Salesforce Inc (CRM) — Q4 2026 Earnings Call Transcript

Good afternoon, and thanks for joining us today on our fiscal 2026 fourth quarter results conference call. We are trying out a new format today and as such, have shortened our prepared remarks to ensure we have time for your questions. Our press release, SEC filings and a replay of today's call can be found on our website. Joining me on the call today are Marc Benioff, Chair and CEO; and Rob Washington, Chief Operating and Finance Officer. We also have Miguel Milano, President and Chief Revenue Officer; and Patrick Stokes, President and Chief Marketing Officer, joining us for the Q&A portion of the call. Some of our comments today may contain forward-looking statements that are subject to risks, uncertainties and assumptions, which could change. Should any of these risks materialize or should our assumptions prove to be incorrect, actual company results or outcomes could differ materially from these forward-looking statements. A description of these risks, uncertainties and assumptions and other factors that could affect our financial results or outcomes is included in our SEC filings, including our most recent report on Forms 10-K, 10-Q and other SEC filings. Except as required by law, we do not undertake any responsibility to update these forward-looking statements. As a reminder, our commentary today will include non-GAAP measures. Reconciliations between our GAAP and non-GAAP results and guidance can be found in our earnings materials and our press release. And with that, let me hand the call to Marc.

All right. Thanks so much, Mike. We're so thrilled to be here with everybody. And I'll tell you what, we're here in this beautiful San Francisco on the 60th floor of Salesforce Tower, and it is a gorgeous day, 70 degrees, the AI capital of the world, and we're coming here to you live, really excited about everything that's going on. So let's start with the highlights from one of the absolute best years in our history and one of the best performances in software ever. We have delivered phenomenal performance across revenue, across margin expansion, across cash flow and CRPO and RPO. I mean the numbers are really incredible. For the full year, we delivered $41.5 billion in revenue, up 10% year-over-year, 9% constant currency. We had $11.2 billion in revenue for the fourth quarter, up 12% year-over-year, 10% constant currency. CRPO rose to $35.1 billion, up 16% year-over-year and 13% in constant currency. And we passed an incredible milestone with $72 billion in total RPO, which is up 14% year-over-year. Last year, we laid out a path towards double-digit revenue growth by the second half of fiscal year '27, and we are hitting our marks. Based on our strong Q4 performance and the fast start with Informatica, we're updating our fiscal year '30 revenue target to $63 billion. Now that means we've only spent 2 years in the '40s, kind of hard to believe. I have never seen performance like this. But this obviously is not a rational market. We all know this. So we're using our remarkable cash flows to take advantage. This is not our first SaaS Pocalypse. We have been through many SaaS Pocalypses. I remember the horrible SaaS Pocalypse of 2020 when not only the software industry was dying, but we were all dying, but we made it through that. And now everyone is back, doing great. So we're so grateful to make it through that, and we're going to make it through this one as well. It's just a great marketing opportunity and a great buying opportunity. That's why we are doing this incredible repurchase authorization of $50 billion. In fiscal year '26, we returned more than $14 billion or 99% of our free cash flow to shareholders. Thank you, Robin, for that. And today, we're increasing our share repurchase authorization to $50 billion because these are some low prices. The biggest brands in the world are choosing Salesforce to lead their Agentic transformation, companies like Amazon, Ford, AT&T, Moderna, GM, Pfizer, and many more. Wins over $1 million in Q4 were up 26% year-over-year. Wins over $10 million were up 33% year-over-year. For example, the U.S. Army, under Army Secretary Dan Driscoll, has awarded us a 10-year indefinite delivery, indefinite quantity contract with a ceiling of $5.6 billion. This level of financial performance is a clear signal that companies across every industry and region are investing in Salesforce to become Agentic enterprises, just like we've been talking about now for 2 years at Dreamforce. The Agentic Enterprise is our real idea; and we're going to talk about Agentforce, which I think just became an $800 million business. We've been seeing incredible demand for Agentforce. In its first 15 months, we closed 29,000 deals, up 50% quarter-over-quarter. Customers in production have increased nearly 50% in Q4. We're all talking about bringing humans, agents, apps, and data together, not just to make people better at their jobs but to redefine how work gets done. We're also seeing amazing things with our new Salesforce IT service product. Since launching our Agentforce for life sciences, we've seen many global pharma companies, including AstraZeneca, Novartis, and Takeda, choosing our Salesforce Life Sciences product. I'm excited about our business here at Salesforce. We are one of only a few companies delivering this level of capability at this scale. Below that, we bring them into Data 360, which allows harmonizing, integrating, and federating data across various data sources throughout the company, bringing it into our apps. This unified platform will help deliver humans and agents working together. Slack is another critical layer that enables all of this work to be done seamlessly. I have one customer, Anthropic, who runs its global operations on Salesforce and Slack. We're excited about our collaborations with partners as they help extend our capabilities. So today, our reporting also mentioned there are over 19 trillion tokens consumed across our platforms. We're excited about that milestone, demonstrating the growth we are achieving. We've also introduced the Agentic Work Unit, which represents one unit of AI work. Today, the agents on our Salesforce platform have delivered 2.4 billion Agentic Work Units. This is not just theories; it's concrete results showing humans and agents working together efficiently.

Marc, congratulations to you and your team. What a quarter?

Mark, I'm so thrilled to talk to you, and I love all your products, and thank you for the Christmas presents. I have them, and I'm using them.

I appreciate it. I'm really happy that so much of our holiday selling season was driven by the launch of Salesforce that happened at the end of September and would love to talk about it.

Mark, you know that we've been working together now, just me and you as well as with our whole sales team to automate SharkNinja's operations. Tell us your view of what's happened and the value we've been able to deliver.

Since we launched Salesforce in Q4, agents have participated in 250,000 consumer engagements during that period. We put so many products out into the market, and sometimes that creates complexity for the consumer, but our agents have allowed our customer service agents to focus on the complicated issues, which has freed up time for them. It's a win for the consumer because they're getting their questions answered quickly, and it's a win for us as it drives down costs while improving experiences.

Thank you, Mark. We're very grateful to you as a customer of Salesforce. It’s been an absolute pleasure getting to work with you.

Marc, I mean, when you think about how far we've come in the last year, today, we have over 5,000 deployments of Agentforce across our 8,300 hotels, which is a huge part of our Agentic platform. We are truly just getting started.

Geoff, congratulations on everything that's going on with Wyndham. Give us your vision of what's happening and how you're using Salesforce as well.

We built a single source of truth, unifying all of our guests' reservation information and data. We call it Wyndham Guest 360, which is delighting our guests and improving their experiences. We're also taking millions of dollars of labor costs out of our operation while driving millions of dollars of increased revenue for these franchisees.

Geoff, it's incredible to see your progress. I’ve been surprised at how quickly you've been able to implement these changes. It takes a great leader and a great team to accomplish something of this scale.

Super exciting. Congrats on the quarter. It's an incredible time to be building for executives and entrepreneurs.

Jason, what is inspiring you to transform SaaStr into this remarkable opportunity?

We're builders at heart. This is the most exciting time to build. We've pushed in with agents and the results have been great; for example, on Agentforce alone, a year ago we were a tiny team, and now we've closed $2.7 million—a lot for us, using our agent.

It's amazing how impactful agents can be. Every segment is impacted by this—small, medium, and large enterprises.

Thanks, Marc. We closed an exceptionally strong fiscal year by rebuilding our platform to convert the raw intelligence of LLMs into real work that drives revenue. This is powering the transition to the agentic enterprise for our customers and ourselves.

Thanks, Robin. And with that, Leila, we're going to go to the first question, please.

Congratulations on a solid end to FY '26, especially with the numbers associated with Agentforce. However, CRPO growth was somewhat disappointing, growing at 9%. Can you talk about the ability of Salesforce to grow the Agentforce business while also bringing along the entire portfolio of products?

It's a great question. Salesforce is a comprehensive business. We’ve been innovating, and are integrating our legacy business to support future growth. We are grateful for what we've been able to achieve.

We're monetizing AI in multiple ways and are seeing great growth in our premium SKUs. Our seats are continuing to grow. We're excited about the incremental value that Agentforce brings, which was illuminated through our customer successes shared today.

With the $50 billion buyback announced, why not lean harder into M&A versus buying back stock?

There are many uses of cash such as dividends, buybacks, and acquisitions. Our board approved a 5.8% increase in our quarterly dividend. Our approach focuses on using cash effectively and keeping our balance sheet strong.

Acquisitions haven't been set aside in our strategy. We're still looking at ways to grow organically and via acquisitions as well.

What is your perspective on the potential for AI model providers to become competitors? Can you clarify your strategy moving forward?

The strategic question is whether these models become platforms. Our job as a software company is to help customers find success by connecting with them in innovative ways.

Can you explain the $2.4 billion in AWUs? How do you monetize this, and what impact does it have on gross margin?

In the short run, we anticipate being neutral on gross margins. We’re building efficiencies into our product development to control costs and drive margins higher over time.

We've started measuring Agentic Work Units as actual work being done through agents. This helps illustrate our customers' ROI from using our platform.

We're seeing significant growth in net new AOV, which I believe will lead to accelerated revenue growth in the second half. We've also successfully added AI elements to our products.

Thank you all for joining us today, and we look forward to seeing you soon.