Executive Summary
Salesforce delivered a solid start to fiscal 2026 with Q1 revenue of $9.829 billion, up 8% year over year (YoY) and 9% in constant currency, supported by continued strength in small/medium business and mid-market segments. The company raised its FY2026 revenue guidance to a high end of $41.3 billion, reflecting favorable FX tailwinds and solid demand across its cloud portfolio, while maintaining discipline on margins and cash flow. Management emphasized the accelerating AI-driven flywheel centered on the ADAM framework (Agents, Data, Apps, Metadata), with Data Cloud and AgentForce delivering outsized growth and cross-cloud value.
Key Performance Indicators
Key Insights
Revenue: $9.829B in Q1 2026, up 8% YoY and ~9% CC. Gross profit: $7.564B; gross margin ~76.96% (0.7696). Operating income: $1.942B; operating margin ~19.76%. EBITDA: $2.749B; EBITDA margin ~27.97%. Net income: $1.541B; net margin ~15.68%. Diluted EPS: $1.59; basic EPS: $1.61. Remaining performance obligation (RPO): $60.9B, up 13% YoY. Current RPO (CRPO): $29.6B, up 12% YoY. Cash flow: net cash provided by operating activities $6.476B; free cash flow $6.297B. Cash and cash equivalents: $10.928B; ...
Financial Highlights
Revenue: $9.829B in Q1 2026, up 8% YoY and ~9% CC. Gross profit: $7.564B; gross margin ~76.96% (0.7696). Operating income: $1.942B; operating margin ~19.76%. EBITDA: $2.749B; EBITDA margin ~27.97%. Net income: $1.541B; net margin ~15.68%. Diluted EPS: $1.59; basic EPS: $1.61. Remaining performance obligation (RPO): $60.9B, up 13% YoY. Current RPO (CRPO): $29.6B, up 12% YoY. Cash flow: net cash provided by operating activities $6.476B; free cash flow $6.297B. Cash and cash equivalents: $10.928B; total current assets $25.866B; total assets $98.61B. Total debt: $11.369B; net debt: $0.441B; cash/equivalents plus short-term investments: $17.408B. Guidance: FY2026 revenue to $41.0–$41.3B (high end $41.3B), FX tailwinds ~$250M; non-GAAP operating margin ~34%; GAAP margin ~21.6%; annual OCF growth 10–11%; free cash flow growth 9–10%. Q2 guidance: $10.1–$10.2B revenue; CRPO growth ~10% nominal with ~+$0.3B FX tailwind. Notable product/portfolio highlights include AgentForce/Data Cloud traction (Data Cloud ARR growth >120% YoY, Data Cloud records >22 trillion, top deals anchored by Data Cloud and AgentForce), Tableau integration, and ongoing Informatica acquisition (expected close early FY2027) with accretion and non-dilutive financing expectations.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
9.83B |
7.62% |
-1.64% |
| Gross Profit |
7.56B |
8.51% |
-2.73% |
| Operating Income |
1.94B |
13.63% |
6.70% |
| Net Income |
1.54B |
0.52% |
-9.78% |
| EPS |
1.61 |
1.90% |
-9.55% |
Management Commentary
Key management takeaways from the earnings call and Q&A:
- Strategy and AI flywheel: Marc Benioff emphasized the ADAM framework (Agents, Data, Apps, Metadata) as the backbone of Salesforce's AI strategy, highlighting how AgentForce and Data Cloud are integrated with MuleSoft, Tableau, and the metadata platform to drive enterprise AI deployment across industries. Quote: "the four elements the app, the data, the agents, and the metadata, that make Salesforce unique" and the expectation that these capabilities will transform customer outcomes.
- Informatica acquisition as a strategic accelerator: Marc described Informatica as a transformational, accretive, nondilutive addition to Salesforce's data capabilities, stating the deal is "a great price for a great company" and will accelerate AI-driven growth by unifying enterprise data. Robin outlined a disciplined M&A integration plan and a path to accretion by year two post-close, funded without share dilution, with close targeted for early FY2027.
- AgentForce momentum and adoption: Marc and Miguel highlighted rapid adoption, with over 4,000 paid AgentForce deals and more than 8,000 in total, 800 customers in production, and rapid expansion in industries like hospitality, retail, and consumer, aided by prebuilt templates and flex-credits pricing.
- Data Cloud scale and cross-cloud value: Robin noted Data Cloud surpassed 22 trillion records (up ~175% YoY) and that roughly half of top deals included Data Cloud and AI, demonstrating enterprise readiness and demand. 50% of Q1 Data Cloud new bookings came from existing customers, underscoring high retention and expansion.
- Tableau and Slack integration as ADAM components: Srini and Marc explained Tableau's role as an embedded, agent-enabled analytics layer, running on Hyperforce and integrated across Salesforce apps and Slack, reinforcing the productivity gains across the enterprise.
- Outlook and guidance: Management reaffirmed a constructive demand environment with raised FY2026 revenue guidance and a Q2 revenue range of $10.1B–$10.2B, supported by FX tailwinds and ongoing data/AI investments. They also signaled the Informatica close and integration plan, with accretion targets within two years.
"This transaction is not expected to disrupt our capital return strategy, inclusive of our share repurchase program and our dividend. The deal will be financed through a combination of cash and new debt, resulting in no share dilution."
— Robin Washington
"We expect to achieve accretion on non-GAAP operating margin, non-GAAP EPS, and free cash flow by year two post-close."
— Robin Washington
Forward Guidance
Management guidance underscores an upbeat but disciplined outlook. Key points: FY2026 revenue guidance raised to $41.0–$41.3B (high end $41.3B), driven by FX tailwinds of up to $250M since last print. Subscription and support revenue growth is expected around 9% in constant currency, aided by Data Cloud and AgentForce contributions, with some moderation from marketing and commerce. Non-GAAP operating margin guided at 34% (GAAP ~21.6%), maintaining a path of margin expansion and cash-flow profitability. Operating cash flow expected to grow 10–11% for the year, and free cash flow 9–10%. Q2 revenue guidance is $10.1B–$10.2B, with CRPO growth of about 10% YoY (nominal) including roughly $0.3B FX tailwind. Risks cited include exposure to macro demand environment, potential headwinds affecting bookings/CRPO, and the exposure to the slower expiration base; the company also highlighted execution risk around Informatica integration and achieving two-year accretion targets. The close of the Informatica deal is expected by early FY2027, with integration accelerated via a dedicated playbook and forward-deployed engineering teams.
Investment implications: The combination of a strong Q1, accelerating Data Cloud and AgentForce adoption, expanding distribution capacity (target ~22% growth in sales capacity for the year), and the Informatica data-layer expansion provides a compelling multi-year growth trajectory. Key monitorables include: the rate of AgentForce and Data Cloud adoption (subscription/consumption mix, usage growth, and ARR), progress of Informatica integration (synergy capture, data-hub expansion, and non-dilutive financing outcomes), FX sensitivity (net tailwinds vs. potential headwinds), and the pace of go-to-market expansion (AEs, pipeline velocity, and cross-sell across clouds).