Salesforce reports 3.4 billion dollars from AI subscriptions and still faces doubts on deals

Salesforce generated revenue of 11.1 billion dollars in the first quarter of financial year 2027, up 13 percent on the year before. Adjusted earnings per share rose 50 percent to 3.88 dollars, and reported earnings 52 percent to 2.42 dollars.

Annual recurring revenue from Agentforce and Data 360 reached just under 3.4 billion dollars, an increase of more than 200 percent. Of that, 1.2 billion dollars come from Agentforce, up 205 percent, and 1.1 billion dollars from the acquired Informatica Cloud.

The group describes itself as the leading provider of customer management with programs that work on their own.

The short version

• Revenue rose 13 percent in the first quarter of financial year 2027 to 11.1 billion dollars, and adjusted earnings per share 50 percent to 3.88 dollars.
• Annual recurring revenue from Agentforce and Data 360 reached just under 3.4 billion dollars, an increase of more than 200 percent.
• For financial year 2027 the group expects revenue of 45.9 to 46.2 billion dollars, which corresponds to around eleven percent growth.

Guidance slightly below expectations

Despite the strong figures the outlook came in a little weaker than hoped. For financial year 2027 Salesforce expects revenue of 45.9 to 46.2 billion dollars, which corresponds to around eleven percent growth.

At the previous set of figures the group had already beaten expectations while full year guidance stayed slightly below. The order book also came in weaker than expected.

As a drag the company names continuing weakness in marketing and commerce as well as growing caution over deals and renewals in the analytics tool Tableau.

Remaining performance obligations came to 67.9 billion dollars, up eleven percent. The current portion stood at 33.6 billion dollars, an increase of 14 percent.

The question analysts are asking

On the analyst call a contradiction was raised that currently shapes the valuation of the company.

On one side stand exceptional figures in the area of programs that work on their own. More than 29,000 deals since launch, an increase of 50 percent against the previous quarter. More than 28.6 trillion language units processed, up 152 percent. 3.8 billion completed work steps carried out by programs rather than by people, up 111 percent against the previous quarter.

On the other side these figures have not translated into new orders on a comparable scale over two quarters.

The answer from management points to the current portion of the order book as a leading indicator and to the fact that full year guidance was raised.

President and finance chief Robin Washington said the company remains confident of delivering an acceleration in organic revenue growth in the second half, carried by sales, service, Slack, Agentforce and Data 360.

More than half comes from existing customers

One figure from the report places the development. More than 50 percent of the deals in the new areas came from existing customers. In the previous quarter it had been more than 60 percent.

That is typical for enterprise software. New functions are first sold to customers who already use the base product. For judging long term growth what matters is when business with new customers arises from it as well.

A target of 63 billion dollars by 2030

Chief executive Marc Benioff has named a long term target. By financial year 2030 revenue is to rise to 63 billion dollars, including the contribution from Informatica. Originally more than 60 billion dollars without that acquisition had been announced.

In the completed financial year 2026 revenue stood at 41.5 billion dollars, up ten percent. The total order book passed 72 billion dollars for the first time.

Operating cash flow in the first quarter was 6.7 billion dollars and free cash flow 6.6 billion dollars. The adjusted operating margin stood at 34.8 percent and the reported margin at 21.1 percent.

For the full year the reported margin was adjusted to 20.6 percent, mainly because of higher restructuring costs.

Frequently asked questions

What contradiction do analysts raise

On one side stand exceptional figures for the programs that work on their own, among them more than 29,000 deals since launch. On the other side these figures have not translated into new orders on a comparable scale over two quarters.

Where do the deals in the new areas come from

More than 50 percent came from existing customers, and in the previous quarter it had been more than 60 percent. That is typical for enterprise software. What matters for long term growth is when business with new customers arises from it as well.

What target does Salesforce have for 2030

Chief executive Marc Benioff has announced that revenue is to rise to 63 billion dollars by financial year 2030, including the contribution from Informatica. Originally more than 60 billion dollars without that acquisition had been named.

This analysis is for information only and is not investment advice.