Salesforce.com ((CRM)) has held its Q4 earnings call. Read on for the main highlights of the call.
Salesforce’s recent earnings call conveyed a predominantly positive sentiment, underscored by its record-breaking revenue and the successful deployment of Agentforce, which has driven notable productivity and efficiency improvements. Despite facing foreign exchange headwinds and challenges in specific industry segments, the company’s robust growth metrics and optimistic outlook for fiscal 2026 contributed to an overall positive sentiment.
Record-Breaking Revenue
Salesforce celebrated a significant milestone by achieving its first $10 billion quarter, marking an 8% increase year-over-year. For the fiscal year, the company reported $37.9 billion in revenue, reflecting a 9% growth compared to the previous year. This record-breaking performance underscores Salesforce’s strong market position and growth trajectory.
Agentforce Success
The deployment of Agentforce has been a major success for Salesforce, with thousands of brands adopting the platform. In just 90 days, 3,000 paying customers were onboarded, highlighting the platform’s appeal and the significant productivity and efficiency gains it offers.
Strong Cash Flow
Salesforce reported a record operating cash flow of $13.1 billion, representing a 28% increase year-over-year. The company’s free cash flow also saw a substantial growth of 31%, indicating strong financial health and operational efficiency.
Data Cloud and AI Growth
The Data Cloud and AI segments have been standout performers, with annual recurring revenue growing nearly 120% year-over-year to reach $900 million. This growth reflects Salesforce’s successful investment in these areas and their increasing importance in the company’s overall strategy.
RPO Milestone
Salesforce achieved a significant milestone with its Remaining Performance Obligation (RPO), which surpassed $60 billion for the first time, reaching $63.4 billion. This 11% year-over-year increase demonstrates the company’s strong future revenue commitments.
Non-GAAP Operating Margin Expansion
The company reported a non-GAAP operating margin of 33%, an improvement of 250 basis points year-over-year. This expansion reflects Salesforce’s focus on operational efficiency and cost management.
Foreign Exchange Headwinds
Salesforce faced a $300 million foreign exchange headwind in the fourth quarter, which impacted its growth rates. Despite this challenge, the company maintained strong overall performance.
Professional Services Business Headwind
The professional services segment continues to be a headwind to growth, with Salesforce increasingly relying on partner ecosystems to mitigate this challenge.
Weaker Performance in Certain Industries
While the Health and Life Sciences sectors performed well, other industries such as Technology, Manufacturing, Automotive, and Energy showed more measured growth, indicating varied performance across different market segments.
Forward-Looking Guidance
Salesforce provided robust guidance for the upcoming fiscal year, projecting FY26 revenue to be between $40.5 billion and $40.9 billion, representing a 7% to 8% year-over-year increase. The company aims to expand its Agentforce platform and integrate AI into its offerings, expecting these initiatives to drive significant productivity and efficiency gains. Salesforce also anticipates a FY26 non-GAAP operating margin of 34% and non-GAAP diluted EPS between $11.09 and $11.17.
In summary, Salesforce’s earnings call highlighted a strong financial performance with record-breaking revenue and successful strategic initiatives like Agentforce and AI integration. Despite facing certain headwinds, the company’s optimistic guidance for fiscal 2026 and continued focus on innovation and efficiency suggest a promising outlook.