Salesforce, the cloud-based software giant long known for its customer relationship management (CRM) tools, delivered a set of fourth quarter and full-year 2026 results that, while fundamentally robust, sent its stock tumbling in after-hours trading. Despite beating Wall Street’s earnings and revenue estimates and raising long-term guidance, investors reacted with caution, pushing shares down about 5% as the company’s fiscal 2027 revenue outlook trailed some analyst projections and broader concerns lingered about the pace of growth in the age of artificial intelligence.
For the quarter ended January 31, 2026, Salesforce reported adjusted earnings per share of $3.81, handily surpassing the $3.05 consensus estimate, according to Seeking Alpha and CNBC. Revenue for the quarter came in at $11.20 billion, slightly above expectations and marking a 12% year-over-year increase—the company’s fastest growth rate in two years. Net income climbed to $1.94 billion, or $2.07 per share, up from $1.71 billion, or $1.75 per share, in the same period last year.
But the market’s response was muted at best. Shares fell about 5% in extended trading on February 25, 2026, as reported by CNBC and Seeking Alpha, compounding a challenging year that saw the stock down 28% so far in 2026, even as the S&P 500 eked out a 1% gain. The immediate decline after the earnings release reflected what many analysts described as a “reset on near-term growth expectations,” rather than a wholesale loss of confidence in the company’s fundamentals.
So what’s driving the disconnect? Part of the answer lies in the company’s guidance for fiscal 2027. Salesforce projected revenue between $45.8 billion and $46.2 billion for the year, representing 10% to 11% growth and including roughly three percentage points from its recent Informatica acquisition. While this outlook is in line with or slightly above some consensus estimates, it failed to ignite enthusiasm among investors hoping for a sharper organic growth reacceleration, especially as generative AI reshapes the software landscape. The company also guided for adjusted EPS of $13.11 to $13.19 for fiscal 2027, again roughly matching expectations but not providing the upside surprise some had hoped for.
Still, the quarter was packed with positive signals. Salesforce’s non-GAAP operating margin expanded to 34.2%, up from 33.1% a year earlier, with guidance for fiscal 2027 at 34.3%. Free cash flow for the quarter surged 39.5% year-over-year to $5.323 billion, and full-year free cash flow reached $14.402 billion. The company authorized a massive $50 billion share buyback, a move CEO Marc Benioff described as driven by “some low prices,” underscoring management’s conviction in the stock’s long-term value.
One of the standout stories of the quarter was the rapid scaling of Agentforce, Salesforce’s AI-powered automation platform. Annualized recurring revenue (ARR) for Agentforce soared to $800 million, up 169% year-over-year, with 29,000 deals closed in the quarter—a 50% increase quarter-over-quarter. Benioff leaned heavily into the AI narrative on the company’s earnings call, highlighting that Agentforce had delivered 2.4 billion Agentic Work Units and processed 19 trillion tokens to date. “AI monetization is scaling,” CFO Robin Washington reiterated, though she acknowledged that the market wants to see this translate into faster organic growth.
Salesforce’s acquisition of Informatica for $8 billion was completed ahead of schedule during the quarter and contributed $399 million in revenue. The deal is expected to be accretive within 12 months and is now included in the company’s raised fiscal 2030 revenue target of $63 billion, up from a previous goal of over $60 billion. The integration of Informatica is being closely watched by investors for its impact on margins and its role in expanding Salesforce’s broader data platform strategy.
The company’s current remaining performance obligation (cRPO), a key indicator of future revenue, came in at $35.1 billion, up 16% year-over-year and above consensus estimates. Total remaining performance obligation (RPO) reached $72.4 billion, a 14% increase. These figures suggest a healthy forward pipeline, though organic growth acceleration remains a “second-half promise” for fiscal 2027, as noted in a detailed analysis by 24/7 Wall St.
Salesforce also continued to invest in innovation and strategic partnerships. During the quarter, it rolled out an AI-enabled Slackbot assistant for paying clients and announced plans to acquire marketing company Qualified. The company’s stake in Anthropic, an AI startup, generated an $811 million gain on strategic investments in the quarter, up from $96 million a year ago. Benioff noted, “I think we just put another $100 million into the new round. We’re about $330 million into Anthropic invested. It’s almost about 1% of Anthropic. And believe me, I wish we had invested a lot more.”
Competition remains fierce. Five customers of ServiceNow switched to Salesforce’s competing IT service management product during the quarter, according to Benioff. Meanwhile, the broader software sector has faced investor skepticism about the near-term impact of generative AI on growth, with IBM’s stock dropping sharply earlier in the week after a rival’s AI tool made headlines for its code modernization capabilities.
Looking ahead, Salesforce’s guidance for the first quarter of fiscal 2027 includes adjusted earnings per share between $3.11 and $3.13 on revenue of $11.03 billion to $11.08 billion, both slightly above analyst expectations. Operating cash flow growth is projected at 9% to 10% for the year. Management, led by Benioff and Washington, expressed confidence that organic growth would reaccelerate in the second half of fiscal 2027, with Agentforce and other AI initiatives expected to play a central role.
As the dust settles on this earnings report, the fundamental narrative for Salesforce remains strong: robust cash generation, expanding margins, and an aggressive push into AI-powered automation. The market, however, is demanding clearer evidence that these investments will soon translate into a meaningful acceleration of organic growth. For now, the gap between Salesforce’s operational strength and its share price performance is a puzzle that only time—and perhaps a few more quarters of AI-fueled momentum—will solve.