Salesforce's Q3 2026 Earnings Call: Contradictions in Agentic Enterprise Adoption, Infrastructure Leverage, Data Cloud/Agentforce Growth, and Sales Capacity Confidence

Date of Call: November 26, 2025

Financials Results

• Revenue: $10.26B, up 9% year-over-year (8% in constant currency)
• Operating Margin: 35.5% non-GAAP operating margin, up 240 basis points year-over-year

Guidance:

• Reiterate FY26 organic subscription & support growth ~9% year-over-year in constant currency; Informatica to add ~80 bps, yielding total S&S growth slightly under 10% YoY CC.
• FY26 organic revenue narrowed to $41.15B–$41.25B (~9% nominal, ~8% CC); including Informatica: $41.45B–$41.55B (~9%–10% nominal, ~9% CC).
• Maintain non-GAAP operating margin guidance at 34.1%; GAAP operating margin adjusted to 20.3%.
• Operating cash flow growth raised to ~13%–14%; free cash flow growth ~13%–14%; capex slightly below 2% of revenue.
• Q4 organic cRPO growth ~11% YoY nominal (9% CC); inclusive of Informatica cRPO growth ~15% nominal (~13% CC) with ~$500M FX tailwind.

Business Commentary:

• Agentforce Growth and Adoption:
• Salesforce's Agentforce ARR reached nearly $1.4 billion in the quarter, up 114% year-over-year, including Agentforce ARR of about $540 million, up 330% year-over-year.

• The growth was driven by the increase in customer adoption of Agentforce and its integration into Salesforce's core products, enhancing customer interactions and elevating business operations.

• CRPO and Revenue Growth:

• Salesforce's current remaining performance obligation (cRPO) ended Q3 at $29.4 billion, up 11% year-over-year in nominal and 11% in constant currency.
• Revenue for the quarter was $10.26 billion, up 9% year-over-year in nominal and 8% in constant currency. The growth was attributed to strong bookings in Agentforce, Data 360, and Agentforce Sales and Service, partially offset by shifts in revenue timing for on-prem products like Tableau and MuleSoft.

• Impact of Informatica Acquisition:
• Salesforce completed the acquisition of Informatica, expected to be accretive within 12 months, and is anticipated to contribute approximately $10 billion in business next year.

• This acquisition enhances Salesforce's data foundation, which is crucial for accurate AI execution and is anticipated to drive further business expansion and revenue growth.

• Operational Efficiency and Margin Expansion:

• Salesforce achieved a non-GAAP operating margin of 35.5% and a GAAP operating margin of 25.5%, representing a significant improvement over the previous quarter.
• The margin expansion was driven by the timing of expenses and a decline in bad debt expenses, reflecting the company's focus on operational excellence and efficient resource allocation.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted strong quarter: "Q3 revenue was $10.26 billion, up 9% year-over-year"; non-GAAP operating margin "35.5%"; operating cash flow $2.3B, up 17% YoY and free cash flow $2.2B, up 22% YoY. Agentforce/Data momentum cited (Agentforce ARR ~$540M, +330% YoY; Agentforce+Data ARR nearly $1.4B, +114% YoY) and repeated messaging of accelerating bookings, pipeline and capacity investments.

Q&A:

• Question from Keith Weiss (Morgan Stanley): Are customers building DIY generative-AI apps or buying from vendors like Salesforce?
  Response: Customers are moving from experimentation to buy: last-mile scale requires enterprise context, data and deterministic workflows — Salesforce's integrated platform uniquely addresses that, so customers prefer platform over DIY.

• Question from Raimo Lenschow (Barclays): How are the expanded sales reps ramping and what about productivity?
  Response: Sales capacity has been materially expanded (~20–23% increase) with enablement; ramp averages 6–12 months and current pipeline growth aligns with increased capacity to capture demand.

• Question from Brad Zelnick (Deutsche Bank): What's Salesforce's competitive advantage in infrastructure and how is it leveraged?
  Response: The differentiated data foundation (Informatica + Data 360 + MuleSoft) provides federated enterprise data (addressable ~$10B) that enables accurate, low-hallucination AI while leveraging hyperscalers to preserve margins.

• Question from Brent Thill (Jefferies): What halo is Agentforce having across other clouds and what's driving Slack's resurgence?
  Response: Agentforce embeds AI/context across apps, accelerating usage and growth across Sales, Service and Slack by turning core products into agentic experiences; rebuilt products enable cross-cloud adoption.

• Question from S. Kirk Materne (Evercore Partners): How is Salesforce monetizing Agentforce given pricing confusion and potential headcount reductions?
  Response: Salesforce offers flexible commercial models (seat-based SKUs, consumption, Agentic Enterprise License Agreements and flex pricing) giving predictability; customers often expand spend as agents augment humans, driving higher AOV despite headcount shifts.

• Question from Bradley Sills (Bank of America): How did 'back to basics' lead-generation and sales focus impact the pipeline?
  Response: They significantly increased distribution capacity (~23%), tied enablement and comp to new goals and aggressively managed seller participation, which revitalized pipeline and contributed to stronger bookings/CRPO.

Contradiction Point 1

Agentic Enterprise and Customer Adoption of AI

It involves the company's strategic focus on becoming an agentic enterprise and the customer adoption of AI solutions, which directly impacts Salesforce's product offerings and market positioning.

Why is there a mismatch between investors' expectations of generative AI's impact on the SaaS application layer and customers' actual adoption of generative AI solutions (e.g., Salesforce's)? - Keith Weiss (Morgan Stanley)

20251204-2026 Q3: Miguel highlights the significant demand for becoming an 'agentic enterprise' by companies to enhance growth, reduce costs, and improve efficiency. Customers initially experimented but now face challenges, making them seek AI solutions from vendors like Salesforce. - Miguel Milano(CRO)

Are customers building their own applications or using a vendor like Salesforce for generative AI? - Keith Weiss (Morgan Stanley)

2026Q3: There is a secular demand trend for becoming agentic enterprises. Customers are facing challenges with DIY solutions, realizing the last mile is hard. Salesforce, with its integrated context, data, apps, and AI, is uniquely positioned to deliver accurate and reliable AI. - Miguel Milano(CRO)

Contradiction Point 2

Salesforce's Competitive Advantage in Infrastructure

It involves the company's competitive advantage in infrastructure, which is critical for the accurate integration of AI and the overall success of Salesforce's offerings.

What is Salesforce's infrastructure competitive advantage and how does it drive company success? - Brad Zelnick (Deutsche Bank)

20251204-2026 Q3: The data foundation composed of Informatica, Data 360, and MuleSoft, which is expected to be a $10 billion business. This foundation enables accurate AI, reducing hallucinations, and supports the harmonization of Salesforce's offerings, with plans to leverage lower-cost data centers built by others. - Marc Benioff(CEO)

What is Salesforce's infrastructure competitive advantage and how does it drive overall success? - Brad Zelnick (Deutsche Bank)

2026Q3: Salesforce's competitive advantage lies in its data infrastructure, including Informatica, Data 360, and MuleSoft. These tools ensure accurate AI, deliver context, and integrate data across platforms, enhancing overall business strength. - Marc Benioff(CEO)

Contradiction Point 3

Agentforce Revenue Contribution to Top Line

It involves differing expectations regarding the timeline and impact of data cloud and Agentforce revenue on the company's top-line growth, which is crucial for investor expectations.

How soon will Data Cloud and Agentforce’s triple-digit growth translate to top-line growth? - Kasthuri Rangan (Goldman Sachs Group, Inc.)

20251204-2026 Q3: The growth in Data Cloud and Agentforce revenue is expected to contribute to top-line growth over time. Salesforce is focusing on customer adoption and expansion, with 40% of new bookings coming from existing customers. - Robin Washington(COO)

Is SaaS overextended given typical tech cycles? Is SaaS in Salesforce's sector vulnerable to disruption from AI-native apps and custom AI? - Kasthuri Rangan (Goldman Sachs Group, Inc.)

2026Q2: The growth in Data Cloud and Agentforce revenue is expected to contribute to top-line growth over time. - Robin Washington(COO)

Contradiction Point 4

Capacity Investments and Sales Growth

It involves the company's strategy for increasing sales capacity and its impact on sales growth, which is crucial for meeting revenue targets and investor expectations.

How do you plan to increase sales reps and manage productivity given the significant capacity investment? - Raimo Lenschow (Barclays)

20251204-2026 Q3: We're seeing double-digit growth in open pipeline, matching the capacity increase, and we're very confident we'll be able to capture the opportunity ahead. - Miguel Milano(CRO)

Can you explain how Agentforce will drive Salesforce's overall growth rate? - Keith Weiss (Morgan Stanley)

2026Q1: We are seeing strong demand across every segment and geographic region, and we feel like we have good capacity to meet that demand. - Miguel Milano(CRO)