Summary
Salesforce opened fiscal 2027 with revenue of $11.13 billion, up 13.3% from the prior-year quarter. Gross profit was $8.56 billion, up 13.2%, and gross margin was 76.9%, flat against the prior-year quarter. Operating income rose 20.9% to $2.35 billion, lifting operating margin to 21.1%, up 1.3 percentage points. Net income was $2.11 billion, up 36.7%, and diluted EPS was $2.42, up 52.2%. The share count is falling fast. The $25 billion accelerated share repurchase delivered in the quarter cut roughly 103 million shares, and the company said it benefited diluted net income per share by $0.14.
The quarter leaned on the data and platform side of the portfolio. Subscription and support revenue rose 14% year over year, or 12% in constant currency, with Informatica contributing $428 million of that line and $444 million of total revenue. In constant currency, Agentforce Apps subscription and support revenue grew 7%, while Data 360, Headless Platform, Other grew 23%. Agentforce and Data 360 annual recurring revenue reached nearly $3.4 billion, up over 200% year over year, including $1.2 billion of Agentforce ARR, up 205%, and $1.1 billion of Informatica Cloud ARR. Agentic Work Units delivered to date hit 3.8 billion, up 111% quarter over quarter, and the platform has processed more than 28.6 trillion tokens to date, up 152%. Public Sector Industry Cloud ARR passed $2 billion, up 23% year over year.
Non-GAAP measures ran well above GAAP. Non-GAAP operating margin was 34.8% and non-GAAP diluted EPS was $3.88, up 50% year over year. Operating cash flow was $6.70 billion, up 3.5% from the prior-year quarter, while capital expenditures of $145.00 million were down 19.0%. Free cash flow, a separate non-GAAP measure, was $6.6 billion, up 4%. Salesforce returned $27.5 billion to shareholders in the quarter, including $27.1 billion of share repurchases and $365 million of dividends.
Backlog metrics held. Remaining performance obligations totaled $67.90 billion, up 11.5% year over year. Current remaining performance obligations were $33.6 billion, up 14% year over year and 13% in constant currency. Deferred revenue, the current portion, was $20.36 billion, up 14.4%. Subscription and support supplied approximately 95% of total revenue. Attrition, excluding Slack self-service, Informatica and current year acquisitions, was approximately eight percent, which management described as consistent with the prior year.
Financing reshaped the balance sheet. Salesforce issued $25 billion of senior notes in March 2026 and applied the net proceeds to the accelerated share repurchase, receiving an initial delivery of about 103 million shares at an average price of $198.34, roughly 80% of the shares expected to be repurchased. Final settlement is expected in the second half of fiscal 2027. Interest expense rose on the new debt, and the company expects the March 2026 offering to keep interest expense above prior-year levels throughout fiscal 2027.
Guidance covers the next quarter and the full fiscal year. For the second quarter of fiscal 2027, revenue is guided to $11.27 billion to $11.35 billion, up 10% to 11% year over year, and non-GAAP diluted EPS is guided to $3.25 to $3.27. Current remaining performance obligation growth is guided to approximately 14% for the second quarter. For the full fiscal year 2027, revenue is guided to $45.9 billion to $46.2 billion, up 11%, with non-GAAP operating margin of 34.3% and non-GAAP diluted EPS of $14.06 to $14.12. Subscription and support revenue growth is guided to slightly under 12% for the full year, and operating cash flow growth and free cash flow growth are guided to approximately 4% to 5%. The cash flow outlook was updated to reflect the $25 billion debt issuance for the ASR.
Risks carry weight into the rest of the year. Salesforce pointed to uncertainty around AI technologies and their integration into products, the effect of the Informatica acquisition on operating results, competition and the pace of innovation, execution on its business plans, macroeconomic and foreign currency volatility, trade restrictions and tariffs, data privacy and cybersecurity rules, and litigation and regulatory investigations. Foreign currency added about two percentage points to revenue growth and one percentage point to current remaining performance obligation growth in the quarter, so a reversal in rates would work against reported results. Demand for larger multi-year transformation engagements softened in professional services, and the company said that may continue in the near term. Sales and marketing remains the largest cost category, and management expects it may decrease as a percentage of revenue over time as it leans on self-serve and partner-led channels.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2027 | Q4 FY2026 | QoQ | Q1 FY2026 | YoY |
|---|---|---|---|---|---|
| Revenue | $11.13B | $11.20B | -0.6% | $9.83B | +13.3% |
| Gross profit | $8.56B | $8.69B | -1.5% | $7.56B | +13.2% |
| Gross margin | 76.9% | 77.6% | -0.7 pp | 77.0% | -0.0 pp |
| Research & development | $1.63B | $1.62B | +0.5% | $1.46B | +11.4% |
| Sales & marketing | $3.77B | $4.02B | -6.2% | $3.43B | +9.9% |
| General & administrative | $740.0M | $902.0M | -18.0% | $697.0M | +6.2% |
| Total operating expenses | $6.22B | $6.82B | -8.9% | $5.62B | +10.6% |
| Operating income (loss) | $2.35B | $1.87B | +25.6% | $1.94B | +20.9% |
| Operating margin | 21.1% | 16.7% | +4.4 pp | 19.8% | +1.3 pp |
| Net income (loss) | $2.11B | $1.94B | +8.4% | $1.54B | +36.7% |
| Net margin | 18.9% | 17.4% | +1.6 pp | 15.7% | +3.3 pp |
| Diluted EPS | $2.42 | $2.03 | +$0.39 | $1.59 | +$0.83 |
Risks
Leverage increased sharply, with principal due on outstanding debt obligations rising to $39.5 billion as of April 30, 2026 from $14.5 billion as of January 31, 2026, after borrowing the full $6.0 billion under the 2026 Term Loan Credit Agreement and issuing $25.0 billion of March 2026 Notes. Interest expense increased to $317 million in the quarter from $68 million a year ago, and the company expects the debt offering to cause interest expense to increase throughout fiscal 2027.
Agentforce and Data 360 are sold through a relatively new consumption-based model with uncertain monetization, and management states it has limited experience determining optimal pricing and may see lower customer consumption than expected. MD&A notes the revenue disclosure was restructured and that customer usage below expectations for these offerings could prevent the company from forecasting renewals or meeting revenue targets.
The filing specifically names AI-native companies and emerging startups that build on generative AI and large language models as competitors, offering autonomous solutions that may bypass traditional business process workflows or displace established user interfaces. It warns that competitors may incorporate AI more efficiently or achieve greater and faster adoption.
The March 2026 ASR Agreements to repurchase $25.0 billion of common stock may obligate the company to deliver shares or make a cash payment upon final settlement, which is expected in the second half of fiscal 2027, and settlement depends on stock price volatility.
The filing cites significant competition for engineers with AI experience and states the company has experienced and expects to continue experiencing difficulty hiring and retaining highly skilled employees. It notes that restructuring actions, including workforce reductions, select data center exits and office space reductions, could negatively impact its ability to attract, integrate, retain and motivate key employees.
The filing re-emphasises that threat actors may use AI, including autonomous agents and frontier models, to discover and weaponise zero-day vulnerabilities and automate multi-stage attack chains, significantly compressing the time available to remediate before exploitation. AI adoption within its own products and internal systems is described as introducing novel security and data governance risks.
Rapidly evolving and sometimes conflicting AI, privacy and data protection rules, including the EU AI Act, Digital Services Act, Data Act and DORA, are cited as potentially increasing compliance costs, restricting features or data flows, delaying launches and exposing the company to penalties or litigation. Government data residency requirements are also flagged as constraining resiliency options.
Sales to larger enterprise and government customers are described as involving longer, costlier cycles, pricing pressure and complex implementation, with some transactions requiring delayed revenue recognition. The filing notes adoption of pricing and packaging for Agentforce and Data 360 may not be widely accepted, and MD&A attributes softer professional services growth partly to less demand for larger, multi-year transformation engagements.
Customer attrition was approximately eight percent as of April 30, 2026, and the filing states it is difficult to predict renewal and upgrade rates given a varied customer base, multi-year contracts and the shift toward consumption-based pricing, which may make it harder to optimise pricing and forecast revenue.
Results are exposed to volatility from the strategic investment portfolio. Gains (losses) on strategic investments, net swung to a $558 million gain in the quarter from a $63 million loss a year ago, driven by realized and unrealized gains on privately held equity investments partly offset by impairments.
The company implemented a new enterprise resource planning system in the second quarter of fiscal 2026 that is essential to its financial planning, reporting and compliance programs, and warns that unforeseen problems with the ERP or migrating away from prior systems could harm its ability to manage the business.
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
Agentforce and Data 360 ARR
Operating Cash Flow
Agentforce ARR
Summary, forecast, risks and KPIs are extracted from Salesforce, Inc.'s SEC filings for Q1 FY2027 (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.