Salesforce, Inc. (סיילספורס)

Salesforce, Inc. sells cloud software for managing customer relationships: systems for sales, customer service, marketing and commerce, the Slack communication platform, and a data and integration layer (Data 360, Informatica, MuleSoft, Tableau). On top of these the company has built an AI-agent layer called Agentforce. It is headquartered in San Francisco and had 83,334 employees at the end of January 2026. About 95% of revenue is annual or multi-year subscription fees.

Revenue for the 12 months ended July 2026 was $43.9 billion. The company reports one operating segment. Since Q1 of fiscal 2027 it splits subscription revenue into only two groups: applications (sales, service, marketing, commerce and Slack) — 67%, and data and platform — 33%. No single customer accounts for more than 10% of revenue.

Marc Benioff, the founder, is Chair and CEO. There is no controlling shareholder and one class of stock. Several finance and engineering roles changed hands over the past year (details in Section 7).

The quarter: three layers to separate

In the May–July 2026 quarter, revenue rose 10.8% to $11.3 billion and earnings per share rose 119% to $4.29. Three factors explain the gap between the two numbers:

• Acquisition: Informatica, acquired in November 2025 for about $9.6 billion, contributed $456 million of revenue. Without it, growth was 6.4% — the lowest of the last six quarters.
• Investment revaluation: Salesforce holds a strategic investment portfolio with a book value of $11.3 billion. It recorded a $2.6 billion gain in the quarter, of which $2.7 billion related to its investment in Anthropic. According to the company, the gain added $2.43 to diluted EPS. It is a gain that was not received in cash.
• Debt-funded buyback: diluted shares fell 14.7% year over year, mainly due to a $25 billion accelerated share repurchase (ASR). Interest expense, in turn, rose from $67 million to $473 million in the quarter.

Excluding the revaluation gain: pre-tax income was about $1.9 billion, versus $2.4 billion a year earlier (−19%), and EPS about $1.83 versus $1.96 (−7%). Operating income itself was almost identical: $2,331 million vs. $2,332 million. Our calculation: pre-tax income less the revaluation gain, then the quarter's effective tax rate.

Q4 FY26 is derived as the full year less three quarters. Growth excluding Informatica: our calculation based on the Informatica contribution the company reports.

What the filing explains: according to the company, growth came from volume — new customers, upgrades and additional subscriptions — and "pricing was not a significant driver". Part of the slowdown reflects term-license revenue (recognized upfront), which fell from about 6% to about 4% of subscription revenue, and a 4% decline in professional services. Subscription cost of revenue rose 23%, according to the filing because of hosting and generative-AI technologies, and subscription gross margin fell from 83.0% to 81.3%.

The multi-year context

Over fiscal 2022–2026, revenue grew an average of 11.9% a year, including acquisitions. GAAP operating margin rose from 2.1% to 20.1%, after rounds of restructuring and cost cuts. Free cash flow nearly tripled, from $5.3 billion to $14.4 billion. Since the start of fiscal 2027, operating margin has held around 20%–21%, and the company's full-year guidance was lowered from 20.6% to 20.1%.

* Includes $4.2 billion of pre-tax investment revaluation gains. Excluding them, by our calculation, about $6.4 billion.

The balance sheet changed within six months. In March 2026 Salesforce issued $25 billion of notes, at rates of 4.50% to 6.70% and maturities out to 2066, and used all the proceeds for a $25 billion accelerated share repurchase (ASR). Under it, the company received 103 million shares at an average price of $198.34, about 80% of the total. According to the company, final settlement is scheduled for Q3 of fiscal 2027, and the final share count will be set by the average share price over the period. The company also refinanced $6.0 billion of Informatica acquisition loans with a five-year term loan.

By our calculation, debt to trailing-12-month operating income before depreciation and amortization is about 3.1x gross and 2.2x net. Operating income covers annual contractual interest (about $1.8 billion) about 4.8 times. There are no principal maturities before March 2028, and a $5 billion credit facility is undrawn. Coupons on the new notes are paid twice a year, so first-half cash flow carried almost none of them.

Capital allocation: since November 2025 the company has acquired, or agreed to acquire, four companies for cash: Informatica (about $9.6 billion), Qualified ($1.2 billion), Contentful (about $1.5 billion) and Fin, i.e. Intercom (about $3.6 billion). The last two had not closed at quarter-end. In fiscal 2026 about $23.5 billion left the company in acquisitions, buybacks and dividends, against free cash flow of $14.4 billion. At Investor Day management presented a return of 190% of free cash flow to shareholders in fiscal 2027. The quarterly dividend is $0.44.

Anthropic: the investment is carried at about $5.1 billion, about 45% of the strategic investment portfolio. It is measured under a method that updates the value only when an observable transaction in the company's securities occurs. Future revaluation gains, or impairments, therefore depend on funding rounds rather than on Salesforce's own results.

Salesforce has one reporting segment. From Q1 of fiscal 2027 the subscription revenue breakdown changed, so the old product series (sales, service, platform, marketing, data) is no longer published.

The company's AI metrics: annual recurring revenue (ARR) for Agentforce and Data 360 reached nearly $3.9 billion, and for Agentforce alone more than $1.5 billion. Two things are worth knowing about these figures. In Q1 the combined metric included $1.1 billion of Informatica. And from Q2, Agentforce ARR also includes Slackbot and Headless 360. The published growth rates (210% and 240%) are therefore not calculated on a constant definition.

Contracts: remaining performance obligation for the next 12 months (cRPO) was $33.5 billion, up 14% in constant currency, versus 10% a year earlier. The figure includes Informatica. In December 2025 the company wrote that Informatica contributed about 4 points to cRPO growth. It has not published the contribution for Q1–Q2 since. The attrition rate, which excludes recent acquisitions, remained about 8%.

Salesforce's competitive base is switching cost. A large organization's customer-management system is wired into its sales, service and marketing processes, its data and third-party applications, so replacing it is a long and expensive project. The filings are consistent with this: attrition of about 8% a year, total contracted backlog of $66.3 billion, and about 95% of revenue from subscriptions.

Where the filings show pressure: most subscriptions are priced per seat, i.e. by number of users. In the filing the company cites "decreases in the number of users at our customers" as an attrition factor, and writes that the move to consumption-based pricing makes attrition and revenue harder to forecast. The applications group, mostly priced per seat, grew 8% in constant currency. At the same time, AI cost already shows up in subscription cost of revenue. The company competes with players such as Microsoft, Oracle and ServiceNow, and with companies building their own AI agents. This review does not include market-share data from a primary source.

Risks that emerge from the filings

• Leverage: $39.5 billion of debt and about $1.8 billion of annual contractual interest. According to the filing, share-price volatility may require the company to deliver shares or cash at ASR settlement.
• Seat model: fewer users at customers and a shift to consumption pricing, which makes revenue and attrition harder to forecast.
• Infrastructure and AI costs: reliance on third-party cloud providers and data-center capacity; subscription cost of revenue rose 23%.
• Acquisition integration: four cash acquisitions in under a year, two still closing. Goodwill of $59.3 billion.
• Investment revaluation: an $11.3 billion portfolio, nearly half in one private company. Value changes go through earnings and can run in either direction.
• Security: the filing adds that advanced AI models shorten the time to discover vulnerabilities and to respond.
• Legal: suits relating to a former customer (Backpage) and a class action over the Slack listing. Management says no material impact; no estimate given.

Topics to monitor in the Q3 report (December 2026)