Salesforce, Inc.
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ITEM 1. BUSINESS
Overview
Salesforce, Inc. (“Salesforce,” the “Company,” “we” or “our”) is a global leader in customer relationship management (“CRM”) technology, helping organizations of any size become agentic enterprises. Founded in 1999, we bring humans, agents, applications, and data together on a trusted, unified platform to unlock growth and innovation.
Our artificial intelligence (“AI”) powered Agentforce 360 Platform unites our offerings — spanning sales, service, marketing, commerce, collaboration, data management, integration, analytics, IT service, industry verticals and more — on a single, intelligent platform for trusted enterprise execution. We unify and harmonize across systems, applications and devices to create a complete view of customers. With this single source of customer truth powering agents, teams can be more responsive, productive and efficient and deliver AI-powered, personalized and automated experiences across every channel. With Agentforce, the agentic layer of the Agentforce 360 Platform, our customers can build and deploy always-on digital labor for employees and customers, leveraging autonomous AI agents across business functions that aim to increase productivity, lower costs and drive operational efficiencies. With Agentforce, AI is embedded in the flow of work — in the applications that our customers already use every day. Every Agentforce-embedded application now reasons, learns, and takes action alongside users.
Our service offerings are designed to be flexible, scalable and easy to use. They can generally be configured easily, deployed rapidly and integrated with other platforms and enterprise applications. We sell to businesses worldwide, primarily on a subscription basis, through our direct sales efforts and also indirectly through partners. In addition, we enable third parties to use our platform and developer tools to create additional functionality and new applications that run on our platform, which are sold separately from, or in conjunction with, our service offerings.
Salesforce is committed to a core set of values: trust, customer success, innovation, equality and sustainability – all of which are grounded in legal and regulatory frameworks that guide and inform our business. Foremost among these is trust, which is paramount and the foundation for everything we do, and is also firmly rooted in compliance with applicable laws governing security, privacy, data protection and operational integrity. Our customers expect to trust and rely on our technology to meet the high enterprise-grade standards of security, privacy, performance, legal compliance and availability at scale. Customer success is at the core of our business, and we align the entire company around our customers’ needs, promoting their success and delivering value while upholding applicable laws, contractual obligations and industry regulations and standards. Innovation is fundamental to our mission, empowering and enabling our customers to stay ahead in their industries and driving technological advancements in line with evolving laws, standards and guidelines. Equality is a legal and ethical mandate and a core tenet that informs how we operate. Our commitment to equal opportunity is anchored in applicable laws, statutes, regulations and principles. We value the equality of every individual at our company and in our communities and are dedicated to fostering a workplace that complies with these protections, creating an inclusive culture where every individual feels seen, heard and valued. Finally, we are committed to creating a more sustainable and nature-positive future for all. Our products and services help our customers meet their own sustainability and compliance priorities, guided by applicable environmental and sustainability-related laws, corporate social responsibility frameworks and legal requirements. By grounding our values in legal and regulatory principles, we reinforce our opportunity and responsibility to uphold high integrity and robust ethical standards, ensuring that trust, fairness, and compliance remain central to everything we seek to do.
We believe that our values, grounded in legal and regulatory frameworks, create value, and the business of business is to make the world a better place for all of our stakeholders, including stockholders, customers, employees, partners, the planet and the communities in which we work and live. Salesforce is committed to giving back to our communities, helping businesses grow while protecting the environment for future generations, and transparent environmental, social and governance disclosures. We believe we have a broad responsibility to society, and we aspire to create a framework for the ethical and humane use of technology that not only drives the success of our customers, but also upholds the basic human rights of every individual.
Our Service Offerings
We believe every business, in every industry, must become an Agentic Enterprise creating agent-first experiences that increase efficiency, boost productivity, and drive growth for customers, employees, and partners. We view Salesforce to be uniquely positioned to lead customers through this transformation. By integrating data, metadata, applications and agents, we have created a deeply unified platform for the Agentic Enterprise, with humans at the center. Central to this ecosystem is Slack, which serves as the primary conversational interface, allowing users to interact with Agentforce-embedded applications and autonomous agents within their natural flow of work. These Agentforce-embedded applications are infused with agentic capabilities that turn workflows into personalized, intelligent, autonomous experiences—so customers and employees can move faster, make better decisions, and achieve more value.
Our service offerings are designed to work together and include:
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Agentforce Sales. Our Agentforce Sales offering is an integrated platform that brings together the power of humans with AI agents to help sales teams sell faster and smarter, and to efficiently manage and automate entire sales processes. It provides sales capabilities and tools built for an entire sales organization – across prospecting, sales engagement, team collaboration, sales analytics and AI, sales programs, sales performance, partner management, and revenue and orders. With our Sales offering, businesses can create lifelong customers by connecting their entire organization and unifying all data sources on a single integrated platform. Further, with Agentforce for Sales, customers can build a sales team augmented by a digital labor force and empower every seller with their own AI agent to help accelerate productivity and drive growth.
Agentforce Service. Our Agentforce Service offering enables companies in every industry to bring all of their customer, employee, IT and field service needs onto one integrated, AI-powered platform to deliver trusted, highly personalized customer support at scale. It also helps our customers maximize productivity, resolve cases faster and improve customer satisfaction by automating routine tasks. With Agentforce for Service, customers can tap the power of digital labor to handle low-touch interactions and help their teams with high-touch tasks, unlocking new levels of efficiency. Agentforce automatically routes cases to the best service agent for the job, responds to customers with personalized, relevant answers grounded in company data and performs tasks like auto-summarizing support cases and field work orders. Our service offering also provides a field service solution that enables companies to connect service agents, dispatchers and mobile employees through one centralized platform, on which they can intelligently schedule and dispatch work as well as track and manage jobs.
Agentforce 360 Platform, Slack and Other. The Agentforce 360 Platform enables companies of all industries, sizes, and locations to build business workflows, applications and AI agents on a single, comprehensive platform to help automate processes, boost efficiency, increase productivity and reduce information technology costs. It facilitates development with no-code and low-code tools that are easy to use and free to learn, empowering teams to build trusted applications, workflows, AI agents and much more. Our Trust Layer is built into the Platform to help customers safely use their data and set guardrails on what AI agents do with that data. The Agentforce 360 Platform is built on Hyperforce, our infrastructure that helps customers manage data governance and compliance at a local level, all over the world. Our technology partners help customers to add the applications and agents they need and utilize the data lakes and other infrastructure they have already invested in. With our open, extensible Agentforce 360 Platform, customers can integrate and build with any data or partner application they choose to make the Agentforce 360 Platform work for their business.
Data 360. Data 360 is Salesforce’s hyperscale, trusted data engine that gives AI agents their context and serves as the foundation for how customers unify our service offerings making their data actionable for both humans and agents. It connects enterprise data from across clouds, systems, and channels utilizing zero-copy technology to access external data sources without the need for duplication. This architecture unifies, cleans, and harmonizes the data into a single, governed source of truth that agents can reliably understand and act on. Through real-time ingestion, transformation, indexing, and retrieval-augmented generation, Data 360 turns both structured records and unstructured content—emails, documents, conversations, and events—into usable, searchable intelligence. This gives AI agents the customer and business context they need to reason accurately, personalize interactions, and make better decisions in the moment. By leveraging Data 360’s metadata and trust framework, Data 360 is designed to make every data point permissioned, governed, and compliant, so agents see only what they are allowed to see and act only within approved boundaries.
Informatica. The acquisition of Informatica closed in the fourth quarter of fiscal 2026, significantly expanding our trusted data foundations. Informatica is an enterprise-grade, AI-powered data management platform that enables customers to discover, integrate, govern, and deliver trusted data at scale across hybrid and multi-cloud environments. It provides comprehensive capabilities for data integration, quality, governance, master data and metadata management, and catalog services that connect and harmonize data from any source—whether on-premises, cloud-based, or within legacy systems. By leveraging Informatica's agentic and metadata-driven architecture, customers can break down data silos with confidence in data quality and compliance, and establish a unified foundation for enterprise AI. Informatica extends our data connectivity beyond native integrations, enabling customers to bring enterprise data from complex, distributed systems into Salesforce and Data 360 while autonomously maintaining governance, lineage, and security controls across the entire data lifecycle.
Slack. Our Slack offering is the conversational interface for the Agentic Enterprise where people and agents work together, connecting knowledge, actions, and data in real time. Slack centralizes conversations and collaboration, automates business processes, makes search and knowledge sharing seamless, and delivers trusted generative and agentic AI that augments employees so they can work smarter, make decisions faster, and drive real outcomes. Slack is also deeply integrated with every Salesforce offering, including Agentforce. We recently introduced Slackbot, a trusted, out-of-the-box personalized employee agent in Slack that can find answers, organize work, create content, schedule meetings, and take action.
Agentforce. Agentforce enables customers to build, deploy, and manage enterprise-grade, autonomous AI agents at scale, enabling humans and agents to work together. Agentforce connects AI models directly to execution, handling workflows. Agents built on Agentforce can access live business data through Data 360, follow company policies defined in Salesforce metadata, and take action through Salesforce applications and MuleSoft Application Programming Interfaces (“APIs”). All of our customers’ deterministic business logic, workflows, and policies are instantly accessible to agents, without requiring
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customers to remove and rebuild existing processes. Agents know the jobs to be done, and the steps needed to complete them, which greatly reduces complexity and speeds time to value. By pairing Large Language Model (“LLM”) reasoning with deterministic logic, Agentforce delivers more accurate, reliable outcomes within our trust layer. Agentforce is infused across every Salesforce application, so intelligence is embedded directly into the workflows where work actually happens. Instead of switching between tools, people can collaborate with agents inside and across the systems they already use every day, using natural language, across the majority of communication channels, including voice, chat and Slack. Every agent operates within defined permissions with full observability, governance, and auditability. Organizations can see what agents are doing, measure their performance, understand why decisions were made and intervene when needed. Teams can manage the complete agent development lifecycle with a set of tools to build, test, deploy, manage and orchestrate AI agents at scale. At its core, Agentforce powers the Agentic Enterprise—where humans set direction and values, and agents execute with speed, precision, and trust.
Agentforce Marketing and Agentforce Commerce.
Marketing. Our Marketing offering is a complete marketing platform designed to help customers personalize engagement across the customer lifecycle. By connecting departments through actionable data and autonomous AI agents, we empower teams to work together to build lasting customer relationships. With Agentforce for Marketing, marketers can save time on every step of the campaign process by generating briefs, content, and journeys, as well as optimizing performance and spend with actionable insights and predictive AI. With unified, 360-degree customer profiles, marketers and AI agents can easily build segments, calculate insights, analyze performance, and power AI recommendations, decisioning and automations. Agentforce for Marketing transforms traditional channels into two-way conversations, and enables teams to seamlessly provide next-best-offer recommendations for sales, support customer retention through proactive promotions, and re-engage inactive shoppers.
Commerce. Our Commerce offering helps connect every aspect of commerce—from marketing and sales to service and fulfillment—on a single, connected, AI-powered platform, enabling brands to deliver personalized, seamless shopping experiences across every customer touchpoint. With Agentforce for Commerce, brands can autonomously manage a range of tasks with AI agents, such as product recommendations and order lookup, helping to boost capacity and productivity across marketing, commerce, merchandising, and store operations. With trusted AI and AI agents, businesses can generate product descriptions and web pages, and deliver personalized shopping assistance using natural language. Native integrations between our Commerce, Sales, Service and Marketing offerings enable brands to tackle complex challenges and build cohesive digital experiences. Additionally, our Commerce offering delivers click-to-code tools, which provide customers with the ability to quickly build and deploy our solutions around their customers as markets, industries, and customers evolve.
Agentforce Integration and Agentforce Analytics.
Integration. Our unified Integration, Automation, and API Management offerings, powered by MuleSoft, provide the essential building blocks to deliver AI-powered, end-to-end, connected experiences and faster innovation. Customers use MuleSoft across their systems to connect data, take action on their data using no-code or low-code automations across any system, and scale API governance to help secure and monitor all of their data in transit. MuleSoft Agent Fabric allows organizations to manage, govern, and observe agents regardless of where they were built or where they run, and provides a central registry to discover and reuse agents across the enterprise.
Analytics. Our analytics offerings, including Tableau, provide advanced, end-to-end solutions that turn data into insight and action for a wide range of business use cases, powered by agentic AI. Built on the Agentforce 360 Platform, Tableau enables customers to visualize, analyze, and act on data from any source, and continuously surface trends, predict outcomes, and deliver recommendations. Tableau Semantics, integrated into Data 360, translates data into business language, driving more accurate responses and relevant insights. Agentforce agents can trigger actions directly from Tableau such as updating a forecast, launching a campaign, or escalating a customer issue. Tableau analytics can be surfaced natively within Salesforce applications, including Slack, lowering the barriers of actionable analytics for everyone.
Other Salesforce Offerings
In addition to our solution specific service offerings, we have specialized solutions that work across our offerings to support our customers’ business needs. These additional service offerings include:
Industries. Our industry vertical offerings meet the specific needs of our customers across different industries, such as financial services, healthcare and life sciences, manufacturing, automotive and government. Each of our distinct industry offerings provide out-of-the-box, Agentforce-powered capabilities that enable industry customers to leverage the full Agentforce 360 Platform with purpose-built tools that address industry-specific needs and provide the speed and flexibility to keep up with changing times and customer demands. Salesforce’s industry offerings also includes Industries AI – a suite of capabilities for more than 200 industries and a library with resources on how to get started for every industry offering. Industries AI serves as the foundation for creating industry-specific AI agents with Agentforce that can be set up in minutes, work around the clock, and autonomously perform industry-specific business tasks and actions.
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Salesforce Starter. We offer Starter Suite, an all-in-one, easy-to-use solution for small and medium-size businesses that brings sales, service, marketing and commerce together. Starter Suite helps businesses launch Salesforce quickly and easily, so they can save time, boost productivity, and manage relationships with all of their customer operations in one centralized location. Starter Suite allows businesses to build a trusted foundation of customer data for advanced AI technology to support efficient business growth.
Business Benefits of Using Our Solutions
The key advantages of our solutions include the following:
•an industry-leading, AI-powered deeply unified platform to create an Agentic Enterprise for business-to-business, business-to-consumer and business-to-employee for the all-digital, work-from-anywhere world;
•scalable, efficient and flexible solutions for any size company or industry;
•a single source of truth that connects customer data across systems, applications and devices to help companies sell, service, market and conduct commerce from anywhere;
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, which may consist of, among other things, trend analyses and statements regarding future events, future financial performance, anticipated growth, and industry prospects, are forward-looking. Words such as “aims,” “anticipates,” “assumes,” “believes,” “commitments,” “could,” “estimates,” “expects,” “forecasts,” “foresees,” “goals,” “intends,” “may,” “plans,” “predicts,” “projects,” “seeks,” “should,” “targets” and “would,” and variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are inherently uncertain and based on management’s current expectations and assumptions, which are subject to risks and uncertainties that are difficult to predict, including those described in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Part I, Item 3, “Quantitative and Qualitative Disclosures About Market Risk,” Part II, Item 1A, “Risk Factors,” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results or outcomes to differ materially from those contained in any forward-looking statements.
In light of these and other risks and uncertainties, the future events and trends discussed in this Quarterly Report on Form 10-Q may not occur as we expect or at all, and our actual results or outcomes may differ materially and adversely from those expressed or implied in our forward-looking statements. Readers are cautioned not to place undue reliance on such forward-looking statements. Except as required by law, we undertake no obligation to revise or update publicly any forward-looking statements for any reason.
Overview
Salesforce is a global leader in customer relationship management (“CRM”) technology, helping organizations of any size become agentic enterprises. Founded in 1999, we bring humans, agents, apps, and data together on a trusted, unified platform to unlock growth and innovation.
Our platform unites sales, service, marketing, commerce and IT teams by connecting customer data across systems, apps and devices to create a complete view of customers. With this single source of customer truth and integrated artificial intelligence (“AI”), teams can be more responsive, productive and efficient, deliver intelligent, personalized experiences across every channel and increase productivity. We continue to expand the capabilities of our autonomous AI agent layer integrated across our platform. Agentforce enables organizations to deploy autonomous agents that reason, make decisions, and execute tasks. Salesforce is the platform that powers how humans and agents work together, whether using Customer 360 apps, Slack, Headless 360, or other user interfaces. We continue to invest for growth, including investing in generative and agentic AI across all products, which we believe will change how our customers help their customers, and continuously look to expand our leadership role in the cloud computing industry.
We continue to focus on several key growth levers, including driving multiple service offering adoption, increasing our penetration with enterprise and international customers and expanding our industry-specific reach with more vertical software solutions. These growth levers often require a more sophisticated go-to-market approach and, as a result, we may incur additional costs upfront to obtain new customers and expand our relationships with existing customers, including additional sales and marketing expenses specific to subscription and support revenue. As a result, we have seen that customers with many of these characteristics drive higher annual revenues and have lower attrition rates than our company average. In addition to these growth levers, our mergers and acquisitions framework has included several acquisitions that have accelerated our agentic roadmap, including our April 2026 acquisition of Qualified.com, Inc. (“Qualified”), our November 2025 acquisition of Informatica, Inc. (“Informatica”) and our October 2025 acquisition of Regrello Corp. (“Regrello”). These acquisitions bring in key talent and technology to accelerate innovation.
We are also focused on reducing our operating expenses to improve our operating margin. We have undertaken various restructuring initiatives to improve operating margins and continue advancing our ongoing commitment to profitable growth, which has included a reduction of our workforce, office space and data centers within certain markets. We continue to evaluate and operationalize future programs to drive further operational efficiencies, optimize our management structure and increase cost optimization efforts to realize long-term sustainable growth. We expect to continue to experience improvements in our operating expenses as a percentage of revenue, which could include various restructuring initiatives or measured hiring initiatives to drive operational efficiencies.
Highlights from First Quarter of Fiscal 2027
•Revenue: For the three months ended April 30, 2026, revenue was $11.1 billion, an increase of 13 percent year-over-year.
•Income from Operations: For the three months ended April 30, 2026, income from operations was $2.3 billion as compared to $1.9 billion from a year ago. Operating margin, which represents income from operations as a percentage
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of total revenue, increased to approximately 21 percent for the three months ended April 30, 2026 compared to approximately 20 percent in the prior year period.
•Net Income per Share: For the three months ended April 30, 2026, diluted net income per share was $2.42 as compared to diluted net income per share of $1.59 from a year ago. Our $25 billion Accelerated Share Repurchase (“ASR Agreements”) executed in March 2026 resulted in the repurchase of approximately 103 million shares in the period and benefitted our diluted net income per share by $0.14.
•Cash: Cash provided by operations for the three months ended April 30, 2026 was $6.7 billion, an increase of three percent year-over-year. Total cash, cash equivalents and marketable securities as of April 30, 2026 was $11.8 billion.
•Remaining Performance Obligation: Total remaining performance obligation, which represents all future revenue under contract yet to be recognized, as of April 30, 2026 was approximately $67.9 billion, an increase of 11 percent year-over-year. Current remaining performance obligation as of April 30, 2026 was approximately $33.6 billion, an increase of 14 percent year-over-year.
•Dividend Program: For the three months ended April 30, 2026, we paid approximately $365 million in dividends and dividend equivalents as compared to $402 million from a year ago.
Our diversified product portfolio and global customer base has provided us with operational resiliency across various geographies, products, and industry segments. During the first quarter of fiscal 2027, we experienced sustained growth in Agentforce Apps and Data 360, bolstered by the acquisition of Informatica.
In addition, the expanding global scope of our business and the heightened volatility of global markets expose us to the risk of fluctuations in foreign currency markets. Total revenues in the three months ended April 30, 2026 were positively impacted by approximately two percent in foreign currency fluctuations compared to the three months ended April 30, 2025. Relative to April 30, 2025, our current remaining performance obligation growth as of April 30, 2026 was positively impacted by one percent compared to what would have been reported using constant currency rates. The impact of foreign currency fluctuations could impact our near-term results and ability to accurately predict our future results and earnings. The impact of these fluctuations can also be compounded by the seasonality of our business in which our fourth quarter has historically been our strongest quarter for new business and renewals.
Fiscal Year
Our fiscal year ends on January 31. References to fiscal 2027, for example, refer to the fiscal year ending January 31, 2027.
Operating Segments
We operate as one segment. See Note 1 “Summary of Business and Significant Accounting Policies” to the condensed consolidated financial statements for further discussion.
Sources of Revenues
We derive our revenues from two sources: (1) subscription and support revenues and (2) professional services and other revenues. Subscription and support revenues accounted for approximately 95 percent of our total revenues for the three months ended April 30, 2026.
Subscription and support revenues primarily include subscription fees from customers accessing our enterprise cloud computing services (collectively, “Cloud Services”), software license revenues from the sales of term software licenses, and support revenues from the sale of support and updates beyond the basic subscription fees or related to the sales of software licenses. Our Cloud Services allow customers to use our multi-tenant software without taking possession of the software. Revenue is generally recognized ratably over the contract term. Subscription and support revenues also include revenues associated with term software licenses that provide the customer with a right to use the software as it exists when made available. Revenues from term software licenses are generally recognized at the point in time when the software is made available to the customer. Revenue from support and updates is recognized as such support and updates are provided, which is generally ratably over the contract term. Changes in contract duration for multi-year term software licenses can impact the amount of revenues recognized upfront. Revenues from term software licenses represent less than ten percent of total subscription and support revenue for the three months ended April 30, 2026.
The revenue growth rates of each of our service offerings, as described below in “Results of Operations,” fluctuate from quarter to quarter and over time. Additionally, we manage the total balanced product portfolio to deliver solutions to our customers and, as a result, the revenue result for each offering is not necessarily indicative of the results to be expected for any subsequent quarter. In addition, some of our Cloud Service offerings have similar features and functions. For example, customers may use our Sales, Service or Platform service offerings to record account and contact information, which are similar features across these service offerings. Depending on a customer’s actual and projected business requirements, more than one
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service offering may satisfy the customer’s current and future needs. We record revenue based on the individual products ordered by a customer, not according to the customer’s business requirements and usage.
Our growth in revenues is also impacted by attrition. Attrition represents the reduction or loss of the annualized value of our contracts with customers. We calculate our attrition rate at a point in time on a trailing twelve-month basis as of the end of each month. In general, we exclude service offerings from acquisitions from our attrition calculation until they are fully integrated into our customer success organization. As of April 30, 2026, our attrition rate, excluding Slack self-service, Informatica, and current year acquisitions, was approximately eight percent.
We continue to maintain a variety of customer programs and initiatives, which, along with increasing enterprise adoption, have helped keep our attrition rate consistent as compared to the prior year. Consistent attrition rates play a role in our ability to maintain growth in our subscription and support revenues.
Seasonal Nature of Unearned Revenue, Accounts Receivable and Operating Cash Flow
Unearned revenue primarily consists of billings to customers for our subscription service. Over 90 percent of the value of our billings to customers is for our subscription and support service. We generally invoice our customers in advance, in annual installments, and typical payment terms provide that our customers pay us within 30 days of invoice. Amounts that have been invoiced are recorded in accounts receivable and in unearned revenue or in revenue depending on whether transfer of control to customers has occurred. In general, we collect our billings in advance of the subscription service period. We typically issue renewal invoices in advance of the renewal service period, and depending on timing, the initial invoice for the subscription and services contract and the subsequent renewal invoice may occur in different quarters. There is a disproportionate weighting toward annual billings in the fourth quarter, primarily as a result of large enterprise account buying patterns. Our fourth quarter has historically been our strongest quarter for new business and renewals. The year-on-year compounding effect of this seasonality in both billing patterns and overall new and renewal business causes the value of invoices that we generate in the fourth quarter for both new business and renewals to increase as a proportion of our total annual billings. Accordingly, because of this billing activity, our first quarter is typically our largest collections and operating cash flow quarter. Generally, our second or third quarter has historically been our smallest operating cash flow quarter. Unearned revenues, accounts receivable and operating cash flow may also be impacted by acquisitions. For example, operating cash flows may be adversely impacted by acquisitions due to transaction costs, financing costs such as interest expense and lower operating cash flows from the acquired entity.
Remaining Performance Obligation
Our remaining performance obligation represents all future revenue under contract that has not yet been recognized as revenue and includes unearned revenue and unbilled amounts. Our current remaining performance obligation represents future revenue under contract that is expected to be recognized as revenue in the next 12 months.
Remaining performance obligation is not necessarily indicative of future revenue growth and is influenced by several factors, including seasonality, the timing of renewals, average contract terms, foreign currency exchange rates and fluctuations in new business growth. Remaining performance obligation is also impacted by acquisitions. Unbilled portions of the remaining performance obligation denominated in foreign currencies are revalued each period based on the period end exchange rates. For multi-year subscription agreements billed annually, the associated unbilled balance and corresponding remaining performance obligation are typically high at the beginning of the contract period, zero just prior to renewal, and increase if the agreement is renewed. Low remaining performance obligation attributable to a particular subscription agreement is often associated with an impending renewal but may not be an indicator of the likelihood of renewal or future revenue from such customer. Changes in contract duration or the timing of delivery of professional services can impact remaining performance obligation as well as the allocation between current and non-current remaining performance obligation.
Cost of Revenues and Operating Expenses
Cost of Revenues
Cost of subscription and support revenues primarily consists of expenses related to our employee-related costs, which includes salaries, benefits and stock-based compensation expense, delivering our service and providing support, including the costs of data center capacity, certain fees paid to various third parties for the use of their technology, services and data, and allocated overhead. Our cost of subscription and support revenues also includes amortization of certain acquisition-related intangible assets, such as the amortization of the cost associated with an acquired company’s developed technology. Also included in the cost of subscription and support revenues are expenses incurred supporting the free user base of Slack, including third-party hosting costs and employee-related costs specific to customer experience and technical operations.
Cost of professional services and other revenues consists primarily of employee-related costs associated with these services, the cost of subcontractors, certain third-party fees and allocated overhead. We believe that our professional services organization facilitates the adoption of our service offerings, helps us to secure larger subscription revenue contracts and
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supports our customers’ success. The cost of professional services may exceed revenues from professional services in future fiscal periods.
Research and Development
Research and development expenses consist primarily of employee-related costs for our engineering staff associated with product development, as well as allocated overhead.
Sales and Marketing
Sales and marketing expenses make up the majority of our operating expenses and consist primarily of employee-related costs and commissions for our sales and marketing staff, as well as payments to partners, marketing programs and allocated overhead. Marketing programs consist of advertising, events, corporate communications, brand building and product marketing activities. We capitalize certain costs to obtain customer contracts, such as commissions, and amortize these costs on a straight-line basis. As such, the timing of expense recognition for these commissions is not consistent with the timing of the associated cash payment.
Our sales and marketing expenses include amortization of certain acquisition-related intangible assets, such as the amortization of the cost associated with an acquired company’s trade names, customer lists and customer relationships.
General and Administrative
General and administrative expenses consist primarily of employee-related costs for finance and accounting, legal, internal audit, human resources and management information systems personnel, as well as professional services fees and allocated overhead.
We allocate overhead such as information technology infrastructure, rent, occupancy charges and certain employee benefits based on headcount. As such, these types of expenses are reflected in each cost of revenue and operating expense category.
Restructuring
Restructuring consists of charges related to employee transition, severance payments, employee benefits and stock-based compensation, as well as impairment charges associated with data center exits and office space reductions. Restructuring excludes allocated overhead.
Critical Accounting Policies and Estimates
Our condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs and expenses, and related disclosures. On an ongoing basis, we evaluate our estimates and assumptions. Our actual results may differ from these estimates under different assumptions or conditions.
We believe that of our significant accounting policies, which are described in Note 1 “Summary of Business and Significant Accounting Policies” to our condensed consolidated financial statements, the following accounting policies and specific estimates involve a greater degree of judgment and complexity. Accordingly, these are the policies and estimates we believe are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations:
•the standalone selling price (“SSP”) of performance obligations for revenue contracts with multiple performance obligations;
•the valuation of privately held strategic investments;
•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 useful lives of intangible assets; and
•the fair value of certain stock awards issued.
These estimates may change, as new events occur and additional information is obtained, and such changes will be recognized in the condensed consolidated financial statements as soon as they become known. Actual results could differ from these estimates and any such differences may be material to our financial statements.
Additionally, refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended January 31, 2026 for further discussion with respect to these policies and estimates.
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Recent Accounting Pronouncements
See Note 1 “Summary of Business and Significant Accounting Policies” to the condensed consolidated financial statements for our discussion about new accounting pronouncements.
Results of Operations
The following tables set forth selected data for each of the periods indicated (in millions):
| 1 | Three Months Ended April 30, | |||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | % of Total Revenues | 2025 | % of Total Revenues | |||||||||||||||||||||||||||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Subscription and support | $ | 10,593 | 95 | % | $ | 9,297 | 95 | % | ||||||||||||||||||||||||||||||||||||||||||
| Professional services and other | 540 | 5 | 532 | 5 | ||||||||||||||||||||||||||||||||||||||||||||||
| Total revenues | 11,133 | 100 | 9,829 | 100 | ||||||||||||||||||||||||||||||||||||||||||||||
| Cost of revenues (1)(2): | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Subscription and support | 1,953 | 18 | 1,611 | 16 | ||||||||||||||||||||||||||||||||||||||||||||||
| Professional services and other | 617 | 5 | 654 | 7 | ||||||||||||||||||||||||||||||||||||||||||||||
| Total cost of revenues | 2,570 | 23 | 2,265 | 23 | ||||||||||||||||||||||||||||||||||||||||||||||
| Gross profit | 8,563 | 77 | 7,564 | 77 | ||||||||||||||||||||||||||||||||||||||||||||||
| Operating expenses (1)(2): | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Research and development | 1,627 | 14 | 1,460 | 15 | ||||||||||||||||||||||||||||||||||||||||||||||
| Sales and marketing | 3,769 | 34 | 3,429 | 35 | ||||||||||||||||||||||||||||||||||||||||||||||
| General and administrative | 740 | 7 | 697 | 7 | ||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring | 80 | 1 | 36 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||
| Total operating expenses | 6,216 | 56 | 5,622 | 57 | ||||||||||||||||||||||||||||||||||||||||||||||
| Income from operations | 2,347 | 21 | 1,942 | 20 | ||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | (317) | (3) | (68) | 0 | ||||||||||||||||||||||||||||||||||||||||||||||
| Gains (losses) on strategic investments, net | 558 | 5 | (63) | (1) | ||||||||||||||||||||||||||||||||||||||||||||||
| Other income | 133 | 1 | 163 | 1 | ||||||||||||||||||||||||||||||||||||||||||||||
| Income before provision for income taxes | 2,721 | 24 | 1,974 | 20 | ||||||||||||||||||||||||||||||||||||||||||||||
| Provision for income taxes | (614) | (5) | (433) | (4) | ||||||||||||||||||||||||||||||||||||||||||||||
| Net income | $ | 2,107 | 19 | % | $ | 1,541 | 16 | % | ||||||||||||||||||||||||||||||||||||||||||
(1) Amounts related to amortization of intangible assets acquired through business combinations, as follows (in millions):
| Three Months Ended April 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | % of Total Revenues | 2025 | % of Total Revenues | |||||||||||||||||||||||||||||||||||||||||||||||
| Cost of revenues | $ | 244 | 2 | % | $ | 162 | 2 | % | ||||||||||||||||||||||||||||||||||||||||||
| Sales and marketing | 317 | 3 | 233 | 2 | ||||||||||||||||||||||||||||||||||||||||||||||
(2) Amounts related to stock-based compensation expense, as follows (in millions):
| Three Months Ended April 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | % of Total Revenues | 2025 | % of Total Revenues | |||||||||||||||||||||||||||||||||||||||||||||||
| Cost of revenues | $ | 138 | 1 | % | $ | 151 | 1 | % | ||||||||||||||||||||||||||||||||||||||||||
| Research and development | 310 | 3 | 275 | 3 | ||||||||||||||||||||||||||||||||||||||||||||||
| Sales and marketing | 320 | 3 | 285 | 3 | ||||||||||||||||||||||||||||||||||||||||||||||
| General and administrative | 102 | 1 | 88 | 1 | ||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring | 10 | 0 | 15 | 0 | ||||||||||||||||||||||||||||||||||||||||||||||
34
The following table sets forth selected balance sheet data and other metrics for each of the periods indicated (in billions):
(1) Amounts do not include operating or financing lease obligations.
| As of | |||||||||||
April 30, 2026 | January 31, 2026 | ||||||||||
| Cash, cash equivalents and marketable securities | $ | 11.8 | $ | 9.6 | |||||||
| Unearned revenue | 20.4 | 24.3 | |||||||||
| Remaining performance obligation | 67.9 | 72.4 | |||||||||
| Principal due on our outstanding debt obligations (1) | 39.5 | 14.5 | |||||||||
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.
Impact of Acquisitions
The comparability of our operating results in the three months ended April 30, 2026 compared to the same period in fiscal 2026 was impacted by our recent acquisitions, including the acquisition of Informatica in November 2025. In our discussion of changes in our results of operations for the three months ended April 30, 2026, compared to the same period in fiscal 2026, we may quantitatively disclose the impact of our acquired products and services for the one-year period subsequent to the acquisition date to the growth in certain of our revenues where such discussions would be meaningful. Expense contributions from our recent acquisitions for each of the respective period comparisons generally were not separately identifiable due to the integration of these businesses into our existing operations or were insignificant to our results of operations during the periods presented.
Revenues
| Three Months Ended April 30, | Variance | |||||||||||||||||||||
| (in millions) | 2026 | 2025 | Dollars | Percent | ||||||||||||||||||
| Subscription and support | $ | 10,593 | $ | 9,297 | $ | 1,296 | 14 | % | ||||||||||||||
| Professional services and other | 540 | 532 | 8 | 2 | ||||||||||||||||||
| Total revenues | $ | 11,133 | $ | 9,829 | $ | 1,304 | 13 | % | ||||||||||||||
The increase in subscription and support revenues for the three months ended April 30, 2026 was primarily caused by volume-driven increases from new business, which includes new customers, upgrades and additional subscriptions from existing customers. Pricing was not a significant driver of the increase in revenues for the period. Revenues from term software licenses, which are recognized at a point in time, represented approximately six percent of total subscription and support revenues for the three months ended April 30, 2026 and 2025. Subscription and support revenues accounted for approximately 95 percent of our total revenues for the three months ended April 30, 2026 and 2025.
The increase in professional services and other revenues for the three months ended April 30, 2026 was primarily due incremental revenue from Informatica which was partially offset by less demand for larger, multi-year transformation engagements, which may continue in the near term.
The acquisition of Informatica in November 2025 contributed approximately $444 million of total revenues in the three months ended April 30, 2026.
35
Subscription and Support Revenues by Service Offering
Subscription and support revenues consisted of the following (in millions):
| Three Months Ended April 30, | ||||||||||||||||||||||||||||
| 2026 | As a % of Total Subscription and Support Revenues | 2025 | As a % of Total Subscription and Support Revenues | Growth Rate | ||||||||||||||||||||||||
| Agentforce Apps | $ | 6,910 | 65 | % | $ | 6,345 | 68 | % | 9 | % | ||||||||||||||||||
| Data 360, Headless Platform, and Other | 3,683 | 35 | 2,952 | 32 | 25 | |||||||||||||||||||||||
| Total | $ | 10,593 | 100 | % | $ | 9,297 | 100 | % | 14 | % | ||||||||||||||||||
Effective as of the first quarter of fiscal year 2027, we have revised the presentation of our disaggregated revenue disclosures to reflect the evolution of our product architecture to deliver the Agentic Enterprise. Consistent with how management evaluates the performance of our business and how we develop, sell, serve, and engage customers, subscription and support revenue is now reported across two primary categories: Agentforce Apps and Data 360, Headless Platform, and Other. Agentforce Apps groups our applications with Agentforce, reflecting how Agentforce is embedded in every app, and is comprised of Agentforce Sales, Agentforce Service, Agentforce Marketing, Agentforce Commerce, Agentforce Apps Flex Credits and Slack. Data 360, Headless Platform, and Other groups our data context layer and unified platform, to reflect the foundation powering Agentforce Apps, and is comprised of Data 360, Data 360 and Platform Flex Credits, Headless Platform, Informatica, Agentforce Mulesoft, Agentforce Tableau and Other.
Revenues by Geography
| Three Months Ended April 30, | |||||||||||||||||||||||||||||
| (in millions) | 2026 | As a % of Total Revenues | 2025 | As a % of Total Revenues | Growth Rate | ||||||||||||||||||||||||
| Americas | $ | 7,233 | 65 | % | $ | 6,469 | 66 | % | 12 | % | |||||||||||||||||||
| Europe | 2,754 | 25 | 2,337 | 24 | 18 | ||||||||||||||||||||||||
| Asia Pacific | 1,146 | 10 | 1,023 | 10 | 12 | ||||||||||||||||||||||||
| Total | $ | 11,133 | 100 | % | $ | 9,829 | 100 | % | 13 | % | |||||||||||||||||||
Revenues by geography are determined based on the region of the Salesforce contracting entity, which may be different than the region of the customer. The increase in revenues across all regions was primarily due to the continued execution of our business and growth strategy, including increasing our geographic reach primarily through extending our go-to-market capabilities globally. Foreign currency positively impacted the year over year fluctuations in revenue by approximately two percent.
Cost of Revenues
| Three Months Ended April 30, | Variance Dollars | |||||||||||||||||||||||||||
| (in millions) | 2026 | As a % of Total Revenues | 2025 | As a % of Total Revenues | ||||||||||||||||||||||||
| Subscription and support | $ | 1,953 | 18 | % | $ | 1,611 | 16 | % | $ | 342 | ||||||||||||||||||
| Professional services and other | 617 | 5 | 654 | 7 | (37) | |||||||||||||||||||||||
| Total cost of revenues | $ | 2,570 | 23 | % | $ | 2,265 | 23 | % | $ | 305 | ||||||||||||||||||
For the three months ended April 30, 2026, the increase in cost of revenues in absolute dollars was primarily due to an increase in service delivery expenses and amortization of purchased intangibles, primarily associated with our acquisition of Informatica. Total cost of revenues as a percentage of total revenues during the three months ended April 30, 2026 was consistent with the same period a year ago.
We intend to continue to invest additional resources in our AI, agentic and cloud services to allow us to scale with our customers and continue to evolve our security measures. The timing of these expenses may cause our cost of revenues as a percentage of revenues to fluctuate over time due to changes in demand for our service offerings.
36
Operating Expenses
| Three Months Ended April 30, | Variance Dollars | |||||||||||||||||||||||||||
| (in millions) | 2026 | As a % of Total Revenues | 2025 | As a % of Total Revenues | ||||||||||||||||||||||||
| Research and development | $ | 1,627 | 14 | % | $ | |||||||||||||||||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-03-19 | ALBER LAURA | Director | Buy | +2,571 ×2 | $194.58 | $500,266 |
| 2026-03-18 | Kirk David Blair | Director | Buy | +2,570 | $194.62 | $500,178 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-09-03 10-Q expected by 2026-09-14 (in 80 days)
- ~2026-12-03 10-Q expected by 2026-12-14 (in 171 days)
- ~2027-03-01 10-K expected by 2027-04-21 (in 259 days)
- ~2027-05-27 10-Q expected by 2027-06-07 (in 346 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-06-02 8-K Officer/Director Change
- 2026-06-01 8-K Officer/Director Change; Financial Statements and Exhibits
- 2026-06-01 S-8 Employee Benefit Plan Registration
- 2026-05-28 10-Q Quarterly Report
- 2026-05-27 8-K Earnings Release; Financial Statements and Exhibits
- 2026-04-16 DEF 14A Proxy Statement
- 2026-03-13 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
- 2026-03-12 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
- 2026-03-06 8-K Officer/Director Change
- 2026-03-02 10-K Annual Report
- 2026-02-25 8-K Earnings Release; Financial Statements and Exhibits
- 2025-12-04 10-Q Quarterly Report
- 2025-12-03 8-K Earnings Release; Financial Statements and Exhibits
- 2025-09-04 10-Q Quarterly Report
- 2025-09-03 8-K Earnings Release; Other Events; Financial Statements and Exhibits