Salesforce 2026 Q3 Earnings Net Income Surges 36.6% on AI-Driven Growth

Salesforce (CRM) reported third-quarter fiscal 2026 results that exceeded expectations, with revenue rising 8.6% year-over-year to $10.26 billion and guidance for fiscal 2026 raised, reflecting confidence in its AI and data strategies.

Revenue

Salesforce’s total revenue for Q3 2026 reached $10.26 billion, driven by robust performance across its core segments. Subscription and support revenue, the company’s largest segment, accounted for $9.73 billion, while professional services and other segments contributed $533 million. The results underscore the growing demand for Salesforce’s AI-powered solutions, particularly Agentforce and Data 360, which continue to drive customer expansion.

Earnings/Net Income

The company’s earnings per share (EPS) surged 37.5% year-over-year to $2.20, while net income hit a record $2.09 billion, a 36.6% increase from $1.53 billion in the prior year. This marks a significant milestone in Salesforce’s profitability, driven by margin expansion and strong AI adoption.

Price Action

Following the earnings release, Salesforce’s stock rose 1.55% in the latest trading day, reflecting investor optimism about its AI-driven growth trajectory.

Post-Earnings Price Action Review

The strategy of buying CRM when revenue beats and selling it in 30 days delivered moderate returns but underperformed the benchmark. The strategy achieved a 56.21% return, while the benchmark returned 138.23%. The Sharpe ratio of 0.22 indicated reasonable risk-adjusted returns, though the maximum drawdown of 0% suggested the strategy avoided losses without capitalizing on broader market gains.

CEO Commentary

CEO Marc Benioff highlighted "strong bookings" and the success of Agentforce, which processed 3.2 trillion tokens in Q3. He emphasized strategic investments in data infrastructure, including the Informatica acquisition, and noted that 70% of customers using Agentforce have moved to production environments. Benioff reiterated confidence in Salesforce’s leadership in enterprise AI adoption.

Guidance

Salesforce raised its fiscal 2026 revenue guidance to $41.15B–$41.25B, reflecting 9%–10% growth. The company also maintained its non-GAAP operating margin target of 34.1% and outlined plans for mid-teens growth in free cash flow.

Additional News

1. M&A Activity: Salesforce announced a partnership with AstraZeneca to leverage its Agentforce platform for AI-driven healthcare engagement, expanding its footprint in the life sciences sector.

2. Strategic Acquisitions: The acquisition of Informatica, finalized earlier in the year, is now contributing to Salesforce’s data infrastructure growth, enhancing its "trusted data foundation."

3. Shareholder Returns: The company deployed $4.2 billion in capital during Q3, including $3.8 billion in share repurchases, signaling continued commitment to shareholder value.

Key Highlights

• AI-Driven ARR Growth: Agentforce and Data 360 combined generated $1.4 billion in annual recurring revenue, up 114% year-over-year.

• Customer Expansion: Agentforce adoption grew 70% quarter-over-quarter, with 50% of new bookings from existing clients.

• Market Position: 90% of Forbes’ top 50 AI companies now use Salesforce, reinforcing its role as a leader in enterprise AI adoption.

Salesforce’s Q3 results demonstrate its ability to monetize AI at scale, with strong revenue growth, margin expansion, and a clear path to achieving its 2030 revenue target of $60 billion. Analysts remain cautiously optimistic, with price targets ranging from $320 to $400, reflecting confidence in the company’s long-term AI strategy.