Salesforce's Q3 2026: Contradictions Emerge on Agentforce's Growth Impact, Mid-Market Strategy, Data Cloud Integration, and Pricing Shifts

Date of Call: December 3, 2025

Financials Results

• Revenue: $10.26B, up 9% YOY (8% in constant currency)
• Operating Margin: Non-GAAP operating margin 35.5% (up ~240 bps YOY); GAAP operating margin improved (up ~130 bps), GAAP guidance adjusted to 20.3%

Guidance:

• Fiscal FY26 organic subscription & support growth ~9% CC; Informatica adds ~80 bps to bring total S&S growth to just under 10% CC.
• FY26 organic total revenue narrowed to $41.15B–$41.25B (~9% nominal, ~8% CC); including Informatica $41.45B–$41.55B (~9%–10% nominal, ~9% CC).
• Non-GAAP operating margin maintained at 34.1%; GAAP operating margin guidance adjusted to 20.3%.
• Operating cash flow and free cash flow growth raised to ~13%–14%; capex <2% of revenue.
• Q4 organic cRPO ~11% nominal (~9% CC); inclusive of Informatica cRPO ~15% nominal (~13% CC).

Business Commentary:

* Agentforce and AI Integration: - Salesforce reported that Agentforce and Data 360 ARR reached nearly $1.4 billion in Q3, up 114% year-on-year, including Agentforce ARR at $540 million, growing 330% year-on-year. - The significant growth was driven by the adoption and integration of AI capabilities across various business functions, including sales, service, and marketing.

• Revenue and Subscription Growth:
• Salesforce's Q3 revenue was $10.26 billion, up 9% year-over-year and 8% in constant currency.

• Growth was attributed to strong performance in Agentforce, Data 360, and Agentforce Sales and Service, partially offset by a faster-than-anticipated shift to cloud for Tableau and on-prem revenue timing.

• Operating Cash Flow and Cash Conversion:

• Operating cash flow for Q3 was $2.3 billion, up 17% year-over-year, and free cash flow was $2.2 billion, up 22% year-over-year.

• The increase in cash flow was driven by strong revenue generation and effective cash conversion from operations.

• Informatica Acquisition:

• Salesforce completed the Informatica acquisition three months ahead of schedule, enhancing its data foundation capabilities.
• The acquisition is expected to contribute significantly to revenue and profitability, with Informatica considered a $10 billion business next year.
  
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management emphasized 'strong results' and growth: Q3 revenue $10.26B (+9% YOY), non‑GAAP operating margin 35.5%, cRPO $29.4B (+11% YOY). Cash flow: operating cash flow $2.3B (+17% YOY), free cash flow $2.2B (+22% YOY). Agentforce/Data momentum: Agentforce & Data ARR +114% YOY; Agentforce ARR +330% YOY; 3.2 trillion tokens processed—all cited as evidence of accelerating adoption.

Q&A:

• Question from Keith Weiss (Morgan Stanley): Customers experimenting with generative AI — are they likely to DIY or buy from vendors like Salesforce?
  Response: Customers are moving from experimentation to scaling but find the 'last mile' hard; enterprise AI requires context, unified data/metadata and deterministic workflows—Salesforce's integrated apps, data and tooling make it the preferred vendor versus DIY.

• Question from Raimo Lenschow (Barclays Bank PLC): How are you ramping expanded sales reps and what about productivity for the extra reps?
  Response: Sales capacity increased materially (roughly 20–23% YTD) with enablement investments; AEs ramp in ~6–12 months and both pipeline generation and enabled capacity are growing double-digits, positioning the sales org to capture demand.

• Question from Brad Zelnick (Deutsche Bank AG): With >$10B scale in data infrastructure, what's Salesforce's competitive advantage in infrastructure and how does it drive company success?
  Response: Competitive advantage is an integrated data foundation (Informatica + Data 360 + MuleSoft) enabling federation, cataloging and enterprise context—delivering accurate, low‑hallucination AI without owning data centers and tightly integrating data with apps/agents.

• Question from Brent Thill (Jefferies LLC): What is the halo effect of Agentforce on other clouds and what's driving Slack's resurgence?
  Response: Agentforce accelerates core clouds by embedding agentic capabilities across Sales, Service, Slack and others; rebuilt products and Slack as the conversational interface are driving increased adoption and cross‑cloud growth.

• Question from S. Kirk Materne (Evercore ISI): How have pricing and monetization evolved given Agentforce could reduce headcount?
  Response: Salesforce offers flexible commercial models—AELA (Agentic Enterprise License Agreements), seat‑based SKUs, usage and flex pricing—providing predictability (multimillion AELAs) and mechanisms (credits/flex) to preserve monetization even if headcount shifts.

• Question from Bradley Sills (BofA Securities): You mentioned getting back to basics in lead generation—what impact has that had on pipeline?
  Response: A radical expansion of distribution capacity (~23% increase) plus focused enablement, compensation alignment and measurement improved lead conversion and created one of the biggest pipeline quarters in years, lifting bookings and CRPO.

Contradiction Point 1

Agentforce Impact on Growth

It involves differing perspectives on how Agentforce is impacting Salesforce's growth, which is crucial for investor expectations and strategic decision-making.

How does Agentforce impact Salesforce’s other clouds, especially Slack, and their growth? - Brent Thill(Jefferies LLC)

2026Q3: Agentforce is enhancing Salesforce's core offerings by integrating with apps like Salesforce Service and Slack, creating an omnichannel supervisor. - Marc Benioff(CEO)

When will Data Cloud and Agentforce's triple-digit growth inflect the top line? - Kasthuri Rangan(Goldman Sachs Group, Inc., Research Division)

2026Q2: We are optimistic about the strategy to monetize AI, focused on capturing customer value. We expect further acceleration and deeper integration into our core products. - Robin Washington(CFO)

Contradiction Point 2

Mid-Market Growth Strategy

It highlights differing approaches to mid-market growth strategy, which is essential for Salesforce's overall growth plan.

What are customers' preferences for developing their own generative AI applications versus using vendor solutions like Salesforce? - Keith Weiss(Morgan Stanley)

2026Q3: Customers are now motivated to go all in with Salesforce to become agentic enterprises, which is a multitrillion market opportunity. - Miguel Milano(CRO)

Given the strong performance of your create and close business over the past two quarters, do you see the mid-market becoming a durable growth driver for the company over the next few years as AI increasingly handles tasks for customers? - S. Kirk Materne(Evercore ISI Institutional Equities)

2026Q2: We are seeing strong strength in the deals with both the SMB segment as well as the mid-market segment. - Miguel Milano(CRO)

Contradiction Point 3

Agentforce's Role and Customer Adoption

It reflects differing perspectives on the extent to which Agentforce is driving customer adoption and growth, which is crucial for understanding Salesforce's strategic positioning and market penetration.

What are customers' preferences regarding building their own applications versus using a vendor like Salesforce for generative AI? - Keith Weiss (Morgan Stanley)

2026Q3: There is a new large secular demand trend called the agentic enterprise, where every company wants to become conversational and smarter. Customers are now frustrated after experimenting and realize the last mile is hard. They need context, data, and deterministic workflows. Salesforce offers the platform for data, apps, and AI to work together, satisfying customer needs. Customers are now motivated to go all in with Salesforce to become agentic enterprises, which is a multitrillion market opportunity. - Miguel Milano(CRO)

What are the key applications and ROI of Agentforce and Data Cloud? - Brad Zelnick (Deutsche Bank)

2026Q1: Non-standalone Agentforce consumption is in excess of $115 million gross ARR over the trailing 12, which represents a twofold increase from Q2. Agentforce is being used in conjunction with parts of the product such as sales cloud and service cloud. - Miguel Milano(CRO)

Contradiction Point 4

Data Cloud and AI Integration

It highlights differing views on the integration and growth of Data Cloud, which is essential for understanding Salesforce's strategic focus and market positioning.

How does Salesforce generate revenue when Agentforce helps customers reduce headcount, and how does this affect AOV growth? - S. Kirk Materne (Evercore ISI Institutional Equities)

2026Q3: Our data business, which includes our data platform, CRM data, and data services, grew 31% year-over-year and now stands at $10 billion in annual revenue. - Marc Benioff(CEO)

What are the key applications and ROI impact of Agentforce and Data Cloud? - Brad Zelnick (Deutsche Bank)

2026Q1: Data Cloud surpassed 22 trillion records this quarter, with 400% growth in consumption across our top 100 deals. - Marc Benioff(CEO)

Contradiction Point 5

Agentforce Pricing and Impact on Salesforce's Business Model

It involves changes in the strategic approach to pricing Agentforce and its impact on Salesforce's overall business model, which can affect customer adoption and revenue expectations.

How does Salesforce monetize Agentforce's impact on reducing customer headcount, and how does this affect AOV growth? - S. Kirk Materne (Evercore ISI Institutional Equities)

2026Q3: Salesforce offers multiple pricing options, including Agentforce for Sales and Service (seat-based), and Agentforce Enterprise License Agreement (AELA, for extreme commitment). Pricing flexibility allows customers to choose based on their agentic transformation needs. Salesforce is seeing increased AOV from Agentforce, with significant multimillion-dollar AELAs signed. - Miguel Milano(CRO)

What are your early observations on Agentforce contracts? Are contract sizes expanding, and what types of expansions are you seeing? Is the shift to a more consumptive model beneficial for Salesforce, and are there any challenges? - Keith Weiss (Morgan Stanley)

2025Q4: We have a mix of human-based pricing, seat-based pricing, and we have a mix of consumption pricing as well. And so with the arrival of Agentforce, we will have a mix of human and agent-based pricing, but it's not -- it's still primarily, in a lot of ways, seat-based pricing. - Marc Benioff(CEO)