Salesforce Q4 Earnings Beat Estimates, Revenues Rise Y/Y

Salesforce, Inc. CRM reported better-than-expected results for the fourth quarter of fiscal 2026. Fourth-quarter non-GAAP earnings were $3.81 per share, which beat the Zacks Consensus Estimate by 25.69%. The bottom line improved 37% year over year.

Salesforce’s fiscal fourth-quarter revenues of $11.2 billion surpassed the Zacks Consensus Estimate by 0.32% and increased 12% year over year. The growth in top and bottom lines reflected the benefits of CRM’s go-to-market strategy and sustained focus on customer success. The initiatives to integrate generative artificial intelligence (AI) into its offerings also boosted demand for Salesforce’s solutions during the reported quarter.

Salesforce’s Q4 Performance in Detail

Coming to CRM’s business segments, revenues from Subscription and Support (95.5% of total revenues) increased 13% year over year to $10.7 billion. Professional Services and Other (4.5% of total sales) revenues declined 3% to $526 million.

In the third quarter of fiscal 2026, Salesforce renamed its service offerings under the Subscription and Support segment to reference Agentforce. There were no changes in the allocation of revenues between these service offerings coming from this change. The renamed offerings are now called Agentforce Sales, Agentforce Service, Agentforce 360 Platform, Slack and Other, Agentforce Marketing and Agentforce Commerce, and Agentforce Integration and Agentforce Analytics.

Agentforce Sales revenues grew 8% year over year to $2.3 billion. Revenues from Agentforce Service increased 7% to $2.5 billion. Agentforce 360 Platform, Slack and Other revenues rose 37% to $2.7 billion. Agentforce Marketing and Agentforce Commerce were down 1% to $1.4 billion. The Agentforce Integration and Agentforce Analytics division recorded 3% year-over-year growth to $1.8 billion.

Revenues from the Americas (65% of total revenues) increased 9% year over year to $7.3 billion. Sales in EMEA (25%) grew 19% to $2.8 billion, while the Asia Pacific (10%) region’s revenues rose 14% to $1.1 billion.

Non-GAAP operating income was $3.84 billion, up 16.1% from the year-ago quarter’s $3.3 billion. Moreover, the non-GAAP operating margin expanded 110 basis points to 34.2%.

Salesforce’s Balance Sheet & Other Details

Salesforce exited the fiscal fourth quarter with cash, cash equivalents and marketable securities of $9.57 billion, down from $11.32 billion at the end of the previous quarter. CRM generated an operating cash flow of $5.46 billion and a free cash flow of $5.32 billion in the fourth quarter. In fiscal 2026, the company generated operating cash flow and free cash flow of $15 billion and $14.4 billion, respectively.

As of Jan. 31, the current remaining performance obligation (cRPO) was $35.1 billion, up 16% year over year. The company returned $4.33 billion to shareholders, including $3.94 billion in share repurchases and $391 million in dividends. In fiscal 2026, it paid $1.59 billion in dividends and bought back shares worth $12.6 billion.

Salesforce Initiates Guidance for Q1 and FY27

For the fiscal first quarter, it projects total sales between $11.03 billion and $11.08 billion, which indicates 12-13% growth from the year-ago level. The Zacks Consensus Estimate for revenues is currently pegged at $10.95 billion.

The company expects non-GAAP earnings per share in the band of $3.11-$3.13, while GAAP EPS is anticipated to be between $1.77 and $1.79. The cRPO growth is projected to be approximately 14% year over year. The Zacks Consensus Estimate for non-GAAP earnings is currently pegged at $2.96.

For fiscal 2027, Salesforce expects revenues in the range of $45.80-$46.20 billion, up 10-11% year over year. The Zacks Consensus Estimate for revenues is currently pegged at $45.94 billion.

Subscription and Support revenues are expected to increase slightly below 12%. The company anticipates fiscal 2027 non-GAAP earnings per share in the range of $13.11-$13.19. The Zacks Consensus Estimate for non-GAAP earnings is currently pegged at $12.99.

Non-GAAP operating margin is projected to be 34.3%, while GAAP operating margin is expected to be 20.9%. Salesforce forecasts operating cash flow growth of 9-10% year over year. The company expects free cash flow growth to be in the range of 9-10% year over year. Capital expenditure is anticipated to be approximately 1.5% of total revenues.

Salesforce’s Zacks Rank and Other Stocks to Consider

Currently, CRM carries a Zacks Rank #2 (Buy).

Analog Devices ADI, Amphenol APH and Monolithic Power Systems MPWR are some other top-ranked stocks that investors can consider in the Zacks Computer and Technology sector. Analog Devices sports a Zacks Rank #1 (Strong Buy), while Amphenol and Monolithic Power Systems carry a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Analog Devices’ fiscal 2026 earnings has moved upward by 11.4% over the past seven days to $11.10 per share, calling for an increase of 42.5% year over year. Analog Devices shares have climbed 54.1% in trailing 12 months.

The Zacks Consensus Estimate for Amphenol’s full-year 2026 earnings is pegged at $4.32 per share, revised upward by 2 cents over the past 30 days and suggests a year-over-year jump of 29.3%. Amphenol shares have soared 131.9% over the past year.

The Zacks Consensus Estimate for Monolithic Power Systems’ fiscal 2026 earnings has been revised upward to $21.63 per share from $21.07 over the past 30 days. Monolithic Power Systems shares have surged 83.5% over the past year.

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