Salesforce：AI agent 的美梦仍是 “可望而不可及”？

On May 29th, Beijing time, after the US stock market closed, SaaS leader $Salesforce(CRM.US) announced its quarterly financial report for 2026. Overall, from the perspective of expected differences, the main performance indicators of this report met or slightly exceeded expectations, showing a decent performance amidst stability. However, in terms of trends, revenue growth did not significantly improve, and the profit margin expansion cycle stagnated without fundamental improvement. The detailed points are as follows:

1. Growth seems to be warming up, but it is not clear: In terms of growth, this quarter Salesforce's core business—subscription revenue grew by 8.3% year-on-year, slightly accelerating compared to the previous quarter, and slightly higher than the expected 7.4%. Growth seems to show initial signs of stabilization and recovery. However, part of this is due to the reduced negative impact of exchange rates, with constant currency growth rate remaining flat at 9% (due to not disclosing decimals, minor differences may have been erased). This cannot be considered a true improvement.

2. Traditional weak, AI strong: Looking at the performance of the five major cloud segments, the more traditional IT spending—sales, customer service, and marketing sectors did not perform well, with growth rates continuing to slow down month-on-month and underperforming market expectations. This reflects that European and American companies are not proactive in their traditional IT spending budgets (weaker economic growth expectations and tariff impacts).

In contrast, the other two cloud platforms and data analytics segments, which are more closely related to AI and Agentforce, performed significantly stronger. Their growth rates exceeded expectations by about 5 percentage points and 4 percentage points, respectively, and showed a noticeable acceleration compared to the previous quarter.

Mainly, the platform cloud, as the infrastructure for Salesforce services, is implicitly included in AI-related services, so the impressive growth of the platform cloud is likely benefiting from companies' stronger willingness to spend on AI (even though the overall IT budget did not grow).

3. Leading indicators show steady growth: The company's key leading indicator—cPRO (short-term unfulfilled balance) had a nominal year-on-year growth rate of 12.1% this quarter, which seems to have significantly accelerated compared to the previous quarter. However, this is mainly due to the impact of exchange rates turning from headwinds to tailwinds (the previous quarter caused a $300 million drag, while this quarter is a $300 million benefit). In reality, the growth rate of cRPO under constant currency was 11% in both the previous and current quarters. There was also no real acceleration.

4. Gross profit declined month-on-month, and the improvement trend stagnated: The core business—subscription revenue's gross profit this quarter was $7.67 billion, a year-on-year increase of 9.4%. Under the premise of accelerating revenue growth and better-than-expected performance, the gross profit fell short of expectations, and the growth rate marginally slowed.

In terms of trends, this quarter's subscription business gross margin declined by 0.5 percentage points month-on-month, and the year-on-year increase narrowed to less than 1 percentage point. The gross margin, which has been rising for years, shows signs of stagnation in improvement.It should be the low gross profit margins of businesses like AI and Agentforce, which are still in the preliminary stage, that are dragging down the overall performance.

5. Expense growth tends to stabilize: This quarter, Salesforce's total operating expenses amounted to $5.62 billion, a year-on-year increase of 6.8%, which is lower than the revenue growth rate. Therefore, the expense ratio has returned to a downward trend, contracting by about 0.4 percentage points year-on-year.

Among these, the largest portion is marketing expenses at $3.43 billion, with a year-on-year increase of 5.9%, which did not significantly rise due to AI promotion. The growth rates of administrative expenses and R&D expenses are also between 6% and 8%, indicating overall stable expense input. However, from the perspective of expectation gaps, the overall expenses are still higher than market expectations.

6. Due to the slight year-on-year increase in gross profit margin this quarter, the expense ratio has also returned to a slight contraction trend. Therefore, the operating profit margin has slightly increased (1.2 percentage points), with operating profit at $1.94 billion, a year-on-year increase of 13.6%, outperforming revenue and showing an improved growth rate compared to the previous quarter.

However, from a longer-term perspective, compared to the significant upward trend in profit margins over the past two fiscal years, the increase in profit margins in recent quarters has significantly narrowed and is nearly stagnant. In the context of the AI era, the company's return to an investment cycle has led to a pause in the profit expansion cycle.

7. Cash flow is not as bad as expected: The company's more focused free cash flow this quarter is nearly $6.3 billion, higher than the overly pessimistic market expectation of $5.89 billion (implying a year-on-year decline). However, the year-on-year growth of only 4% also confirms that the company is currently in an investment cycle. Combined with the fact that both GAAP and non-GAAP operating profits are not higher than expected, mainly because Capex investment has not significantly expanded (this quarter was $180 million, compared to $150 million last quarter).

8. Guidance: For the next quarter, the company guides revenue growth at constant exchange rates of 8% to 9%, which is better than the market's original expectation of flat or slightly declining, but there are no significant signs of acceleration. The guidance for cRPO growth at constant exchange rates is 10%, slightly slowing from this quarter's 11%, but still slightly higher than more conservative expectations.

Dolphin Research's View:

Overall, Salesforce's performance this quarter is considered quite good under not very high expectations. Revenue, cash flow profit, and leading indicator cRPO all slightly outperformed expectations. However, aside from short-term expectation gaps, looking at the trend of the performance itself:

① On the growth side, aside from the favorable shift from adverse to favorable exchange rates, revenue and cRPO have not shown any real signs of re-acceleration. Structurally, constrained by recent negative outlooks on macroeconomic growth and the impact of tariffs, companies' overall willingness and budget for IT spending are not high, and traditional businesses are showing a marginal slowdown trendIn contrast, companies are relatively more generous with their spending on AI-related expenses under limited budgets. According to company disclosures, the annualized revenue contribution from data cloud and AI-related services has reached approximately $1 billion, a year-on-year increase of 120% (the growth rate remains the same as the previous quarter). Undoubtedly, this is one of the main drivers of growth. However, it still only accounts for 2.7% of total revenue, and the absolute scale remains very limited, which cannot fundamentally accelerate the overall growth of the company.

② On the profit side, it can be seen that due to investments in AI and related businesses, the trend of gross margin improvement has stagnated. Although expenses have not significantly increased, which has dragged down profit margins, it can no longer squeeze out incremental profits as it did previously through substantial contraction. It is evident that during the AI investment cycle, there are currently no driving factors to continue improving profit margins.

From the guidance perspective, although the company has raised its revenue guidance for the entire fiscal year 2026, the guidance for operating profit margin and cash flow growth remains unchanged. It is also clear that the management does not have high expectations for profit margin growth in the medium term. The underlying logic is that the investments required for AI are upfront, but the growth revenue that can be generated in the medium to short term is relatively limited.

Therefore, overall, growth has not fundamentally accelerated and remains stagnant, and profit growth will not significantly outpace revenue, which remains the main storyline for the company's current and subsequent performance. Thus, although the company's current valuation is very low within the SaaS industry, with a PS ratio of about 7x for fiscal year 2026, the current bullish outlook on the company is more based on the optional investment potential that AI and Agentforce may bring for growth inflection points. Until the story of Agentforce is validated or clearer optimistic signals emerge, Dolphin Research currently holds a hopeful but wait-and-see attitude.

The following is a detailed interpretation of this quarter's financial report:

1. Brief Introduction to Salesforce Business & Revenue

Salesforce is a pioneer in the CRM (Customer Relationship Management) industry in the United States and even globally, being one of the first to propose the concept of SaaS, or software-as-a-service. The biggest feature of this model is the use of cloud services instead of localized deployment; it adopts a subscription payment model rather than a one-time purchase.

Therefore, Salesforce's business and revenue structure mainly consists of two categories: ① Over 95% of revenue comes from various types of SaaS service subscription income; ② The remaining approximately 5% is made up of expert service income from project consulting, product training, etc.

Further examining the main subscription income, it is composed of five segmented categories of SaaS services, and the revenue scale of each major segment is roughly equivalent, including:

① Sales Cloud: The core of CRM and the company's earliest business, mainly consisting of various process management tools for the sales phase of enterprises, such as customer contact, quoting, and signing functions② Service Cloud: Another core business of the company, mainly includes various functions related to customer service, such as customer information management, online customer service, etc.

③ Marketing & Commerce Cloud: The Marketing Cloud systematically conducts marketing through various channels such as search, social media, and email; the Commerce Cloud mainly involves building virtual malls required for e-commerce, order management, payment, and other functions.

④ Integration & Analytics: Salesforce integrates internal database services and business analysis tools, mainly consisting of MuleSoft and Tableau.

⑤ Platform & others: The infrastructure and services that other Salesforce SaaS services rely on, similar to PaaS (Platform-as-a-Service). It also includes collaboration office services similar to Microsoft Teams or domestic Feisheng—Slack.

II. Strong in AI, Weak in Tradition, This Quarter's Growth Slightly Exceeds Expectations

On the growth side, this quarter Salesforce's core business subscription revenue was nearly $9.3 billion, a year-on-year increase of 8.3%, slightly accelerating compared to the previous quarter, and slightly higher than the expected 7.4%. The issue of Salesforce's continued slowing growth seems to show initial signs of stabilization and recovery. However, part of this is due to the favorable impact of the dollar exchange rate weakening, which has reduced the negative impact on revenue. The growth rate at constant exchange rates remains flat, at 9% for both this quarter and the last quarter (due to not disclosing decimals, there may be minor differences that have been smoothed out).

Looking at the five major segments,

① The growth of the three traditional clouds: Sales, Service, and Marketing is not good and below expectations. The three grew by 6.7%, 7%, and 3.4% respectively, continuing to slow down compared to the previous quarter and below market expectations by 0.6pct to 2.5pct. The weak growth of traditional clouds reflects that IT spending in European and American enterprises is not thriving, which reflects concerns about subsequent economic growth and tariff impacts. Among them, the Marketing Cloud, which had the worst growth, aligns with the common understanding that trade enterprises are the most impacted.

② However, the company's other two relatively newer segments, the Platform Cloud and Data Analytics, which are more related to AI and Agentforce, grew strongly. The Platform Cloud revenue increased by 14% year-on-year, and the Data Analytics segment also grew by 9.9%. Both exceeded expectations by about 5pct and 4pct respectively, and the trend shows a significant acceleration compared to the previous quarter.**

As the infrastructure for Salesforce services, enterprises default to using Platform Cloud when adopting Agentforce. Therefore, the strong growth of Platform Cloud is likely benefiting from enterprises' increased willingness to spend on AI. As for the data analytics segment, it is mainly attributed to the revenue growth of its analytics tool Tableau, which surged from 3% last quarter to 12%. This is also somewhat benefited by the spillover demand for AI functionalities.

Due to stronger-than-expected growth in core subscription revenue driven by Platform Cloud and data analytics, along with approximately $530 million in service revenue this quarter (in line with expectations and with minimal impact), Salesforce's total revenue this quarter reached $9.83 billion, a year-on-year increase of 7.6%, exceeding the expected 6.7%.

II. Leading indicators show steady growth, long-term confidence stronger than short-term

This somewhat reflects the leading indicators for subsequent growth -- the nominal year-on-year growth rate of cRPO (current remaining performance obligations) this quarter is 12.1%, which appears to have accelerated significantly compared to last quarter. However, this is mainly due to the impact of exchange rates shifting from headwinds to tailwinds (last quarter caused a $300 million drag, while this quarter is a $300 million benefit). At constant exchange rates, the growth rate of cRPO was 11% in both last quarter and this quarter.

It also includes the growth of all long-term unfulfilled obligations over 12 months, which accelerated from 11.4% last quarter to 13%. The acceleration trend is similar to that of short-term cRPO, so it should also mainly be influenced by the shift from exchange rate headwinds to tailwinds .

Structurally, it can be seen that the growth rate of long-term unfulfilled obligations continues to outpace that of short-term ones, indicating that newly added contracts are primarily long-term. This suggests that enterprises do not have high confidence in IT spending in the medium to short term, but still have high expectations for long-term expenditures such as AI.

III. Gross profit once again falls short of expectations, is AI investment a drag?In terms of gross profit, Salesforce's core business this season - the gross profit of subscription revenue is $7.67 billion, a year-on-year increase of 9.4%. Under the premise of accelerating revenue growth and better-than-expected performance, the gross profit, however, fell short of expectations, and the growth rate has marginally slowed.

It can be seen that the gross margin for subscription business this season is 82.7%, a decrease of 0.5 percentage points quarter-on-quarter, and the year-on-year increase has also narrowed to less than 1 percentage point. The upward trend in gross margin that has been present in recent years shows signs of stagnation. Dolphin still speculates that the lower gross margins of businesses like AI and Agentforce, which are still in the preliminary stages, along with upfront investments vs. limited short-term revenue contributions, have dragged down the gross margin.

Additionally, the $120 million gross loss from service revenue, which has been in long-term gross loss (recently also showing a trend of expanding losses), means that this season Salesforce's total gross profit is approximately $7.56 billion, lower than the expected $7.62 billion.

IV. Expense growth stabilizes, expense ratio shrinks, but slightly higher than expected

From the expense perspective, this season Salesforce's total operating expenses are $5.62 billion, a year-on-year increase of 6.8%. Although the growth rate has slowed compared to the previous season, it is higher than the market expectation of 5.8%.

However, it can be seen that the expense growth rate is lower than the revenue growth, so the expense-to-revenue ratio has returned to a downward trend this season, decreasing by about 0.4 percentage points year-on-year to 57.2%.

Specifically, the largest portion of marketing expenses is $3.43 billion, slightly higher than expected. However, it has only increased by 5.9% year-on-year, making it the slowest growing among the three expenses.

The growth rates of management expenses and R&D expenses are also between 6% and 8%, with the growth of the three expenses being basically consistent. It can be seen that the pace of expense investment is relatively stable (but compared to market expectations, the growth will be relatively contracted, still more).

As an important component of expenses for SaaS companies, this quarter's stock-based compensation expense is approximately $810 million, accounting for 8.3% of revenue, with a trend of SBC expense ratio expanding again.

V. Profit is better than pessimistic expectations, but the stagnation of profit margin improvement is an unchanging backdrop

In terms of profit performance, although the gross margin this quarter has decreased sequentially, it still shows a slight year-on-year increase. The expense ratio has also returned to a slight contraction trend. Therefore, the operating profit margin has slightly increased (1.2pct) to 19.8%, with the final operating profit at $1.94 billion, a year-on-year growth of only 13.6%, outpacing revenue growth and showing an increase in growth rate compared to the previous quarter.

However, from a longer perspective, compared to the profit margin year-on-year increase of over 10pct in fiscal year 24, the recent upward movement in profit margins has clearly diminished. This reflects that the company is returning to an investment cycle in the AI era.

From the perspective of expectation differences, both gross margin and expense spending are not good compared to expectations, and operating profit is only roughly in line with expectations.

The company's more focused free cash flow profit performed well, this quarter nearly $6.3 billion, higher than the expected $5.89 billion. It did not show a year-on-year decline as the market feared, but the only 4% year-on-year growth also verifies that the company is indeed in an investment cycle.

Dolphin Research's past Salesforce research:

Financial report commentary:

February 27, 2025 financial report commentary “ Salesforce: Do agents need to spend money first to make money later? ”

February 27, 2025 minutes “ Salesforce (Minutes): The "Holy Trinity" of Applications, Data, and Agents ”In-depth Analysis:

On January 15, 2025, the second coverage of Salesforce: Can the Old SaaS "Sprout New Buds"? was first published.

On January 7, 2025, the second coverage of “Will Artificial Intelligence Really Replace Humans? How Much Can Salesforce Benefit? was first published.

Risk Disclosure and Statement of this Article: Dolphin Research Disclaimer and General Disclosure