Salesforce February 2026 earnings review

Some dark and some light clouds on the sky

The stock price of Salesforce has seen a lot of pressure in recent weeks and is down 26% so far this year, and the overall drawdown reached 50%.

CEO Marc Benioff directly addressed this at the beginning of the quarterly earnings call:

This is not our first SaaSpocalypse. We have been through many SaaSpocalypses. I remember the horrible SaaSpocalypse 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.

Another company that is getting hit hard by AI fears is Adobe. Learn more about Adobe and whether it is really over for the company here:

There is a lot of fear that the newest generation of AI tools, and especially Claude post an existential threat to all existing software companies. More on the state of AI and what is happening to software stocks right now here:

On February 25th, Salesforce released the 2025 numbers, which are internally referred to as FY2026, so don’t be confused when you see official statements. It is time that we take a closer look. Before we do that, it is important that you know Salesforce. You will find my deep dive here:

Management’s summary

Invest at your own risk; this is not financial advice! This is not a recommendation to buy or sell any securities discussed in the article.

That’s how the management described the Q4/2025 results: As you can see, they are all about Agentforce, Salesforce’s newest gemstone.

“We delivered a phenomenal quarter to close out a record fiscal 2026, delivering $41.5 billion in revenue, up 10% year-over-year and we passed an incredible milestone, with $72 billion in total RPO, up 14% year-over-year,” said Marc Benioff, Chair and CEO, Salesforce. “We’ve rebuilt Salesforce to become the operating system for the Agentic Enterprise, bringing humans and agents together on one trusted platform. And the more intelligence moves to where work happens, the more valuable Salesforce becomes. Agentforce ARR reached $800 million, up 169% year-over-year, and we’ve closed 29,000 deals, up 50% quarter-over-quarter. We’ve consumed nearly 20 trillion tokens, and converted them into more than 2.4 billion agentic work units to date, moments where AI wasn't just reasoning — it was delivering real work. Agentic AI is a tailwind for our business, and we’re well on our way to $63 billion in revenue in FY30.”

“Salesforce delivered a record Q4 as our customers' shift to the Agentic Enterprise surges, fueling NNAOV acceleration in H2 FY26,” said Robin Washington, President and Chief Financial and Operating Officer, Salesforce. “Our performance makes us even more confident in our path to reaccelerate organic revenue growth in H2 FY27. By driving adoption of Agentforce and Data 360 across our platform, we are building a powerful engine that converts raw intelligence into enterprise work. Reflecting our strong trajectory, we’ve increased our authorization to $50 billion for share repurchases and increased our quarterly dividend, reinforcing our commitment to delivering significant shareholder value.

Salesforce loves colorful slides, and here are their main takeaways from this quarter’s earnings call:

Income Statement

The topline numbers came in strong. Revenue increased by 10% compared to the previous year, and excluding the Informatica contribution, we are looking at an increase of 8.5%.

The revenue growth was driven by the strong Agentforce 360 and Slack performance, as well as the Sales and Service platforms. Tableau and Marketing slowed down recently.

The increase in revenue of 9.6%, paired with a slight increase in the gross margin (now 77.7%), led to an increase in the gross profit of 10.3%.

Since the operating expenses grew at a lower pace than the operating profit, the operating margin improved to 21.5%, and the operating income improved by 16.3%. Parts of the increase in the SG&A expenses are coming from the Informatica integration. More on that later.

The net income improved by 20% due to the high gain on the sale of investments.

The earnings per share of $7.8 increased with 23%, even faster than the net income, due to the share buybacks.

The number of outstanding shares has been declining since 2023 and declined by 1.8% last year.

On a quarterly basis, the numbers look equally good, with EPS growing 18.3% vs last year’s Q4 and EPS reaching $2.07.

Balance Sheet

On the asset side, the cash and short-term investments decreased as a result of the Informatica acquisition and the large share buybacks. Goodwill increased likewise due to the Informatica takeover.

On the liabilities side, there are two interesting points: Number one: The increase in debt to finance the takeover, and more importantly: The increase in unearned revenue current. Customers are paying upfront to receive services, the dream of every working capital manager. Even better: This position keeps growing. This indicates that the business to come is higher than it was a year ago. All of this unearned revenue will eventually become real revenue that is visible on the income statement.

Cash Flow Statement

Cash from operations was significantly higher than last year’s Q4. The operating cash flow was driven by the add-back of depreciation and amortization, the stock-based compensation (which I wish were lower), and the large change in unearned revenues, which is typical for Q4.

On an annual basis, the operating cash flow reached a new high and is trending in the right direction, even after deducting the large SBC. Capex are historllycally low, and therefore the operating cash flow is almost equal to the free cash flow.

The Informatica takeover

Salesforce announced the Informatica deal in May 2025 and closed it in November 2025. The most recent quarterly numbers, therefore, already include the effects of the takeover.

To put it simply: Informatica helps companies gather data from different systems, clean and organize it, and make it usable for deeper analytics and AI. As Marc Benioff correctly states below: You must get your data right. Another way to put this is the old but golden rule, “Shit in, shit out”.

The reasons for the takeover were given as follows:

The close of the acquisition brings Informatica’s rich data catalog, integration, governance, quality and privacy, metadata management, and Master Data Management (MDM) services to the Salesforce platform, establishing a unified and comprehensive data foundation for agentic AI — and enabling AI agents to operate safely, responsibly, and at scale across the modern enterprise.

“You have to get your data right to get your AI right,” said Marc Benioff, Chair and CEO of Salesforce. “Data and context is the true fuel of Agentforce, and without clean, connected, trusted data there is no intelligence – only hallucination. Informatica is the trusted platform that turns fragmented enterprise data into context, so every agent can reason, act, and deliver outcomes with precision. When companies get their data right, they get their AI right, and Agentforce becomes unstoppable.”

The following solutions from Salesforce are (hopefully positively) impacted by the Informatica acquisition:

Achieving Data Clarity with Data 360: Informatica will strengthen Data 360, ensuring data from across organizations is not only unified, but clear, trusted, and actionable.

Delivering Complete Integration with MuleSoft: MuleSoft, a leader in application integration and API management, combined with Informatica’s advanced data integration and governance capabilities, will create a comprehensive, end-to-end integration offering that empowers customers to unlock all enterprise data and systems for the AI era.

Elevating Agentforce 360 Platform: Informatica and Salesforce together will provide a critical data foundation for autonomous AI agents to interpret and act on trusted data.

Context-Rich Insights for Tableau: Tableau users will benefit from richer, context-driven insights thanks to a more accessible and better-understood data landscape.

Regarding the large $8 billion price tag.

Yes, it was another expensive takeover for Salesforce. If it was the right call can only be evaluated in a couple of years. Since Informatica just recently started posting a positive net income, valuing the deal on a net income multiple makes no sense. With a free cash flow of $466 million and SBC of $262 million, the EV/(FCF-SBC) multiple for the takeover was 41. While 41 is a fantastic number and not coincidentally the name of this Substack, the valuation proved to be on the high end. Let’s hope Salesforce can make this work.

Operational metrics

For Salesforce, the remaining performance obligations (RPO) and current remaining performance obligations (cRPO) are important metrics to track. These tell you how much revenue has been contracted but not yet been recognized. Read: Future secured revenue. This value always jumps in Q4 since that is when most corporations spend their budgets for next year. During the year, this naturally goes down. The cRPO is the RPO that is expected to be recognized in the next 12 months.

As of Q4, the cRPO was $35.1 billion. As a comparison, Salesforce had revenues of $41.5 billion in the last year. That means that 85% of last year’s revenue is already secured for this year. Long live SaaS. Some of the growth can be attributed to Informatica.

Everything at Salesforce is now about Agentforce. It is just a matter of time before Salesforce will rename itself to Agentforce. What is impressive is that the AgenforceARR has already reached $800 million, an increase of 170% vs last year, and 29,000 deals have been closed. Other companies would kill for such numbers.

Agentforce is also all over their product category names. Everything is Agentforce now.

Salesforce introduced a new metric called Agentic Work Units (AWU). This measures how many tasks were completed by an AI agent. A total of 2.4 billion AWUs have been devlired and the growth is strong with AWUs up 57% quarter over quarter.

Salesforce has processed now more than 19 trillion tokens, up 5x vs the previous year. A token is a small piece of text that is being processed by an AI to give you an answer. In very simple terms. Each word and punctuation that you enter into an LLM is a token, and so is every piece of text that the AI or LLM answers. The sum of those is counted as processed tokens.

The earnings call

Salesforce and especially the CEO Marc, really put on a show for this earnings call. They tried out a new format, and it’s a nice change to the standard Q&A rounds that most companies run. You will find it here:

I went through the whole thing, so you don’t have to. I noted the most important parts:

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