Good afternoon. My name is Jennifer and I will be your conference operator today. At this time I would like to welcome everyone to the CRM Second Quarter Fiscal Year 2016 Earnings 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. Thank you. And I would like to turn the conference over to Mr. John Cummings, Vice President of Investor Relations. Sir, you may begin.

Thanks so much, Jennifer, and good afternoon, everyone, and thanks for joining us for our fiscal second quarter 2016 results conference call. Our second quarter results press release, SEC filings and a replay of today's call can be found on our IR website at www.salesforce.com/investor. We'll also post the highlights of today's call on Twitter at the handle, @salesforce_ir. With me today is Marc Benioff, Chief Executive Officer; Keith Block, President and Vice Chairman; and Mark Hawkins, Chief Financial Officer. Marc, Keith and Mark will share a few prepared remarks and we'll open the call for questions. As a reminder, our commentary today will primarily be in non-GAAP terms. Reconciliations between our GAAP and non-GAAP results and guidance can be found in our earnings press release. During our call we may offer additional metrics to provide further insights into our business or results. This detail may or may not be provided in the future. We may also reference certain unreleased services or features not yet available and we cannot guarantee the timing or availability of these services or features, so recommend that customers listening today make purchase decisions based on services or features currently available. Some of our comments today may also contain forward-looking statements which are subject to risks, uncertainties, and assumptions. Should any these materialize or should our assumptions prove to be incorrect, actual company results could differ materially from these forward-looking statements. A description of our risks, uncertainties and assumptions and other factors that could affect our financial results are included in our SEC filings, including our most recent report on Form 10-Q. So with that, let me turn the call over to Marc. Marc Russell Benioff - Chairman & Chief Executive Officer: Well, hey. Thanks so much, John, and thanks, everyone, for being on the call…

And our first question comes from the line of Brent Thill with UBS.

Good afternoon. A question for Mark Hawkins. On the Service Cloud, the growth rate really stood out, accelerating to 40%, up from what you saw in Q1. Just curious if you could give everyone just a little more color on what you're seeing in the Service Cloud and what you see in the pipeline going forward? Mark J. Hawkins - Chief Financial Officer & Executive Vice President: Sure. I'll start out on this, and then will just turn it over, Brent, to Keith, as well here. But we saw just a tremendous amount of traction in the Service Cloud. I think part of the issue when we see deal after deal coming forward is the ROI. It's just so strong. People are able to help their customer raise their customer satisfaction and also have a really strong ROI from that standpoint. So I saw it coming through in a lot of big deals, and that's probably a good segue for Keith. Keith G. Block - Vice Chairman & President: Yeah, just a couple comments on that. Obviously, this is proof positive that we're not just a Salesforce automation company, and that we have a very diversified, very, very strong portfolio across the Customer Success Platform. Specifically around service, as you know, many companies differentiate themselves because of service and the way that they deliver service, so many companies are looking for innovation around how they engage with their customers. And over 70% of all sales, quite frankly, come from great service. So we're seeing this play out in the marketplace. Customers talk to us about how they can transform their business, and our Service Cloud product is best-in-class, so that certainly is what we're seeing going on in the marketplace right now. Marc Russell Benioff - Chairman & Chief Executive Officer: I'd also like to add, with the Service Cloud, we've talked a lot about the success of many of our customers, including Home Depot, we've even pointed you to our really cool Home Depot Community site: community.homedepot.com. If you want to see the Service Cloud in action yourself, you just have to go to support.us.playstation.com. That's Sony's website for supporting the Sony PlayStation. It runs entirely on Salesforce's Service Cloud. It's had over 16 million page views so far and we're doing our Service Cloud, our console, case management, live agent knowledge, and social service with Sony. It's completely cool and it's another great example the success our customers are having with Service Cloud.

And your next question comes from Keith Weiss with Morgan Stanley. Keith Eric Weiss - Morgan Stanley & Co. LLC: Excellent. Thank you. Thanks, for taking the question, and very nice quarter. A question for Keith, perhaps. In talking about the vertical solutions that you guys are – or the industry solutions that you're looking to roll out, the actual product you guys are looking to roll out, can you help us think about two aspects of it? One, how do you think about that expanding the potential market opportunity for salesforce.com? I'm assuming that it's going to let you guys go deeper into existing customers as well as address new customers, but I'd like to get your perspective on that. As well as from a distribution perspective, anything you guys need to change around or expand out to be able to – a distributor will sell those industry solutions? Keith G. Block - Vice Chairman & President: Yeah. Listen, thank you very much for the question. So as we continue to fuel our industry strategy, it really starts in a number of ways. Number one is that we want to make sure that we have the right industry messaging, the right content around our Customer Success Platform specific to a particular industry. Secondly, industries just deepen the relationship with a customer. Marc and I both talked about the level of engagement that we're seeing from CEOs. A lot of that dialog is around specific industry and vertical content. So as we continue to think about our product portfolio and we extend our Customer Success Platform, which is an incredible platform, it's not just things that we extend ourselves. Our customers extend it. We have an incredible ecosystem that extends the capability of the platform. There is a natural play to deepen the relationships, drive more strategic relationships with more industry-focus product. Specific to your question around how we organize in the field, over the last few years, we have been very carefully and very slowly moving to more and more of a vertical orientation. For example, we have a huge focus on our public sector. We are taking a look at expanding how we go after financial services markets and healthcare and life sciences markets. So we've done this very carefully and very thoughtfully, and it's really paying out in our results.

Your next question comes from Mark Murphy with JPMorgan.

Yes. Thank you. Question for Marc Benioff. It seems like a fascinating time in the history of the software industry. You have Sage re-architecting under the force.com platform, the big three traditional software companies are trying to deal with the cloud a bit more actively, and for a couple of them their product revenues are actually declining for the first time ever outside of recession. And then their margins are under pressure while yours are increasing. So I'm wondering as they talk up their own cloud products, to what extent do think the bigger traditional software companies can retain some of their customers versus to what extent – it feels like they're leaky buckets and they might inadvertently drive more customers to reassess and perhaps move in your direction? Marc Russell Benioff - Chairman & Chief Executive Officer: Well, I think the way to understand the future is to look at the past, and you can look at IBM with the Mainframe business. I think we all know IBM still sells a lot of Mainframes. That doesn't mean that IBM is innovating, that doesn't mean that IBM is creating value for customers or helping them to transform customers' businesses or align them with modern trends. It just means they're selling them old technology and upgrading it. And that's what you see with companies like Oracle and SAP. These are old technology bases that are kind of meandering along like Mainframes. And I think that is reflected exactly as you said in their license revenue growth, which has been poor, and then their movement to the cloud has been stunted because they don't want to shift those customers into new models. Exactly why IBM lost the PC business because they were too afraid to let go of the Mainframe. It's the…

And our next question comes from Richard Davis with Canaccord.

Hi. Thanks very much. So in my opinion, you guys have really improved and frankly continue to improve on force.com. And so my question is, by running a platform operation, you've seen successes like Veeva emerge, which is kind of win-win, but you also get to see kind of emerging promising companies. Could you either – you may not be able to name the firms, but at least – by name, but at least by segment what do you see kind of emerging? Because you guys get a free look at some of the interesting things that are out there that are pretty exciting. Thanks. Marc Russell Benioff - Chairman & Chief Executive Officer: Well, one of the things that we've done is not only become an amazing platform company, which has spawned incredible companies like you've seen like Veeva, which has become one of our largest customers, or even FinancialForce which has become one of our largest customers. We've also had the chance to help our customers build and create their own applications using our platform, and I think that's been actually by far the most exciting thing for us, because it's taking us from just having a static application to something that customers mold and shape like they would with Play-Doh or Lego and they can create everything they want. And when you get to Dreamforce, you're going to see the next iteration of our Lightning Platform that we released last year and you're going to see a level of application, the creation capabilities that's never been before possible in our industry, and the ability to execute that on everything from an Apple Watch to a phone, to a desktop or a tablet. And that idea that we do have that super dynamic app/dev environment and that's how…

Great. Thank you very much.

Your next question comes from Tom Roderick with Stifel. Tom M. Roderick - Stifel, Nicolaus & Co., Inc.: Good afternoon. So a question here about RelateIQ. Going on a little over a year since you made the acquisition, been seeing more in the way of marketing, advertising, just more socialization of what RelateIQ is and what customers are using it for. Can you talk a little bit more about what the plans are for that technology? How you think about maybe potentially integrating it with other clouds outside of the Sales Cloud? And just anything else you sort of have planned for RelateIQ as it pertains to integrating it with the broad organization? Thanks. Marc Russell Benioff - Chairman & Chief Executive Officer: I think you're going to have to come to Dreamforce because it's going to be one of the most exciting announcements that we have at the show.

Your next question comes from Kash Rangan with Merrill Lynch.

Hi, guys. Thank you very much. By my calculations, it looks like billings grew 30% – almost 30% on a year-over-year basis. Pretty spectacular if I take into account the year-over-year changes in deferred revenue or impact of deferred revenue and revenue. So Marc Benioff, question for you. Oracle Executive Chairman said sometime back that in their next fiscal year that they will add more cloud subscription revenue than salesforce.com. Just wondering what you think of that. And also secondly, look at some of your businesses, your platform business, congratulations, almost $1 billion business today. Service Cloud almost $2 billion. As you march up and try to be the next $20 billion revenue company or whatever, what are the products that are going to look like the big successes tomorrow? Is it going to be Wave, or is it going to be platform, or is it going to be marketing? Which is going to be the next Sales Cloud? Which is going to be the next Service Cloud? I'm trying to get your view for the future. Thank you. Marc Russell Benioff - Chairman & Chief Executive Officer: Well, Kash, I think we've mostly seen Oracle actually fail in the cloud market, I mean, for a long time, Larry said that the cloud was ridiculous and then he started taking it more seriously, but I just haven't seen any competitive cloud solutions from Oracle. And I think that's the shame. And I do view Larry as one of the most capable leaders in our industry. He's amazing. Of course, he's one of my mentors. But in this area of the cloud, Oracle has not delivered. And I think a great example of that is in the CRM marketplace. Here you can see Salesforce is selling billions of dollars of CRM in the cloud this year. Oracle is selling millions of dollars. And I think if you are selling millions and you have a competitor who is a relatively new entrant selling billions, well, then I would chalk that up as a failure in the cloud.

Your next question comes from Heather Bellini with Goldman Sachs. Heather Anne Bellini - Goldman Sachs & Co.: Hi. Just had a sort of follow-up to what Kash was asking, but specifically wanted to focus on Wave and talk a little bit about how you've seen adoption since you launched it at Dreamforce a year ago and kind of what typical rollout pattern looks like from customers, from the ones who've become big adopters, kind of how does their footprint evolve? And also, what are you hearing from the field – maybe Keith Block, as to what the next level or next stage of innovation that customers are looking for on the analytics side? Thank you. Keith G. Block - Vice Chairman & President: Okay. Hi, Heather. Thanks for the question. So, as you know, we are very excited about announcing Wave at last Dreamforce and very quickly, we were able to sign up some large, very strategic deals. In fact, if I go through the roster of customers that I just mentioned in the earnings call, many of them were existing analytics customers or had signed up net new as analytics customers and part of the solution that they're looking for to transform their businesses. So we have gotten some tremendous feedback about the capabilities of that particular cloud, and how it fits relative to the customer engagement and driving customer success and how it does against the competition. I'll tell you, it will be the fastest launch of any product line that we've ever had here at Salesforce. So, there's a lot of enthusiasm, there's a lot of innovation, there's quite a bit of traction with the product. We're getting some great feedback from our customers. We're getting great feedback from our partners and I think that – it is very differentiated in the way that it drives insights to actions and that's not something that you see from the legacy BI product lines that have been entrenched for 20 or 30 years. So customers think of it as innovative and game-breaking and we're starting to see the results.

Your next question is from Alex Zukin with Stephens.

Hey, guys. Thanks for taking my question. Maybe Keith, you mentioned the growth of Salesforce consultants worldwide at 44% and I'm wondering how has your messaging changed to the SI community or what has changed about their practices that they're making these types of investments today. Keith G. Block - Vice Chairman & President: So there's several things going on. First of all, I think everybody knows that one of our growth strategies was to really expand our ecosystem and that takes a couple of flavors. We talked a little bit on this call, couple questions ago around our platform and our ISVs focus, but another very important piece of that, obviously, is the systems integrators globally and the regional boutiques who have influence in the boardroom, who have industry expertise and deep content and are at the forefront of helping our joint customers transform their businesses. Really what's happening is that we're moving away from the legacy world of on-premise into the cloud and the integrators and influencers in the world, they see it, they want to be part of it, they see new business opportunities, they want to drive unprecedented levels of customer success, and we're the only company that can bring that solution to bear with our Customer Success Platform at scale. And that's why these integrators and influencers are really latching onto us and partnering with us and locking arms and they are making the investments in their Salesforce practices and cannibalizing their legacy SAP and Oracle practices. And that's exactly what's happening. They see this huge shift in the marketplace and they want to be able to respond to it with us. Marc Russell Benioff - Chairman & Chief Executive Officer: Yeah, I think they also – just to add on to Keith's point – they clearly see that the world is going to the cloud and they want to be part of it, no doubt.

Your next question comes from Karl Keirstead.

Thank you. A question for Mark Hawkins. Mark, congrats on the margin and cash flow performance during the quarter. I actually wanted to ask you a question about your guidance on both margins and cash flow. You've guided to non-GAAP operating margin improvement of plus 150 basis points. I think in the first half you were plus 180 basis points so the guide implies a little bit of a slower rate of improvement in the second half and it's not obvious why that would be. And then on the cash flow side to get to your 24%, 25% growth given your great first half performance, operating cash flow in the second half would actually have to be negative year-over-year and we haven't really seen that since the recession. So, my take is that you're appropriately keeping expectations low and there's some conservatism built into both margin and cash flow guide, but I wanted to give you an opportunity to flag anything that might be informing your guidance on those two metrics in the second half? Thank you. Mark J. Hawkins - Chief Financial Officer & Executive Vice President: Sure. No, I appreciate the question, actually. Let's just break it down one question at a time. Let's start with the operating margin. We're super-pleased with the operating margin. As you've heard we've expanded the operating margin for five quarters in a row year-on-year. Moreover you've heard from Marc and I, just absolute unequivocal commitment to the revenue operating margin framework that we talk about in terms of the rate of growth and the rate of operating margin expansion. That's really clear, and you're seeing period after period after period of demonstrating that with action and results. And we're committed to the increase, obviously. And so, at the same time, it's obviously…

Your next question is from Brendan Barnicle with Pacific Crest Securities.

Thanks so much. Keith, I had two quick follow-ups for you. One on Wave, when might you take that more down market? We've heard about a lot of success at the high-end of the market. And then second on the Marketing Cloud, obviously, great momentum there. Is there a point at which you need to have an ecommerce engine that you partner with or build? Increasingly we're hearing that about something that CMOs are looking for in their marketing applications. Thanks. Keith G. Block - Vice Chairman & President: Yeah, so thanks for the question. Just a couple of comments. I mentioned earlier on Wave how excited we were at Dreamforce and demonstrated some proof points very quickly and we continue to gain momentum in that marketplace. I think one of the things that the Wave team has done just an outstanding job of is to get feedback and that's what great companies do, they listen to their customers and their customers inspire them. And that's what Salesforce is all about. And so, we have gotten some great feedback on analytics. We are well-positioned in the marketplace. We've got a great ecosystem associated with analytics. We've got more than 80 partners. We've done some great things with Merck and Barclays and Genomic Health, and we'll continue to evolve and augment and enhance the product so that it is far-reaching. So we're excited about the future of Wave and we think it's going to be an incredible product. It's already had a great first year, almost first year, I should say. We're very proud of our Marketing Cloud performance in the quarter. That cloud is gaining momentum. It has really been an incredible part of our Customer Success Platform. It completes our solution for our customers to transform their businesses as far as how they define their digital strategies and their customer strategies. And so we will continue to see, again, as all innovative companies do, but none like Salesforce, we will continue to innovate our product line and enhance our product line, and there are natural adjacencies that you look to and we'll continue to innovate. That is the DNA and heart and soul of this company. We are all about innovation. So, you'll continue to see great offerings coming out of this place.

Your next question comes from Kirk Materne with Evercore ISI.

Thanks very much, and congratulations on the quarter. Marc and Keith, I was curious about your comments about Europe. Obviously, you're starting to see some really nice momentum in that region. I assume a lot of that has to (51:25) investments on the data center side. I was curious about sort of your thoughts on is the market over there getting better or are you guys taking share? And I guess in particular around your cloud offerings, are there any solutions in particular that are resonating with customers over there, whether it's the Service Cloud or Marketing Cloud, that's really helping you guys gain some momentum? Thanks. Marc Russell Benioff - Chairman & Chief Executive Officer: I think the most important thing that we did in Europe, we did quite a few years ago, which was decide that Europe was extremely important to Salesforce. And we refined our distribution strategy really being focused on seven core countries which we've really just expanded to nine core countries. The idea that we were going to be super-focused in Europe and the UK, France and Germany was a huge reset for us, because ultimately what we're doing is building the UK cloud, the French cloud, the German cloud, and we're paying more attention to these customers inside these countries than ever before. Of course that doesn't mean that we don't do business in other countries, or don't have customers in other countries, but this extraordinary focus in these core countries where the buyers are has paid off in spades for us and it's allowed us to scale distribution, scale service, scale marketing and make sure our products are right for those products in those core mega-markets. That has resulted in numbers in Europe and growth in this company. We haven't seen numbers like…

Okay. Investments on the data center piece (54:38)? Marc Russell Benioff - Chairman & Chief Executive Officer: I'd just like to add that, if you go to my Facebook feed or my Twitter feed you'll see I posted a video that summarizes our Q2 results. And I spent the majority of the quarter in Europe. I lived over there. It's the third year in a row that I've done that, and the video covers some of our activities in Europe for the year and the quarter, as well. Mark J. Hawkins - Chief Financial Officer & Executive Vice President: Just to chip in one last point. Kirk, you'd asked about market share specifically, I just want to add – since you asked it, address it directly, we're globally taking market share. It's been a persistent trend in CRM. And Gartner's report just show we took another 200 basis points of market share, so that's exciting and I just wanted to get that out since you asked about it.

And our final question comes from Philip Winslow with Credit Suisse. Philip A. Winslow - Credit Suisse Securities (USA) LLC (Broker): Thanks, guys. Obviously you guys have had a great quarter of billings growth but also balanced that with margin expansion and cash flow. The question here is to Mark and then to Keith, as well. I mean, obviously there's lots of areas that Salesforce can continue to expand and you definitely have a broad vision here. And then if you look at where some of the leverage is coming from it's definitely the sales and marketing line. Sort of how you're balancing for this broad vision and kind of continued growth aspirations with the margin expansion? (56:02) I have one quick-follow to that. Marc Russell Benioff - Chairman & Chief Executive Officer: Go ahead (56:08). Mark J. Hawkins - Chief Financial Officer & Executive Vice President: (56:11) just initially, and then perhaps Marc Benioff will chip in as well. But I would say, the way we're balancing that, Phil, is that, clearly we have a huge opportunity as articulated by Marc Benioff. It's an amazing market space and the way we balance it in terms of our different offerings in our company in total is we're a growth company, number one, and we have the revenue margin framework that we look at to try to make sure we're fully taking advantage of really helping our customers in these markets, and helping them be successful. And at the end of the day, we want to also expanded our operating margins in a framework consistent with our revenue growth. And so we try to balance that at the highest level and then obviously it goes down to each of the different clouds. A lot of companies have one single product that they're driving. It's unprecedented to have the number of clouds that we have that are huge, either a billion, multi-billion, so on and so forth and there's a portfolio that people look at. But Marc and Keith, do you want to add more? Keith G. Block - Vice Chairman & President: Yeah, I think I'll would just follow that up. This is an incredibly successful company that it's just an execution machine with great products and great customers and great innovation and great partners. And as part of being a growth company, we invest in our customers, we invest in innovation, we invest in our employees, and we invest in our partners. And when you are the leader and viewed as the trusted advisors to the most significant and important companies in the world, that's what you do, that's where you place your bets and that's where you innovate and invest in and that's what this company is all about. It's innovation and growth and customer success.

We have reached our allotted time for questions. I'd like to turn the conference back over to our presenters.

Well, thank you very much. Thanks for everyone for joining us today. We appreciate it. We look forward to updating you on our Q3 results in November. We look forward to seeing you at Dreamforce and particularly our Investor Day on September 15. In the meantime, if you have any follow-up questions, you can email us at investor@salesforce.com. Thanks so much.

Thank you for your participation. This does conclude today's conference call and you may now disconnect.