Executive Summary
Salesforce reported QQ1 2026 results with revenue of $9.829 billion, up 7.62% year over year, but down 1.64% quarter over quarter. The gross margin stood at 76.96%, supporting a robust operating margin of 19.76% and a solid net margin of 15.68%, underscoring earnings quality despite ongoing investment in growth initiatives. Free cash flow was exceptionally strong at $6.297 billion (64.1% of revenue), highlighting the company’s ability to translate operating performance into meaningful cash generation even as it sustains high sales and R&D expenditures.
Liquidity and balance sheet remain fortified. Salesforce ended QQ1 2026 with cash and short-term investments totaling approximately $17.408 billion and a net debt position of $441 million, reflecting substantial liquidity to fund expansion, strategic acquisitions, or returns to shareholders. Capex was modest at $179 million, reinforcing a favorable free cash flow profile. The balance sheet shows high goodwill and intangible assets (Goodwill and Intangibles around $55.314 billion), consistent with a history of strategic acquisitions, which provides scale and platform breadth but also warrants ongoing impairment risk monitoring in a growth-elevated SaaS cycle. The company continues to invest in its core platforms (CRM, Slack, Tableau, MuleSoft) while pursuing efficiency in SG&A and R&D to sustain ARR growth and long-cycle customer retention.
Overall, the QQ1 2026 performance reinforces Salesforce’s role as a leading, cash-generative CRM platform with a durable customer base, strong balance sheet flexibility, and meaningful opportunities from AI-enabled product enhancements and ecosystem monetization. Investors should monitor ARR growth signals, multi-product expansion, and any shifts in deal cycles or customer concentration as the model scales.
Key Performance Indicators
Key Insights
Revenue: $9.829B; YoY growth 7.62%; QoQ growth -1.64%
Gross Profit: $7.564B; Gross Margin 76.96%; YoY margin +8.51%; QoQ margin -2.73%
Operating Income: $1.942B; Operating Margin 19.76%; YoY +13.63%; QoQ +6.70%
EBITDA: $2.749B; EBITDA Margin 27.97%
Net Income: $1.541B; Net Margin 15.68%; YoY +0.52%; QoQ -9.78%
Earnings Per Share (GAAP): $1.61; EPS Diluted $1.59; YoY EPS +1.90%; QoQ -9.55%
R&D Expenses: $1.460B; SG&A (Selling, General & Administrative) Expense: $4.126B; SG&A...
Financial Highlights
Revenue: $9.829B; YoY growth 7.62%; QoQ growth -1.64%
Gross Profit: $7.564B; Gross Margin 76.96%; YoY margin +8.51%; QoQ margin -2.73%
Operating Income: $1.942B; Operating Margin 19.76%; YoY +13.63%; QoQ +6.70%
EBITDA: $2.749B; EBITDA Margin 27.97%
Net Income: $1.541B; Net Margin 15.68%; YoY +0.52%; QoQ -9.78%
Earnings Per Share (GAAP): $1.61; EPS Diluted $1.59; YoY EPS +1.90%; QoQ -9.55%
R&D Expenses: $1.460B; SG&A (Selling, General & Administrative) Expense: $4.126B; SG&A as % of revenue approx. 41.9%
Other notable items: Interest expense $68.0M; Depreciation & Amortization $843.0M; Net Other Income $32.0M; Tax expense $433.0M
Cash Flow and Liquidity: Net cash provided by operating activities $6.476B; Capex $179M; Free Cash Flow $6.297B (FCF Margin ~64.1% of revenue)
Balance Sheet Highlights: Cash & cash equivalents $10.928B; Short-term investments $6.480B; Total cash & short-term investments $17.408B; Total current assets $25.866B; Total assets $98.610B; Goodwill $51.281B; Intangible assets $4.033B; Total liabilities $37.944B; Total stockholders’ equity $60.666B; Debt outstanding $11.369B; Net debt $0.441B
Capital Allocation: Purchases of investments $2.235B; Proceeds from investments $0.847B; Common stock repurchased $2.633B; Dividends paid $0.402B; Debt repayments $0.179B; Other financing activities $0.294B; Net cash used in financing activities $(2.92)B; Foreign exchange impact $0.091B; Net increase in cash $(2.0)B to $(+2.08)B? Note: Net change in cash reported as +$2.08B; end cash balance $10.928B
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
9.83B |
7.62% |
-1.64% |
| Gross Profit |
7.56B |
8.51% |
-2.73% |
| Operating Income |
1.94B |
13.63% |
6.70% |
| Net Income |
1.54B |
0.52% |
-9.78% |
| EPS |
1.61 |
1.90% |
-9.55% |
Management Commentary
Transcript not provided in the supplied data. Summary analysis relies on reported financials and balance sheet data. For a fully integrated synthesis with management commentary, please provide the earnings call transcript or grant access to the source so quotes and theme-based insights (strategy, operations, market conditions) can be incorporated with direct quotes.
Transcript not provided.
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Transcript not provided.
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Forward Guidance
Management did not publish explicit forward-looking targets in the provided data. Based on the QQ1 2026 results, the near-term outlook centers on sustaining high free cash flow generation, continuing investments in AI-enabled CRM capabilities (and adjacent analytics and integration offerings like Tableau and MuleSoft), and leveraging Slack to deepen collaboration across the Salesforce platform. The key uncertainties include macro-economy-driven IT spend, enterprise deal cycles, and competitive pressure from large cloud players.
Assessment of achievability: Given FCF generation of $6.297B on $9.829B revenue and a strong balance sheet, Salesforce has the financial capacity to fund product development, go-to-market expansions, and potential strategic acquisitions if compelling value propositions arise. Watch for: (1) ARR growth and net retention, (2) contribution from multi-product expansions within existing customer bases, (3) progress in AI-enabled offerings and corresponding monetization, and (4) any signs of discipline in SG&A/M&D spend that could improve profitability in a slower growth scenario.