A month has gone by since the last earnings report for Salesforce (CRM). Shares have lost about 14.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Salesforce due for a breakout? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the latest earnings report in order to get a better handle on the important catalysts.
Salesforce delivered a solid first-quarter fiscal 2027 non-GAAP earnings of $3.88 per share, up 50.4% year over year. The bottom line beat the Zacks Consensus Estimate by 24.4%.
Revenues rose 13.3% year over year to $11.13 billion and exceeded the consensus mark by 0.68%. Results reflected continued customer demand for Salesforce’s agentic offerings, with Agentforce ARR surpassing the $1 billion milestone.
Subscription and support revenues (95.1% of total revenues) increased 13.9% year over year to $10.59 billion, accounting for the bulk of total revenues. Professional services and other revenues (4.9% of total revenues) totaled $540 million, indicating relatively stable services activity during the quarter.
Within the updated revenue disclosure framework, Agentforce Apps revenue was $6.91 billion, while Data 360, Headless Platform and Other contributed $3.68 billion. Regionally, the Americas (65% of total revenues) generated revenues of $7.23 billion and grew 11.8% year over year. Europe (24.7% of total revenues) delivered revenues of $2.75 billion, reflecting year-over-year growth of 17.8%, while Asia Pacific (10.25 of total revenues) contributed revenues of $1.15 billion, up 12% year over year.
Profitability also improved. Non-GAAP operating income totaled $3.87 billion, up 22% from the year-ago quarter’s $3.17 billion. Moreover, the non-GAAP operating margin expanded 250 basis points to 34.8%, supported by operating leverage and disciplined spending. Management emphasized productivity gains from the internal adoption of AI tooling, even as it continued to invest in go-to-market capacity.
Salesforce exited the first quarter with cash, cash equivalents and marketable securities of $11.83 billion, up from $9.57 billion at the end of the previous quarter. CRM generated an operating cash flow of $6.70 billion and a free cash flow of $6.56 billion in the first quarter.
As of April 30, the current remaining performance obligation (CRPO) was $33.6 billion, up 13.5% year over year. The company returned $27.5 billion to shareholders during the quarter, including $27.1 billion in share repurchases and $365 million in dividends. CRM also launched a $25 billion accelerated share repurchase program, with an upfront delivery of 103 million shares, which management said boosted both GAAP and non-GAAP per-share results in the quarter.
