Summary
Salesforce opened fiscal 2026 with revenue of $9.83 billion, up 7.6% from the prior-year quarter. Subscription and support carried the quarter and made up roughly 95% of the total, while professional services and other revenue declined on softer demand for large, multi-year transformation engagements. Gross profit was $7.56 billion, up 8.5%, and gross margin rose to 77.0% from 76.3% a year earlier. Platform and Other was the fastest growing subscription offering at 14%.
Profit growth outpaced the top line. Operating income was $1.94 billion, up 13.6%, and operating margin climbed to 19.8% from 18.7%. Net income was $1.54 billion, up 0.5%, and diluted earnings per share were $1.59, up from $1.56. Items below the operating line explain the gap between those two growth rates. Salesforce booked a loss on its strategic investment portfolio this quarter against a gain a year earlier, and the effective tax rate rose to 22% from 18%, mainly on lower excess tax benefits from stock-based compensation. Restructuring charges also increased.
Cash remains the strongest part of the story. Operating cash flow was $6.48 billion, up 3.7%, and capital expenditures were $179 million, up 9.8%. Free cash flow, a non-GAAP measure, was $6.3 billion, up 4%. The first quarter is typically the company's largest collections and operating cash flow quarter because of its annual billing cycle. Deferred revenue was $17.80 billion, up 10.8%. Total remaining performance obligation was $60.90 billion, up 13.0%, and the current portion grew 12% year over year and 11% in constant currency. Salesforce also returned $3.1 billion to shareholders through share repurchases and dividends.
The AI and data push shows up across the numbers. Data Cloud and AI annual recurring revenue passed $1 billion, up more than 120% year over year. Nearly 60% of the quarter's top 100 deals included Data Cloud and AI, and more than half included six or more clouds. Salesforce has closed over 8,000 Agentforce deals since launch, half of them paid. Agentforce handled over 750,000 requests on help.salesforce.com and cut case volume by 7% year over year, while Data Cloud ingested 22 trillion records, up 175%. Attrition, excluding Slack self-service, was approximately 8% as of April 30, 2025, in line with the prior year.
Guidance covers the second quarter and the full year. For the second quarter of fiscal 2026, Salesforce guided revenue to $10.11 billion to $10.16 billion, up 8% to 9% year over year and 7% to 8% in constant currency. For the full fiscal year 2026, the company lifted revenue guidance to $41.0 billion to $41.3 billion, up 8% to 9% year over year, a $400 million raise at the high end of the range, and guided subscription and support revenue growth of approximately 9.5%. It kept full-year GAAP operating margin guidance at 21.6% and non-GAAP operating margin guidance at 34.0%, along with operating cash flow growth of approximately 10% to 11% and free cash flow growth of approximately 9% to 10%.
Two items sit outside the quarter's results. In May 2025, Salesforce signed a definitive agreement to acquire Informatica for $25 per share in cash, an equity value of roughly $8 billion net of its existing stake, to be funded with new debt and cash on the balance sheet. Management expects the deal to close in early FY27 and sees no anticipated impact on fiscal 2026 guidance. On risk, management flagged unpredictability around economic policy and international trade, including tariffs, as a possible drag on new and renewal business. The company expects $160 million to $190 million in future cash payments tied to restructuring.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2026 | Q4 FY2025 | QoQ | Q1 FY2025 | YoY |
|---|---|---|---|---|---|
| Revenue | $9.83B | $9.99B | -1.6% | $9.13B | +7.6% |
| Gross profit | $7.56B | $7.78B | -2.7% | $6.97B | +8.5% |
| Gross margin | 77.0% | 77.8% | -0.9 pp | 76.3% | +0.6 pp |
| Research & development | $1.46B | $1.42B | +2.8% | $1.37B | +6.7% |
| Sales & marketing | $3.43B | $3.47B | -1.2% | $3.24B | +5.9% |
| General & administrative | $697.0M | $767.0M | -9.1% | $647.0M | +7.7% |
| Total operating expenses | $5.62B | $5.96B | -5.6% | $5.26B | +6.8% |
| Operating income (loss) | $1.94B | $1.82B | +6.7% | $1.71B | +13.6% |
| Operating margin | 19.8% | 18.2% | +1.6 pp | 18.7% | +1.1 pp |
| Net income (loss) | $1.54B | $1.71B | -9.8% | $1.53B | +0.5% |
| Net margin | 15.7% | 17.1% | -1.4 pp | 16.8% | -1.1 pp |
| Diluted EPS | $1.59 | $1.75 | -$0.16 | $1.56 | +$0.03 |
Risks
MD&A states that unpredictability around economic policies or international trade, including tariffs, could result in consumer and economic uncertainty and may lead to slower growth in new and renewal business, potentially impacting financial results. The risk factor discussion also cites trade wars, tariff threats or impositions, and retaliatory actions as factors that can delay customer purchasing decisions and reduce value or duration of subscription contracts.
The risk factors state that as Salesforce increasingly builds AI into offerings, it faces more competition because AI technologies are increasingly integrated into its markets. It warns competitors may incorporate AI into their offerings more efficiently or successfully and achieve greater and faster adoption, and that new AI offerings may disrupt workforce needs and negatively impact demand for its offerings.
Agentforce and Data Cloud use consumption-based pricing, and Salesforce says it has limited experience determining optimal pricing for consumption-based contracts. Customer flexibility in timing consumption could produce lower-than-expected consumption and suboptimal pricing, while the markets and monetization strategies for these offerings remain relatively new and uncertain.
Salesforce entered a definitive agreement in May 2025 to acquire Informatica Inc. for approximately $8 billion in equity value, net of its current investment, and expects to fund it with new debt and cash. The risk factors describe failure to realize expected benefits, integration difficulties, retention of acquired employees, assumption of liabilities, and increased indebtedness.
As more sales efforts target larger enterprise customers, including governmental entities and industries such as financial services and healthcare and life sciences, the risk factors say the sales cycle may become more time-consuming and expensive. Customers often demand more configuration, integration and features, which can increase costs, divert resources to fewer large transactions, and delay revenue recognition.
Restructuring actions since January 2023 included workforce and office space reductions, and Salesforce initiated further targeted workforce and office space reductions throughout fiscal 2025. The risk factors warn these actions could negatively impact its ability to attract, integrate, retain and motivate key employees, and MD&A notes approximately $36 million of restructuring costs in the first quarter and $160 million to $190 million of expected future cash payments.
For the three months ended April 30, 2025, gains (losses) on strategic investments, net were a $63 million loss compared with a $37 million gain in the prior-year period. MD&A attributes the loss primarily to $47 million of impairments and $16 million of losses on public securities, and risk factors cite partial or complete loss of invested capital and fair value volatility.
MD&A reports the effective tax rate increased to 22% for the three months ended April 30, 2025 from 18% in the prior-year period, primarily due to lower excess tax benefits from stock-based compensation. The risk factors warn the effective tax rate may fluctuate because of changes in domestic and foreign earnings, discrete tax items, acquisitions, operating structure changes and global tax developments.
Risk factors highlight evolving privacy, cloud computing, cross-border data transfer and AI regulations, including the EU DSA, Data Act and AI Act and state AI laws such as the Utah Artificial Intelligence Policy Act and Colorado Artificial Intelligence Act. Noncompliance could require changes to practices and services, increase potential liability and penalties, and reduce demand.
Risk factors say threat actors are using AI, including generative AI models, to create new sophisticated attack methods that are increasingly automated, targeted and coordinated and more difficult to defend against. Salesforce also discloses it is and has been the target of malicious cyberattacks and other security incidents, though identified events to date have not had a material financial impact.
SaaS KPIs
All quarters →Free cash flow
Non-GAAP operating margin
Billings and other
Current remaining performance obligation (cRPO)
Remaining performance obligation (RPO)
Attrition Rate
Operating Cash Flow
Summary, forecast, risks and KPIs are extracted from Salesforce, Inc.'s SEC filings for Q1 FY2026 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.