Salesforce Inc (CRM) Q1 2026 Earnings Call Highlights: Strong Revenue Growth and Strategic ...

Revenue: $9.83 billion in Q1, up 8% year over year. Subscription and Support Revenue: Grew 9% in constant currency. Non-GAAP Operating Margin: 32.3% for the quarter. Operating Cash Flow: $6.5 billion. Remaining Performance Obligation (RPO): $60.9 billion, up 13% year over year.

Current Remaining Performance Obligation (CRPO): $29.6 billion, up 12% year over year in nominal terms. Fiscal Year 2026 Revenue Guidance: Raised to $41.3 billion at the high end. Agentforce ARR: $100 million. Data Cloud ARR: More than $1 billion, grew over 120% year over year. Dividend Payout Increase: 4% in Q1.

Share Repurchases and Dividends: Over $3 billion returned in Q1. Warning! GuruFocus has detected 7 Warning Signs with NSCIF. Release Date: May 28, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Salesforce Inc (NYSE:CRM) reported strong Q1 fiscal 2026 revenue of $9.83 billion, up 8% year over year. The company raised its fiscal year 2026 revenue guidance by $400 million to $41.3 billion at the high end.

Salesforce Inc (NYSE:CRM) achieved a non-GAAP operating margin of 32.3% in the quarter. The acquisition of Informatica for $8 billion is expected to enhance Salesforce's data and AI capabilities. Agentforce has seen rapid adoption with over 4,000 paid customers and $100 million in ARR, showcasing strong growth potential. Negative Points There are concerns about the timing of when Agentforce and Data Cloud will significantly drive overall growth acceleration. The integration of Informatica is expected to take time, with accretion anticipated by fiscal year 2027.

Some geographic regions, such as parts of EMEA, remain constrained, impacting overall growth. The company faces challenges in expanding its distribution capacity, which has been flat for the last two years. There is uncertainty in customer behavior due to macroeconomic factors and geopolitical tensions, which could impact future growth. Q & A Highlights Q: The excitement around Agentforce and the Data Cloud is palpable. When can we expect these to become bigger drivers for Salesforce's overall growth rate? A: Marc Benioff, CEO, emphasized the company's commitment to growth while maintaining margin and cash flow frameworks.

He highlighted the need for distribution expansion, particularly in small and medium businesses, and announced plans to hire 1,000 to 2,000 more salespeople to capitalize on growth opportunities. Miguel Milano, Chief Revenue Officer, added that the company is expanding its sales capacity and focusing on high-growth areas, with a target of 22% overall capacity growth by the end of the fiscal year. Story Continues Q: Have you seen any uncertainty in customer behavior given the macroeconomic environment? A: Robin Washington, President and CFO, noted that Salesforce benefits from a balanced portfolio across geographies and industries, which helps mitigate macroeconomic uncertainties. She mentioned strong momentum in data and AI, with modest contributions from Agentforce, and highlighted the company's confidence in its guidance due to strong product offerings and increased sales capacity. Q: How will the acquisition of Informatica change the game for Salesforce, especially in relation to Agentforce and data strategy? A: Marc Benioff explained that Informatica will accelerate Salesforce's data strategy by enhancing its ability to unify and activate data.

Srinivas Tallapragada, Chief Engineering Officer, emphasized that Informatica will complement Salesforce's existing data platform, which includes MuleSoft, Data Cloud, and Tableau, providing a trusted data platform necessary for the success of Agentforce. Q: What are some leading indicators that suggest Agentforce is a significant cycle for Salesforce? A: Marc Benioff highlighted the rapid adoption of Agentforce, with 8,000 customers and 4,000 paying customers in a short period. He emphasized that Agentforce is deeply integrated with Salesforce's other products, driving comprehensive solutions for customers. Miguel Milano added that Agentforce deals typically include multiple Salesforce clouds, indicating strong cross-product adoption. Q: What are your thoughts on the potential impact of AI on white-collar jobs, and how can Salesforce help companies navigate these changes? A: Marc Benioff acknowledged the potential for AI to transform jobs but emphasized that Salesforce is focused on repositioning employees rather than eliminating jobs.

He highlighted Salesforce's success in using Agentforce internally to handle customer support, reducing the need for human intervention while creating opportunities for employees in other areas. Benioff also noted that while AI can enhance productivity, it cannot replace all human functions, and Salesforce aims to help companies leverage AI responsibly. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. View Comments