Cover Page
Cover Page - shares shares in Millions | 6 Months Ended | |
Jul. 31, 2019 | Aug. 15, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jul. 31, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-32224 | |
Entity Registrant Name | salesforce.com, inc. | |
Entity Central Index Key | 0001108524 | |
Current Fiscal Year End Date | --01-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 94-3320693 | |
Entity Address, Address Line One | Salesforce Tower | |
Entity Address, Address Line Two | 415 Mission Street, 3rd Fl | |
Entity Address, City or Town | San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94105 | |
City Area Code | 415 | |
Local Phone Number | 901-7000 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | CRM | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 877 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Jul. 31, 2019 | Jan. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 3,510 | $ 2,669 |
Marketable securities | 2,532 | 1,673 |
Accounts receivable, net | 2,332 | 4,924 |
Costs capitalized to obtain revenue contracts, net | 786 | 788 |
Prepaid expenses and other current assets | 743 | 629 |
Total current assets | 9,903 | 10,683 |
Property and equipment, net | 2,283 | 2,051 |
Operating lease right-of-use assets (Note 1) | 2,904 | |
Costs capitalized to obtain revenue contracts, noncurrent, net | 1,105 | 1,232 |
Strategic investments | 1,614 | 1,302 |
Goodwill | 13,199 | 12,851 |
Intangible assets acquired through business combinations, net | 1,725 | 1,923 |
Capitalized software and other assets, net | 603 | 695 |
Total assets | 33,336 | 30,737 |
Current liabilities: | ||
Accounts payable, accrued expenses and other liabilities | 2,347 | 2,691 |
Operating lease liabilities, current (Note 1) | 706 | |
Unearned revenue | 7,142 | 8,564 |
Total current liabilities | 10,195 | 11,255 |
Noncurrent debt | 2,973 | 3,173 |
Noncurrent operating lease liabilities (Note 1) | 2,341 | |
Other noncurrent liabilities | 661 | 704 |
Total liabilities | 16,170 | 15,132 |
Stockholders’ equity: | ||
Common stock | 1 | 1 |
Additional paid-in capital | 15,024 | 13,927 |
Accumulated other comprehensive loss | (77) | (58) |
Retained earnings | 2,218 | 1,735 |
Total stockholders’ equity | 17,166 | 15,605 |
Total liabilities and stockholders’ equity | $ 33,336 | $ 30,737 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | ||
Revenues: | |||||
Total revenues | $ 3,997 | $ 3,281 | $ 7,734 | $ 6,287 | |
Cost of revenues: | |||||
Total cost of revenues | [1],[2] | 967 | 849 | 1,881 | 1,616 |
Gross profit | 3,030 | 2,432 | 5,853 | 4,671 | |
Operating expenses: | |||||
Research and development | [1],[2] | 607 | 463 | 1,161 | 887 |
Marketing and sales | [1],[2] | 1,824 | 1,504 | 3,521 | 2,833 |
General and administrative | [1],[2] | 375 | 350 | 737 | 645 |
Loss on settlement of Salesforce.org reseller agreement (Note 6) | [1],[2] | 166 | 0 | 166 | 0 |
Total operating expenses | [1],[2] | 2,972 | 2,317 | 5,585 | 4,365 |
Income from operations | 58 | 115 | 268 | 306 | |
Gains on strategic investments, net | 109 | 143 | 390 | 354 | |
Other expense | (3) | (27) | (12) | (44) | |
Income before benefit from (provision for) income taxes | 164 | 231 | 646 | 616 | |
Benefit from (provision for) income taxes | (73) | 68 | (163) | 27 | |
Net income | $ 91 | $ 299 | $ 483 | $ 643 | |
Basic net income per share (in dollars per share) | $ 0.12 | $ 0.40 | $ 0.62 | $ 0.87 | |
Diluted net income per share (in dollars per share) | $ 0.11 | $ 0.39 | $ 0.61 | $ 0.84 | |
Shares used in computing basic net income per share (in shares) | 776 | 747 | 774 | 737 | |
Shares used in computing diluted net income per share (in shares) | 795 | 774 | 795 | 763 | |
Subscription and support | |||||
Revenues: | |||||
Total revenues | $ 3,745 | $ 3,060 | $ 7,241 | $ 5,870 | |
Cost of revenues: | |||||
Total cost of revenues | [1],[2] | 727 | 638 | 1,405 | 1,211 |
Professional services and other | |||||
Revenues: | |||||
Total revenues | 252 | 221 | 493 | 417 | |
Cost of revenues: | |||||
Total cost of revenues | [1],[2] | $ 240 | $ 211 | $ 476 | $ 405 |
[1] | Amounts include amortization of intangible assets acquired through business combinations, as follows: Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Cost of revenues $ 62 $ 52 $ 123 $ 91 Marketing and sales 65 67 133 97 | ||||
[2] | Amounts include stock-based expense, as follows: Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Cost of revenues $ 46 $ 43 $ 89 $ 77 Research and development 98 81 179 147 Marketing and sales 199 174 376 294 General and administrative 45 53 87 85 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Stock-based expenses | $ 388 | $ 351 | $ 731 | $ 603 |
Cost of revenues | ||||
Amortization of purchased intangibles from business combinations | 62 | 52 | 123 | 91 |
Stock-based expenses | 46 | 43 | 89 | 77 |
Research and development | ||||
Stock-based expenses | 98 | 81 | 179 | 147 |
Marketing and sales | ||||
Amortization of purchased intangibles from business combinations | 65 | 67 | 133 | 97 |
Stock-based expenses | 199 | 174 | 376 | 294 |
General and administrative | ||||
Stock-based expenses | $ 45 | $ 53 | $ 87 | $ 85 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 91 | $ 299 | $ 483 | $ 643 |
Other comprehensive loss, net of reclassification adjustments: | ||||
Foreign currency translation and other losses | (17) | (17) | (30) | (27) |
Unrealized gains (losses) on marketable securities and privately held debt securities | 6 | 0 | 14 | (4) |
Other comprehensive loss, before tax | (11) | (17) | (16) | (31) |
Tax effect | (1) | 0 | (3) | 0 |
Other comprehensive loss, net | (12) | (17) | (19) | (31) |
Comprehensive income | $ 79 | $ 282 | $ 464 | $ 612 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders’ Equity - USD ($) shares in Millions, $ in Millions | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | |
Beginning balance (in shares) at Jan. 31, 2018 | 730 | |||||
Beginning balance at Jan. 31, 2018 | $ 10,376 | $ 1 | $ 9,752 | $ (12) | $ 635 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative effect of accounting changes | [1] | (17) | (7) | (10) | ||
Common stock issued (in shares) | 11 | |||||
Common stock issued | 384 | 384 | ||||
Shares issued related to business combinations, net (in shares) | 10 | |||||
Shares issued related to business combinations, net | 1,565 | 1,565 | ||||
Settlement of convertible notes and warrants (in shares) | 6 | |||||
Settlement of convertible notes and warrants | 4 | 4 | ||||
Stock-based expenses | 603 | 603 | ||||
Other comprehensive loss, net of tax | (31) | (31) | ||||
Net income | 643 | 643 | ||||
Ending balance (in shares) at Jul. 31, 2018 | 757 | |||||
Ending balance at Jul. 31, 2018 | 13,527 | $ 1 | 12,308 | (50) | 1,268 | |
Beginning balance (in shares) at Apr. 30, 2018 | 734 | |||||
Beginning balance at Apr. 30, 2018 | 11,060 | $ 1 | 10,123 | (33) | 969 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock issued (in shares) | 7 | |||||
Common stock issued | 269 | 269 | ||||
Shares issued related to business combinations, net (in shares) | 10 | |||||
Shares issued related to business combinations, net | 1,565 | 1,565 | ||||
Settlement of convertible notes and warrants (in shares) | 6 | |||||
Settlement of convertible notes and warrants | 0 | 0 | ||||
Stock-based expenses | 351 | 351 | ||||
Other comprehensive loss, net of tax | (17) | (17) | ||||
Net income | 299 | 299 | ||||
Ending balance (in shares) at Jul. 31, 2018 | 757 | |||||
Ending balance at Jul. 31, 2018 | 13,527 | $ 1 | 12,308 | (50) | 1,268 | |
Beginning balance (in shares) at Jan. 31, 2019 | 770 | |||||
Beginning balance at Jan. 31, 2019 | $ 15,605 | $ 1 | 13,927 | (58) | 1,735 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock issued (in shares) | 3 | 10 | ||||
Common stock issued | $ 366 | 366 | ||||
Stock-based expenses | 731 | 731 | ||||
Other comprehensive loss, net of tax | (19) | (19) | ||||
Net income | 483 | 483 | ||||
Ending balance (in shares) at Jul. 31, 2019 | 780 | |||||
Ending balance at Jul. 31, 2019 | 17,166 | $ 1 | 15,024 | (77) | 2,218 | |
Beginning balance (in shares) at Apr. 30, 2019 | 775 | |||||
Beginning balance at Apr. 30, 2019 | 16,446 | $ 1 | 14,383 | (65) | 2,127 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Common stock issued (in shares) | 5 | |||||
Common stock issued | 253 | 253 | ||||
Stock-based expenses | 388 | 388 | ||||
Other comprehensive loss, net of tax | (12) | (12) | ||||
Net income | 91 | 91 | ||||
Ending balance (in shares) at Jul. 31, 2019 | 780 | |||||
Ending balance at Jul. 31, 2019 | $ 17,166 | $ 1 | $ 15,024 | $ (77) | $ 2,218 | |
[1] | Reflects the cumulative effect adjustments upon the adoption of Accounting Standards Update ("ASU") 2016-01, "Financial Instruments - Overall (Subtopic 825-10)" ("ASU 2016-01") and ASU 2016-16, "Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory." |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | ||
Operating activities: | |||||
Net income | $ 91 | $ 299 | $ 483 | $ 643 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation and amortization | 457 | 253 | 894 | 450 | |
Amortization of costs capitalized to obtain revenue contracts, net | 217 | 183 | 426 | 371 | |
Expenses related to employee stock plans | 388 | 351 | 731 | 603 | |
Loss on settlement of Salesforce.org reseller agreement (Note 6) | [1],[2] | 166 | 0 | 166 | 0 |
Gains on strategic investments, net | (109) | (143) | (390) | (354) | |
Changes in assets and liabilities, net of business combinations: | |||||
Accounts receivable, net | (146) | (149) | 2,628 | 2,013 | |
Costs capitalized to obtain revenue contracts, net | (173) | (146) | (297) | (264) | |
Prepaid expenses and other current assets and other assets | 28 | 4 | (69) | (86) | |
Accounts payable | 26 | 71 | 41 | 121 | |
Accrued expenses and other liabilities | 267 | 108 | (293) | (398) | |
Operating lease liabilities | (182) | 0 | (346) | 0 | |
Unearned revenue | (594) | (373) | (1,573) | (1,175) | |
Net cash provided by operating activities | 436 | 458 | 2,401 | 1,924 | |
Investing activities: | |||||
Business combinations, net of cash acquired | (423) | (4,803) | (433) | (4,985) | |
Purchases of strategic investments | (62) | (37) | (221) | (184) | |
Sales of strategic investments | 71 | 2 | 265 | 6 | |
Purchases of marketable securities | (772) | (28) | (1,506) | (291) | |
Sales of marketable securities | 375 | 335 | 461 | 1,273 | |
Maturities of marketable securities | 137 | 40 | 193 | 88 | |
Capital expenditures | (178) | (170) | (337) | (292) | |
Net cash used in investing activities | (852) | (4,661) | (1,578) | (4,385) | |
Financing activities: | |||||
Proceeds from issuance of debt, net | 0 | 496 | 0 | 2,966 | |
Proceeds from employee stock plans | 152 | 182 | 371 | 383 | |
Principal payments on financing obligations | [3] | (134) | (89) | (145) | (108) |
Repayments of debt | (201) | 0 | (202) | (1,027) | |
Net cash provided by (used in) financing activities | (183) | 589 | 24 | 2,214 | |
Effect of exchange rate changes | (1) | 11 | (6) | 23 | |
Net increase (decrease) in cash and cash equivalents | (600) | (3,603) | 841 | (224) | |
Cash and cash equivalents, beginning of period | 4,110 | 5,922 | 2,669 | 2,543 | |
Cash and cash equivalents, end of period | 3,510 | 2,319 | 3,510 | 2,319 | |
Cash paid during the period for: | |||||
Interest | 6 | 22 | 56 | 29 | |
Income taxes, net of tax refunds | 37 | 18 | 55 | 37 | |
Non-cash investing and financing activities: | |||||
Fair value of equity awards assumed | 0 | 387 | 0 | 387 | |
Fair value of common stock issued as consideration for business combinations | $ 0 | $ 1,178 | $ 0 | $ 1,178 | |
[1] | Amounts include amortization of intangible assets acquired through business combinations, as follows: Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Cost of revenues $ 62 $ 52 $ 123 $ 91 Marketing and sales 65 67 133 97 | ||||
[2] | Amounts include stock-based expense, as follows: Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Cost of revenues $ 46 $ 43 $ 89 $ 77 Research and development 98 81 179 147 Marketing and sales 199 174 376 294 General and administrative 45 53 87 85 | ||||
[3] | Previously referred to as principal payments on capital lease obligations. |
Summary of Business and Signifi
Summary of Business and Significant Accounting Policies | 6 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Business and Significant Accounting Policies | Summary of Business and Significant Accounting Policies Description of Business Salesforce.com, inc. (the "Company") is a leading provider of enterprise software, delivered through the cloud, with a focus on customer relationship management, or CRM. The Company introduced its first CRM solution in 2000, and has since expanded its service offerings into new areas and industries with new editions, features and platform capabilities. The Company's core mission is to empower its customers to connect with their customers in entirely new ways through cloud, mobile, social, Internet of Things (“IoT”) and artificial intelligence ("AI") technologies. The Company's Customer Success Platform is a comprehensive portfolio of service offerings providing sales force automation, customer service and support, marketing automation, digital commerce, integration solutions, community management, industry-specific solutions, analytics, application development, IoT integration, collaborative productivity tools, an enterprise cloud marketplace which the Company refers to as the AppExchange, and its professional services. Fiscal Year The Company’s fiscal year ends on January 31. References to fiscal 2020 , for example, refer to the fiscal year ending January 31, 2020 . Basis of Presentation The accompanying condensed consolidated balance sheets as of July 31, 2019 and January 31, 2019 and the condensed consolidated statements of operations, condensed consolidated statements of comprehensive income , condensed consolidated statements of stockholders' equity and condensed consolidated statements of cash flows for the three and six months ended July 31, 2019 and 2018 , respectively, are unaudited. These financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the financial information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s balance sheets as of July 31, 2019 and January 31, 2019 , and its results of operations, including its comprehensive income , stockholders' equity and its cash flows for the three and six months ended July 31, 2019 and 2018 . All adjustments are of a normal recurring nature. The results for the three and six months ended July 31, 2019 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending January 31, 2020 . These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2019 , filed with the Securities and Exchange Commission (the “SEC”) on March 8, 2019 . The Company prospectively adopted Accounting Standards Update No. 2016-02, "Leases (Topic 842)" ("ASU 2016-02"), also referred to as Topic 842, as discussed below. As a result, the condensed consolidated balance sheet as of July 31, 2019 is not comparable with that as of January 31, 2019. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions in the Company’s condensed consolidated financial statements and notes thereto. Significant estimates and assumptions made by management include the determination of: • the standalone selling price (SSP) of performance obligations for revenue contracts with multiple performance obligations; • the fair value of assets acquired and liabilities assumed for business combinations; • the recognition, measurement and valuation of current and deferred income taxes and uncertain tax positions; • the average period of benefit associated with costs capitalized to obtain revenue contracts; • the fair value of certain stock awards issued; • the useful lives of intangible assets; and • the valuation of privately-held strategic investments. Actual results could differ materially from those estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the result of which forms the basis for making judgments about the carrying values of assets and liabilities. Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Segments The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision makers in deciding how to allocate resources and assess performance. Over the past few years, the Company has completed a number of acquisitions. These acquisitions have allowed the Company to expand its offerings, presence and reach in various market segments of the enterprise cloud computing market. While the Company has offerings in multiple enterprise cloud computing market segments, including as a result of the Company's acquisitions, and operates in multiple countries, the Company’s business operates in one operating segment because most of the Company's offerings operate on its single Customer Success Platform and most of the Company's products are deployed in a nearly identical way, and the Company’s chief operating decision makers evaluate the Company’s financial information and resources and assess the performance of these resources on a consolidated basis. Since the Company operates in one operating segment, all required financial segment information can be found in the consolidated financial statements. Concentrations of Credit Risk, Significant Customers and Investments The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities and accounts receivable. Collateral is not required for accounts receivable. The Company maintains an allowance for its doubtful accounts receivable. This allowance is based upon historical loss patterns, the number of days that billings are past due and an evaluation of the potential risk of loss associated with delinquent accounts. Receivables are written-off and charged against the recorded allowance when the Company has exhausted collection efforts without success. No single customer accounted for more than five percent of accounts receivable at July 31, 2019 and January 31, 2019 . No single customer accounted for five percent or more of total revenue during the six months ended July 31, 2019 and 2018 , respectively. As of July 31, 2019 and January 31, 2019 , assets located outside the Americas were 15 percent and 14 percent of total assets, respectively. As of July 31, 2019 and January 31, 2019 , assets located in the United States were 83 percent and 84 percent of total assets, respectively. The Company is also exposed to concentrations of risk in its strategic investment portfolio. As of July 31, 2019 , the Company held one publicly traded investment with a carrying value that was greater than 15 percent of the Company's total strategic investments and four other investments with carrying values that were individually greater than five percent of its total strategic investments, of which two were publicly traded and two were privately held. As of January 31, 2019 , the Company held five investments that were individually greater than five percent of its total strategic investments, of which four were publicly traded and one was privately held. Revenue Recognition The Company derives its revenues from two sources: (1) subscription revenues, which are comprised of subscription fees from customers accessing the Company’s enterprise cloud computing services (collectively, "Cloud Services"), software licenses, and from customers paying for additional support beyond the standard support that is included in the basic subscription fees; and (2) related professional services such as process mapping, project management and implementation services. Other revenue consists primarily of training fees. Revenue is recognized upon transfer of control of promised products and services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. If the consideration promised in a contract includes a variable amount, for example, overage fees, contingent fees or service level penalties, the Company includes an estimate of the amount it expects to receive for the total transaction price if it is probable that a significant reversal of cumulative revenue recognized will not occur. The Company determines the amount of revenue to be recognized through application of the following steps: • Identification of the contract, or contracts with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when or as the Company satisfies the performance obligations. The Company’s subscription service arrangements are non-cancelable and do not contain refund-type provisions. Subscription and Support Revenues Subscription and support revenues are comprised of fees that provide customers with access to Cloud Services, software licenses and related support and updates during the term of the arrangement. Cloud Services allow customers to use the Company's multi-tenant software without taking possession of the software. Revenue is generally recognized ratably over the contract term. Since the May 2018 acquisition of MuleSoft, Inc. ("MuleSoft"), subscription and support revenues also includes software licenses. These licenses for on-premises software provide the customer with a right to use the software as it exists when made available. Customers purchase these licenses through a subscription. Revenues from distinct licenses are generally recognized upfront when the software is made available to the customer. In cases where the Company allocates revenue to software updates and support, primarily because the updates are provided at no additional charge, such revenue is recognized as the updates are provided, which is generally ratably over the contract term. The Company typically invoices its customers annually. Typical payment terms provide that customers pay within 30 days of invoice. Amounts that have been invoiced are recorded in accounts receivable and in unearned revenue or revenue, depending on whether transfer of control to customers has occurred. Professional Services and Other Revenues The Company’s professional services contracts are either on a time and materials, fixed fee or subscription basis. These revenues are recognized as the services are rendered for time and materials contracts, on a proportional performance basis for fixed price contracts or ratably over the contract term for subscription professional services contracts. Training revenues are recognized as the services are performed. Significant Judgments - Contracts with Multiple Performance Obligations The Company enters into contracts with its customers that may include promises to transfer multiple Cloud Services, software licenses, premium support and professional services. A performance obligation is a promise in a contract with a customer to transfer products or services that are distinct. Determining whether products and services are distinct performance obligations that should be accounted for separately or combined as one unit of accounting may require significant judgment. Cloud Services and software licenses are distinct because such offerings are often sold separately. In determining whether professional services are distinct, the Company considers the following factors for each professional services agreement: availability of the services from other vendors, the nature of the professional services, the timing of when the professional services contract was signed in comparison to the subscription start date and the contractual dependence of the service on the customer’s satisfaction with the professional services work. To date, the Company has concluded that all of the professional services included in contracts with multiple performance obligations are distinct. The Company allocates the transaction price to each performance obligation on a relative standalone selling price ("SSP") basis. The SSP is the price at which the Company would sell a promised product or service separately to a customer. Judgment is required to determine the SSP for each distinct performance obligation. The Company determines SSP by considering its overall pricing objectives and market conditions. Significant pricing practices taken into consideration include the Company’s discounting practices, the size and volume of the Company’s transactions, the customer demographic, the geographic area where services are sold, price lists, the Company's go-to-market strategy, historical sales and contract prices. As the Company’s go-to-market strategies evolve, the Company may modify its pricing practices in the future, which could result in changes to SSP. In certain cases, the Company is able to establish SSP based on observable prices of products or services sold separately in comparable circumstances to similar customers. The Company uses a single amount to estimate SSP when it has observable prices. If SSP is not directly observable, for example when pricing is highly variable, the Company uses a range of SSP. The Company determines the SSP range using information that may include market conditions or other observable inputs. The Company typically has more than one SSP for individual products and services due to the stratification of those products and services by customer size and geography. Costs Capitalized to Obtain Revenue Contracts The Company capitalizes incremental costs of obtaining a non-cancelable subscription and support revenue contract. The capitalized amounts consist primarily of sales commissions paid to the Company’s direct sales force. Capitalized amounts also include (1) amounts paid to employees other than the direct sales force who earn incentive payouts under annual compensation plans that are tied to the value of contracts acquired, (2) commissions paid to employees upon renewals of subscription and support contracts, (3) the associated payroll taxes and fringe benefit costs associated with the payments to the Company’s employees, and to a lesser extent (4) success fees paid to partners in emerging markets where the Company has a limited presence. Costs capitalized related to new revenue contracts are amortized on a straight-line basis over four years , which, although longer than the typical initial contract period, reflects the average period of benefit, including expected contract renewals. In arriving at this average period of benefit, the Company evaluated both qualitative and quantitative factors which included the estimated life cycles of its offerings and its customer attrition. Additionally, the Company amortizes capitalized costs for renewals and success fees paid to partners over two years . The capitalized amounts are recoverable through future revenue streams under all non-cancelable customer contracts. The Company periodically evaluates whether there have been any changes in its business, the market conditions in which it operates or other events which would indicate that its amortization period should be changed or if there are potential indicators of impairment. Amortization of capitalized costs to obtain revenue contracts is included in marketing and sales expense in the accompanying condensed consolidated statements of operations. During the six months ended July 31, 2019 , the Company capitalized $297 million of costs to obtain revenue contracts and amortized $426 million to marketing and sales expense. During the same period a year ago, the Company capitalized $264 million of costs to obtain revenue contracts and amortized $371 million to marketing and sales expense. Costs capitalized to obtain a revenue contract, net on the Company's condensed consolidated balance sheets totaled $1.9 billion at July 31, 2019 and $2.0 billion at January 31, 2019 . There were no impairments of costs to obtain revenue contracts for the three and six months ended July 31, 2019 and 2018, respectively. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are stated at fair value. Marketable Securities The Company considers all of its marketable debt securities as available for use in current operations, including those with maturity dates beyond one year, and therefore classifies these securities within current assets on the condensed consolidated balance sheets. Securities are classified as available for sale and are carried at fair value, with the change in unrealized gains and losses, net of tax, reported as a separate component on the condensed consolidated statements of comprehensive income until realized. Fair value is determined based on quoted market rates when observable or utilizing data points that are observable, such as quoted prices, interest rates and yield curves. Declines in fair value judged to be other-than-temporary on securities available for sale are included as a reduction to investment income. To determine whether a decline in value is other-than-temporary, the Company evaluates, among other factors: the duration and extent to which the fair value has been less than the carrying value and its intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in fair value. For the purposes of computing realized and unrealized gains and losses, the cost of securities sold is based on the specific-identification method. Interest on securities classified as available for sale is included as a component of investment income. Strategic Investments The Company holds strategic investments in publicly held equity securities and privately held debt and equity securities in which the Company does not have a controlling interest or significant influence. Publicly held equity securities are measured using quoted prices in their respective active markets with changes recorded through gains (losses) on strategic investments, net on the condensed consolidated statement of operations . Privately held equity securities without a readily determinable fair value are recorded at cost and adjusted for impairments and observable price changes with a same or similar security from the same issuer and are recorded through gains on strategic investments, net on the condensed consolidated statement of operations . Privately held debt securities are recorded at fair value with changes in fair value recorded through accumulated other comprehensive income on the condensed consolidated balance sheet. If, based on the terms of these publicly traded and privately held securities, the Company determines that the Company exercises significant influence on the entity to which these securities relate, the Company will apply the equity method of accounting for such investments. Privately held debt and equity securities are valued using significant unobservable inputs or data in an inactive market and the valuation requires the Company's judgment due to the absence of market prices and inherent lack of liquidity. The carrying value is not adjusted for the Company's privately held equity securities if there are no observable price changes in a same or similar security from the same issuer or if there are no identified events or changes in circumstances that may indicate impairment, as discussed below. In determining the estimated fair value of its strategic investments in privately held companies, the Company utilizes the most recent data available to the Company. Valuations of privately held companies are inherently complex due to the lack of readily available market data. In addition, the determination of whether an orderly transaction is for a same or similar investment requires significant management judgment including the nature of rights and obligations of the investments, the extent to which differences in those rights and obligations would affect the fair values of those investments, and the impact of any differences based on the stage of operational development of the investee. The Company assesses its privately held debt and equity securities strategic investment portfolio at least quarterly for impairment. The Company’s impairment analysis encompasses an assessment of the severity and duration of the impairment and qualitative and quantitative analysis of other key factors including the investee’s financial metrics, the investee’s products and technologies meeting or exceeding predefined milestones, market acceptance of the product or technology, other competitive products or technology in the market, general market conditions, management and governance structure of the investee, the investee’s liquidity, debt ratios and the rate at which the investee is using its cash. If the investment is considered to be impaired, the Company recognizes an impairment through the condensed consolidated statement of operations and establishes a new carrying value for the investment. Derivative Financial Instruments The Company enters into foreign currency derivative contracts with financial institutions to reduce foreign exchange risk. The Company uses forward currency derivative contracts to minimize the Company’s exposure to balances primarily denominated in the Euro, British Pound Sterling, Japanese Yen, Canadian Dollar and Australian Dollar. The Company’s foreign currency derivative contracts, which are not designated as hedging instruments, are used to reduce the exchange rate risk associated primarily with intercompany receivables and payables. The Company’s derivative financial instruments program is not designated for trading or speculative purposes. The Company generally enters into master netting arrangements with the financial institutions with which it contracts for such derivative contracts, which permit net settlement of transactions with the same counterparty, thereby reducing credit-related losses in the event of the financial institutions' nonperformance. As of July 31, 2019 and January 31, 2019 , the outstanding foreign currency derivative contracts were recorded at fair value on the condensed consolidated balance sheets. Foreign currency derivative contracts are marked-to-market at the end of each reporting period with gains and losses recognized as other expense to offset the gains or losses resulting from the settlement or remeasurement of the underlying foreign currency denominated receivables and payables. While the contract or notional amount is often used to express the volume of foreign currency derivative contracts, the amounts potentially subject to credit risk are generally limited to the amounts, if any, by which the counterparties’ obligations under the agreements exceed the obligations of the Company to the counterparties. Fair Value Measurement The Company measures its cash and cash equivalents, marketable securities and foreign currency derivative contracts at fair value. In addition, the Company measures its strategic investments, including its publicly held equity securities, privately held debt securities and privately held equity securities for which there has been an observable price change in a same or similar security, at fair value. The additional disclosures regarding the Company’s fair value measurements are included in Note 5 “Fair Value Measurement.” Property and Equipment Property and equipment are stated at cost. Depreciation is calculated on a straight-line basis over the estimated useful lives of those assets as follows: Computers, equipment and software 3 to 9 years Furniture and fixtures 5 years Leasehold improvements Shorter of the estimated lease term or 10 years Building and structural components Average weighted useful life of 32 years Building improvements 10 years When assets are retired or otherwise disposed of, the cost and accumulated depreciation and amortization are removed from their respective accounts and any loss on such retirement is reflected in operating expenses. Capitalized Software Costs The Company capitalizes costs related to its enterprise cloud computing services and certain projects for internal use incurred during the application development stage. Costs related to preliminary project activities and post implementation activities are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life, which is generally three to five years . Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Intangible Assets Acquired through Business Combinations Intangible assets are amortized over their estimated useful lives. Each period, the Company evaluates the estimated remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. Management tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. Impairment Assessment The Company evaluates intangible assets and long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. This includes but is not limited to significant adverse changes in business climate, market conditions, or other events that indicate an asset's carrying amount may not be recoverable. Recoverability of these assets is measured by comparing the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate. If the undiscounted cash flows used in the test for recoverability are less than the carrying amount of these assets, the carrying amount of such assets is reduced to fair value. The Company evaluates and tests the recoverability of its goodwill for impairment at least annually during its fourth quarter of each fiscal year or more often if and when circumstances indicate that goodwill may not be recoverable. There were no material impairments of capitalized software, intangible assets, long-lived assets or goodwill during the six months ended July 31, 2019 and 2018 , respectively. Business Combinations The Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions and tax-related valuation allowances are initially recorded in connection with a business combination as of the acquisition date. The Company continues to collect information and reevaluates these estimates and assumptions quarterly and records any adjustments to the Company’s preliminary estimates to goodwill provided that the Company is within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s condensed consolidated statement of operations . In the event the Company acquires an entity with which the Company has a preexisting relationship, the Company will recognize a gain or loss to settle that relationship as of the acquisition date within the condensed consolidated statements of operations. In the event that the Company acquires an entity in which the Company previously held a strategic investment, the difference between the fair value of the shares as of the date of the acquisition and the carrying value of the strategic investment is recorded as a gain or loss and recorded within net gains (losses) on strategic investments in the condensed consolidated statement of operations . Leases Effective at the start of fiscal 2020, the Company adopted the provisions and expanded disclosure requirements described in Topic 842. The Company adopted the standard using the prospective method. Accordingly, the results for the prior comparable periods were not adjusted to conform to the current period measurement or recognition of results. The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities, current and noncurrent operating lease liabilities on the Company’s condensed consolidated balance sheets. Finance leases are included in property and equipment, accrued expenses and other liabilities, and other noncurrent liabilities on the Company’s condensed consolidated balance sheets. ROU assets represent the Company's right to use an underlying asset for the lease term and the corresponding lease liabilities represent its obligation to make lease payments arising from the lease. Lease ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The lease ROU asset is reduced for tenant incentives and excludes any initial direct costs incurred. As the Company’s leases do not provide an implicit rate, the net present value of future minimum lease payments is determined using the Company’s incremental borrowing rate. The Company's incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, in an economic environment where the leased asset is located. The Company’s lease terms may include options to extend or terminate the lease. These options are reflected in the ROU asset and lease liability when it is reasonably certain that the Company will exercise the option. The Company reassesses the lease term if and when a significant event or change in circumstances occurs within the control of the Company, such as construction of significant leasehold improvements that are expected to have economic value when the option becomes exercisable. Lease expenses for minimum lease payments for operating leases are recognized on a straight-line basis over the lease term. Amortization expense of the ROU asset for finance leases is recognized on a straight-line basis over the lease term and interest expense for finance leases is recognized based on the incremental borrowing rate. The Company has lease agreements with lease and non-lease components, which it has elected to combine for all asset classes. In addition, the Company does not recognize ROU assets or lease liabilities for leases with a term of 12 months or less of all asset classes. On the lease commencement date the Company establishes assets and liabilities for the present value of estimated future costs to retire long-lived assets at the termination or expiration of a lease. Such assets are depreciated over the lease term to operating expense. The Company additionally has entered into subleases for unoccupied leased office space. Any impairments to the ROU asset, leasehold improvements or other assets as a result of a sublease are recognized in the period the sublease is executed and recorded as an operating expense. Any sublease payments received in excess of the straight-line rent payments for the sublease are recorded as an offset to operating expenses and recognized over the sublease life. Stock-Based Expense Stock-based expenses related to stock options are measured based on grant date at fair value using the Black-Scholes option pricing model and restricted stock awards based on grant date at fair value using the closing stock price. The Company recognizes stock-based expenses related to stock options and restricted stock awards on a straight-line basis, net of |
Revenues
Revenues | 6 Months Ended |
Jul. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Disaggregation of Revenue Subscription and Support Revenue by the Company's service offerings Subscription and support revenues consisted of the following (in millions ): Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Sales Cloud $ 1,130 $ 1,004 $ 2,203 $ 1,969 Service Cloud 1,087 892 2,107 1,740 Salesforce Platform and Other 912 712 1,754 1,287 Marketing and Commerce Cloud 616 452 1,177 874 $ 3,745 $ 3,060 $ 7,241 $ 5,870 Total Revenue by Geographic Locations Revenues by geographical region consisted of the following (in millions ): Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Americas $ 2,816 $ 2,338 $ 5,433 $ 4,439 Europe 786 629 1,541 1,235 Asia Pacific 395 314 760 613 $ 3,997 $ 3,281 $ 7,734 $ 6,287 Revenues by geography are determined based on the region of the Company's contracting entity, which may be different than the region of the customer. Americas revenue attributed to the United States was approximately 96 percent during the three and six months ended July 31, 2019 and 2018 . No other country represented more than ten percent of total revenue during the three and six months ended July 31, 2019 and 2018 , respectively. Contract Balances Contract Asset As described in Note 1, subscription and support revenue is generally recognized ratably over the contract term beginning on the commencement date of each contract. License revenue is recognized as the licenses are delivered. The Company records a contract asset when revenue recognized on a contract exceeds the billings. The Company's standard billing terms are annual in advance. Contract assets were $268 million as of July 31, 2019 as compared to $215 million as of January 31, 2019 which is included in prepaid expenses and other current assets on the condensed consolidated balance sheet. Impairments of contract assets were immaterial during the three and six months ended July 31, 2019 and 2018, respectively. Unearned Revenue Unearned revenue represents amounts that have been invoiced in advance of revenue recognition and is recognized as revenue when transfer of control to customers has occurred or services have been provided. The unearned revenue balance does not represent the total contract value of annual or multi-year, non-cancelable subscription agreements. The Company records unearned revenue when the billings on a contract exceed the revenue recognized. The Company generally invoices customers in annual installments. The unearned revenue balance is influenced by several factors, including seasonality, the compounding effects of renewals, invoice duration, invoice timing, dollar size and new business linearity within the quarter. The change in unearned revenue was as follows (in millions ): Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Unearned revenue, beginning of period $ 7,585 $ 6,201 $ 8,564 $ 6,995 Billings and other* 3,396 2,875 6,110 5,086 Contribution from contract asset 7 31 51 25 Revenue recognized ratably over time (3,736 ) (3,056 ) (7,223 ) (5,924 ) Revenue recognized over time as delivered (174 ) (162 ) (346 ) (299 ) Revenue recognized at a point in time (87 ) (63 ) (165 ) (64 ) Unearned revenue from business combinations 151 57 151 64 Unearned revenue, end of period $ 7,142 $ 5,883 $ 7,142 $ 5,883 *Other includes, for example, the impact of foreign currency translation Revenue recognized ratably over time is generally billed in advance and includes Cloud Services, the related support and advisory services. The majority of revenue recognized for these services is from the beginning of period unearned revenue balance. Revenue recognized over time as delivered includes professional services billed on a time and materials basis, fixed fee professional services and training classes that are primarily billed, delivered and recognized within the same reporting period. The majority of revenue recognized is billed and recognized in the current period. Revenue recognized at a point in time substantially includes the portion of software subscriptions allocated to the on-premise software element, which either resulted in smaller unearned revenue or a contract asset. Remaining Performance Obligation Transaction price allocated to the remaining performance obligation, referred to by the Company as remaining performance obligation, represents contracted revenue that has not yet been recognized, which includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods. Transaction price allocated to the remaining performance obligation is influenced by several factors, including seasonality, the timing of renewals, the timing of delivery of software licenses, average contract terms and foreign currency exchange rates. Unbilled portions of the remaining performance obligation denominated in foreign currencies are revalued each period based on the period end exchange rates. Unbilled portions of the remaining performance obligation are subject to future economic risks including bankruptcies, regulatory changes and other market factors. The Company excludes amounts related to performance obligation that are billed and recognized as they are delivered. This primarily consists of professional services contracts that are on a time-and-materials basis. The majority of the Company's noncurrent remaining performance obligation is expected to be recognized in the next 13 to 36 months. Remaining performance obligation consisted of the following (in billions): Current Noncurrent Total As of July 31, 2019 $ 12.1 $ 13.2 $ 25.3 As of January 31, 2019 $ 11.9 $ 13.8 $ 25.7 |
Investments
Investments | 6 Months Ended |
Jul. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Marketable Securities At July 31, 2019 , marketable securities consisted of the following (in millions ): Investments classified as Marketable Securities Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate notes and obligations $ 1,474 $ 3 $ (1 ) $ 1,476 U.S. treasury securities 123 0 (1 ) 122 Mortgage backed obligations 88 0 0 88 Asset backed securities 504 1 0 505 Municipal securities 109 0 0 109 Foreign government obligations 49 0 0 49 U.S. agency obligations 10 0 0 10 Time deposits 8 0 0 8 Covered bonds 165 0 0 165 Total marketable securities $ 2,530 $ 4 $ (2 ) $ 2,532 At January 31, 2019 , marketable securities consisted of the following (in millions ): Investments classified as Marketable Securities Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate notes and obligations $ 1,027 $ 0 $ (8 ) $ 1,019 U.S. treasury securities 89 0 (1 ) 88 Mortgage backed obligations 79 0 (1 ) 78 Asset backed securities 245 0 (1 ) 244 Municipal securities 104 0 0 104 Foreign government obligations 58 0 (1 ) 57 U.S. agency obligations 4 0 0 4 Time deposits 4 0 0 4 Covered bonds 75 0 0 75 Total marketable securities $ 1,685 $ 0 $ (12 ) $ 1,673 The contractual maturities of the investments classified as marketable securities are as follows (in millions ): As of July 31, 2019 January 31, 2019 Due within 1 year $ 1,081 $ 482 Due in 1 year through 5 years 1,446 1,189 Due in 5 years through 10 years 5 2 $ 2,532 $ 1,673 As of July 31, 2019 , the following marketable securities were in an unrealized loss position (in millions ): Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Corporate notes and obligations $ 0 $ 0 $ 158 $ (1 ) $ 158 $ (1 ) U.S. treasury securities 0 0 47 (1 ) 47 (1 ) $ 0 $ 0 $ 205 $ (2 ) $ 205 $ (2 ) The unrealized losses for each of the fixed rate marketable securities were less than $1 million . The Company does not believe any of the unrealized losses represent an other-than-temporary impairment based on its evaluation of available evidence as of July 31, 2019 , such as the Company's intent to hold the investment and whether it is more likely than not that the Company will be required to sell the investment before recovery of the investment's amortized basis. The Company expects to receive the full principal and interest on all of these marketable securities. Investment Income Investment income consists of interest income, realized gains and realized losses on the Company’s cash, cash equivalents and marketable securities. The components of investment income are presented below (in millions ): Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Interest income $ 31 $ 12 $ 57 $ 32 Realized gains 1 0 1 1 Realized losses (1 ) 0 (1 ) (5 ) Investment income $ 31 $ 12 $ 57 $ 28 Strategic Investments Strategic investments by form and measurement category as of July 31, 2019 were as follows (in millions ): Measurement Category Fair Value (1) Measurement Alternative Other (2) Total Equity securities $ 607 $ 917 $ 57 $ 1,581 Debt securities 0 0 33 33 Balance as of July 31, 2019 $ 607 $ 917 $ 90 $ 1,614 (1) Equity securities under fair value represent the carrying value of strategic investments in publicly held equity securities. (2) Other includes the Company's investments accounted for under the equity method of accounting or amortized cost. Strategic investments by form and measurement category as of January 31, 2019 were as follows (in millions ): Measurement Category Fair Value (1) Measurement Alternative Other (2) Total Equity securities $ 436 $ 785 $ 50 $ 1,271 Debt securities 0 0 31 31 Balance as of January 31, 2019 $ 436 $ 785 $ 81 $ 1,302 (1) Equity securities under fair value represent the carrying value of strategic investments in publicly held equity securities. (2) Other includes the Company's investments accounted for under the equity method of accounting or amortized cost. Measurement Alternative Adjustments Privately held equity securities accounted for under the measurement alternative included in the table above for the three and six months ended July 31, 2019 and 2018 were as follows (in millions ): Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Carrying amount, beginning of period $ 927 $ 554 $ 785 $ 548 Adjustments related to privately held equity securities: Net additions (reductions) (1) (9 ) 19 11 30 Impairments and downward adjustments (33 ) (5 ) (51 ) (23 ) Upward adjustments 32 99 172 112 Carrying amount, end of period $ 917 $ 667 $ 917 $ 667 (1) Net reductions include sales of securities and reclassifications due to changes to capital structure. Since the adoption of ASU 2016-01 on February 1, 2018, cumulative impairments and downward adjustments were $83 million and cumulative upward adjustments were $346 million through July 31, 2019 . Gains (losses) on strategic investments, net Gains and losses recognized in the three and six months ended July 31, 2019 and 2018 were as follows (in millions): 2 Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Net gains recognized on publicly traded securities $ 66 $ 65 $ 216 $ 276 Net gains recognized on privately held securities 0 90 122 81 Net gains recognized on sales of equity securities 43 1 62 9 Net gains (losses) recognized on debt securities 0 (13 ) (10 ) (12 ) Gains on strategic investments, net $ 109 $ 143 $ 390 $ 354 Net gains recognized in the three and six months ended July 31, 2019 for investments still held as of July 31, 2019 were $66 million and $328 million , respectively. This excludes recognized gains on the sale of our equity securities for the three and six months ended July 31, 2019 of $43 million and $62 million , respectively. In April 2019, the Company made a strategic investment of $100 million in cash for common shares of a technology company in a private placement concurrent with the investee company's initial public offering. The Company's shares are subject to a 365 -day market standoff agreement. As of July 31, 2019 , the fair value of the investment was approximately $265 million . The investment was made as part of the Company's overall strategy of investing in complementary companies to facilitate potential alignment and integration into the Company’s offerings or product features. The Company's ownership interest represents approximately one percent of the economic interest of the investee company's outstanding capital stock. |
Derivatives
Derivatives | 6 Months Ended |
Jul. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives Details on outstanding foreign currency derivative contracts are presented below (in millions ): As of July 31, 2019 January 31, 2019 Notional amount of foreign currency derivative contracts $ 4,420 $ 4,496 Fair value of foreign currency derivative contracts (22 ) 25 The fair value of the Company’s outstanding derivative instruments not designated as hedging instruments are summarized below (in millions ): As of Balance Sheet Location July 31, 2019 January 31, 2019 Foreign currency derivative contracts Prepaid expenses and other current assets $ 37 $ 42 Gains (losses) on derivative instruments not designated as hedging instruments recorded in other income in the condensed consolidated statements of operations during the three and six months ended July 31, 2019 and 2018 , respectively, are summarized below (in millions ): Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Foreign currency derivative contracts $ (35 ) $ (10 ) $ 1 $ 10 |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended |
Jul. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2. Significant other inputs that are directly or indirectly observable in the marketplace. Level 3. Significant unobservable inputs which are supported by little or no market activity. All of the Company’s cash equivalents, marketable securities and foreign currency derivative contracts are classified within Level 1 or Level 2 because the Company’s cash equivalents, marketable securities and foreign currency derivative contracts are valued using quoted market prices or alternative pricing sources and models utilizing observable market inputs. The following table presents information about the Company’s assets that are measured at fair value as of July 31, 2019 and indicates the fair value hierarchy of the valuation (in millions ): Description Quoted Prices in Significant Other Significant Balance as of Cash equivalents (1): Time deposits $ 0 $ 622 $ 0 $ 622 Money market mutual funds 829 0 0 829 Marketable securities: Corporate notes and obligations 0 1,476 0 1,476 U.S. treasury securities 0 122 0 122 Mortgage backed obligations 0 88 0 88 Asset backed securities 0 505 0 505 Municipal securities 0 109 0 109 Foreign government obligations 0 49 0 49 U.S. agency obligations 0 10 0 10 Time deposits 0 8 0 8 Covered bonds 0 165 0 165 Strategic investments: Publicly held equity securities 607 0 0 607 Foreign currency derivative contracts (2) 0 37 0 37 Total assets $ 1,436 $ 3,191 $ 0 $ 4,627 ___________ (1) Included in “cash and cash equivalents” in the accompanying condensed consolidated balance sheet as of July 31, 2019 , in addition to $2.1 billion of cash. (2) Included in “prepaid expenses and other current assets” in the accompanying condensed consolidated balance sheet as of July 31, 2019 . The following table presents information about the Company’s assets that are measured at fair value as of January 31, 2019 and indicates the fair value hierarchy of the valuation (in millions ): Description Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance as of January 31, 2019 Cash equivalents (1): Time deposits $ 0 $ 314 $ 0 $ 314 Money market mutual funds 1,234 0 0 1,234 Marketable securities: Corporate notes and obligations 0 1,019 0 1,019 U.S. treasury securities 0 88 0 88 Mortgage backed obligations 0 78 0 78 Asset backed securities 0 244 0 244 Municipal securities 0 104 0 104 Foreign government obligations 0 57 0 57 U.S. agency obligations 0 4 0 4 Time deposits 0 4 0 4 Covered bonds 0 75 0 75 Strategic investments: Publicly held equity securities 436 0 0 436 Foreign currency derivative contracts (2) 0 42 0 42 Total assets $ 1,670 $ 2,029 $ 0 $ 3,699 ______________ (1) Included in “cash and cash equivalents” in the accompanying condensed consolidated balance sheet as of January 31, 2019 , in addition to $1.1 billion of cash. (2) Included in “prepaid expenses and other current assets” in the accompanying condensed consolidated balance sheet as of January 31, 2019 . Strategic investments measured and recorded at fair value on a non-recurring basis The Company's privately held debt and equity securities and equity method investments are recorded at fair value only if an impairment or observable price adjustment is recognized in the current period. If an impairment or observable price adjustment is recognized on the Company's non-marketable equity securities during the period, the Company classifies these assets as Level 3 within the fair value hierarchy based on the nature of the fair value inputs. The Company classified privately held debt and equity securities and equity method investments as Level 3. The Company's privately held debt and equity securities and equity method investments amounted to $1.0 billion as of July 31, 2019 and $0.9 billion as of January 31, 2019 . |
Business Combinations
Business Combinations | 6 Months Ended |
Jul. 31, 2019 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations Salesforce.org In June 2019, Salesforce.org, the independent nonprofit social enterprise that resold the Company's service offerings to non-profit and higher education organizations, was combined with the Company. The Company has included the financial results of Salesforce.org, which are not material, in the condensed consolidated financial statements from the date of acquisition. The transaction costs associated with the acquisition were not material. The Company paid a one-time cash payment of $300 million for all shares of Salesforce.org to the independent, non-consolidated Salesforce.com Foundation (also referred to as the Foundation), which is considered a related party as discussed in Note 14 "Related-Party Transactions." Prior to the business combination, the Company and Salesforce.org had existing reseller and resource sharing agreements that, among other things, allowed Salesforce.org the right to resell select Company offerings and related upgraded support to non-profit organizations and for-profit and non-profit educational institutions free of charge or at discounted prices. Both agreements were effectively settled upon consummation of the business combination. Using an income approach, the Company assessed the contractual terms and conditions of the reseller agreement as compared to current market conditions, such as the cost to service contracts sold under the reseller agreement, and determined that the terms were not at fair value. Specifically, the reseller agreement provided favorable terms to Salesforce.org by providing the Company's products and services at no cost. As a result, the Company recorded a non-cash charge of approximately $166 million within operating expenses on the date the transaction closed. The loss represents the difference between the value of the remaining performance obligation recorded by Salesforce.org under the reseller agreement and the value of the remaining performance obligation if those same contracts had been sold at fair value. The following table summarizes the business combination (in millions): Cash $ 300 Loss on settlement of Salesforce.org reseller agreement (166 ) Total $ 134 The following table summarizes the fair value of assets acquired and liabilities assumed as of the date of acquisition (in millions): Fair Value Cash and cash equivalents $ 54 Deferred tax asset, current 47 Other current and noncurrent assets 46 Goodwill 164 Accounts payable, accrued expenses and other liabilities, current and noncurrent (39 ) Unearned revenue (138 ) Net assets acquired $ 134 The excess of purchase consideration over the fair value of net tangible liabilities assumed was recorded as goodwill, which is primarily attributed to the assembled workforce and expanded market opportunities, for which there is no basis for U.S. income tax purposes. The fair values assigned to tangible assets acquired and liabilities assumed are based on management’s estimates and assumptions and may be subject to change as additional information is received and certain tax returns are finalized. The Company expects to finalize the valuation as soon as practicable, but not later than one year from the acquisition date. MapAnything In May 2019, the Company acquired all outstanding stock of MapAnything, Inc. ("MapAnything"), which integrates map-based visualization, asset tracking and route optimization for field sales and service teams. The Company has included the financial results of MapAnything, which are not material, in the condensed consolidated financial statements from the date of acquisition. The transaction costs associated with the acquisition were not material. The acquisition date fair value of the consideration transferred for MapAnything was approximately $213 million , which consisted of cash and the fair value of stock options and restricted stock awards assumed. The Company recorded approximately $53 million for developed technology and customer relationships with estimated useful lives of four to five years . The Company recorded approximately $152 million of goodwill which is primarily attributed to the assembled workforce and expanded market opportunities from integrating MapAnything's technology with the Company's other offerings. The majority of the goodwill balance is not deductible for U.S. income tax purposes. The fair values assigned to tangible assets acquired and liabilities assumed are based on management’s estimates and assumptions and may be subject to change as additional information is received and certain tax returns are finalized. The Company expects to finalize the valuation as soon as practicable, but not later than one year from the acquisition date. The Company invested $23 million in a noncontrolling equity investment in MapAnything prior to the acquisition. The Company recognized a gain of approximately $9 million as a result of remeasuring its prior equity interest in MapAnything held before the business combination. The gain is included in gains on strategic investments, net in the condensed consolidated statement of operations. |
Intangible Assets Acquired Thro
Intangible Assets Acquired Through Business Combinations and Goodwill | 6 Months Ended |
Jul. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Acquired Through Business Combinations and Goodwill | Intangible Assets Acquired Through Business Combinations and Goodwill Intangible assets acquired through business combinations Intangible assets acquired through business combinations are as follows (in millions ): Intangible Assets, Gross Accumulated Amortization Intangible Assets, Net Weighted Jan 31, 2019 Additions and retirements, net July 31, 2019 Jan 31, 2019 Expense and retirements, net July 31, 2019 Jan 31, 2019 July 31, 2019 Acquired developed technology $ 1,429 $ 33 $ 1,462 $ (889 ) $ (123 ) $ (1,012 ) $ 540 $ 450 2.6 Customer relationships 1,938 25 1,963 (560 ) (129 ) (689 ) 1,378 1,274 5.9 Other (1) 52 0 52 (47 ) (4 ) (51 ) 5 1 1.0 Total $ 3,419 $ 58 $ 3,477 $ (1,496 ) $ (256 ) $ (1,752 ) $ 1,923 $ 1,725 5.0 (1) Included in other are trade names, trademarks and territory rights. Amortization of intangible assets resulting from business combinations for the three months ended July 31, 2019 and 2018 was $127 million and $119 million , respectively, and for the six months ended July 31, 2019 and 2018 was $256 million and $188 million , respectively. The expected future amortization expense for intangible assets as of July 31, 2019 is as follows (in millions ): Fiscal Period: Remaining six months of Fiscal 2020 $ 228 Fiscal 2021 429 Fiscal 2022 366 Fiscal 2023 218 Fiscal 2024 152 Thereafter 332 Total amortization expense $ 1,725 Customer contract assets acquired through business combinations Customer contract assets resulting from business combinations reflects the fair value of future billings of amounts that are contractually committed by acquired companies' existing customers as of the acquisition date. Customer contract assets are amortized over the corresponding contract terms. Customer contract assets resulting from business combinations at July 31, 2019 and January 31, 2019 were $81 million and $121 million , respectively, and are included in other assets on the condensed consolidated balance sheets. Goodwill Goodwill represents the excess of the purchase price in a business combination over the fair value of net assets acquired. Goodwill amounts are not amortized, but rather tested for impairment at least annually during the fourth quarter. The changes in the carrying amounts of goodwill, which is generally not deductible for tax purposes, were as follows (in millions ): Balance as of January 31, 2019 $ 12,851 Salesforce.org 164 MapAnything 152 Other acquisitions and adjustments (1) 32 Balance as of July 31, 2019 $ 13,199 (1) Adjustments include adjustments of acquisition date fair value, including the effect of foreign currency translation. |
Debt
Debt | 6 Months Ended |
Jul. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt The carrying values of the Company's borrowings were as follows (in millions ): Instrument Date of issuance Maturity date Effective interest rate for the three months ended July 31, 2019 July 31, 2019 January 31, 2019 2021 Term Loan May 2018 May 2021 3.18% $ 299 (1) $ 499 2023 Senior Notes April 2018 April 2023 3.26% 994 993 2028 Senior Notes April 2018 April 2028 3.70% 1,489 1,488 Loan assumed on 50 Fremont February 2015 June 2023 3.75% 195 196 Total carrying value of debt 2,977 3,176 Less current portion of debt (4 ) (3 ) Total noncurrent debt $ 2,973 $ 3,173 (1) The Company repaid $200 million of the 2021 Term Loan in June 2019. Each of the Company's debt agreements requires it to maintain compliance with certain debt covenants, all of which the Company was in compliance with as of July 31, 2019 . The expected future principal payments for all borrowings as of July 31, 2019 is as follows (in millions ): Fiscal period: Remaining six months of Fiscal 2020 $ 2 Fiscal 2021 4 Fiscal 2022 304 Fiscal 2023 4 Fiscal 2024 1,182 Thereafter 1,500 Total principal outstanding $ 2,996 Revolving Credit Facility In April 2018, the Company entered into a Second Amended and Restated Credit Agreement ("Revolving Loan Credit Agreement") with Wells Fargo Bank, National Association, and certain other institutional lenders that provides for $1.0 billion unsecured revolving credit facility (“Credit Facility”) that matures in April 2023. The Revolving Loan Credit Agreement amended and restated the Company’s existing revolving credit facility dated July 2016. The Company may use the proceeds of future borrowings under the Credit Facility for refinancing other indebtedness, working capital, capital expenditures and other general corporate purposes, including permitted acquisitions. There were no outstanding borrowings under the Credit Facility as of July 31, 2019 . The Company continues to pay a commitment fee on the available amount of the Credit Facility, which is included within interest expense in the Company's condensed consolidated statement of operations . Interest Expense on Debt The following table sets forth total interest expense recognized related to debt (in millions ): Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Contractual interest expense $ 28 $ 31 $ 56 $ 42 Amortization of debt issuance costs 1 1 2 13 Amortization of debt discount 0 0 0 4 $ 29 $ 32 $ 58 $ 59 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jul. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity The fair value of the Company's stock options and ESPP shares was estimated on the date of grant and the first day of the ESPP purchase period, respectively, using the Black-Scholes option pricing model. The weighted-average fair value per share for stock options grants was $38.97 and $40.69 in the three and six months ended July 31, 2019 , respectively, compared to $32.35 and $28.69 in the three and six months ended July 31, 2018 , respectively. The weighted-average fair value per share for ESPP shares was $38.88 in the three months ended July 31, 2019 compared to $32.26 in the three months ended July 31, 2018 . Stock option activity for the six months ended July 31, 2019 is as follows: Options Outstanding Outstanding Stock Options (in millions) Weighted- Average Exercise Price Aggregate Intrinsic Value (in millions) Balance as of January 31, 2019 26 $ 74.15 Options granted under all plans 6 160.40 Exercised (3 ) 55.34 Canceled (1 ) 108.14 Balance as of July 31, 2019 28 $ 94.60 $ 1,745 Vested or expected to vest 26 $ 91.53 $ 1,699 Exercisable as of July 31, 2019 13 $ 65.76 $ 1,236 The following table summarizes information about stock options outstanding as of July 31, 2019 : Options Outstanding Options Exercisable Range of Exercise Number Outstanding (in millions) Weighted- Average Remaining Contractual Life (Years) Weighted- Average Exercise Price Number of Shares (in millions) Weighted- Average Exercise Price $0.27 to $52.30 5 4.2 $ 30.34 4 $ 33.10 $54.36 to $75.57 7 3.6 67.79 5 65.73 $76.48 to $113.00 4 3.7 84.54 3 82.74 $118.04 5 5.6 118.04 1 118.04 $122.03 to $158.76 1 6.3 141.75 0 0.00 $161.50 6 6.6 161.50 0 0.00 28 4.8 $ 94.60 13 $ 65.76 Restricted stock activity for the six months ended July 31, 2019 is as follows: Restricted Stock Outstanding Outstanding (in millions) Weighted Average Grant Date Fair Value Aggregate Intrinsic Value (in millions) Balance as of January 31, 2019 21 $ 103.33 Granted - restricted stock units and awards 9 160.75 Granted - performance-based stock units 1 161.50 Canceled (1 ) 108.35 Vested and converted to shares (6 ) 99.70 Balance as of July 31, 2019 24 $ 126.53 $ 3,687 Expected to vest 20 $ 3,148 During the six months ended July 31, 2019 , the Company recognized stock-based expense related to its equity plans for employees and non-employee directors of $731 million . As of July 31, 2019 , the aggregate stock compensation remaining to be amortized to costs and expenses was approximately $3.4 billion . The Company will amortize this stock compensation balance as follows: $778 million during the remaining six months of fiscal 2020 ; $1.1 billion during fiscal 2021 ; $875 million during fiscal 2022 ; $525 million during fiscal 2023 and $82 million during fiscal 2024 . The expected amortization reflects only outstanding stock awards as of July 31, 2019 and assumes no forfeiture activity. The aggregate stock compensation remaining to be amortized to costs and expenses will be recognized over a remaining weighted average period of two years. Shares reserved and available for future issuance as of July 31, 2019 and January 31, 2019 were 133 million shares and 115 million shares, respectively. |
Income Taxes
Income Taxes | 6 Months Ended |
Jul. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Effective Tax Rate The Company computes its year-to-date provision for income taxes by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusts the provision for discrete tax items recorded in the period. For the six months ended July 31, 2019 , the Company reported a tax provision of $163 million on a pretax income of $646 million , which resulted in an effective tax rate of 25 percent . The Company's effective tax rate differs from the U.S. statutory rate of 21 percent primarily due to profitable jurisdictions outside of the United States subject to tax rates greater than 21 percent, offset by excess tax benefits from stock-based compensation. For the six months ended July 31, 2018 , the Company reported a tax benefit of $27 million on a pretax income of $616 million , which resulted in a negative effective tax rate of 4 percent . Included in this tax amount was a discrete tax benefit of $139 million from a partial release of the valuation allowance in connection with the acquisition of MuleSoft. The net deferred tax liability from the acquisition of MuleSoft provided a source of additional income to support the realizability of the Company's pre-existing deferred tax assets and, as a result, the Company released a portion of its valuation allowance. The tax benefit associated with the release of the valuation allowance was partially offset by income taxes in profitable jurisdictions outside of the United States. Unrecognized Tax Benefits and Other Considerations The Company records liabilities related to its uncertain tax positions. Tax positions for the Company and its subsidiaries are subject to income tax audits by multiple tax jurisdictions throughout the world. Certain prior year tax returns are currently being examined or reviewed by various taxing authorities in countries including the United States, United Kingdom and Germany. In March 2017, the Company received the final notice of proposed adjustments primarily related to transfer pricing issues from the Internal Revenue Service. The Company has been appealing the proposed adjustments and is awaiting the final outcome. The Company believes that it has provided adequate reserves for its income tax uncertainties in all open tax years. As the outcome of the tax audits cannot be predicted with certainty, if any issues arising in the Company's tax audits progress in a manner inconsistent with management's expectations, the Company could adjust its provision for income taxes in the future. Any adjustments resulting from the U.S. audits may have a significant impact to the Company's tax provision. In addition, the Company anticipates it is reasonably possible that a decrease of unrecognized tax benefits up to approximately $3 million may occur in the next 12 months, as the applicable statutes of limitations lapse. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jul. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding for the fiscal period. Diluted earnings per share is computed by giving effect to all potential weighted average dilutive common stock, including options, restricted stock units, warrants and the convertible senior notes. The dilutive effect of outstanding awards and convertible securities is reflected in diluted earnings per share by application of the treasury stock method. A reconciliation of the denominator used in the calculation of basic and diluted earnings per share is as follows (in millions ): 2 Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Numerator: Net income $ 91 $ 299 $ 483 $ 643 Denominator: Weighted-average shares outstanding for basic earnings per share 776 747 774 737 Effect of dilutive securities: Convertible senior notes which matured in April 2018 0 0 0 2 Employee stock awards 19 23 21 20 Warrants which settled in June and July 2018 0 4 0 4 Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share 795 774 795 763 The weighted-average number of shares outstanding used in the computation of diluted earnings per share does not include the effect of the following potential outstanding common stock. The effects of these potentially outstanding shares were not included in the calculation of diluted earnings per share because the effect would have been anti-dilutive (in millions): Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Employee stock awards 7 7 5 5 |
Leases and Other Commitments
Leases and Other Commitments | 6 Months Ended |
Jul. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Leases and Other Commitments | Leases and Other Commitments Leases The Company has operating leases for corporate offices, data centers, and equipment under non-cancelable operating leases with various expiration dates. The leases have remaining terms of 1 year to 23 years , some of which include options to extend for up to 5 years , and some of which include options to terminate within 1 year . The components of lease expense were as follows (in millions): Three Months Ended July 31, 2019 Six Months Ended July 31, 2019 Operating lease cost $ 217 $ 423 Finance lease cost: Amortization of right-of-use assets $ 17 $ 33 Interest on lease liabilities 5 11 Total finance lease cost $ 22 $ 44 Supplemental cash flow information related to operating and finance leases was as follows (in millions): Three Months Ended July 31, 2019 Six Months Ended July 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows for operating leases $ 209 $ 391 Operating cash outflows for finance leases 4 8 Financing cash outflows for finance leases 134 136 Right-of-use assets obtained in exchange for lease obligations: Operating leases 171 330 Supplemental balance sheet information related to operating and finance leases was as follows (in millions): As of July 31, 2019 Operating leases: Operating lease right-of-use assets $ 2,904 Operating lease liabilities, current $ 706 Noncurrent operating lease liabilities 2,341 Total operating lease liabilities $ 3,047 Finance leases: Buildings and building improvements $ 325 Computers, equipment and software 468 Accumulated depreciation (372 ) Property and equipment, net $ 421 Accrued expenses and other liabilities $ 76 Other noncurrent liabilities 336 Total finance lease liabilities $ 412 Other information related to leases was as follows: As of July 31, 2019 Weighted average remaining lease term Operating leases 7 years Finance leases 21 years Weighted average discount rate Operating leases 2.8 % Finance leases 4.5 % The weighted average remaining lease term for real estate leases with multiple floors with different lease end dates is calculated based on the lease end date for each individual floor. As of July 31, 2019 , the maturities of lease liabilities under non-cancelable operating and finance leases are as follows (in millions ): Operating Leases Finance Leases Fiscal Period: Remaining six months of Fiscal 2020 $ 384 $ 36 Fiscal 2021 723 67 Fiscal 2022 516 23 Fiscal 2023 356 23 Fiscal 2024 284 24 Thereafter 1,133 434 Total minimum lease payments 3,396 607 Less: Imputed interest (349 ) (195 ) Total $ 3,047 $ 412 Operating lease amounts above do not include sublease income. The Company has entered into various sublease agreements with third parties. Under these agreements, the Company expects to receive sublease income of approximately $14 million in the remainder of fiscal 2020, $130 million in the next four years and $73 million thereafter. The Company’s lease terms may include options to extend or terminate the lease. These options are reflected in the Company's future contractual obligations when it is reasonably certain that the Company will exercise that option. The Company did not use hindsight when determining lease term, therefore, as of July 31, 2019 , renewal options are only included for the Company's finance lease for 350 Mission. As of July 31, 2019 , the Company has additional operating leases that have not yet commenced totaling $2.0 billion and therefore not reflected on the condensed consolidated balance sheet and tables above. These operating leases include agreements for office facilities to be constructed. These operating leases will commence between fiscal year 2021 and fiscal year 2025 with lease terms of 9 to 17 years. Of the total operating lease commitment balance, including leases not yet commenced, of $5.4 billion , approximately $4.7 billion is related to facilities space. The remaining commitment amount is primarily related to equipment. Letters of Credit As of July 31, 2019 , the Company had a total of $92 million in letters of credit outstanding substantially in favor of certain landlords for office space. These letters of credit renew annually and expire at various dates through 2033 |
Legal Proceedings and Claims
Legal Proceedings and Claims | 6 Months Ended |
Jul. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings and Claims | Legal Proceedings and Claims In the ordinary course of business, the Company is or may be involved in various legal or regulatory proceedings, claims or purported class actions related to alleged infringement of third-party patents and other intellectual property rights, commercial, corporate and securities, labor and employment, wage and hour and other claims. The Company has been, and may in the future be put on notice or sued by third-parties for alleged infringement of their proprietary rights, including patent infringement. In December 2018, the Company was named as a nominal defendant and certain of its current and former directors were named as defendants in a purported shareholder derivative action in the Delaware Court of Chancery. The complaint alleged that excessive compensation was paid to such directors for their service, included claims of breach of fiduciary duty and unjust enrichment, and sought restitution and disgorgement of a portion of the directors' compensation. Subsequently, three similar shareholder derivative actions were filed in the Delaware Court of Chancery. The cases have been consolidated under the caption In re Salesforce.com, Inc. Derivative Litigation . The Company believes that the ultimate outcome of this litigation will not materially and adversely affect its business, financial condition, results of operations or cash flows. Tableau Litigation In July and August 2017, two substantially similar securities class action complaints were filed against Tableau Software, Inc. ("Tableau") and two of its now former executive officers. The first complaint was filed in the U.S. District for the Southern District of New York (the “Scheufele Action”). The second complaint was filed in the U.S. District Court for the Western District of Washington and was voluntarily dismissed on October 17, 2017. In December 2017, the lead plaintiff in the Scheufele Action filed an amended complaint, which alleged that between February 5, 2015 and February 4, 2016, Tableau and certain of its executive officers violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder, in connection with statements regarding Tableau’s business and operations by allegedly failing to disclose that product launches and software upgrades by competitors were negatively impacting Tableau’s competitive position and profitability. The amended complaint sought unspecified damages, interest, attorneys’ fees and other costs. In February 2018, the lead plaintiff filed a second amended complaint (the "SAC"), which contains substantially similar allegations as the amended complaint, and added as defendants two of Tableau’s now former executive officers and directors. Defendants filed a motion to dismiss the SAC in March 2018, which was denied in February 2019. Defendants filed an answer to the SAC in March 2019, and subsequently amended their answer in April 2019. In August 2018, Tableau was named as a nominal defendant in a purported shareholder derivative action in the United States District Court for the District of Delaware, allegedly on behalf of and for the benefit of Tableau, against certain of its now former directors and officers. The derivative action arises out of many of the factual allegations at issue in the Scheufele Action, and generally alleges that the individual defendants breached fiduciary duties owed to Tableau. The complaint seeks unspecified damages and equitable relief, attorneys' fees, costs and expenses. The case is currently stayed. In July 2019, three civil actions were filed against Tableau and each of the members of Tableau’s board of directors as of the dates of the complaints asserting claims under Sections 14(e), 14(d), and 20(a) of the Exchange Act challenging the adequacy of certain public disclosures made by Tableau concerning its proposed transaction with Salesforce. Salesforce was named as a defendant in one of these three actions. Specifically, Shiva Stein, a purported Tableau stockholder, commenced an action in the United States District Court for the District of Delaware (the “Stein Action”); Marcy Curtis, a purported Tableau stockholder, commenced a putative class action in the United States District Court for the District of Delaware (the “Curtis Action”); and Cathy O'Brien, a purported Tableau stockholder, commenced an action in the United States District Court for the Southern District of New York (the “O'Brien Action”). Salesforce was named as a defendant in the Curtis Action. The plaintiffs seek, among other things, an injunction that would have prevented the acquisition of Tableau by Salesforce, rescission of the transaction or rescissory damages, an accounting by the defendants for all damages caused to the plaintiffs, and the award of attorneys’ fees and expenses. Tableau has not answered the complaint in the Curtis, or O'Brien Actions, and Salesforce has not answered the complaint in the Curtis Action. In general, the resolution of a legal matter could prevent the Company from offering its service to others, could be material to the Company’s financial condition or cash flows, or both, or could otherwise adversely affect the Company’s operating results. The Company makes a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. The outcomes of legal proceedings and other contingencies are, however, inherently unpredictable and subject to significant uncertainties. As a result, the Company is not able to reasonably estimate the amount or range of possible losses in excess of any amounts accrued, including losses that could arise as a result of application of non-monetary remedies, with respect to the contingencies it faces, and the Company’s estimates may not prove to be accurate. In management’s opinion, resolution of all current matters is not expected to have a material adverse impact on the Company’s condensed consolidated results of operations, cash flows or financial position. However, depending on the nature and timing of any such dispute or other contingency, an unfavorable resolution of a matter could materially affect the Company’s current or future results of operations or cash flows, or both, in a particular quarter. |
Related-Party Transactions
Related-Party Transactions | 6 Months Ended |
Jul. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions In January 1999, the Foundation was chartered on an idea of leveraging the Company’s people, technology and resources to help improve communities around the world. The Company calls this integrated philanthropic approach the 1-1-1 model. Beginning in 2008, Salesforce.org, which was a non-profit public benefit corporation, was established to resell the Company's services to non-profit organizations and certain higher education organizations. As discussed in Note 6, in June 2019, the Company completed a business combination with Salesforce.org. The Company’s Chairman is the chairman of the Foundation and, prior to the closing of the business combination, was the chairman of Salesforce.org. The Company’s Chairman holds one of the three Foundation board seats. Prior to the closing of the business combination, the Company’s Chairman, one of the Company’s employees and one of the Company’s board members held three of Salesforce.org’s eight board seats. Prior to the closing of the business combination, the Company did not control the Foundation’s or Salesforce.org's activities, and accordingly, the Company did not consolidate either of the related entities' statement of activities with its financial results. Since the Foundation’s and Salesforce.org’s inception, and prior to the closing of the business combination with Salesforce.org, the Company provided at no charge certain resources to those entities' employees such as office space, furniture, equipment, facilities, services and other resources. The value of these items was approximately $6 million in fiscal 2020, prior to the business combination, and $7 million for the six months ended July 31, 2018 . Additionally, the Company allowed Salesforce.org to donate subscriptions of the Company’s services to other qualified non-profit organizations. Prior to the closing of the business combination with Salesforce.org, the value of the subscriptions sold by Salesforce.org to external customers pursuant to the reseller agreement, as amended, was approximately $110 million for fiscal 2020, prior to the business combination, and $117 million for the six months ended July 31, 2018 . As discussed in Note 6 "Business Combinations", in June 2019, the Company reorganized its relationship with Salesforce.org, which was accounted for as a business combination. This transaction did not change the relationship and accounting considerations with the Foundation, as described above. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jul. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Tableau Software, Inc. On August 1, 2019, pursuant to an Agreement and Plan of Merger dated June 9, 2019, the Company acquired all of the outstanding capital stock of Tableau, which provides a self-service analytics platform that enables users to easily access, prepare, analyze, and present findings in their data. The preliminary acquisition date fair value of the consideration transferred for Tableau is estimated to be approximately $14.9 billion comprised of $14.6 billion in common stock issued, or approximately 96 million shares, and $0.3 billion related to the fair value of stock options and restricted stock awards assumed. The Company will include the financial results of Tableau in the condensed consolidated financial statements from the date of the acquisition on August 1, 2019. In connection with the acquisition, the Company promptly obtained all regulatory clearances necessary to close, and no divestiture or other remedies were requested by the applicable authorities. In July 2019, the United Kingdom Competition and Markets Authority (the “CMA”) informed the parties that it planned to review the merger. On July 31, 2019, the CMA issued a “hold separate” order requiring Salesforce and Tableau to operate separately while the CMA conducts its review. Although the Company believes that the merger does not raise any competition concerns, it intends to fully comply with the CMA's order and keep the Tableau business operationally separate from Salesforce until the lifting of the order or conclusion of the CMA’s review. Salesforce is working constructively with the CMA to address the CMA's questions as it conducts this review. ClickSoftware Technologies Ltd. In August 2019, the Company agreed to acquire the holding company of ClickSoftware Technologies Ltd. (“ClickSoftware”). ClickSoftware is a software company providing field service management solutions. The total consideration for ClickSoftware is estimated to be approximately $1.35 billion |
Summary of Business and Signi_2
Summary of Business and Significant Accounting Policies (Policies) | 6 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
Fiscal Year | Fiscal Year The Company’s fiscal year ends on January 31. References to fiscal 2020 , for example, refer to the fiscal year ending January 31, 2020 . |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated balance sheets as of July 31, 2019 and January 31, 2019 and the condensed consolidated statements of operations, condensed consolidated statements of comprehensive income , condensed consolidated statements of stockholders' equity and condensed consolidated statements of cash flows for the three and six months ended July 31, 2019 and 2018 , respectively, are unaudited. These financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the financial information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s balance sheets as of July 31, 2019 and January 31, 2019 , and its results of operations, including its comprehensive income , stockholders' equity and its cash flows for the three and six months ended July 31, 2019 and 2018 . All adjustments are of a normal recurring nature. The results for the three and six months ended July 31, 2019 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending January 31, 2020 . These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2019 , filed with the Securities and Exchange Commission (the “SEC”) on March 8, 2019 . The Company prospectively adopted Accounting Standards Update No. 2016-02, "Leases (Topic 842)" ("ASU 2016-02"), also referred to as Topic 842, as discussed below. As a result, the condensed consolidated balance sheet as of July 31, 2019 is not comparable with that as of January 31, 2019. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions in the Company’s condensed consolidated financial statements and notes thereto. Significant estimates and assumptions made by management include the determination of: • the standalone selling price (SSP) of performance obligations for revenue contracts with multiple performance obligations; • the fair value of assets acquired and liabilities assumed for business combinations; • the recognition, measurement and valuation of current and deferred income taxes and uncertain tax positions; • the average period of benefit associated with costs capitalized to obtain revenue contracts; • the fair value of certain stock awards issued; • the useful lives of intangible assets; and • the valuation of privately-held strategic investments. Actual results could differ materially from those estimates. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the result of which forms the basis for making judgments about the carrying values of assets and liabilities. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. |
Segments | Segments The Company operates as one operating segment. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision makers in deciding how to allocate resources and assess performance. Over the past few years, the Company has completed a number of acquisitions. These acquisitions have allowed the Company to expand its offerings, presence and reach in various market segments of the enterprise cloud computing market. While the Company has offerings in multiple enterprise cloud computing market segments, including as a result of the Company's acquisitions, and operates in multiple countries, the Company’s business operates in one operating segment because most of the Company's offerings operate on its single Customer Success Platform and most of the Company's products are deployed in a nearly identical way, and the Company’s chief operating decision makers evaluate the Company’s financial information and resources and assess the performance of these resources on a consolidated basis. Since the Company operates in one operating segment, all required financial segment information can be found in the consolidated financial statements. |
Concentrations of Credit Risk, Significant Customers and Investments | Concentrations of Credit Risk, Significant Customers and Investments The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents, marketable securities and accounts receivable. Collateral is not required for accounts receivable. The Company maintains an allowance for its doubtful accounts receivable. This allowance is based upon historical loss patterns, the number of days that billings are past due and an evaluation of the potential risk of loss associated with delinquent accounts. Receivables are written-off and charged against the recorded allowance when the Company has exhausted collection efforts without success. No single customer accounted for more than five percent of accounts receivable at July 31, 2019 and January 31, 2019 . No single customer accounted for five percent or more of total revenue during the six months ended July 31, 2019 and 2018 , respectively. As of July 31, 2019 and January 31, 2019 , assets located outside the Americas were 15 percent and 14 percent of total assets, respectively. As of July 31, 2019 and January 31, 2019 , assets located in the United States were 83 percent and 84 percent of total assets, respectively. The Company is also exposed to concentrations of risk in its strategic investment portfolio. As of July 31, 2019 , the Company held one publicly traded investment with a carrying value that was greater than 15 percent of the Company's total strategic investments and four other investments with carrying values that were individually greater than five percent of its total strategic investments, of which two were publicly traded and two were privately held. As of January 31, 2019 , the Company held five investments that were individually greater than five percent of its total strategic investments, of which four were publicly traded and one was privately held. |
Revenue Recognition and Costs Capitalized to Obtain Revenue Contracts | Revenue Recognition The Company derives its revenues from two sources: (1) subscription revenues, which are comprised of subscription fees from customers accessing the Company’s enterprise cloud computing services (collectively, "Cloud Services"), software licenses, and from customers paying for additional support beyond the standard support that is included in the basic subscription fees; and (2) related professional services such as process mapping, project management and implementation services. Other revenue consists primarily of training fees. Revenue is recognized upon transfer of control of promised products and services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. If the consideration promised in a contract includes a variable amount, for example, overage fees, contingent fees or service level penalties, the Company includes an estimate of the amount it expects to receive for the total transaction price if it is probable that a significant reversal of cumulative revenue recognized will not occur. The Company determines the amount of revenue to be recognized through application of the following steps: • Identification of the contract, or contracts with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when or as the Company satisfies the performance obligations. The Company’s subscription service arrangements are non-cancelable and do not contain refund-type provisions. Subscription and Support Revenues Subscription and support revenues are comprised of fees that provide customers with access to Cloud Services, software licenses and related support and updates during the term of the arrangement. Cloud Services allow customers to use the Company's multi-tenant software without taking possession of the software. Revenue is generally recognized ratably over the contract term. Since the May 2018 acquisition of MuleSoft, Inc. ("MuleSoft"), subscription and support revenues also includes software licenses. These licenses for on-premises software provide the customer with a right to use the software as it exists when made available. Customers purchase these licenses through a subscription. Revenues from distinct licenses are generally recognized upfront when the software is made available to the customer. In cases where the Company allocates revenue to software updates and support, primarily because the updates are provided at no additional charge, such revenue is recognized as the updates are provided, which is generally ratably over the contract term. The Company typically invoices its customers annually. Typical payment terms provide that customers pay within 30 days of invoice. Amounts that have been invoiced are recorded in accounts receivable and in unearned revenue or revenue, depending on whether transfer of control to customers has occurred. Professional Services and Other Revenues The Company’s professional services contracts are either on a time and materials, fixed fee or subscription basis. These revenues are recognized as the services are rendered for time and materials contracts, on a proportional performance basis for fixed price contracts or ratably over the contract term for subscription professional services contracts. Training revenues are recognized as the services are performed. Significant Judgments - Contracts with Multiple Performance Obligations The Company enters into contracts with its customers that may include promises to transfer multiple Cloud Services, software licenses, premium support and professional services. A performance obligation is a promise in a contract with a customer to transfer products or services that are distinct. Determining whether products and services are distinct performance obligations that should be accounted for separately or combined as one unit of accounting may require significant judgment. Cloud Services and software licenses are distinct because such offerings are often sold separately. In determining whether professional services are distinct, the Company considers the following factors for each professional services agreement: availability of the services from other vendors, the nature of the professional services, the timing of when the professional services contract was signed in comparison to the subscription start date and the contractual dependence of the service on the customer’s satisfaction with the professional services work. To date, the Company has concluded that all of the professional services included in contracts with multiple performance obligations are distinct. The Company allocates the transaction price to each performance obligation on a relative standalone selling price ("SSP") basis. The SSP is the price at which the Company would sell a promised product or service separately to a customer. Judgment is required to determine the SSP for each distinct performance obligation. The Company determines SSP by considering its overall pricing objectives and market conditions. Significant pricing practices taken into consideration include the Company’s discounting practices, the size and volume of the Company’s transactions, the customer demographic, the geographic area where services are sold, price lists, the Company's go-to-market strategy, historical sales and contract prices. As the Company’s go-to-market strategies evolve, the Company may modify its pricing practices in the future, which could result in changes to SSP. In certain cases, the Company is able to establish SSP based on observable prices of products or services sold separately in comparable circumstances to similar customers. The Company uses a single amount to estimate SSP when it has observable prices. If SSP is not directly observable, for example when pricing is highly variable, the Company uses a range of SSP. The Company determines the SSP range using information that may include market conditions or other observable inputs. The Company typically has more than one SSP for individual products and services due to the stratification of those products and services by customer size and geography. Costs Capitalized to Obtain Revenue Contracts The Company capitalizes incremental costs of obtaining a non-cancelable subscription and support revenue contract. The capitalized amounts consist primarily of sales commissions paid to the Company’s direct sales force. Capitalized amounts also include (1) amounts paid to employees other than the direct sales force who earn incentive payouts under annual compensation plans that are tied to the value of contracts acquired, (2) commissions paid to employees upon renewals of subscription and support contracts, (3) the associated payroll taxes and fringe benefit costs associated with the payments to the Company’s employees, and to a lesser extent (4) success fees paid to partners in emerging markets where the Company has a limited presence. Costs capitalized related to new revenue contracts are amortized on a straight-line basis over four years , which, although longer than the typical initial contract period, reflects the average period of benefit, including expected contract renewals. In arriving at this average period of benefit, the Company evaluated both qualitative and quantitative factors which included the estimated life cycles of its offerings and its customer attrition. Additionally, the Company amortizes capitalized costs for renewals and success fees paid to partners over two years . The capitalized amounts are recoverable through future revenue streams under all non-cancelable customer contracts. The Company periodically evaluates whether there have been any changes in its business, the market conditions in which it operates or other events which would indicate that its amortization period should be changed or if there are potential indicators of impairment. Amortization of capitalized costs to obtain revenue contracts is included in marketing and sales expense in the accompanying condensed consolidated statements of operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents are stated at fair value. |
Marketable Securities | Marketable Securities The Company considers all of its marketable debt securities as available for use in current operations, including those with maturity dates beyond one year, and therefore classifies these securities within current assets on the condensed consolidated balance sheets. Securities are classified as available for sale and are carried at fair value, with the change in unrealized gains and losses, net of tax, reported as a separate component on the condensed consolidated statements of comprehensive income until realized. Fair value is determined based on quoted market rates when observable or utilizing data points that are observable, such as quoted prices, interest rates and yield curves. Declines in fair value judged to be other-than-temporary on securities available for sale are included as a reduction to investment income. To determine whether a decline in value is other-than-temporary, the Company evaluates, among other factors: the duration and extent to which the fair value has been less than the carrying value and its intent and ability to retain the investment for a period of time sufficient to allow for any anticipated recovery in fair value. For the purposes of computing realized and unrealized gains and losses, the cost of securities sold is based on the specific-identification method. Interest on securities classified as available for sale is included as a component of investment income. |
Strategic Investments | Strategic Investments The Company holds strategic investments in publicly held equity securities and privately held debt and equity securities in which the Company does not have a controlling interest or significant influence. Publicly held equity securities are measured using quoted prices in their respective active markets with changes recorded through gains (losses) on strategic investments, net on the condensed consolidated statement of operations . Privately held equity securities without a readily determinable fair value are recorded at cost and adjusted for impairments and observable price changes with a same or similar security from the same issuer and are recorded through gains on strategic investments, net on the condensed consolidated statement of operations . Privately held debt securities are recorded at fair value with changes in fair value recorded through accumulated other comprehensive income on the condensed consolidated balance sheet. If, based on the terms of these publicly traded and privately held securities, the Company determines that the Company exercises significant influence on the entity to which these securities relate, the Company will apply the equity method of accounting for such investments. Privately held debt and equity securities are valued using significant unobservable inputs or data in an inactive market and the valuation requires the Company's judgment due to the absence of market prices and inherent lack of liquidity. The carrying value is not adjusted for the Company's privately held equity securities if there are no observable price changes in a same or similar security from the same issuer or if there are no identified events or changes in circumstances that may indicate impairment, as discussed below. In determining the estimated fair value of its strategic investments in privately held companies, the Company utilizes the most recent data available to the Company. Valuations of privately held companies are inherently complex due to the lack of readily available market data. In addition, the determination of whether an orderly transaction is for a same or similar investment requires significant management judgment including the nature of rights and obligations of the investments, the extent to which differences in those rights and obligations would affect the fair values of those investments, and the impact of any differences based on the stage of operational development of the investee. The Company assesses its privately held debt and equity securities strategic investment portfolio at least quarterly for impairment. The Company’s impairment analysis encompasses an assessment of the severity and duration of the impairment and qualitative and quantitative analysis of other key factors including the investee’s financial metrics, the investee’s products and technologies meeting or exceeding predefined milestones, market acceptance of the product or technology, other competitive products or technology in the market, general market conditions, management and governance structure of the investee, the investee’s liquidity, debt ratios and the rate at which the investee is using its cash. If the investment is considered to be impaired, the Company recognizes an impairment through the condensed consolidated statement of operations and establishes a new carrying value for the investment. |
Derivative Financial Instruments | Derivative Financial Instruments The Company enters into foreign currency derivative contracts with financial institutions to reduce foreign exchange risk. The Company uses forward currency derivative contracts to minimize the Company’s exposure to balances primarily denominated in the Euro, British Pound Sterling, Japanese Yen, Canadian Dollar and Australian Dollar. The Company’s foreign currency derivative contracts, which are not designated as hedging instruments, are used to reduce the exchange rate risk associated primarily with intercompany receivables and payables. The Company’s derivative financial instruments program is not designated for trading or speculative purposes. The Company generally enters into master netting arrangements with the financial institutions with which it contracts for such derivative contracts, which permit net settlement of transactions with the same counterparty, thereby reducing credit-related losses in the event of the financial institutions' nonperformance. As of July 31, 2019 and January 31, 2019 , the outstanding foreign currency derivative contracts were recorded at fair value on the condensed consolidated balance sheets. Foreign currency derivative contracts are marked-to-market at the end of each reporting period with gains and losses recognized as other expense to offset the gains or losses resulting from the settlement or remeasurement of the underlying foreign currency denominated receivables and payables. While the contract or notional amount is often used to express the volume of foreign currency derivative contracts, the amounts potentially subject to credit risk are generally limited to the amounts, if any, by which the counterparties’ obligations under the agreements exceed the obligations of the Company to the counterparties. |
Fair Value Measurement | Fair Value Measurement The Company measures its cash and cash equivalents, marketable securities and foreign currency derivative contracts at fair value. In addition, the Company measures its strategic investments, including its publicly held equity securities, privately held debt securities and privately held equity securities for which there has been an observable price change in a same or similar security, at fair value. The additional disclosures regarding the Company’s fair value measurements are included in Note 5 “Fair Value Measurement.” |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. Depreciation is calculated on a straight-line basis over the estimated useful lives of those assets as follows: Computers, equipment and software 3 to 9 years Furniture and fixtures 5 years Leasehold improvements Shorter of the estimated lease term or 10 years Building and structural components Average weighted useful life of 32 years Building improvements 10 years When assets are retired or otherwise disposed of, the cost and accumulated depreciation and amortization are removed from their respective accounts and any loss on such retirement is reflected in operating expenses. |
Capitalized Software Costs | Capitalized Software Costs The Company capitalizes costs related to its enterprise cloud computing services and certain projects for internal use incurred during the application development stage. Costs related to preliminary project activities and post implementation activities are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life, which is generally three to five years . Management evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. |
Intangible Assets acquired through Business Combinations | Intangible Assets Acquired through Business Combinations Intangible assets are amortized over their estimated useful lives. Each period, the Company evaluates the estimated remaining useful life of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization. Management tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets. |
Impairment Assessment | Impairment Assessment The Company evaluates intangible assets and long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. This includes but is not limited to significant adverse changes in business climate, market conditions, or other events that indicate an asset's carrying amount may not be recoverable. Recoverability of these assets is measured by comparing the carrying amount of each asset to the future undiscounted cash flows the asset is expected to generate. If the undiscounted cash flows used in the test for recoverability are less than the carrying amount of these assets, the carrying amount of such assets is reduced to fair value. The Company evaluates and tests the recoverability of its goodwill for impairment at least annually during its fourth quarter of each fiscal year or more often if and when circumstances indicate that goodwill may not be recoverable. |
Business Combinations | Business Combinations The Company uses its best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The Company’s estimates are inherently uncertain and subject to refinement. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. In addition, uncertain tax positions and tax-related valuation allowances are initially recorded in connection with a business combination as of the acquisition date. The Company continues to collect information and reevaluates these estimates and assumptions quarterly and records any adjustments to the Company’s preliminary estimates to goodwill provided that the Company is within the measurement period. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s condensed consolidated statement of operations . In the event the Company acquires an entity with which the Company has a preexisting relationship, the Company will recognize a gain or loss to settle that relationship as of the acquisition date within the condensed consolidated statements of operations. In the event that the Company acquires an entity in which the Company previously held a strategic investment, the difference between the fair value of the shares as of the date of the acquisition and the carrying value of the strategic investment is recorded as a gain or loss and recorded within net gains (losses) on strategic investments in the condensed consolidated statement of operations . |
Leases | Leases Effective at the start of fiscal 2020, the Company adopted the provisions and expanded disclosure requirements described in Topic 842. The Company adopted the standard using the prospective method. Accordingly, the results for the prior comparable periods were not adjusted to conform to the current period measurement or recognition of results. The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities, current and noncurrent operating lease liabilities on the Company’s condensed consolidated balance sheets. Finance leases are included in property and equipment, accrued expenses and other liabilities, and other noncurrent liabilities on the Company’s condensed consolidated balance sheets. ROU assets represent the Company's right to use an underlying asset for the lease term and the corresponding lease liabilities represent its obligation to make lease payments arising from the lease. Lease ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The lease ROU asset is reduced for tenant incentives and excludes any initial direct costs incurred. As the Company’s leases do not provide an implicit rate, the net present value of future minimum lease payments is determined using the Company’s incremental borrowing rate. The Company's incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, in an economic environment where the leased asset is located. The Company’s lease terms may include options to extend or terminate the lease. These options are reflected in the ROU asset and lease liability when it is reasonably certain that the Company will exercise the option. The Company reassesses the lease term if and when a significant event or change in circumstances occurs within the control of the Company, such as construction of significant leasehold improvements that are expected to have economic value when the option becomes exercisable. Lease expenses for minimum lease payments for operating leases are recognized on a straight-line basis over the lease term. Amortization expense of the ROU asset for finance leases is recognized on a straight-line basis over the lease term and interest expense for finance leases is recognized based on the incremental borrowing rate. The Company has lease agreements with lease and non-lease components, which it has elected to combine for all asset classes. In addition, the Company does not recognize ROU assets or lease liabilities for leases with a term of 12 months or less of all asset classes. On the lease commencement date the Company establishes assets and liabilities for the present value of estimated future costs to retire long-lived assets at the termination or expiration of a lease. Such assets are depreciated over the lease term to operating expense. The Company additionally has entered into subleases for unoccupied leased office space. Any impairments to the ROU asset, leasehold improvements or other assets as a result of a sublease are recognized in the period the sublease is executed and recorded as an operating expense. Any sublease payments received in excess of the straight-line rent payments for the sublease are recorded as an offset to operating expenses and recognized over the sublease life. |
Stock-Based Expense | Stock-Based Expense Stock-based expenses related to stock options are measured based on grant date at fair value using the Black-Scholes option pricing model and restricted stock awards based on grant date at fair value using the closing stock price. The Company recognizes stock-based expenses related to stock options and restricted stock awards on a straight-line basis, net of estimated forfeitures, over the requisite service period of the awards, which is generally the vesting term of four years . Stock-based expenses related to its Amended and Restated 2004 Employee Stock Purchase Plan (“ESPP” or “2004 Employee Stock Purchase Plan”) are measured based on grant date at fair value using the Black-Scholes option pricing model. The Company recognizes stock-based expenses related to shares issued pursuant to the 2004 Employee Stock Purchase Plan on a straight-line basis over the offering period, which is 12 months . The ESPP allows employees to purchase shares of the Company's common stock at a 15 percent discount and also allows employees to reduce their percentage election once during a six month purchase period (December 15 and June 15 of each fiscal year), but not increase that election until the next one-year offering period. The ESPP also includes a re-set provision for the purchase price if the stock price on the purchase date is less than the stock price on the offering date. Stock-based expenses related to performance share grants, which are awarded to executive officers, are measured based on grant date at fair value using a Monte Carlo simulation model and expensed on a straight-line basis, net of estimated forfeitures, over the service period of the awards, which is generally the vesting term of three years . The Company, at times, grants unvested restricted shares to employee stockholders of certain acquired companies in lieu of cash consideration. These awards are generally subject to continued post-acquisition employment. Therefore, the Company accounts for them as post-acquisition stock-based expense. The Company recognizes stock-based expense equal to the grant date fair value of the restricted stock awards on a straight-line basis over the requisite service period of the awards, which is generally four years . |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on temporary differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax laws is recognized in the condensed consolidated statements of operations in the period that includes the enactment date. The Company’s tax positions are subject to income tax audits by multiple tax jurisdictions throughout the world. The Company recognizes the tax benefit of an uncertain tax position only if it is more likely than not that the position is sustainable upon examination by the taxing authority, solely based on its technical merits. The tax benefit recognized is measured as the largest amount of benefit which is greater than 50 percent likely to be realized upon settlement with the taxing authority. The Company recognizes interest accrued and penalties related to unrecognized tax benefits in the income tax provision. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts that are more likely than not expected to be realized based on the weighting of positive and negative evidence. Future realization of deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character (for example, ordinary income or capital gain) within the carryback or carryforward periods available under the applicable tax law. The Company regularly reviews the deferred tax assets for recoverability based on historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. The Company’s judgments regarding future profitability may change due to many factors, including future market conditions and the ability to successfully execute its business plans. Should there be a change in the ability to recover deferred tax assets, the tax provision would increase or decrease in the period in which the assessment is changed. |
Foreign Currency Translation | Foreign Currency Translation The functional currency of the Company’s major foreign subsidiaries is generally the local currency. Adjustments resulting from translating foreign functional currency financial statements into U.S. dollars are recorded as a separate component on the condensed consolidated statement of comprehensive income. Foreign currency transaction gains and losses are included in other income in the condensed consolidated statement of operations for the period. All assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the exchange rate on the balance sheet date. Revenues and expenses are translated at the average exchange rate during the period. Equity transactions are translated using historical exchange rates. |
Warranties and Indemnification | Warranties and Indemnification The Company’s enterprise cloud computing services are typically warranted to perform in a manner consistent with general industry standards that are reasonably applicable and materially in accordance with the Company’s online help documentation under normal use and circumstances. The Company’s arrangements generally include certain provisions for indemnifying customers against liabilities if its products or services infringe a third party’s intellectual property rights. To date, the Company has not incurred any material costs as a result of such obligations and has not accrued any material liabilities related to such obligations in the accompanying condensed consolidated financial statements. The Company has also agreed to indemnify its directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by the Company, arising out of that person’s services as the Company’s director or officer or that person’s services provided to any other company or enterprise at the Company’s request. The Company maintains director and officer insurance coverage that would generally enable the Company to recover a portion of any future amounts paid. The Company may also be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions. |
New Accounting Pronouncements Adopted and Pending Adoption | New Accounting Pronouncements Adopted in Fiscal 2020 ASU 2016-02 In February 2016, the FASB issued Topic 842, which requires lessees to record most leases on their balance sheet but recognize the expenses on their statement of operations and cash flows on the statement of cash flows in a manner similar to previous accounting guidance. Topic 842 generally requires that lessees recognize operating and financing liabilities for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. Effective on February 1, 2019, the Company adopted the provisions and expanded disclosure requirements described in Topic 842. The Company adopted the standard using the transitional provision of Accounting Standards Update 2018-11, “Leases (Topic 842) Targeted Improvements” (“ASU 2018-11”), which allows for the adoption of Topic 842 to be applied prospectively at the beginning of the fiscal year of adoption. As such, the condensed consolidated balance sheet is not comparable with that as of January 31, 2019 . The Company elected the package of practical expedients and therefore did not reassess prior conclusions on whether contracts are or contain a lease, lease classification, and initial direct costs. The Company did not use hindsight when determining the lease term. Upon adoption of Topic 842, leases previously designated as operating leases are now reported on the condensed consolidated balance sheet, which has materially increased total assets and liabilities. Specifically, the Company recorded operating lease ROU assets of approximately $2.9 billion and corresponding operating lease liabilities of $3.1 billion on its opening condensed consolidated balance sheet. Leases previously designated as capital leases are now identified as finance leases and continue to be reported on the condensed consolidated balance sheet. In addition, the previously recorded financing obligation and building asset associated with the Company's leased facility at 350 Mission Street was derecognized and the lease is now accounted for as a finance lease on the Company's condensed consolidated balance sheet. Topic 842 did not have a material impact to the Company’s condensed consolidated statement of operations or net cash provided by operating activities. The adoption did not impact the Company’s compliance with its debt covenants. Accounting Pronouncements Pending Adoption ASU 2016-13 In June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13) "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost, which includes the Company's accounts receivables, certain financial instruments and contract assets. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. ASU 2016-13 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2019, and requires a cumulative effect adjustment to the balance sheet as of the beginning of the first reporting period in which the guidance is effective. The Company is evaluating the impact of the adoption of ASU 2016-13 on its consolidated financial statements in order to adopt the new standard in the first quarter of fiscal 2021. |
Reclassifications | Reclassifications Certain reclassifications to fiscal 2019 balances were made to conform to the current period presentation in the condensed consolidated balance sheets, statements of operations and statements of cash flows. These reclassifications did not affect net cash provided by operating, investing, or financing activities. |
Summary of Business and Signi_3
Summary of Business and Significant Accounting Policies (Tables) | 6 Months Ended |
Jul. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Property and Equipment Estimated Useful Lives | Property and equipment are stated at cost. Depreciation is calculated on a straight-line basis over the estimated useful lives of those assets as follows: Computers, equipment and software 3 to 9 years Furniture and fixtures 5 years Leasehold improvements Shorter of the estimated lease term or 10 years Building and structural components Average weighted useful life of 32 years Building improvements 10 years |
Revenues (Tables)
Revenues (Tables) | 6 Months Ended |
Jul. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Disaggregation of Revenue Subscription and Support Revenue by the Company's service offerings Subscription and support revenues consisted of the following (in millions ): Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Sales Cloud $ 1,130 $ 1,004 $ 2,203 $ 1,969 Service Cloud 1,087 892 2,107 1,740 Salesforce Platform and Other 912 712 1,754 1,287 Marketing and Commerce Cloud 616 452 1,177 874 $ 3,745 $ 3,060 $ 7,241 $ 5,870 Total Revenue by Geographic Locations Revenues by geographical region consisted of the following (in millions ): Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Americas $ 2,816 $ 2,338 $ 5,433 $ 4,439 Europe 786 629 1,541 1,235 Asia Pacific 395 314 760 613 $ 3,997 $ 3,281 $ 7,734 $ 6,287 |
Unearned Revenue | The change in unearned revenue was as follows (in millions ): Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Unearned revenue, beginning of period $ 7,585 $ 6,201 $ 8,564 $ 6,995 Billings and other* 3,396 2,875 6,110 5,086 Contribution from contract asset 7 31 51 25 Revenue recognized ratably over time (3,736 ) (3,056 ) (7,223 ) (5,924 ) Revenue recognized over time as delivered (174 ) (162 ) (346 ) (299 ) Revenue recognized at a point in time (87 ) (63 ) (165 ) (64 ) Unearned revenue from business combinations 151 57 151 64 Unearned revenue, end of period $ 7,142 $ 5,883 $ 7,142 $ 5,883 *Other includes, for example, the impact of foreign currency translation |
Remaining Transaction Price | Remaining performance obligation consisted of the following (in billions): Current Noncurrent Total As of July 31, 2019 $ 12.1 $ 13.2 $ 25.3 As of January 31, 2019 $ 11.9 $ 13.8 $ 25.7 |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jul. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Marketable Securities | At July 31, 2019 , marketable securities consisted of the following (in millions ): Investments classified as Marketable Securities Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate notes and obligations $ 1,474 $ 3 $ (1 ) $ 1,476 U.S. treasury securities 123 0 (1 ) 122 Mortgage backed obligations 88 0 0 88 Asset backed securities 504 1 0 505 Municipal securities 109 0 0 109 Foreign government obligations 49 0 0 49 U.S. agency obligations 10 0 0 10 Time deposits 8 0 0 8 Covered bonds 165 0 0 165 Total marketable securities $ 2,530 $ 4 $ (2 ) $ 2,532 At January 31, 2019 , marketable securities consisted of the following (in millions ): Investments classified as Marketable Securities Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate notes and obligations $ 1,027 $ 0 $ (8 ) $ 1,019 U.S. treasury securities 89 0 (1 ) 88 Mortgage backed obligations 79 0 (1 ) 78 Asset backed securities 245 0 (1 ) 244 Municipal securities 104 0 0 104 Foreign government obligations 58 0 (1 ) 57 U.S. agency obligations 4 0 0 4 Time deposits 4 0 0 4 Covered bonds 75 0 0 75 Total marketable securities $ 1,685 $ 0 $ (12 ) $ 1,673 |
Schedule of Short-Term and Long-Term Marketable Securities | The contractual maturities of the investments classified as marketable securities are as follows (in millions ): As of July 31, 2019 January 31, 2019 Due within 1 year $ 1,081 $ 482 Due in 1 year through 5 years 1,446 1,189 Due in 5 years through 10 years 5 2 $ 2,532 $ 1,673 |
Schedule of Marketable Securities in a Unrealized Loss Position | As of July 31, 2019 , the following marketable securities were in an unrealized loss position (in millions ): Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Corporate notes and obligations $ 0 $ 0 $ 158 $ (1 ) $ 158 $ (1 ) U.S. treasury securities 0 0 47 (1 ) 47 (1 ) $ 0 $ 0 $ 205 $ (2 ) $ 205 $ (2 ) |
Schedule of Components of Investment Income | The components of investment income are presented below (in millions ): Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Interest income $ 31 $ 12 $ 57 $ 32 Realized gains 1 0 1 1 Realized losses (1 ) 0 (1 ) (5 ) Investment income $ 31 $ 12 $ 57 $ 28 |
Schedules of Strategic Investments | Strategic investments by form and measurement category as of July 31, 2019 were as follows (in millions ): Measurement Category Fair Value (1) Measurement Alternative Other (2) Total Equity securities $ 607 $ 917 $ 57 $ 1,581 Debt securities 0 0 33 33 Balance as of July 31, 2019 $ 607 $ 917 $ 90 $ 1,614 (1) Equity securities under fair value represent the carrying value of strategic investments in publicly held equity securities. (2) Other includes the Company's investments accounted for under the equity method of accounting or amortized cost. Strategic investments by form and measurement category as of January 31, 2019 were as follows (in millions ): Measurement Category Fair Value (1) Measurement Alternative Other (2) Total Equity securities $ 436 $ 785 $ 50 $ 1,271 Debt securities 0 0 31 31 Balance as of January 31, 2019 $ 436 $ 785 $ 81 $ 1,302 (1) Equity securities under fair value represent the carrying value of strategic investments in publicly held equity securities. (2) Other includes the Company's investments accounted for under the equity method of accounting or amortized cost. Measurement Alternative Adjustments Privately held equity securities accounted for under the measurement alternative included in the table above for the three and six months ended July 31, 2019 and 2018 were as follows (in millions ): Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Carrying amount, beginning of period $ 927 $ 554 $ 785 $ 548 Adjustments related to privately held equity securities: Net additions (reductions) (1) (9 ) 19 11 30 Impairments and downward adjustments (33 ) (5 ) (51 ) (23 ) Upward adjustments 32 99 172 112 Carrying amount, end of period $ 917 $ 667 $ 917 $ 667 (1) Net reductions include sales of securities and reclassifications due to changes to capital structure. Since the adoption of ASU 2016-01 on February 1, 2018, cumulative impairments and downward adjustments were $83 million and cumulative upward adjustments were $346 million through July 31, 2019 . Gains (losses) on strategic investments, net Gains and losses recognized in the three and six months ended July 31, 2019 and 2018 were as follows (in millions): 2 Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Net gains recognized on publicly traded securities $ 66 $ 65 $ 216 $ 276 Net gains recognized on privately held securities 0 90 122 81 Net gains recognized on sales of equity securities 43 1 62 9 Net gains (losses) recognized on debt securities 0 (13 ) (10 ) (12 ) Gains on strategic investments, net $ 109 $ 143 $ 390 $ 354 |
Derivatives (Tables)
Derivatives (Tables) | 6 Months Ended |
Jul. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Outstanding Foreign Currency Derivative Contracts Related Primarily to Intercompany Receivables and Payables | Details on outstanding foreign currency derivative contracts are presented below (in millions ): As of July 31, 2019 January 31, 2019 Notional amount of foreign currency derivative contracts $ 4,420 $ 4,496 Fair value of foreign currency derivative contracts (22 ) 25 |
Fair Value of Outstanding Derivative Instruments | The fair value of the Company’s outstanding derivative instruments not designated as hedging instruments are summarized below (in millions ): As of Balance Sheet Location July 31, 2019 January 31, 2019 Foreign currency derivative contracts Prepaid expenses and other current assets $ 37 $ 42 |
Schedule of The Effect of The Derivative Instruments Not Designated as Hedging Instruments on the Condensed Consolidated Statements of Operations | Gains (losses) on derivative instruments not designated as hedging instruments recorded in other income in the condensed consolidated statements of operations during the three and six months ended July 31, 2019 and 2018 , respectively, are summarized below (in millions ): Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Foreign currency derivative contracts $ (35 ) $ (10 ) $ 1 $ 10 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 6 Months Ended |
Jul. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value an a Recurring Basis | The following table presents information about the Company’s assets that are measured at fair value as of July 31, 2019 and indicates the fair value hierarchy of the valuation (in millions ): Description Quoted Prices in Significant Other Significant Balance as of Cash equivalents (1): Time deposits $ 0 $ 622 $ 0 $ 622 Money market mutual funds 829 0 0 829 Marketable securities: Corporate notes and obligations 0 1,476 0 1,476 U.S. treasury securities 0 122 0 122 Mortgage backed obligations 0 88 0 88 Asset backed securities 0 505 0 505 Municipal securities 0 109 0 109 Foreign government obligations 0 49 0 49 U.S. agency obligations 0 10 0 10 Time deposits 0 8 0 8 Covered bonds 0 165 0 165 Strategic investments: Publicly held equity securities 607 0 0 607 Foreign currency derivative contracts (2) 0 37 0 37 Total assets $ 1,436 $ 3,191 $ 0 $ 4,627 ___________ (1) Included in “cash and cash equivalents” in the accompanying condensed consolidated balance sheet as of July 31, 2019 , in addition to $2.1 billion of cash. (2) Included in “prepaid expenses and other current assets” in the accompanying condensed consolidated balance sheet as of July 31, 2019 . The following table presents information about the Company’s assets that are measured at fair value as of January 31, 2019 and indicates the fair value hierarchy of the valuation (in millions ): Description Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance as of January 31, 2019 Cash equivalents (1): Time deposits $ 0 $ 314 $ 0 $ 314 Money market mutual funds 1,234 0 0 1,234 Marketable securities: Corporate notes and obligations 0 1,019 0 1,019 U.S. treasury securities 0 88 0 88 Mortgage backed obligations 0 78 0 78 Asset backed securities 0 244 0 244 Municipal securities 0 104 0 104 Foreign government obligations 0 57 0 57 U.S. agency obligations 0 4 0 4 Time deposits 0 4 0 4 Covered bonds 0 75 0 75 Strategic investments: Publicly held equity securities 436 0 0 436 Foreign currency derivative contracts (2) 0 42 0 42 Total assets $ 1,670 $ 2,029 $ 0 $ 3,699 ______________ (1) Included in “cash and cash equivalents” in the accompanying condensed consolidated balance sheet as of January 31, 2019 , in addition to $1.1 billion of cash. (2) Included in “prepaid expenses and other current assets” in the accompanying condensed consolidated balance sheet as of January 31, 2019 . |
Business Combinations (Tables)
Business Combinations (Tables) | 6 Months Ended |
Jul. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of Consideration Transferred | The following table summarizes the business combination (in millions): Cash $ 300 Loss on settlement of Salesforce.org reseller agreement (166 ) Total $ 134 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the fair value of assets acquired and liabilities assumed as of the date of acquisition (in millions): Fair Value Cash and cash equivalents $ 54 Deferred tax asset, current 47 Other current and noncurrent assets 46 Goodwill 164 Accounts payable, accrued expenses and other liabilities, current and noncurrent (39 ) Unearned revenue (138 ) Net assets acquired $ 134 |
Intangible Assets Acquired Th_2
Intangible Assets Acquired Through Business Combinations and Goodwill (Tables) | 6 Months Ended |
Jul. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets Acquired From Business Combinations | Intangible assets acquired through business combinations are as follows (in millions ): Intangible Assets, Gross Accumulated Amortization Intangible Assets, Net Weighted Jan 31, 2019 Additions and retirements, net July 31, 2019 Jan 31, 2019 Expense and retirements, net July 31, 2019 Jan 31, 2019 July 31, 2019 Acquired developed technology $ 1,429 $ 33 $ 1,462 $ (889 ) $ (123 ) $ (1,012 ) $ 540 $ 450 2.6 Customer relationships 1,938 25 1,963 (560 ) (129 ) (689 ) 1,378 1,274 5.9 Other (1) 52 0 52 (47 ) (4 ) (51 ) 5 1 1.0 Total $ 3,419 $ 58 $ 3,477 $ (1,496 ) $ (256 ) $ (1,752 ) $ 1,923 $ 1,725 5.0 (1) Included in other are trade names, trademarks and territory rights. |
Expected Future Amortization Expense for Purchased Intangible Assets | The expected future amortization expense for intangible assets as of July 31, 2019 is as follows (in millions ): Fiscal Period: Remaining six months of Fiscal 2020 $ 228 Fiscal 2021 429 Fiscal 2022 366 Fiscal 2023 218 Fiscal 2024 152 Thereafter 332 Total amortization expense $ 1,725 |
Schedule of Goodwill | The changes in the carrying amounts of goodwill, which is generally not deductible for tax purposes, were as follows (in millions ): Balance as of January 31, 2019 $ 12,851 Salesforce.org 164 MapAnything 152 Other acquisitions and adjustments (1) 32 Balance as of July 31, 2019 $ 13,199 (1) Adjustments include adjustments of acquisition date fair value, including the effect of foreign currency translation. |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jul. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The carrying values of the Company's borrowings were as follows (in millions ): Instrument Date of issuance Maturity date Effective interest rate for the three months ended July 31, 2019 July 31, 2019 January 31, 2019 2021 Term Loan May 2018 May 2021 3.18% $ 299 (1) $ 499 2023 Senior Notes April 2018 April 2023 3.26% 994 993 2028 Senior Notes April 2018 April 2028 3.70% 1,489 1,488 Loan assumed on 50 Fremont February 2015 June 2023 3.75% 195 196 Total carrying value of debt 2,977 3,176 Less current portion of debt (4 ) (3 ) Total noncurrent debt $ 2,973 $ 3,173 (1) The Company repaid $200 million of the 2021 Term Loan in June 2019. |
Schedule of Maturities of Long-term Debt | The expected future principal payments for all borrowings as of July 31, 2019 is as follows (in millions ): Fiscal period: Remaining six months of Fiscal 2020 $ 2 Fiscal 2021 4 Fiscal 2022 304 Fiscal 2023 4 Fiscal 2024 1,182 Thereafter 1,500 Total principal outstanding $ 2,996 |
Schedule of Interest Expense | The following table sets forth total interest expense recognized related to debt (in millions ): Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Contractual interest expense $ 28 $ 31 $ 56 $ 42 Amortization of debt issuance costs 1 1 2 13 Amortization of debt discount 0 0 0 4 $ 29 $ 32 $ 58 $ 59 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jul. 31, 2019 | |
Equity [Abstract] | |
Share-based Compensation, Stock Options, Activity | Stock option activity for the six months ended July 31, 2019 is as follows: Options Outstanding Outstanding Stock Options (in millions) Weighted- Average Exercise Price Aggregate Intrinsic Value (in millions) Balance as of January 31, 2019 26 $ 74.15 Options granted under all plans 6 160.40 Exercised (3 ) 55.34 Canceled (1 ) 108.14 Balance as of July 31, 2019 28 $ 94.60 $ 1,745 Vested or expected to vest 26 $ 91.53 $ 1,699 Exercisable as of July 31, 2019 13 $ 65.76 $ 1,236 |
Schedule Of Stock Options Outstanding | The following table summarizes information about stock options outstanding as of July 31, 2019 : Options Outstanding Options Exercisable Range of Exercise Number Outstanding (in millions) Weighted- Average Remaining Contractual Life (Years) Weighted- Average Exercise Price Number of Shares (in millions) Weighted- Average Exercise Price $0.27 to $52.30 5 4.2 $ 30.34 4 $ 33.10 $54.36 to $75.57 7 3.6 67.79 5 65.73 $76.48 to $113.00 4 3.7 84.54 3 82.74 $118.04 5 5.6 118.04 1 118.04 $122.03 to $158.76 1 6.3 141.75 0 0.00 $161.50 6 6.6 161.50 0 0.00 28 4.8 $ 94.60 13 $ 65.76 |
Schedule Of Restricted Stock Activity | Restricted stock activity for the six months ended July 31, 2019 is as follows: Restricted Stock Outstanding Outstanding (in millions) Weighted Average Grant Date Fair Value Aggregate Intrinsic Value (in millions) Balance as of January 31, 2019 21 $ 103.33 Granted - restricted stock units and awards 9 160.75 Granted - performance-based stock units 1 161.50 Canceled (1 ) 108.35 Vested and converted to shares (6 ) 99.70 Balance as of July 31, 2019 24 $ 126.53 $ 3,687 Expected to vest 20 $ 3,148 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jul. 31, 2019 | |
Earnings Per Share [Abstract] | |
Reconciliation of Denominator Used in Calculation of Basic And Diluted Loss Per Share | A reconciliation of the denominator used in the calculation of basic and diluted earnings per share is as follows (in millions ): 2 Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Numerator: Net income $ 91 $ 299 $ 483 $ 643 Denominator: Weighted-average shares outstanding for basic earnings per share 776 747 774 737 Effect of dilutive securities: Convertible senior notes which matured in April 2018 0 0 0 2 Employee stock awards 19 23 21 20 Warrants which settled in June and July 2018 0 4 0 4 Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share 795 774 795 763 |
Shares Excluded From Diluted Earnings or Loss Per Share | The weighted-average number of shares outstanding used in the computation of diluted earnings per share does not include the effect of the following potential outstanding common stock. The effects of these potentially outstanding shares were not included in the calculation of diluted earnings per share because the effect would have been anti-dilutive (in millions): Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Employee stock awards 7 7 5 5 |
Leases and Other Commitments (T
Leases and Other Commitments (Tables) | 6 Months Ended |
Jul. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Components of lease expense and supplemental cash flow information | The components of lease expense were as follows (in millions): Three Months Ended July 31, 2019 Six Months Ended July 31, 2019 Operating lease cost $ 217 $ 423 Finance lease cost: Amortization of right-of-use assets $ 17 $ 33 Interest on lease liabilities 5 11 Total finance lease cost $ 22 $ 44 Supplemental cash flow information related to operating and finance leases was as follows (in millions): Three Months Ended July 31, 2019 Six Months Ended July 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash outflows for operating leases $ 209 $ 391 Operating cash outflows for finance leases 4 8 Financing cash outflows for finance leases 134 136 Right-of-use assets obtained in exchange for lease obligations: Operating leases 171 330 |
Balance sheet and other information related to leases | Supplemental balance sheet information related to operating and finance leases was as follows (in millions): As of July 31, 2019 Operating leases: Operating lease right-of-use assets $ 2,904 Operating lease liabilities, current $ 706 Noncurrent operating lease liabilities 2,341 Total operating lease liabilities $ 3,047 Finance leases: Buildings and building improvements $ 325 Computers, equipment and software 468 Accumulated depreciation (372 ) Property and equipment, net $ 421 Accrued expenses and other liabilities $ 76 Other noncurrent liabilities 336 Total finance lease liabilities $ 412 Other information related to leases was as follows: As of July 31, 2019 Weighted average remaining lease term Operating leases 7 years Finance leases 21 years Weighted average discount rate Operating leases 2.8 % Finance leases 4.5 % |
Maturities of lease liabilities | As of July 31, 2019 , the maturities of lease liabilities under non-cancelable operating and finance leases are as follows (in millions ): Operating Leases Finance Leases Fiscal Period: Remaining six months of Fiscal 2020 $ 384 $ 36 Fiscal 2021 723 67 Fiscal 2022 516 23 Fiscal 2023 356 23 Fiscal 2024 284 24 Thereafter 1,133 434 Total minimum lease payments 3,396 607 Less: Imputed interest (349 ) (195 ) Total $ 3,047 $ 412 |
Maturities of lease liabilities | As of July 31, 2019 , the maturities of lease liabilities under non-cancelable operating and finance leases are as follows (in millions ): Operating Leases Finance Leases Fiscal Period: Remaining six months of Fiscal 2020 $ 384 $ 36 Fiscal 2021 723 67 Fiscal 2022 516 23 Fiscal 2023 356 23 Fiscal 2024 284 24 Thereafter 1,133 434 Total minimum lease payments 3,396 607 Less: Imputed interest (349 ) (195 ) Total $ 3,047 $ 412 |
Summary of Business and Signi_4
Summary of Business and Significant Accounting Policies - Narrative (Detail) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jul. 31, 2019USD ($) | Jul. 31, 2018USD ($) | Jul. 31, 2019USD ($)segment | Jul. 31, 2018USD ($) | Jan. 31, 2019USD ($) | Feb. 01, 2019USD ($) | |
Summary of Business and Significant Accounting Policies [Line Items] | ||||||
Number of operating segments | segment | 1 | |||||
Capitalized contract cost, amortization term | 4 years | 4 years | ||||
Capitalized contract cost, renewals and success fees, amortization term | 2 years | |||||
Costs capitalized to obtain revenue contracts, net | $ 173,000,000 | $ 146,000,000 | $ 297,000,000 | $ 264,000,000 | ||
Amortization of costs capitalized to obtain revenue contracts, net | 217,000,000 | 183,000,000 | 426,000,000 | 371,000,000 | ||
Costs capitalized to obtain revenue contracts, net | 1,900,000,000 | 1,900,000,000 | $ 2,000,000,000 | |||
Impairments of costs to obtain revenue contracts | 0 | $ 0 | 0 | 0 | ||
Impairments of capitalized software and long-lived assets | 0 | 0 | ||||
Impairment of intangible assets | 0 | 0 | ||||
Impairment of goodwill | $ 0 | $ 0 | ||||
Offering period | 12 months | |||||
Discount for ESPP | 15.00% | |||||
Purchase period | 6 months | |||||
Percentage of tax benefit likely to be realized upon settlement (greater than 50%) | 50.00% | |||||
Operating lease right-of-use assets | 2,904,000,000 | $ 2,904,000,000 | ||||
Operating lease liabilities | $ 3,047,000,000 | $ 3,047,000,000 | ||||
ASU 2016-02 | ||||||
Summary of Business and Significant Accounting Policies [Line Items] | ||||||
Operating lease right-of-use assets | $ 2,900,000,000 | |||||
Operating lease liabilities | $ 3,100,000,000 | |||||
Stock options and restricted stock | ||||||
Summary of Business and Significant Accounting Policies [Line Items] | ||||||
Vesting period | 4 years | |||||
Performance-based restricted stock units | ||||||
Summary of Business and Significant Accounting Policies [Line Items] | ||||||
Vesting period | 3 years | |||||
Restricted stock activity | ||||||
Summary of Business and Significant Accounting Policies [Line Items] | ||||||
Award requisite service period | 4 years | |||||
Accounts Receivable | Customer Concentration Risk | ||||||
Summary of Business and Significant Accounting Policies [Line Items] | ||||||
Concentration risk percentage | 5.00% | |||||
Revenue | Customer Concentration Risk | ||||||
Summary of Business and Significant Accounting Policies [Line Items] | ||||||
Concentration risk percentage | 5.00% | |||||
Strategic Investments | Strategic Investment Portfolio Concentration Risk | One Investment | ||||||
Summary of Business and Significant Accounting Policies [Line Items] | ||||||
Concentration risk percentage | 15.00% | |||||
Strategic Investments | Strategic Investment Portfolio Concentration Risk | Four Investments, Two Publicly Traded, Two Privately Held | ||||||
Summary of Business and Significant Accounting Policies [Line Items] | ||||||
Concentration risk percentage | 5.00% | |||||
Strategic Investments | Strategic Investment Portfolio Concentration Risk | Five Investments, Four Publicly Traded, One Privately Held | ||||||
Summary of Business and Significant Accounting Policies [Line Items] | ||||||
Concentration risk percentage | 5.00% | |||||
Outside Americas | Assets | Geographic Concentration Risk | ||||||
Summary of Business and Significant Accounting Policies [Line Items] | ||||||
Concentration risk percentage | 15.00% | 14.00% | ||||
Untied States | Assets | Geographic Concentration Risk | ||||||
Summary of Business and Significant Accounting Policies [Line Items] | ||||||
Concentration risk percentage | 83.00% | 84.00% | ||||
Internal-use software | Minimum | ||||||
Summary of Business and Significant Accounting Policies [Line Items] | ||||||
Property and equipment, estimated useful lives | 3 years | |||||
Internal-use software | Maximum | ||||||
Summary of Business and Significant Accounting Policies [Line Items] | ||||||
Property and equipment, estimated useful lives | 5 years |
Summary of Business and Signi_5
Summary of Business and Significant Accounting Policies - Schedule of Property and Equipment Estimated Useful Lives (Detail) | 6 Months Ended |
Jul. 31, 2019 | |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 5 years |
Building and structural components | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 32 years |
Building improvements | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 10 years |
Minimum | Computers, equipment and software | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 3 years |
Maximum | Computers, equipment and software | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 9 years |
Maximum | Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 10 years |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 3,997 | $ 3,281 | $ 7,734 | $ 6,287 |
Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 2,816 | 2,338 | 5,433 | 4,439 |
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 786 | 629 | 1,541 | 1,235 |
Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 395 | $ 314 | $ 760 | $ 613 |
Untied States | Geographic Concentration Risk | Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk percentage | 96.00% | 96.00% | 96.00% | 96.00% |
Subscription and support | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 3,745 | $ 3,060 | $ 7,241 | $ 5,870 |
Sales Cloud | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 1,130 | 1,004 | 2,203 | 1,969 |
Service Cloud | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 1,087 | 892 | 2,107 | 1,740 |
Salesforce Platform and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 912 | 712 | 1,754 | 1,287 |
Marketing and Commerce Cloud | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 616 | $ 452 | $ 1,177 | $ 874 |
Revenues - Contract Balances, U
Revenues - Contract Balances, Unearned Revenue and Remaining Performance Obligation (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | Jan. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||||
Contract asset | $ 268 | $ 268 | $ 215 | ||
Unearned Revenue [Roll Forward] | |||||
Unearned revenue, beginning of period | 7,585 | $ 6,201 | 8,564 | $ 6,995 | |
Billings and other | 3,396 | 2,875 | 6,110 | 5,086 | |
Contribution from contract asset | 7 | 31 | 51 | 25 | |
Unearned revenue from business combinations | 151 | 57 | 151 | 64 | |
Unearned revenue, end of period | 7,142 | 5,883 | 7,142 | 5,883 | |
Remaining Performance Obligation | |||||
Current | 12,100 | 12,100 | 11,900 | ||
Noncurrent | 13,200 | 13,200 | 13,800 | ||
Total | 25,300 | 25,300 | $ 25,700 | ||
Revenue recognized ratably over time | |||||
Unearned Revenue [Roll Forward] | |||||
Revenue recognized | (3,736) | (3,056) | (7,223) | (5,924) | |
Revenue recognized over time as delivered | |||||
Unearned Revenue [Roll Forward] | |||||
Revenue recognized | (174) | (162) | (346) | (299) | |
Revenue recognized at a point in time | |||||
Unearned Revenue [Roll Forward] | |||||
Revenue recognized | $ (87) | $ (63) | $ (165) | $ (64) |
Revenues - Remaining Performanc
Revenues - Remaining Performance Obligation (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-09-01 | Jul. 31, 2019 |
Minimum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Noncurrent remaining performance obligation, recognition period | 13 months |
Maximum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Noncurrent remaining performance obligation, recognition period | 36 months |
Investments - Schedule of Marke
Investments - Schedule of Marketable Securities (Detail) - USD ($) $ in Millions | Jul. 31, 2019 | Jan. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 2,530 | $ 1,685 |
Unrealized Gains | 4 | 0 |
Unrealized Losses | (2) | (12) |
Fair Value | 2,532 | 1,673 |
Corporate notes and obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,474 | 1,027 |
Unrealized Gains | 3 | 0 |
Unrealized Losses | (1) | (8) |
Fair Value | 1,476 | 1,019 |
U.S. treasury securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 123 | 89 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (1) | (1) |
Fair Value | 122 | 88 |
Mortgage backed obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 88 | 79 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | (1) |
Fair Value | 88 | 78 |
Asset backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 504 | 245 |
Unrealized Gains | 1 | 0 |
Unrealized Losses | 0 | (1) |
Fair Value | 505 | 244 |
Municipal securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 109 | 104 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | 109 | 104 |
Foreign government obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 49 | 58 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | (1) |
Fair Value | 49 | 57 |
U.S. agency obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 10 | 4 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | 10 | 4 |
Time deposits | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 8 | 4 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | 8 | 4 |
Covered bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 165 | 75 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | $ 165 | $ 75 |
Investments - Schedule of Short
Investments - Schedule of Short-Term and Long-Term Marketable Securities (Detail) - USD ($) $ in Millions | Jul. 31, 2019 | Jan. 31, 2019 |
Investments, Debt and Equity Securities [Abstract] | ||
Due within 1 year | $ 1,081 | $ 482 |
Due in 1 year through 5 years | 1,446 | 1,189 |
Due in 5 years through 10 years | 5 | 2 |
Fair Value of Marketable Securities | $ 2,532 | $ 1,673 |
Investments - Schedule of Mar_2
Investments - Schedule of Marketable Securities in Unrealized Loss Position (Detail) $ in Millions | 6 Months Ended |
Jul. 31, 2019USD ($) | |
Debt Securities, Available-for-sale [Line Items] | |
Marketable securities in an unrealized loss position for less than 12 months, Fair Value | $ 0 |
Marketable securities in an unrealized loss position for less than 12 months, Unrealized Losses | 0 |
Marketable securities in an unrealized loss position for more than 12 months, Fair Value | 205 |
Marketable securities in an unrealized loss position for more than 12 months, Unrealized Losses | (2) |
Marketable securities in an unrealized loss position, Fair Value | 205 |
Marketable securities in an unrealized loss position, Unrealized Losses | (2) |
Unrealized losses on fixed rate investments, upper range value | 1 |
Corporate notes and obligations | |
Debt Securities, Available-for-sale [Line Items] | |
Marketable securities in an unrealized loss position for less than 12 months, Fair Value | 0 |
Marketable securities in an unrealized loss position for less than 12 months, Unrealized Losses | 0 |
Marketable securities in an unrealized loss position for more than 12 months, Fair Value | 158 |
Marketable securities in an unrealized loss position for more than 12 months, Unrealized Losses | (1) |
Marketable securities in an unrealized loss position, Fair Value | 158 |
Marketable securities in an unrealized loss position, Unrealized Losses | (1) |
U.S. treasury securities | |
Debt Securities, Available-for-sale [Line Items] | |
Marketable securities in an unrealized loss position for less than 12 months, Fair Value | 0 |
Marketable securities in an unrealized loss position for less than 12 months, Unrealized Losses | 0 |
Marketable securities in an unrealized loss position for more than 12 months, Fair Value | 47 |
Marketable securities in an unrealized loss position for more than 12 months, Unrealized Losses | (1) |
Marketable securities in an unrealized loss position, Fair Value | 47 |
Marketable securities in an unrealized loss position, Unrealized Losses | $ (1) |
Investments - Schedule of Compo
Investments - Schedule of Components of Investment Income (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Interest income | $ 31 | $ 12 | $ 57 | $ 32 |
Realized gains | 1 | 0 | 1 | 1 |
Realized losses | (1) | 0 | (1) | (5) |
Total investment income | $ 31 | $ 12 | $ 57 | $ 28 |
Investments - Schedule of Strat
Investments - Schedule of Strategic Investments (Detail) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2019 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | Jan. 31, 2019 | |
Investment Holdings [Line Items] | ||||||
Strategic investments | $ 1,614 | $ 1,614 | $ 1,302 | |||
Strategic Investments [Roll Forward] | ||||||
Carrying amount, beginning of period | 927 | $ 554 | 785 | $ 548 | ||
Adjustments related to privately held equity securities: | ||||||
Net additions (reductions) | (9) | 19 | 11 | 30 | ||
Impairments and downward adjustments | (33) | (5) | (51) | (23) | ||
Upward adjustments | 32 | 99 | 172 | 112 | ||
Carrying amount, beginning of period | $ 927 | 917 | 667 | 917 | 667 | |
Cumulative impairments and downward adjustments | 83 | 83 | ||||
Cumulative upward adjustments | 346 | 346 | ||||
Net realized gains (losses) recognized | 66 | 328 | ||||
Gains on strategic investments, net | 109 | 143 | 390 | 354 | ||
Publicly traded securities | ||||||
Adjustments related to privately held equity securities: | ||||||
Net realized gains (losses) recognized | 66 | 65 | 216 | 276 | ||
Privately held securities | ||||||
Adjustments related to privately held equity securities: | ||||||
Net realized gains (losses) recognized | 0 | 90 | 122 | 81 | ||
Equity securities | ||||||
Investment Holdings [Line Items] | ||||||
Strategic investments | 1,581 | 1,581 | 1,271 | |||
Adjustments related to privately held equity securities: | ||||||
Net realized gains (losses) recognized | 43 | 1 | 62 | 9 | ||
Debt securities | ||||||
Investment Holdings [Line Items] | ||||||
Strategic investments | 33 | 33 | 31 | |||
Adjustments related to privately held equity securities: | ||||||
Net realized gains (losses) recognized | 0 | $ (13) | (10) | $ (12) | ||
Private Placement, Technology Company | ||||||
Investment Holdings [Line Items] | ||||||
Strategic investments | $ 100 | |||||
Adjustments related to privately held equity securities: | ||||||
Term of market standoff agreement | 365 days | |||||
Fair value of investment | $ 265 | $ 265 | ||||
Economic interest | 1.00% | 1.00% | ||||
Fair Value | ||||||
Investment Holdings [Line Items] | ||||||
Strategic investments | $ 607 | $ 607 | 436 | |||
Fair Value | Equity securities | ||||||
Investment Holdings [Line Items] | ||||||
Strategic investments | 607 | 607 | 436 | |||
Fair Value | Debt securities | ||||||
Investment Holdings [Line Items] | ||||||
Strategic investments | 0 | 0 | 0 | |||
Measurement Alternative | ||||||
Investment Holdings [Line Items] | ||||||
Strategic investments | 917 | 917 | 785 | |||
Measurement Alternative | Equity securities | ||||||
Investment Holdings [Line Items] | ||||||
Strategic investments | 917 | 917 | 785 | |||
Measurement Alternative | Debt securities | ||||||
Investment Holdings [Line Items] | ||||||
Strategic investments | 0 | 0 | 0 | |||
Other | ||||||
Investment Holdings [Line Items] | ||||||
Strategic investments | 90 | 90 | 81 | |||
Other | Equity securities | ||||||
Investment Holdings [Line Items] | ||||||
Strategic investments | 57 | 57 | 50 | |||
Other | Debt securities | ||||||
Investment Holdings [Line Items] | ||||||
Strategic investments | $ 33 | $ 33 | $ 31 |
Derivatives - Schedule of Outst
Derivatives - Schedule of Outstanding Foreign Currency Derivative Contracts Related Primarily to Intercompany Receivables and Payables (Detail) - Derivatives not designated as hedging instruments - USD ($) $ in Millions | Jul. 31, 2019 | Jan. 31, 2019 |
Derivative [Line Items] | ||
Fair value of foreign currency derivative contracts | $ (22) | $ 25 |
Foreign currency derivative contracts | ||
Derivative [Line Items] | ||
Notional amount of foreign currency derivative contracts | $ 4,420 | $ 4,496 |
Derivatives - Fair Value of Out
Derivatives - Fair Value of Outstanding Derivative Instruments (Detail) - USD ($) $ in Millions | Jul. 31, 2019 | Jan. 31, 2019 |
Derivatives not designated as hedging instruments | Prepaid expenses and other current assets | Foreign currency derivative contracts | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets | $ 37 | $ 42 |
Derivatives - Effect of Derivat
Derivatives - Effect of Derivative Instruments Not Designated as Hedging Instruments on Condensed Consolidated Statements of Operations (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Derivatives not designated as hedging instruments | Foreign currency derivative contracts | Other income (expense) | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (losses) on derivative instruments recognized in income | $ (35) | $ (10) | $ 1 | $ 10 |
Fair Value Measurement (Detail)
Fair Value Measurement (Detail) - USD ($) $ in Millions | Jul. 31, 2019 | Jan. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Publicly held equity securities | $ 1,614 | $ 1,302 |
Total assets | 4,627 | 3,699 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Publicly held equity securities | 607 | 436 |
Total assets | 1,436 | 1,670 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Publicly held equity securities | 0 | 0 |
Total assets | 3,191 | 2,029 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Publicly held equity securities | 0 | 0 |
Total assets | 0 | 0 |
Prepaid expenses and other current assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency derivative contracts | 37 | 42 |
Prepaid expenses and other current assets | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency derivative contracts | 0 | 0 |
Prepaid expenses and other current assets | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency derivative contracts | 37 | 42 |
Prepaid expenses and other current assets | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Foreign currency derivative contracts | 0 | 0 |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Publicly held equity securities | 607 | 436 |
Time deposits | Cash and cash equivalents | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 622 | 314 |
Time deposits | Cash and cash equivalents | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Time deposits | Cash and cash equivalents | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 622 | 314 |
Time deposits | Cash and cash equivalents | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Money market mutual funds | Cash and cash equivalents | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 829 | 1,234 |
Money market mutual funds | Cash and cash equivalents | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 829 | 1,234 |
Money market mutual funds | Cash and cash equivalents | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Money market mutual funds | Cash and cash equivalents | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Corporate notes and obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 1,476 | 1,019 |
Corporate notes and obligations | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Corporate notes and obligations | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 1,476 | 1,019 |
Corporate notes and obligations | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
U.S. treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 122 | 88 |
U.S. treasury securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
U.S. treasury securities | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 122 | 88 |
U.S. treasury securities | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Mortgage backed obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 88 | 78 |
Mortgage backed obligations | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Mortgage backed obligations | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 88 | 78 |
Mortgage backed obligations | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Asset backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 505 | 244 |
Asset backed securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Asset backed securities | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 505 | 244 |
Asset backed securities | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Municipal securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 109 | 104 |
Municipal securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Municipal securities | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 109 | 104 |
Municipal securities | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Foreign government obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 49 | 57 |
Foreign government obligations | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Foreign government obligations | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 49 | 57 |
Foreign government obligations | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
U.S. agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 10 | 4 |
U.S. agency obligations | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
U.S. agency obligations | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 10 | 4 |
U.S. agency obligations | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Time deposits | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 8 | 4 |
Time deposits | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Time deposits | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 8 | 4 |
Time deposits | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Covered bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 165 | 75 |
Covered bonds | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Covered bonds | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 165 | 75 |
Covered bonds | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | 0 |
Cash | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 2,100 | 1,100 |
Privately held debt and equity securities and equity method investments | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 1,000 | $ 900 |
Business Combinations (Narrativ
Business Combinations (Narrative) (Details) - USD ($) $ in Millions | Apr. 30, 2019 | Jun. 30, 2019 | May 31, 2019 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | Jan. 31, 2019 | |
Business Acquisition [Line Items] | |||||||||
Loss on settlement of Salesforce.org reseller agreement | [1],[2] | $ 166 | $ 0 | $ 166 | $ 0 | ||||
Useful life | 5 years | ||||||||
Goodwill | $ 13,199 | $ 13,199 | $ 12,851 | ||||||
Salesforce.org | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash | $ 300 | ||||||||
Loss on settlement of Salesforce.org reseller agreement | 166 | ||||||||
Consideration transferred | 134 | ||||||||
Goodwill | $ 164 | ||||||||
MapAnything, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration transferred | $ 23 | $ 213 | |||||||
Intangible assets | 53 | ||||||||
Goodwill | 152 | ||||||||
Remeasurement gain | $ 9 | ||||||||
Minimum | MapAnything, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Useful life | 4 years | ||||||||
Maximum | MapAnything, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Useful life | 5 years | ||||||||
[1] | Amounts include amortization of intangible assets acquired through business combinations, as follows: Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Cost of revenues $ 62 $ 52 $ 123 $ 91 Marketing and sales 65 67 133 97 | ||||||||
[2] | Amounts include stock-based expense, as follows: Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Cost of revenues $ 46 $ 43 $ 89 $ 77 Research and development 98 81 179 147 Marketing and sales 199 174 376 294 General and administrative 45 53 87 85 |
Business Combinations (Consider
Business Combinations (Consideration Transferred) (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | ||
Business Acquisition [Line Items] | ||||||
Loss on settlement of Salesforce.org reseller agreement | [1],[2] | $ (166) | $ 0 | $ (166) | $ 0 | |
Salesforce.org | ||||||
Business Acquisition [Line Items] | ||||||
Cash | $ 300 | |||||
Loss on settlement of Salesforce.org reseller agreement | (166) | |||||
Total | $ 134 | |||||
[1] | Amounts include amortization of intangible assets acquired through business combinations, as follows: Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Cost of revenues $ 62 $ 52 $ 123 $ 91 Marketing and sales 65 67 133 97 | |||||
[2] | Amounts include stock-based expense, as follows: Three Months Ended July 31, Six Months Ended July 31, 2019 2018 2019 2018 Cost of revenues $ 46 $ 43 $ 89 $ 77 Research and development 98 81 179 147 Marketing and sales 199 174 376 294 General and administrative 45 53 87 85 |
Business Combinations (Estimate
Business Combinations (Estimated Fair Values of Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Millions | Jul. 31, 2019 | Jun. 30, 2019 | Jan. 31, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 13,199 | $ 12,851 | |
Salesforce.org | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 54 | ||
Deferred tax asset, current | 47 | ||
Other current and noncurrent assets | 46 | ||
Goodwill | 164 | ||
Accounts payable, accrued expenses and other liabilities, current and noncurrent | (39) | ||
Unearned revenue | (138) | ||
Net assets acquired | $ 134 |
Intangible Assets Acquired Th_3
Intangible Assets Acquired Through Business Combinations and Goodwill (Intangible Assets Acquired From Business Combinations) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | Jan. 31, 2019 | |
Finite-lived Intangible Assets [Roll Forward] | |||||
Intangible assets, gross, beginning balance | $ 3,419 | ||||
Accumulated amortization, beginning balance | (1,496) | ||||
Intangible assets, net, beginning balance | 1,923 | ||||
Additions and retirements, net | 58 | ||||
Expense and retirements, net | (256) | ||||
Intangible assets, gross, ending balance | $ 3,477 | 3,477 | |||
Accumulated amortization, ending balance | (1,752) | (1,752) | |||
Intangible assets, net, ending balance | 1,725 | $ 1,725 | |||
Weighted average remaining useful life | 5 years | ||||
Amortization of intangible assets | 127 | $ 119 | $ 256 | $ 188 | |
Contract asset | 268 | 268 | $ 215 | ||
Other assets | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Contract asset | 81 | 81 | $ 121 | ||
Acquired developed technology | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Intangible assets, gross, beginning balance | 1,429 | ||||
Accumulated amortization, beginning balance | (889) | ||||
Intangible assets, net, beginning balance | 540 | ||||
Additions and retirements, net | 33 | ||||
Expense and retirements, net | (123) | ||||
Intangible assets, gross, ending balance | 1,462 | 1,462 | |||
Accumulated amortization, ending balance | (1,012) | (1,012) | |||
Intangible assets, net, ending balance | 450 | $ 450 | |||
Weighted average remaining useful life | 2 years 7 months 6 days | ||||
Customer relationships | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Intangible assets, gross, beginning balance | $ 1,938 | ||||
Accumulated amortization, beginning balance | (560) | ||||
Intangible assets, net, beginning balance | 1,378 | ||||
Additions and retirements, net | 25 | ||||
Expense and retirements, net | (129) | ||||
Intangible assets, gross, ending balance | 1,963 | 1,963 | |||
Accumulated amortization, ending balance | (689) | (689) | |||
Intangible assets, net, ending balance | 1,274 | $ 1,274 | |||
Weighted average remaining useful life | 5 years 10 months 24 days | ||||
Other | |||||
Finite-lived Intangible Assets [Roll Forward] | |||||
Intangible assets, gross, beginning balance | $ 52 | ||||
Accumulated amortization, beginning balance | (47) | ||||
Intangible assets, net, beginning balance | 5 | ||||
Additions and retirements, net | 0 | ||||
Expense and retirements, net | (4) | ||||
Intangible assets, gross, ending balance | 52 | 52 | |||
Accumulated amortization, ending balance | (51) | (51) | |||
Intangible assets, net, ending balance | $ 1 | $ 1 | |||
Weighted average remaining useful life | 1 year |
Intangible Assets Acquired Th_4
Intangible Assets Acquired Through Business Combinations and Goodwill (Expected Future Amortization Expense for Purchased Intangible Assets) (Details) - USD ($) $ in Millions | Jul. 31, 2019 | Jan. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remaining six months of Fiscal 2020 | $ 228 | |
Fiscal 2021 | 429 | |
Fiscal 2022 | 366 | |
Fiscal 2023 | 218 | |
Fiscal 2024 | 152 | |
Thereafter | 332 | |
Total amortization expense | $ 1,725 | $ 1,923 |
Intangible Assets Acquired Th_5
Intangible Assets Acquired Through Business Combinations and Goodwill (Goodwill) (Details) $ in Millions | 6 Months Ended |
Jul. 31, 2019USD ($) | |
Goodwill [Roll Forward] | |
Balance as of January 31, 2019 | $ 12,851 |
Other acquisitions and adjustments | 32 |
Balance as of July 31, 2019 | 13,199 |
Salesforce.org | |
Goodwill [Roll Forward] | |
Goodwill acquired | 164 |
MapAnything, Inc. | |
Goodwill [Roll Forward] | |
Goodwill acquired | $ 152 |
Debt - Carrying Value of Borrow
Debt - Carrying Value of Borrowings (Details) - USD ($) $ in Millions | 1 Months Ended | ||
Jun. 30, 2019 | Jul. 31, 2019 | Jan. 31, 2019 | |
Debt Instrument [Line Items] | |||
Total carrying value of debt | $ 2,977 | $ 3,176 | |
Less current portion of debt | (4) | (3) | |
Total noncurrent debt | $ 2,973 | 3,173 | |
Term Loans | 2021 Term Loan | |||
Debt Instrument [Line Items] | |||
Effective interest rate for the three months ended July 31, 2019 | 3.18% | ||
Total carrying value of debt | $ 299 | 499 | |
Pay down of debt | $ 200 | ||
Senior Notes | 2023 Senior Notes | |||
Debt Instrument [Line Items] | |||
Effective interest rate for the three months ended July 31, 2019 | 3.26% | ||
Total carrying value of debt | $ 994 | 993 | |
Senior Notes | 2028 Senior Notes | |||
Debt Instrument [Line Items] | |||
Effective interest rate for the three months ended July 31, 2019 | 3.70% | ||
Total carrying value of debt | $ 1,489 | 1,488 | |
Secured Debt | Loan assumed on 50 Fremont | |||
Debt Instrument [Line Items] | |||
Effective interest rate for the three months ended July 31, 2019 | 3.75% | ||
Total carrying value of debt | $ 195 | $ 196 |
Debt - Future Principal Payment
Debt - Future Principal Payments (Details) $ in Millions | Jul. 31, 2019USD ($) |
Debt Disclosure [Abstract] | |
Remaining six months of Fiscal 2020 | $ 2 |
Fiscal 2021 | 4 |
Fiscal 2022 | 304 |
Fiscal 2023 | 4 |
Fiscal 2024 | 1,182 |
Thereafter | 1,500 |
Total principal outstanding | $ 2,996 |
Debt - Revolving Credit Facilit
Debt - Revolving Credit Facility (Details) - USD ($) | Jul. 31, 2019 | Jan. 31, 2019 | Apr. 30, 2018 |
Line of Credit Facility [Line Items] | |||
Total carrying value of debt | $ 2,977,000,000 | $ 3,176,000,000 | |
Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | $ 1,000,000,000 | ||
Total carrying value of debt | $ 0 |
Debt - Schedule of Interest Exp
Debt - Schedule of Interest Expense (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Debt Disclosure [Abstract] | ||||
Contractual interest expense | $ 28 | $ 31 | $ 56 | $ 42 |
Amortization of debt issuance costs | 1 | 1 | 2 | 13 |
Amortization of debt discount | 0 | 0 | 0 | 4 |
Debt interest expense | $ 29 | $ 32 | $ 58 | $ 59 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Options Outstanding (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 6 Months Ended |
Jul. 31, 2019 | |
Outstanding Stock Options | |
Beginning balance (in shares) | 26 |
Options granted under all plans (in shares) | 6 |
Exercised (in shares) | (3) |
Canceled (in shares) | (1) |
Ending balance (in shares) | 28 |
Outstanding Stock Options, Vested or expected to vest (in shares) | 26 |
Outstanding Stock Options, Exercisable (in shares) | 13 |
Options Outstanding Weighted-Average Exercise Price | |
Beginning balance (in dollars per share) | $ 74.15 |
Options granted under all plans (in dollars per share) | 160.40 |
Exercised (in dollars per share) | 55.34 |
Canceled (in dollars per share) | 108.14 |
Ending balance (in dollars per share) | 94.60 |
Weighted-Average Exercise Price, Vested or expected to vest (in dollars per share) | 91.53 |
Weighted-Average Exercise Price, Exercisable (in dollars per share) | $ 65.76 |
Aggregate Intrinsic Value | |
Balance | $ 1,745 |
Vested or expected to vest | 1,699 |
Exercisable | $ 1,236 |
Stock Options Outstanding Information | |
Options, Number Outstanding (in shares) | 28 |
Weighted-Average Remaining Contractual Life, Options Outstanding | 4 years 9 months 18 days |
Weighted-Average Exercise Price, Options Outstanding (in dollars per share) | $ 94.60 |
Options Exercisable, Number of Shares (in shares) | 13 |
Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 65.76 |
$0.27 to $52.30 | |
Stock Options Outstanding Information | |
Range of Exercise Prices, Minimum (in dollars per share) | 0.27 |
Range of Exercise Prices, Maximum (in dollars per share) | $ 52.30 |
Options, Number Outstanding (in shares) | 5 |
Weighted-Average Remaining Contractual Life, Options Outstanding | 4 years 2 months 12 days |
Weighted-Average Exercise Price, Options Outstanding (in dollars per share) | $ 30.34 |
Options Exercisable, Number of Shares (in shares) | 4 |
Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 33.10 |
$54.36 to $75.57 | |
Stock Options Outstanding Information | |
Range of Exercise Prices, Minimum (in dollars per share) | 54.36 |
Range of Exercise Prices, Maximum (in dollars per share) | $ 75.57 |
Options, Number Outstanding (in shares) | 7 |
Weighted-Average Remaining Contractual Life, Options Outstanding | 3 years 7 months 6 days |
Weighted-Average Exercise Price, Options Outstanding (in dollars per share) | $ 67.79 |
Options Exercisable, Number of Shares (in shares) | 5 |
Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 65.73 |
$76.48 to $113.00 | |
Stock Options Outstanding Information | |
Range of Exercise Prices, Minimum (in dollars per share) | 76.48 |
Range of Exercise Prices, Maximum (in dollars per share) | $ 113 |
Options, Number Outstanding (in shares) | 4 |
Weighted-Average Remaining Contractual Life, Options Outstanding | 3 years 8 months 12 days |
Weighted-Average Exercise Price, Options Outstanding (in dollars per share) | $ 84.54 |
Options Exercisable, Number of Shares (in shares) | 3 |
Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 82.74 |
$118.04 | |
Stock Options Outstanding Information | |
Range of Exercise Prices, Minimum (in dollars per share) | 118.04 |
Range of Exercise Prices, Maximum (in dollars per share) | $ 118.04 |
Options, Number Outstanding (in shares) | 5 |
Weighted-Average Remaining Contractual Life, Options Outstanding | 5 years 7 months 6 days |
Weighted-Average Exercise Price, Options Outstanding (in dollars per share) | $ 118.04 |
Options Exercisable, Number of Shares (in shares) | 1 |
Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 118.04 |
$122.03 to $158.76 | |
Stock Options Outstanding Information | |
Range of Exercise Prices, Minimum (in dollars per share) | 122.03 |
Range of Exercise Prices, Maximum (in dollars per share) | $ 158.76 |
Options, Number Outstanding (in shares) | 1 |
Weighted-Average Remaining Contractual Life, Options Outstanding | 6 years 3 months 18 days |
Weighted-Average Exercise Price, Options Outstanding (in dollars per share) | $ 141.75 |
Options Exercisable, Number of Shares (in shares) | 0 |
Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 0 |
$161.50 | |
Stock Options Outstanding Information | |
Range of Exercise Prices, Minimum (in dollars per share) | 161.50 |
Range of Exercise Prices, Maximum (in dollars per share) | $ 161.50 |
Options, Number Outstanding (in shares) | 6 |
Weighted-Average Remaining Contractual Life, Options Outstanding | 6 years 7 months 6 days |
Weighted-Average Exercise Price, Options Outstanding (in dollars per share) | $ 161.50 |
Options Exercisable, Number of Shares (in shares) | 0 |
Options Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 0 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Restricted Stock Activity (Detail) $ / shares in Units, shares in Millions, $ in Millions | 6 Months Ended |
Jul. 31, 2019USD ($)$ / sharesshares | |
Restricted stock activity | |
Restricted Stock Outstanding | |
Beginning balance (in shares) | 21 |
Granted (in shares) | 9 |
Canceled (in shares) | (1) |
Vested and converted to shares (in shares) | (6) |
Ending balance (in shares) | 24 |
Expected to vest (in shares) | 20 |
Restricted Stock Outstanding, Weighted-Average Exercise Price | |
Beginning balance (in dollars per share) | $ / shares | $ 103.33 |
Granted (in dollars per share) | $ / shares | 160.75 |
Canceled (in dollars per share) | $ / shares | 108.35 |
Vested and converted to shares (in dollars per share) | $ / shares | 99.70 |
Ending balance (in dollars per share) | $ / shares | $ 126.53 |
Restricted Stock Outstanding, Aggregate Intrinsic Value | |
Ending balance | $ | $ 3,687 |
Expected to vest | $ | $ 3,148 |
Performance-based restricted stock units | |
Restricted Stock Outstanding | |
Granted (in shares) | 1 |
Restricted Stock Outstanding, Weighted-Average Exercise Price | |
Granted (in dollars per share) | $ / shares | $ 161.50 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | Jan. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted-average fair value per share of grants (in dollars per share) | $ 38.97 | $ 32.35 | $ 40.69 | $ 28.69 | |
Total shares available for future grant (in shares) | 133 | 133 | 115 | ||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 731 | ||||
Compensation not yet recognized, stock options | $ 3,400 | 3,400 | |||
Amortization, remainder of fiscal year | 778 | 778 | |||
Amortization, year two | 1,100 | 1,100 | |||
Amortization, year three | 875 | 875 | |||
Amortization, year four | 525 | 525 | |||
Amortization, year five | $ 82 | $ 82 | |||
Period for recognition | 2 years | ||||
ESPP | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted-average fair value per share of grants (in dollars per share) | $ 38.88 | $ 32.26 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Benefit from (provision for) income taxes | $ (73) | $ 68 | $ (163) | $ 27 |
Income (loss) before benefit from (provision for) income taxes | 164 | $ 231 | $ 646 | $ 616 |
Effective tax rate | 25.00% | (4.00%) | ||
Discrete tax benefit | $ 139 | |||
Reasonably possible decrease of unrecognized tax benefits | $ 3 | $ 3 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation of Denominator Used in Calculation of Basic and Diluted Loss Per Share (Detail) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Numerator: | ||||
Net income | $ 91 | $ 299 | $ 483 | $ 643 |
Denominator: | ||||
Weighted-average shares outstanding for basic earnings per share (in shares) | 776 | 747 | 774 | 737 |
Effect of dilutive securities: | ||||
Convertible senior notes which matured in April 2018 (in shares) | 0 | 0 | 0 | 2 |
Employee stock awards (in shares) | 19 | 23 | 21 | 20 |
Warrants which settled in June and July 2018 (in shares) | 0 | 4 | 0 | 4 |
Adjusted weighted-average shares outstanding and assumed conversions for diluted earnings per share (in shares) | 795 | 774 | 795 | 763 |
Earnings Per Share - Shares Exc
Earnings Per Share - Shares Excluded from Diluted Earnings or Loss Per Share (Detail) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2019 | Jul. 31, 2018 | Jul. 31, 2019 | Jul. 31, 2018 | |
Employee stock awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded | 7 | 7 | 5 | 5 |
Leases and Other Commitments -
Leases and Other Commitments - Additional Information (Detail) $ in Millions | 6 Months Ended |
Jul. 31, 2019USD ($) | |
Other Commitments [Line Items] | |
Operating lease extension term | 5 years |
Operating lease termination option | 1 year |
Sublease income, remainder of fiscal year | $ 14 |
Sublease income, next four years | 130 |
Sublease income, thereafter | 73 |
Operating leases that have not yet commenced | 2,000 |
Operating lease commitment balance, including leases not yet commenced | 5,400 |
Letter of credit | |
Other Commitments [Line Items] | |
Value of outstanding letters of credit | $ 92 |
Minimum | |
Other Commitments [Line Items] | |
Operating lease term | 1 year |
Maximum | |
Other Commitments [Line Items] | |
Operating lease term | 23 years |
Facility to be Constructed | Minimum | |
Other Commitments [Line Items] | |
Operating lease term | 9 years |
Facility to be Constructed | Maximum | |
Other Commitments [Line Items] | |
Operating lease term | 17 years |
Facilities Space | |
Other Commitments [Line Items] | |
Operating lease commitment balance, including leases not yet commenced | $ 4,700 |
Leases and Other Commitments _2
Leases and Other Commitments - Components of Lease Expense and Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jul. 31, 2019 | Jul. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease cost | $ 217 | $ 423 |
Finance lease cost: | ||
Amortization of right-of-use assets | 17 | 33 |
Interest on lease liabilities | 5 | 11 |
Interest on lease liabilities | 22 | 44 |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash outflows for operating leases | 209 | 391 |
Operating cash outflows for finance leases | 4 | 8 |
Financing cash outflows for finance leases | 134 | 136 |
Right-of-use assets obtained in exchange for lease obligations: | ||
Operating leases | $ 171 | $ 330 |
Leases and Other Commitments _3
Leases and Other Commitments - Balance Sheet and Other Information Related to Leases (Details) $ in Millions | Jul. 31, 2019USD ($) |
Operating leases: | |
Operating lease right-of-use assets | $ 2,904 |
Operating lease liabilities, current | 706 |
Noncurrent operating lease liabilities | 2,341 |
Total operating lease liabilities | 3,047 |
Finance leases: | |
Accumulated depreciation | (372) |
Property and equipment, net | 421 |
Accrued expenses and other liabilities | 76 |
Other noncurrent liabilities | 336 |
Total finance lease liabilities | $ 412 |
Weighted average remaining lease term | |
Operating leases | 7 years |
Finance leases | 21 years |
Weighted average discount rate | |
Operating leases | 2.80% |
Finance leases | 4.50% |
Buildings and building improvements | |
Finance leases: | |
Finance leases, gross | $ 325 |
Computers, equipment and software | |
Finance leases: | |
Finance leases, gross | $ 468 |
Leases and Other Commitments _4
Leases and Other Commitments - Maturities of Lease Liabilities (Details) $ in Millions | Jul. 31, 2019USD ($) |
Operating Leases | |
Remaining six months of Fiscal 2020 | $ 384 |
Fiscal 2021 | 723 |
Fiscal 2022 | 516 |
Fiscal 2023 | 356 |
Fiscal 2024 | 284 |
Thereafter | 1,133 |
Total minimum lease payments | 3,396 |
Less: Imputed interest | (349) |
Total | 3,047 |
Finance Leases | |
Remaining six months of Fiscal 2020 | 36 |
Fiscal 2021 | 67 |
Fiscal 2022 | 23 |
Fiscal 2023 | 23 |
Fiscal 2024 | 24 |
Thereafter | 434 |
Total minimum lease payments | 607 |
Less: Imputed interest | (195) |
Total | $ 412 |
Legal Proceedings and Claims (D
Legal Proceedings and Claims (Details) - claim | Jul. 31, 2019 | Aug. 31, 2017 | Jul. 31, 2019 |
Shareholder Derivative Lawsuits | |||
Loss Contingencies [Line Items] | |||
Number of claims filed | 3 | ||
Tableau Software, Inc. (Tableau) Litigation | |||
Loss Contingencies [Line Items] | |||
Number of claims filed | 3 | 2 |
Related-Party Transactions (Det
Related-Party Transactions (Details) - Affiliated Entity $ in Millions | 6 Months Ended | |
Jul. 31, 2019USD ($)board_memberemployeeboard_seat | Jul. 31, 2018USD ($) | |
Related Party Transaction [Line Items] | ||
Number of Company's board members that hold board seats in Foundation | 1 | |
Number of board seats in Foundation | 3 | |
Number of Company's employees that hold board seats in non-profit | employee | 1 | |
Number of Company's board members that hold board seats in non-profit | board_member | 1 | |
Number of board seats in non-profit held by Company's employees and board members | 3 | |
Number of board seats in non-profit | 8 | |
Value of resources donated to related parties | $ | $ 6 | $ 7 |
Value of donated subscriptions to related parties | $ | $ 110 | $ 117 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - USD ($) shares in Millions, $ in Millions | Aug. 31, 2019 | Aug. 01, 2019 |
Tableau Software, Inc. | ||
Subsequent Event [Line Items] | ||
Consideration transferred | $ 14,900 | |
Common stock issued | $ 14,600 | |
Common stock issued (in shares) | 96 | |
Fair value of stock options and restricted stock awards assumed | $ 300 | |
ClickSoftware Technologies Ltd. | ||
Subsequent Event [Line Items] | ||
Consideration transferred | $ 1,350 |