency, revenue grew faster at 30%. Operating cash flow exceeded $280 million for the quarter also an increase of more than 30% year-over-year and deferred revenue grew to more than $1.7 billion also up 30%. Based on these great results, we’re raising our full fiscal 2014 revenue guidance which we project at $3.835 billion to $3.875 billion and will roll on our way to first $1 billion quarter. In addition, I’m thrilled that after a decade of growth and market share gains, Gartner announced this quarter that Salesforce is now the largest CRM platform in the world. We’ve displaced SAP to become the number one CRM market share leader regardless of On Premise or Cloud, Salesforce is number one. I’d like to congratulate all of our employees, our customers; our shareholders on this important achievement of become the number one CRM company. Salesforce has always been a catalyst and evangelist for innovation and enterprise software. We pioneered the shift to cloud, to social, to mobile and today with this next generation of technology, our customers are connecting with their customers in entirely new ways. They are becoming customer companies and they’re transforming for managing systems record to systems of engagement and we’re leading the way. With our full product lines, the Sales Cloud, the Service Cloud, the Marketing Cloud and the Salesforce Platform, customers have the tools to become customer companies and unlock greater levels of growth, innovation and success. That’s why our customers have made us the clear leader in each of our four core markets. First, our flagship Sales Cloud is the number one…

Thank you, Marc. We delivered another solid quarter in Q1 with strong year-over-year revenue, deferred revenue and operating cash flow growth. Our success during the quarter was driven by continued demand across all of our cloud solutions supported by further declines in attrition. Let me take you through these another highlights from our first quarter results, starting with the income statement. Q1 revenue was $893 million, that’s up 28% over last year, excluding an approximately $10 million FX headwind, first quarter revenue was up 30% year-over-year. Looking at year-over-year growth on a regional basis, revenue in the Americas grew 30% to $631 million. revenue in Europe grew 38% in dollars, and in constant currency to $163 million and revenue in Asia increased 7% in dollars and 17% in constant currency to $99 million. As I mentioned previously, our dollar attrition continued its steady decline in the first quarter and is now in the low double-digit percentage range. Our first quarter non-GAAP gross margin was 80.2%, that’s about a 160 basis points lower than Q1 last year. Our first quarter non-GAAP operating margin was 10.5% or about 100 basis points lower than last year, leading to the first quarter non-GAAP operating income of $94 million, that’s up 18% over the last year. Our results in Q1 included an approximately $8 million charge for an IP licensing agreement, which was recorded in costs per revenue. This represented about 90 basis points of margin dilution in the quarter. We added more than 480 new employees in Q1, bringing our total head count to 10,300, that’s up 23% over Q1 last year. Turning to EPS, non-GAAP EPS was $0.10 for the first quarter. the licensing agreement charge that I just mentioned represented approximately $0.01 of GAAP and non-GAAP EPS. Turning to cash flow, first…

Brent Thill – UBS: Hi, great. Marc I was curious if you could just give us your view on the next steps for the Marketing Cloud and if you could also address with Social.com as you mentioned, your pricing is now based on the percent of the ad spend a little different than your past pricing model. Can you talk about – should we expect more changes going forward in some of the pricing methodologies that you’re unveiling some of the new products going forward? Thank you.

Well, thanks very much for that question. An area where I spent a lot of my time, initially say how I look at this, strategically. number one, Salesforce is now the number one CRM Company in the world. I mentioned that in the script, and that’s an incredible accomplishment for the company. And for us to continue to be number one in CRM world, it means that we have to be number one in three main areas. One, we have to be number one in sales, which we are, and if you can see the new Gartner Magic Quadrant in sales it’s clear as they were number one. And it’s not any clear, and then if you get the new Magic Quadrant for our customer service and then support and customer engagement that just came out about a week or two ago now. It’s credible market in customer support. we’re number one in service. And that has been an incredible journey, it’s been a fight, it’s been tremendous accomplishment, and especially gratifying when we saw SAP got pushed into the challenge of Quadrant, as we assume this strong position in the Leader Quadrant. And that’s very important to us. so, number one in sales, number one in service. And that’s true in revenue, that’s true in market share, and that’s true in feature functionality. Now, marketing is an area that we’ve recently entered into, as you know. and it’s not really an area that we’ve gone through into organically or grow our own development, but we’ve acquired our way into marketing, first by purchasing Radian6 and then by buying Buddy Media. Buddy Media had purchased just before, we bought them Brighter Option, which we then have rebuilt and now relaunched as Social.com. And by no means, are we number one…

Your next question is from Heather Bellini with Goldman Sachs. Please go ahead with your question. Heather Bellini – Goldman Sachs: Hi, great. Good afternoon gentlemen. I was just wondering Marc, we have a good number of private companies telling us they’re starting to write ease some very big checks for Force.com. I was wondering if you could talk about, what we should be expecting in that business, what type of milestone should be we looking for, I know you mentioned what you did in Japan this past quarter, but is there anything else you could share with us on kind of things we should use to benchmark the business?

Yes. There are – the way to look at this business, which we call the Salesforce platform, is the following way. First of all, where our customers were buying our sales or service or marketing products they’re extending those products with applications that are customer centric and they are customizing, they are enhancing, they’re configuring using the Salesforce platform, which includes Force.com, which includes our APIs, which includes Heroku, which includes Site.com, our website capability, which includes our app exchange where we have approximately 2,000 applications in there. And that stuff, they are extending and complementing the work they have done with sales, service and marketing. Step two is, a lot of those companies are building their unique custom applications. And those applications are the applications that they need, the apps that they need to run their business. Used to be back in the day, the big companies by Sequel Server, Visual Basic Powerbuilder, sequel forms whatever it was to basically do structured and unstructured data management, and have rapid application development capability. We see those customers turning to our platform to get that same kind of capability rapidly. And we’re very excited about the growth of that brings us, the stickiness that brings us with the customer by starting to manage their metadata, not just the data and delivering those next-generation apps. And three, the AppExchange, you’ve seen a number of really great ISV’s converge on our AppExchange, many of them who are building natively on our platform. And these app, application companies, I mean just great, great, great companies some that are even going public now, I’m sure you know, with native apps. And we could be more excited for them. And we’re continuing to grow and also partner from a revenue and go-to-market perspective with a lot…

Your next question is from Mark Murphy with Piper Jaffray. Please go ahead with your question. Mark Murphy – Piper Jaffray: Yes, thank you very much. Marc, how do you think about the scale of the opportunity in the long-term for becoming the customer company and offering the Force.com platform? And specifically, if you compare the size of that opportunity or that market to other markets such as human resources or financials, what do you think has a more profound impact on an organization between modernizing the front office or automating the back office and therefore what do you think is a bigger opportunity?

Well, I’ve got two words for you which is transaction volumes. And I think that you see that with Salesforce, we make public, as you know. In nauseam, we’ve talked about this. I don’t got a revelation anybody on this call or in this room that we publish our transaction rates every single day. But the reason that you don’t see other vendors provide their transaction numbers is because they’re actually quite low. Now, when we publish a transaction number, that’s a complex transaction; it’s a complex transaction that we deliver. You saw that in the first quarter, we delivered 78.7 billion transactions in the quarter. And if you think about other cloud providers, who else is telling you how many complex transactions. Now, when I talk about a transaction, what I mean is as defined by the late Jim Gray who basically define in transaction as a complete unit of work in the computing model and the ability to not only to commit that transaction, which is a technical term, but also to be able to roll back that transaction into unit work. And we’re reporting that transaction number and we’ve done that for quite a few years. I think that you can determine the value that a company is placing on its customers by the amount of data that it holds the amount of metadata that it holds and that is reflected most accurately in the number of transactions. The transaction number is really the sum of all capabilities of the system and saying we’ve delivered when we are on our way to delivering more than a 100 billion transactions in the quarter. Okay, what’s another one that we follow closely tweets the way that really judge the success of Twitter is, of course, when they had a…

Your next question is from Brendan Barnicle with Pacific Crest Securities. Please go ahead with your question. Brendan Barnicle – Pacific Crest Securities: Thanks. Hi, Marc, I wanted to follow-up on – it’s been a while since the Rypple acquisition, and at that time you talked of sort of building a whole new class of apps that had more social integrated into them. I was wondering if you could give us a little more update on which of those have been most successful and sort of where you see that effort going.

Well, I of course, I’ll talk about Rypple, which is now known as Work.com and if you haven’t seen the new version of Work.com, it’s phenomenal. We’ve owned the company I think for just a little bit over a year now, a couple of incredible founders that joined our company from that company with Daniel Debow and David Stein. And under the leadership of a tremendous executive in our industry, John Wookey here at Salesforce who is running that capability, as well as our GoInstant acquisition, which is also another phenomenal story underway. but in the case of these small acquisitions that we’re doing like Rypple, like GoInstant and others, a lot of these are, what we are – acquisitions that we’re going to acquire talent and it’s a kind of extend and complement our capability. The one that we really kicked all this off with was Jigsaw. You probably remember when we bought Jigsaw for about $150 million and I don’t remember the exact amount. It’s not in front of me obviously at the table. And of course we’ve worked on that. We evolve the team. We evolve the products and the technology. We loosely coupled it into our architecture. We’ve rebranded in Data.com. And what this year Data.com had a phenomenal quarter they’re probably going to – I think they’re going to do more than $100 million this year. It’s pretty exciting or approximately that. They’re well on their way to doing that. And it’s a great success story here at Salesforce and it’s a commitment. I have to tell you we’re in quarter one or quarter two or even quarter five or six after buying a small company that’s not when we’re looking at is this a success or is this a failure. We want to get…

Your next question is from Nandan Amladi with Deutsche Bank. Please go ahead with your question. Nandan Amladi – Deutsche Bank: Hi, good afternoon. Thanks for taking my question, question on the off-balance sheet backlog. That seem to have slowed a little bit. We’re still up 33% year-on-year. But compared to where it was last year, was it tough comps or were there some other moving parts we need to understand?

Sure. There’s a couple of things. I think firstly, in Q1 last year, you’ll recall that we signed a largest deal in the company’s history that was signed in Q1 that added a big boost to the off-balance sheet, because it’s multiyear agreement. And also, we renewed one of our largest customers Japan Post for several years, and that’s also I think top five customers worldwide, and so those two transactions in the first quarter of last year made it kind of a tough comp. And then secondly, I think over the last few years, we’ve seen extension of our average contract length. We talked about that on our fourth quarter call that our average contract length is now just over two years, and at some point that the pace of that contract extension length will slow, and so that will provide a bit of a drag on that off-balance-sheet but it is still a very healthy growth rate of the tough comp. So we were happy with the number.

Your next question is from Keith Weiss with Morgan Stanley. Please go ahead with your question. Keith Weiss – Morgan Stanley: Excellent, thank you guys for taking my question and nice quarter. I just want to drill down on margins a little bit and one with a clarification, the licensing impact that was 90 basis points year-on-year on gross margins or operating margins?

It’s about the same, it’s about $8 million on our revenue numbers, so it basically got the same 90 point impact on, its recorded in cost of sales, so it was in the gross margin number and it was also obviously in the operating margin number.

Your next question is from David Hilal with FBR. Please go ahead with your question. Samad Samana – FBR: Hi, this is Samad Samana for Dave. We’ve been hearing lot of attraction in the government space; can you give us an update on the government focus and amongst your existing products where you see the biggest opportunity and which could be the most successful there?

Okay, yes, I will do that. As you know, Salesforce.com has not focused on the U.S. Government as a major opportunity over the last 14 years. We’ve been too emerged and amassed really in the commercial markets. It just has not been a major focus for us. A couple of years ago, we started to get much more excited about that opportunity and we really looked at how would we start to build and expand our capabilities. What we realized was that that would require us to do a couple of things; one, bring in new leadership to focus on not only the U.S. government but also the global government opportunity, which includes the Japan government or the U.K. government et cetera, as well as a new technology capability which would be to build the government, we call it government pod; that is, to build a pod that is a special version of our product that would be accessible only to the government, and that would allow critical agencies that we saw becoming interested in our technology like the GSA for example or others to become more invested in using our technology. We also had to bring in a new set of leadership and we hired Vivek Kundra who is our Executive Vice President of our Global Government business unit and he is based in Washington D.C. In addition to that, in addition to focusing upon building a new technology platform in addition to focusing on that next-generation leadership, we also recognized we had to spend a lot more time with the government and also do more marketing events in Washington D.C. And just as an example, yesterday, we had more than 2,000 customers attend our Washington D.C. program. Now, in addition to that, you may know that about 60 days ago, I also personally led a program in Washington D.C. myself which was a sub-1,000 seminar focused on government agencies as well. Now, these are primarily federal agencies; this is not – this does not also include our work in cities and also in states or in foreign governments. Overall, we see that as a tremendous opportunity for growth and we’re continuing to invest there. And as you know, it’s a long process, but we’re very excited by our work in a number of agencies, in a number of states, in a number of cities and we’ll be doing more to communicate that progress and success stories in the future. It’s wide-ranging from automating the GSA, which is the government’s determining arm to 311 call centers in a number of cities around the country to foreign governments, and I think a great example is Ministry of Economy, Trade and Industry that we talked about today with METI and what’s going on in Japan. So all of those things together make us very optimistic about our work with the government in the future, and I do think that the government is ready to go to the cloud.

Your next question is from Phil Winslow with Credit Suisse. Please go ahead with your question. Phil Winslow – Credit Suisse: All right. Thanks, guys. A lot of focus has been put on obviously Force.com and the Marketing Cloud. But just wanted to focus back in on the Service Cloud, just curious what trends you are seeing there? Obviously, you’ve had very strong momentum in the past, is that continuing? Then also competitively with write-down having been inside of Oracle for a bit, wondered if you could just talk about the competitive environment? Thanks.

I think that it’s really fascinating the competitive situation, because in our industry CEOs like myself tend to basically have to predict the future or do their best to predict the future and then focus in certain areas. And it’s a great example is – of course, Microsoft is extremely focused on Windows 8. That’s a huge part of their story. They’re trying to save their operating system business and their Office business through Windows 8, which they’ve seen Windows to accelerate very aggressively as the world has moved away from the personal computer and towards the phone and the tablet and with launching Windows 8 this year, Microsoft basically have said they want to be the Windows 8 company and that in all situations the answer is Windows 8. That’s true for SAP. You saw Sapphire last week and the main focus of Sapphire was HANA. The focus of HANA – this HANA application or that HANA implementation or even HANA in the cloud and SAP has said it’s the HANA company. And Oracle, I know Larry extremely well. He has a very impressive piece of technology with Exadata and he is very much wants to be the Exadata company, he views that as the future of the database and the future of its applications, and I get that and Oracle wants to be the Exadata company. But we don’t want to be the Exadata company or the HANA company or the Windows 8 company, we want to be the customer company. We want to enable our customers to help their customers connect in a new way, and that is along the lines of sales, service and marketing and the development of a customer platform. Number one, how do you market the customers when they are everywhere? Number two,…

Your next question is from Jason Maynard with Wells Fargo. Please go ahead with your question. Jason Maynard – Wells Fargo: Good afternoon guys. Marc, in your comments you’ve made some really interesting points about the shift to engagement apps and this new customer company point of view. Can you maybe share your vision around how Chatter, the new mobile apps, and the UI changes drive that positioning change?

Well, I think it’s a great question, and I’ll tell you that I am not ready to spill the beans which I’m very good at doing. What I’ll tell you is that the world is changing faster than ever and in our industry it’s no different. And you can really see it by what users are carrying with them when they even travel. I used to always have my laptop with me when I traveled, but now I mostly just have my phone. And that’s amazing to me. And I switch off between an iPhone and an Android device probably like a lot of people. Sometimes I have both with me. LTE networks have really changed this device performance everywhere I go in the world. And the phones are actually quite a bit bigger than they were just a couple of years ago, and I have seen some of the new phones that are coming, and they’re all starting to stretch a little bit more towards the iPad. I think that that is a very unusual and interesting change in our industry. It’s subtle, but it is seminal. And the reason why it’s seminal is, because it’s not the focus of the enterprise that all of a sudden I feel there like go in the pocket of my jacket and run my whole company, but that’s really my focus. My focus is and really has been that in the shift to mobility, which is way bigger than tablets and just phone – the billions and billions of devices are phones. In the world of social, which is billions of users in the social world and the world of next-generation Big Data, which is a lot about the APIs that are coming out of all these systems that we have to…

Your next question is from Walter Pritchard with Citi. Please go ahead with your question. Walter Pritchard – Citi: Hi thanks. Graham, I wonder if you could talk about deferred sales commission. If we look at the new deferred commissions on the cash flow that was actually down substantially year-over-year, but $32 million comes into about half of that. Can you talk about what the drivers of that number were?

Well I think we still have some comparison issues with Q1 and Q4 of the previous year, where we had sort of really, really spectacular large transactions closing that drove very high commission payments to sales teams that were involved in those transactions and clearly we have a strong fourth quarter here but we didn’t have some of these marquee transactions that really drive the big, big commission checks. So I mean other than that, we haven’t I would say year-over-year growth in terms of hiring is a bit slower this year versus the previous year but we haven’t changed the comp plans particularly or anything like that. So I think it’s really the profile and the distribution of the transactions that creates a lot of that change.

And your final question today comes from Raimo Lenschow with Barclays. Please go ahead with your question. Raimo Lenschow – Barclays Capital: Thank you. My question, just a quick one on the regions, I noticed that Asia has been decelerating of the two quarters and is actually growing at a growth rate, it doesn’t look overly exciting. Could you just talk about some of the drivers there? Thank you.

So Raimo, I think we have highlighted that on previous calls that in spite the fact that we obviously have some very large, very successful customers in Japan. Generally that market has been quite tough for us, over the last couple of years particularly in the enterprise. I think small businesses continue to kind of move along very nicely but enterprise in Japan has been slow and of course that takes time to kind of feed through into our revenue numbers. Now you are seeing obviously a different approach to managing the Japanese economy. We will be there next week for a customer company tour and I think our sales team over feel much more excited about the prospects for large enterprise transaction this year but it’s primarily Japan that is affecting that revenue growth number, the rest of Asia, which is sort of Australia, New Zealand and ASEAN has been relatively consistent performer over the last few years.

Great. Well, thanks everyone and thanks for joining us today. Just encourage you all again to register for Dreamforce, do that early and we look forward to updating you in August. Thanks very much.

Thank you everyone for joining today’s conference call. You may now disconnect.