8 Key Insights from Salesforce’s Q1 FY26 Earnings Call : Wiola Balicka
by: Wiola Balicka
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**Summary of Salesforce's Q1 FY26 Earnings Call** Salesforce recently released its Q1 FY26 earnings, and the overall outlook is positive. Key highlights include strong growth in product lines, particularly with Agentforce, and a successful integration of AI and data strategies. Here are the main points: 1. **Agentforce Revenue Growth**: Despite initial challenges, Agentforce has surpassed 4,000 paid deals and generated over $100 million in annual recurring revenue (ARR) within just two quarters of its launch. 2. **Informatica Acquisition**: CEO Marc Benioff expressed enthusiasm for the $8 billion acquisition of Informatica, which is expected to enhance Salesforce's data management capabilities. However, analysts remain skeptical, leading to a slight drop in stock value. 3. **Data Cloud + AI Revenue**: This combined offering has crossed $1 billion in ARR, reflecting a 120% year-on-year growth. The integration of AI with data services is proving beneficial for customer engagement. 4. **Sales and Service Clouds Growth**: While still significant, growth in these areas has slowed to 7%, prompting Salesforce to explore new pricing models and strategies to maintain revenue. 5. **Platform & Other Segment Growth**: This segment grew by 14%, with MuleSoft and Tableau showing strong recovery, indicating a rising demand for integration and analytics solutions. 6. **Margin Expansion**: Salesforce achieved a non-GAAP operating margin of 32.3% while continuing to invest in research and development, showcasing financial health. 7. **Regional Performance**: The Asia-Pacific and EMEA regions outperformed the Americas, with strong demand noted in South Asia and Europe. 8. **New Pricing Model**: Salesforce is shifting to a consumption-based pricing model for Agentforce, allowing customers to pay based on usage rather than fixed licenses, which has received mixed feedback. **Conclusion**: Salesforce's push into AI and data is yielding positive results, but investor confidence remains a concern. The success of the Informatica acquisition will be crucial for future growth. **Additional Context**: Salesforce is adapting to market demands by evolving its pricing strategies and focusing on customer usage metrics, which could reshape its business model and career opportunities for Salesforce professionals. **Hashtags for SEO**: #Salesforce #EarningsCall #Agentforce #AI #DataCloud #Informatica #CRM #TechNews #BusinessGrowth #SalesforceProfessionals #FinancialResults
Salesforce have just posted their Q1 FY26 earnings, and the overall sentiment proved positive. Key product lines are showing a strong trajectory, Agentforce is beginning to show its true value, and the company’s big bet on AI + data is starting to pay off.
For Salesforce professionals, these developments offer a real indication of where momentum for the CRM is heading, which skills are becoming most available, and how Salesforce’s evolving business model could continue to impact customers and careers going forward. Here are 8 of the most important takeaways from Salesforce’s Q1 FY26 results.
1. Agentforce Shows Some Material Revenue
We’ve spoken at length at Salesforce Ben about the early teething issues that Agentforce has had with Salesforce professionals. Salesforce’s flagship product didn’t hit the ground running when they released the tool last September, with many in the ecosystem raising issues around its pricing, guidance, ROI, and overall ability to perform.
This, in turn, began to have an impact on Salesforce’s stock value. Initially chosen as a top pick by Wall Street investors going into 2025, the company’s stock was downgraded in April of this year, with investment bank D.A Davidson attributing this to Salesforce’s “premature” focus on AI and Agentforce.
Despite recent challenges, Salesforce shared encouraging figures that point to strong momentum behind their AI product.
The company confirmed that Agentforce had already surpassed 4,000 paid deals and over 8,000 total transactions, which have generated more than $100M in annual recurring revenue (ARR) – just two quarters after its launch.
Salesforce also mentioned how they’re using Agentforce internally – their own sales team has logged 21,000+ interactions with agents in Slack, which has saved them an estimated 44,000 hours annually.
After months of scrutiny around Agentforce, these figures will come as a relief to Salesforce leadership, offering proof that the product is gaining traction at scale. The key question now is whether they can convert more of that momentum into revenue. Only half of the 8,000 transactions so far have been paid, a ratio they’ll no doubt aim to improve heading into Q2.
2. Salesforce Excited About Informatica Deal Despite Analysts’ Concerns
Marc Benioff, CEO of Salesforce, detailed his excitement around Salesforce’s $8B acquisition of Informatica last week, describing the deal as “amazing” and “transformational”.
Further calling it “a critical complementary asset”, Informatica promises to bring market-leading metadata management, master data, and ETL tools that sit upstream of Data Cloud and Agentforce.
Robin Washington, Chief Operating and Financial Officer at Salesforce, shared that the deal is accretive to non-GAAP operating margin. This means that once Informatica’s numbers are folded in, Salesforce’s adjusted profit percentage should go up rather than down.
While this should reassure investors, many stock analysts are skeptical about the deal, leading to a drop in Salesforce’s stock value. On May 29, Salesforce’s stock dropped by 3%, with one analyst suggesting this is due to risks within the deal that have potentially “tipped the scale” for their stock value.
While Salesforce remains openly optimistic about their new billion-dollar deal, the market is keeping a close eye on how this deal will pan out going forward.
3. Data Cloud + AI Crosses $1B in Revenue
Salesforce’s bet big on bundling its vector database, harmonization tools, and agent framework under a single “Data Cloud + AI” banner, and it looks as though this decision is starting to pay off.
In Q1, the combination reached over $1B in ARR, which is up by 120% year-on-year. Salesforce highlighted this milestone alongside headline revenue, underlining that the growth engine now sits inside Platform rather than Sales or Service. Adoption is broadening, and Benioff explained in the earnings call that 60% of the quarter’s top 100 deals contained both Data Cloud and AI, and half of all new Data Cloud bookings were expansions from existing customers.
Those numbers show the “flywheel” at work – once customers load records into Data Cloud, they will quickly discover that agents can reason over them, which in turn drives further data ingestion.
The platform now stores 22 trillion records, up 175 percent versus last year, giving Salesforce priceless lock-in. The next hurdle is performance at scale, which is why the company is adding Informatica’s metadata catalogue to govern quality and lineage. For now, the billion-dollar benchmark removes any doubt that the AI bet is translating into measurable revenue.
4. Core Sales and Service Clouds No Longer Lead in Growth
Sales and Service still account for nearly $4.4B of quarterly revenue, but they are no longer the growth leaders. The earnings call highlighted how both clouds are growing 7% in constant currency, which is roughly half the rate they posted a year ago.
Salesforce cited two pressures in the call – slower seat expansion among large enterprises, and a leap-year headwind that clipped one point of growth.
In a recent interview with Salesforce Ben, Paid CEO Manny Medina said this transition away from “pay-per-seat” pricing was inevitable, saying: “One, it’s very easy to sell. If you go to a customer and you tell them, ‘You only pay when you get results,’ it sounds like an IQ test. How do you say no to that?”
“The second part is that it creates a business model differentiation that sets you apart from the competition. So from a competitive dynamic environment, you are preventing your competitors from coming in and saying, ‘Look, I can do the same but cheaper’, because you don’t know what the same is.”
To soften the blow, Salesforce is pursuing average-revenue-per-user (ARPU) tactics, such as raising list prices, bundling AI credits into premium editions, and pushing value-based add-ons such as Revenue Intelligence. These efforts appear to be working, with Benioff noting that “pricing and packaging continue to be a key lever,” helping to offset weak license counts.
The overbearing message from Salesforce in the earnings call is that staying on lower-tier editions will become progressively harder.
Salesforce pros now need to be just as good at tuning and upgrading existing Sales Cloud setups as they are at building new ones. The main Sales and Service Clouds should keep growing steadily, but not rapidly, until a wave of contract renewals and new AI features gives them a boost.
5. Platform & Other Takes the Growth Crown, MuleSoft and Tableau Reaccelerate
While legacy clouds slowed, Platform & Other jumped 14% in constant currency, the fastest of any segment. MuleSoft returned to 8% growth after a tumultuous few quarters, and Tableau vaulted to 12% after languishing at 3% just two quarters ago.
Two things changed: First, Salesforce rolled both products into every enterprise motion instead of selling them through specialist teams. Account executives now lead with MuleSoft connectors and Tableau’s visual layer whenever they pitch Agentforce, making integration and insights part of one bundled sale.
Secondly, the company embedded the analytics engine into Slack and retrofitted MuleSoft APIs directly into Data Cloud, removing the configuration work that once slowed adoption.
It was mentioned in the earnings call that half of Q1 MuleSoft and Tableau bookings were expansion deals – which is glaring proof that customers who integrate or visualize some data soon want to do more.
With Informatica set to slot in underneath, the entire Platform bucket should keep outrunning the core clouds. For Salesforce professionals, that means rising demand for integration architects and Tableau developers, which could encourage more Salesforce professionals to take on new skills as this demand potentially increases.
6. Margin Expansion Marches On, Even While Hiring
Few software firms can claim simultaneous top-line growth, cash generation, and margin expansion, yet Salesforce have managed all three.
Non-GAAP operating margin reached 32.3%, up 20 basis points year-on-year, while operating cash flow hit $6.5B.
The company highlighted how they are heavily funding R&D and sales investment without losing efficiency. Cost of revenue and operating expenses remain roughly 68% of revenue, which is unchanged despite AI capital expenditure.
Part of this is their redeployment efforts, with Washington disclosing that 500 customer support staff are retraining for data and AI roles, saving Salesforce $50M annually and filling technical vacancies that otherwise would have required new hiring.
Meanwhile, Salesforce returned $3.1B to shareholders during the quarter through buy-backs and dividends, demonstrating confidence that free cash flow will stay robust.
For customers, this financial discipline should reassure them that aggressive AI roadmaps are not coming at the expense of product support or stability, while for professionals, it signals that data and agent skills offer future-proof career paths inside Salesforce and across its partner ecosystem.
7. APAC and EMEA Outpace the Americas
The earnings call highlighted that Asia-Pacific grew 11% and EMEA 9% in constant currency, comfortably ahead of the 7% logged in the Americas.
South Asia was the main standout, with Benioff describing the region as “on fire,” noting strong demand during recent visits to Japan and India. Europe is growing mostly thanks to strong sales in the UK and France, with banks and life-science firms buying Salesforce’s industry-specific clouds.
The Americas results tell two different stories. As mentioned, sales to small and mid-sized businesses were strong, but large enterprise deals slowed down, especially in the tech sector, where companies are still cutting back. One benefit of this regional mix is a currency boost – thanks to favorable exchange rates, Salesforce raised its full-year revenue forecast by $400M.
Looking ahead, Salesforce plans to boost account-executive capacity by over 20% in high-growth geographical areas, betting that local language support and in-region data residency (including FedRAMP High for Agentforce) will accelerate adoption.
8. Consumption-Based Pricing Starts to Reshape the Business
Salesforce have recently announced a new pricing model for Agentforce that shifts from selling fixed licenses to selling usage. The catalyst is Flex Credits, a pool of prepaid tokens that customers burn only when Agentforce or Data Cloud actually run jobs.
Benioff said Flex Credits were designed after “a huge amount of customer feedback” on pricing rigidity encouraged them to change their approach. This has so far drawn mixed reactions from the ecosystem – some have said that it will become far simpler to correlate cost and ROI, while others say it’s still difficult to forecast.
Early figures look strong so far – in Q1, 30% of Agentforce bookings came from existing customers refilling their credit balance. Data Cloud shows an even deeper consumption curve, with 50% of new bookings coming from customers expanding usage rather than starting fresh. This shows that customers are leaning towards the consumption-based approach, and Salesforce are following suit.
Salesforce’s shift to usage-based pricing is also changing how the company works internally. Instead of just tracking how many new seats are sold, sales teams are now measured on “net new AOV” – a metric that includes both renewals and upsells to focus on long-term customer value. Engineering teams are getting more hands-on too, working directly with customers to speed up setup and boost usage, which helps drive more consumption.
For Salesforce professionals, this means roles are evolving. Companies now need people who can make the system run efficiently, manage credit usage, and show the business value of what’s being done. As more revenue depends on how much customers actually use the platform, usage will become one of the most important indicators of Salesforce’s success.
Final Thoughts
Salesforce had plenty to celebrate on this earnings call, and their full-throttle push into AI is beginning to show real results. It must come as a huge relief to see some Agentforce growth amidst the scrutiny. However, their stock value continues to dip, raising questions about whether investor confidence will keep pace with the company’s AI ambitions.
The planned Informatica acquisition raises a similar question. Salesforce’s ambitions are huge, but so is the skepticism. The real test will be whether the company can fold Informatica into its AI stack quickly enough to silence the doubters, or whether the deal ends up as an expensive distraction.
The post 8 Key Insights from Salesforce’s Q1 FY26 Earnings Call appeared first on Salesforce Ben.
June 02, 2025 at 03:22PM
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