Salesforce 2026 Q3 Earnings Surpasses Expectations with 36.6% Net Income Growth

Salesforce (CRM) delivered a robust Q3 2026 performance, exceeding expectations with revenue growth of 8.6% and a 37.5% rise in EPS. The company raised full-year revenue guidance to $41.15–41.25 billion, driven by AI initiatives like Agentforce and Data 360, while net income surged 36.6% to $2.09 billion, marking a 20-year high.

Revenue

Salesforce’s total revenue reached $10.26 billion in Q3 2026, an 8.6% increase from $9.44 billion a year earlier. Subscription and support revenue accounted for the lion’s share at $9.73 billion, while professional services and other revenue contributed $533 million. This growth underscores the company’s strong performance in its core offerings and ancillary services.

Earnings/Net Income

Salesforce’s EPS rose 37.5% to $2.20 in Q3 2026, outpacing the $1.60 from the prior year. Net income surged 36.6% to $2.09 billion, reflecting operational efficiency and strategic AI investments. The 37.5% EPS growth and 36.6% net income increase highlight Salesforce’s profitability, driven by strategic AI initiatives and operational efficiency.

Price Action

The stock price of Salesforce edged up 1.55% during the latest trading day, jumped 8.46% during the most recent full trading week, and dropped 5.31% month-to-date.

Post-Earnings Price Action Review

The strategy of buying CRM when revenues beat and holding for 30 days resulted in a 56.21% return, significantly underperforming the benchmark return of 138.23%. Despite this, the strategy had a high volatility of 35.69% and a maximum drawdown of 0.00%, indicating a risky but potentially rewarding approach.

CEO Commentary

Marc Benioff highlighted Salesforce’s Q3 performance, noting $10.26 billion in revenue (+9% YoY) and a 35.5% non-GAAP operating margin. He emphasized Agentforce’s 330% ARR growth and Data 360’s 119% ingestion increase, alongside strategic priorities like AI adoption and Informatica integration. Benioff expressed optimism about the “agentic enterprise” model, with 18,500 Agentforce deals closed in a year.

Guidance

Robin Washington provided fiscal 2026 guidance: revenue of $41.15–41.25 billion (organic 9% YoY), subscription and support growth of 9%–10%, and non-GAAP operating margin of 34.1%. Free cash flow and CRPO growth are projected at 13–14% and 11–13% YoY, respectively.

Additional News

Recent developments include Robert W. Baird setting a new $315.00 price target for CRM, reflecting confidence in AI-driven growth. Insider activity saw Parker Harris sell 134,662 shares, while David Blair Kirk purchased 3,400 shares. Additionally, Salesforce adjusted revenue projections due to currency fluctuations, citing foreign exchange headwinds as a factor in revised guidance.