Salesforce Delivers Record First Quarter Fiscal 2027 Results
SAN FRANCISCO--( BUSINESS WIRE)--Salesforce (NYSE: CRM), the world's #1 AI CRM, today announced results for its first quarter fiscal 2027 ended April 30, 2026.
First Quarter Financial Highlights
“This was an outstanding quarter for Salesforce — record revenue, record deals, and cash flow,” said Marc Benioff, Chair and CEO, Salesforce. “Agentic AI is the biggest growth opportunity for our customers, and for Salesforce. We’re the #1 Agentic CRM, with Agentforce now powering every Customer 360 application and helping tens of thousands of businesses across every industry transform into Agentic Enterprises. With more than $1 billion in Agentforce ARR, $3.4 billion in combined AI and data ARR, and 3.8 billion Agentic Work Units delivered for our customers, Salesforce has never been more essential.”
“We remain confident in delivering organic revenue acceleration in the second half of FY27, driven by growth in Sales, Service, Slack, Agentforce, and Data 360,” said Robin Washington, President and Chief Financial and Operating Officer, Salesforce. “We are executing against our profitable growth framework and remain on track to deliver on our FY30 targets while maximizing shareholder value.”
Salesforce Company Highlights
Guidance
Salesforce's guidance includes GAAP and non-GAAP financial measures. The following tables summarize Salesforce's guidance for the second quarter fiscal 2027 and full-year fiscal 2027:
Q2 FY27 Guidance
GAAP
Non-GAAP (1)
Revenue
$11.27 - $11.35 billion
N/A
Revenue growth (2)
10% - 11%
10% CC, $50M Y/Y FX
Includes slightly above 4pts Informatica contribution
Diluted net income per share
$1.74 - $1.76
$3.25 - $3.27
Current remaining performance obligation growth (3)
Approximately 14%
Approximately 13% CC, $200M Y/Y FX
Full Year FY27 Guidance
GAAP
Non-GAAP (1)
Revenue
$45.9 - $46.2 billion
N/A
Revenue growth (2)
11%
Approximately 10% - 11% CC, $300M Y/Y FX
Includes approximately 3pts Informatica contribution
Subscription & support revenue growth (4)
Slightly Under 12%
Approximately 11% CC
Includes approximately 3pts Informatica contribution
Operating margin
20.6%
34.3%
Diluted net income per share
$7.93 - $7.99
$14.06 - $14.12
Operating cash flow growth
Approximately 4% - 5%
N/A
Free cash flow growth
N/A
Approximately 4% - 5%
Capital expenditures
N/A
Approximately 1.5% of revenue
(1) Non-GAAP CC revenue growth, non-GAAP CC remaining performance obligation growth, non-GAAP CC subscription & support revenue growth, non-GAAP operating margin, non-GAAP diluted net income per share, and free cash flow growth are non-GAAP financial measures. See below for an explanation of non-GAAP financial measures. The Company's shares used in computing GAAP diluted net income per share guidance and non-GAAP diluted net income per share guidance reflect the reduction to share count from the 103 million shares initially delivered under the ASR, but excludes any impact to share count from the final ASR settlement or potential Q2 - Q4 FY27 open-market repurchase activity under our share repurchase program.
(2) Revenue FX impact is calculated by taking the current period rates compared to the prior period average rates.
(3) Current remaining performance obligation FX impact is calculated by taking the current period rates compared to the prior period ending rates.
(4) Subscription & support revenue excludes professional services revenue.
The following is a reconciliation of GAAP operating margin guidance to non-GAAP operating margin guidance for the full year:
Full Year FY27
Guidance
GAAP operating margin (1)
20.6%
Plus
Amortization of purchased intangibles (2)
4.2%
Stock-based compensation expense (2)(3)
9.0%
Restructuring and acquisition-related costs (2)(3)
0.5%
Non-GAAP operating margin (1)
34.3%
(1) GAAP operating margin is the proportion of GAAP income from operations as a percentage of GAAP revenue. Non-GAAP operating margin is the proportion of non-GAAP income from operations as a percentage of GAAP revenue.
(2) The percentages shown above have been calculated based on the midpoint of the low and high ends of the revenue guidance for full year FY27.
(3) The percentages shown in the restructuring and acquisition-related costs line have been calculated based on charges associated with the Company's restructuring initiatives and acquisition-related costs. Stock-based compensation expense excludes stock-based compensation expense related to the Company's restructuring initiatives, which is included in the restructuring and acquisition-related costs line.
The following is a per share reconciliation of GAAP diluted net income per share to non-GAAP diluted net income per share guidance for the next quarter and the full year:
Fiscal 2027
Q2
FY27
GAAP diluted net income per share range (1)(2)
$1.74 - $1.76
$7.93 - $7.99
Plus
Amortization of purchased intangibles
$
0.63
$
2.28
Stock-based compensation expense
$
1.16
$
4.94
Restructuring and acquisition-related costs (3)
$
0.08
$
0.30
Less
Income tax effects and adjustments (4)
$
(0.36
)
$
(1.39
)
Non-GAAP diluted net income per share (2)
$3.25 - $3.27
$14.06 - $14.12
Shares used in computing basic net income per share (millions) (5)
820
835
Shares used in computing diluted net income per share (millions) (5)
823
839
(1) The Company's GAAP tax provision is expected to be approximately 21.5% for the three months ended July 31, 2026 and 22.0% for the year ended January 31, 2027. The GAAP tax rates may fluctuate due to discrete tax items, changes in valuation allowance assessment, future acquisitions, or other transactions.
(2) The Company's projected GAAP and non-GAAP diluted net income per share assumes no change to the value of our strategic investment portfolio as it is not possible to forecast future gains and losses. The impact of future gains or losses from the Company’s strategic investment portfolio could be material.
(3) The estimated impact to GAAP diluted net income per share is in connection with the Company's restructuring initiatives and acquisition-related costs.
(4) The Company’s non-GAAP tax provision uses a long-term projected tax rate of 20.5%, which reflects currently available information and could be subject to change.
(5) The Company's shares used in computing GAAP net income per share guidance and non-GAAP net income per share guidance include the 103 million shares initially delivered under the ASR, but excludes any impact to share count from the final ASR settlement or potential Q2 - Q4 FY27 open-market repurchase activity under our share repurchase program.
For additional information regarding non-GAAP financial measures see the reconciliation of results and related explanations below.
Management will provide further commentary around these guidance assumptions on its earnings call.
Product Releases and Enhancements
Salesforce releases major updates for our core platform and apps three times a year, with additional updates happening regularly across our portfolio. These releases are a result of significant research and development investments made over multiple years, and are designed to help customers drive cost savings, boost efficiency, and build trust.
Salesforce leaders will participate in a Q1 FY27 Product & Innovation - Headless 360 + Slack webinar on Friday, May 29, 2026, at 11:00 AM PT / 2:00 PM ET. A live webcast and replay details of the event will be available on the Salesforce Investor Relations website at www.salesforce.com/investor.
To learn more about our newest innovations and product release highlights, including our latest Spring 2026 Product Release, see FY27 Q1 Product Releases and Announcements at https://www.salesforce.com/news/stories/fy27-q1-highlights/ and see our latest major release at www.salesforce.com/releases.
Environmental, Social, and Governance (ESG) Strategy
To learn more about our latest initiatives and priorities, review our Stakeholder Impact Report at https://salesforce.com/stakeholder-impact-report.
Quarterly Earnings Webcast
Salesforce plans to host a live earnings webcast broadcast at 2:00 p.m. (PT) / 5:00 p.m. (ET) to discuss its financial results with the investment community. A live webcast and replay details of the event will be available on the Salesforce Investor Relations website at www.salesforce.com/investor.
About Salesforce
Salesforce helps organizations of any size become agentic enterprises - integrating humans, agents, apps, and data on a trusted, unified platform to unlock unprecedented growth and innovation. Visit www.salesforce.com for more information.
"Safe harbor" statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements about the Company's financial and operating results and guidance, which include, but are not limited to, expected GAAP and non-GAAP financial and other operating and non-operating results, including revenue, net income, net income per share, operating cash flow growth, operating margin, expected revenue growth, expected foreign currency exchange rate impact, expected current remaining performance obligation growth, expected tax rates or provisions, stock-based compensation expenses, amortization of purchased intangibles, shares outstanding, market growth, strategic investments, expected restructuring expense or charges, expectations regarding our total addressable market and expected timing of product releases and enhancements. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the Company’s results or outcomes could differ materially and adversely from those expressed or implied by our forward-looking statements. Readers are cautioned not to place undue reliance on such forward-looking statements.
The risks and uncertainties referred to above include -- but are not limited to -- risks associated with:
Further information on these and other factors that could affect the Company’s actual results or outcomes is included in the reports on Forms 10-K, 10-Q and 8-K and in other filings it makes with the Securities and Exchange Commission from time to time. These documents are available on the SEC Filings section of the Financials section of the Company’s website at investor.salesforce.com/financials/.
Salesforce, Inc. assumes no obligation and does not intend to revise or update publicly any forward-looking statements for any reason, except as required by law.
© 2026 Salesforce, Inc. All rights reserved. Salesforce and other marks are trademarks of Salesforce, Inc. Other brands featured herein may be trademarks of their respective owners.
Condensed Consolidated Statements of Operations
(in millions, except per share data)
(Unaudited)
Three Months Ended April 30,
2026
2025
Revenues:
Subscription and support
$
10,593
$
9,297
Professional services and other
540
532
Total revenues
11,133
9,829
Cost of revenues (1)(2):
Subscription and support
1,953
1,611
Professional services and other
617
654
Total cost of revenues
2,570
2,265
Gross profit
8,563
7,564
Operating expenses (1)(2):
Research and development
1,627
1,460
Sales and marketing
3,769
3,429
General and administrative
740
697
Restructuring
80
36
Total operating expenses
6,216
5,622
Income from operations
2,347
1,942
Interest expense
(317
)
(68
)
Gains (losses) on strategic investments, net
558
(63
)
Other income
133
163
Income before provision for income taxes
2,721
1,974
Provision for income taxes
(614
)
(433
)
Net income
$
2,107
$
1,541
Basic net income per share
$
2.43
$
1.61
Diluted net income per share (3)
$
2.42
$
1.59
Shares used in computing basic net income per share
868
960
Shares used in computing diluted net income per share
871
970
(1) Amounts include amortization of intangible assets acquired through business combinations, as follows:
Three Months Ended April 30,
2026
2025
Cost of revenues
$
244
$
162
Sales and marketing
317
233
(2) Amounts include stock-based compensation expense, as follows:
Three Months Ended April 30,
2026
2025
Cost of revenues
$
138
$
151
Research and development
310
275
Sales and marketing
320
285
General and administrative
102
88
Restructuring
10
15
(3) During the three months ended April 30, 2026 and 2025, gains (losses) on strategic investments impacted GAAP diluted net income per share by $0.49 and $(0.05) based on a U.S. tax rate of 23.5%, and non-GAAP diluted net income per share by $0.51 and $(0.05) based on a non-GAAP tax rate of 20.5% and 22.0%, respectively.
Salesforce, Inc.
Condensed Consolidated Statements of Operations
(As a percentage of total revenues)
(Unaudited)
Three Months Ended April 30,
2026
2025
Revenues:
Subscription and support
95
%
95
%
Professional services and other
5
5
Total revenues
100
100
Cost of revenues (1)(2):
Subscription and support
18
16
Professional services and other
5
7
Total cost of revenues
23
23
Gross profit
77
77
Operating expenses (1)(2):
Research and development
14
15
Sales and marketing
34
35
General and administrative
7
7
Restructuring
1
0
Total operating expenses
56
57
Income from operations
21
20
Interest expense
(3
)
0
Gains (losses) on strategic investments, net
5
(1
)
Other income
1
1
Income before provision for income taxes
24
20
Provision for income taxes
(5
)
(4
)
Net income
19
%
16
%
(1) Amounts include amortization of intangible assets acquired through business combinations as a percentage of total revenues, as follows:
Three Months Ended April 30,
2026
2025
Cost of revenues
2
%
2
%
Sales and marketing
3
2
(2) Amounts include stock-based compensation expense as a percentage of total revenues, as follows:
Three Months Ended April 30,
2026
2025
Cost of revenues
1
%
1
%
Research and development
3
3
Sales and marketing
3
3
General and administrative
1
1
Restructuring
0
0
Salesforce, Inc.
Condensed Consolidated Balance Sheets
(in millions)
April 30, 2026
January 31, 2026
Assets
(unaudited)
Current assets:
Cash and cash equivalents
$
8,935
$
7,327
Marketable securities
2,902
2,238
Accounts receivable, net
5,080
14,339
Costs capitalized to obtain revenue contracts, net
2,065
2,075
Prepaid expenses and other current assets
2,631
2,243
Total current assets
21,613
28,222
Property and equipment, net
3,150
3,120
Operating lease right-of-use assets, net
1,889
2,003
Noncurrent costs capitalized to obtain revenue contracts, net
2,920
2,985
Strategic investments
7,772
7,591
Goodwill
59,291
57,941
Intangible assets acquired through business combinations, net
6,650
6,815
Deferred tax assets and other assets, net
3,395
3,628
Total assets
$
106,680
$
112,305
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable, accrued expenses and other liabilities
$
6,582
$
8,253
Operating lease liabilities, current
557
548
Unearned revenue
20,363
24,317
Debt, current
0
4,000
Total current liabilities
27,502
37,118
Noncurrent debt
39,280
10,439
Noncurrent operating lease liabilities
2,047
2,189
Other noncurrent liabilities
3,616
3,417
Total liabilities
72,445
53,163
Stockholders’ equity:
Common stock
1
1
Treasury stock, at cost
(55,028
)
(32,228
)
Additional paid-in capital
64,913
68,835
Accumulated other comprehensive income
395
313
Retained earnings
23,954
22,221
Total stockholders’ equity
34,235
59,142
Total liabilities and stockholders’ equity
$
106,680
$
112,305
Salesforce, Inc.
Condensed Consolidated Statements of Cash Flows
(in millions)
(Unaudited)
Three Months Ended April 30,
2026
2025
Operating activities:
Net income
$
2,107
$
1,541
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (1)
985
843
Amortization of costs capitalized to obtain revenue contracts, net
584
545
Stock-based compensation expense
857
814
(Gains) losses on strategic investments, net
(558
)
63
Changes in assets and liabilities, net of business combinations:
Accounts receivable, net
9,431
7,591
Costs capitalized to obtain revenue contracts, net
(509
)
(365
)
Prepaid expenses and other current assets and other assets
(162
)
(481
)
Accounts payable and accrued expenses and other liabilities
(1,897
)
(1,007
)
Operating lease liabilities
(138
)
(124
)
Unearned revenue
(3,999
)
(2,944
)
Net cash provided by operating activities
6,701
6,476
Investing activities:
Business combinations, net of cash acquired
(1,452
)
0
Purchases of strategic investments
(325
)
(149
)
Sales of strategic investments
415
6
Purchases of marketable securities
(1,089
)
(2,086
)
Sales of marketable securities
352
405
Maturities of marketable securities
61
436
Capital expenditures
(145
)
(179
)
Net cash used in investing activities
(2,183
)
(1,567
)
Financing activities:
Proceeds from issuance of debt, net of issuance costs
24,842
0
Repurchases of common stock
(27,248
)
(2,633
)
Payments for taxes related to net share settlement of equity awards
(250
)
0
Proceeds from employee stock plans
230
294
Principal payments on financing obligations
(130
)
(179
)
Payments of dividends and dividend equivalents
(365
)
(402
)
Net cash used in financing activities
(2,921
)
(2,920
)
Effect of exchange rate changes
11
91
Net increase in cash and cash equivalents
1,608
2,080
Cash and cash equivalents, beginning of period
7,327
8,848
Cash and cash equivalents, end of period
$
8,935
$
10,928
(1) Includes amortization of intangible assets acquired through business combinations, depreciation of fixed assets and amortization and impairment of right-of-use assets.
Salesforce, Inc.
Additional Metrics
(Unaudited)
Supplemental Revenue Analysis
Remaining Performance Obligation
Remaining performance obligation ("RPO") represents contracted revenue that has not yet been recognized, which includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods. RPO is influenced by several factors, including seasonality, the timing of renewals, the timing of term license deliveries, average contract terms and foreign currency exchange rates. Remaining performance obligation is also impacted by acquisitions. Unbilled portions of RPO denominated in foreign currencies are revalued each period based on the period end exchange rates. The portion of RPO that is unbilled is not recorded on the condensed consolidated balance sheets.
RPO consisted of the following (in billions):
Current
Noncurrent
Total
As of April 30, 2026
$
33.6
$
34.3
$
67.9
As of January 31, 2026
35.1
37.3
72.4
As of October 31, 2025
29.4
30.1
59.5
As of July 31, 2025
29.4
30.5
59.9
As of April 30, 2025
29.6
31.3
60.9
Unearned Revenue
Unearned revenue represents amounts that have been invoiced in advance of revenue recognition and is recognized as revenue when transfer of control to customers has occurred or services have been provided. The change in unearned revenue was as follows (in millions):
Three Months Ended April 30,
2026
2025
Unearned revenue, beginning of period
$
24,317
$
20,743
Billings and other (1)
7,179
6,885
Revenue recognized over time
(10,486
)
(9,211
)
Revenue recognized at a point in time
(647
)
(618
)
Unearned revenue, end of period
$
20,363
$
17,799
(1) Other includes, for example, the impact of foreign currency translation as well as contributions from contract assets and business combinations.
Disaggregation of Revenue
Subscription and Support Revenue by the Company's service offerings (1)
Subscription and support revenues consisted of the following (in millions):
Three Months Ended April 30,
2026
2025
Agentforce Apps
$
6,910
$
6,345
Data 360, Headless Platform, & Other
3,683
2,952
Total Subscription and Support Revenue
$
10,593
$
9,297
(1) To reflect the evolution of its product architecture to deliver the Agentic Enterprise, and consistent with how management evaluates the performance of the business, the Company revised the presentation of its disaggregated revenue disclosures in the first quarter of 2027 into two primary categories: Agentforce Apps, and Data 360, Headless Platform, & Other. Agentforce Apps is comprised of Agentforce Sales, Agentforce Service, Agentforce Marketing, Agentforce Commerce, Agentforce Apps Flex Credits and Slack. Data 360, Headless Platform, & Other is comprised of Data 360, Data 360 and Platform Flex Credits, Headless Platform, Informatica, Agentforce Mulesoft, Agentforce Tableau and Other. Reclassifications to the prior period were made to conform to the current period presentation and did not affect total subscription and support revenue.
Total Revenue by Geographic Locations
Revenues by geographical region consisted of the following (in millions):
Three Months Ended April 30,
2026
2025
Americas
$
7,233
$
6,469
Europe
2,754
2,337
Asia Pacific
1,146
1,023
Total Revenue
$
11,133
$
9,829
Constant Currency Growth Rates
Subscription and support revenues constant currency growth rates by the Company's service offerings were as follows:
Three Months Ended
April 30, 2026
Compared to Three Months
Ended April 30, 2025
Three Months Ended
January 31, 2026
Compared to Three Months
Ended January 31, 2025
Three Months Ended
April 30, 2025
Compared to Three Months
Ended April 30, 2024
Agentforce Apps
7%
6%
7%
Data 360, Headless Platform, & Other
23%
21%
13%
Total growth
12%
11%
9%
Revenue constant currency growth rates by geographical region were as follows:
Three Months Ended
April 30, 2026
Compared to Three Months
Ended April 30, 2025
Three Months Ended
January 31, 2026
Compared to Three Months
Ended January 31, 2025
Three Months Ended
April 30, 2025
Compared to Three Months
Ended April 30, 2024
Americas
11%
9%
7%
Europe
12%
13%
9%
Asia Pacific
12%
13%
11%
Total growth
12%
10%
8%
Current remaining performance obligation constant currency growth rates were as follows:
April 30, 2026
Compared to
April 30, 2025
January 31, 2026
Compared to
January 31, 2025
April 30, 2025
Compared to
April 30, 2024
Total growth
13%
13%
11%
Salesforce, Inc.
GAAP Results Reconciled to Non-GAAP Results
The following tables reflect selected GAAP results reconciled to Non-GAAP results.
(in millions, except per share data)
(Unaudited)
Three Months Ended April 30,
2026
2025
Non-GAAP income from operations
GAAP income from operations
$
2,347
$
1,942
Plus:
Amortization of purchased intangibles (1)
561
395
Stock-based compensation expense (2)(3)
870
799
Restructuring and acquisition-related costs
96
36
Non-GAAP income from operations
$
3,874
$
3,172
Non-GAAP operating margin as a percentage of revenues
Total revenues
$
11,133
$
9,829
GAAP operating margin (4)
21.1
%
19.8
%
Non-GAAP operating margin (4)
34.8
%
32.3
%
Non-GAAP net income
GAAP net income
$
2,107
$
1,541
Plus:
Amortization of purchased intangibles (1)
561
395
Stock-based compensation expense (2)(3)
870
799
Restructuring and acquisition-related costs
96
36
Income tax effects and adjustments
(257
)
(272
)
Non-GAAP net income
$
3,377
$
2,499
Three Months Ended April 30,
2026
2025
Non-GAAP diluted net income per share
GAAP diluted net income per share
$
2.42
$
1.59
Plus:
Amortization of purchased intangibles (1)
0.64
0.41
Stock-based compensation expense (2)(3)
1.00
0.82
Restructuring and acquisition-related costs
0.11
0.04
Income tax effects and adjustments
(0.29
)
(0.28
)
Non-GAAP diluted net income per share
$
3.88
$
2.58
Shares used in computing non-GAAP diluted net income per share
871
970
(1) Amortization of purchased intangibles was as follows:
Three Months Ended April 30,
2026
2025
Cost of revenues
$
244
$
162
Sales and marketing
317
233
$
561
$
395
(2) Stock-based compensation expense, excluding stock-based compensation expense related to restructuring, was as follows:
Three Months Ended April 30,
2026
2025
Cost of revenues
$
138
$
151
Research and development
310
275
Sales and marketing
320
285
General and administrative
102
88
$
870
$
799
(3) Stock-based compensation expense included in the GAAP to non-GAAP reconciliation tables above excludes stock-based compensation expense related to restructuring initiatives for each of the three months ended April 30, 2026 and 2025 of $10 million and $15 million, respectively, which are included in the restructuring and acquisition-related costs line.
(4) GAAP operating margin is the proportion of GAAP income from operations as a percentage of GAAP revenue. Non-GAAP operating margin is the proportion of non-GAAP income from operations as a percentage of GAAP revenue. Non-GAAP income from operations excludes the impact of the amortization of purchased intangibles, stock-based compensation expense, charges associated with the Company's restructuring initiatives and acquisition-related costs.
Salesforce, Inc.
Computation of Basic and Diluted GAAP and Non-GAAP Net Income Per Share
(in millions, except per share data)
(Unaudited)
Three Months Ended April 30,
2026
2025
GAAP Basic Net Income Per Share
Net income
$
2,107
$
1,541
Basic net income per share
$
2.43
$
1.61
Shares used in computing basic net income per share
868
960
Three Months Ended April 30,
2026
2025
Non-GAAP Basic Net Income Per Share
Non-GAAP net income
$
3,377
$
2,499
Non-GAAP basic net income per share
$
3.89
$
2.60
Shares used in computing non-GAAP basic net income per share
868
960
Three Months Ended April 30,
2026
2025
GAAP Diluted Net Income Per Share
Net income
$
2,107
$
1,541
Diluted net income per share
$
2.42
$
1.59
Shares used in computing diluted net income per share
871
970
Three Months Ended April 30,
2026
2025
Non-GAAP Diluted Net Income Per Share
Non-GAAP net income
$
3,377
$
2,499
Non-GAAP diluted net income per share
$
3.88
$
2.58
Shares used in computing non-GAAP diluted net income per share
871
970
Supplemental Cash Flow Information
Computation of Free Cash Flow, a Non-GAAP Measure
(in millions)
(Unaudited)
Three Months Ended April 30,
2026
2025
GAAP net cash provided by operating activities
$
6,701
$
6,476
Capital expenditures
(145
)
(179
)
Free cash flow
$
6,556
$
6,297
Non-GAAP Financial Measures: This press release includes information about non-GAAP operating margin, non-GAAP net income per share, non-GAAP tax rates, free cash flow, constant currency revenue and revenue growth rate, constant currency subscription and support revenue growth rate and constant currency current remaining performance obligation growth rates (collectively the “non-GAAP financial measures”). These non-GAAP financial measures are measurements of financial performance that are not prepared in accordance with U.S. generally accepted accounting principles and computational methods may differ from those used by other companies. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with the Company’s condensed consolidated financial statements prepared in accordance with GAAP. Management uses both GAAP and non-GAAP financial measures when planning, monitoring and evaluating the Company’s performance.
The primary purpose of using non-GAAP financial measures is to provide supplemental information that may prove useful to investors and to enable investors to evaluate the Company’s results in the same way management does. Management believes that supplementing GAAP disclosure with non-GAAP disclosure provides investors with a more complete view of the Company’s operational performance and allows for meaningful period-to-period comparisons and analysis of trends in the Company’s business. Further to the extent that other companies use similar methods in calculating non-GAAP financial measures, the provision of supplemental non-GAAP information can allow for a comparison of the Company’s relative performance against other companies that also report non-GAAP operating results.
Non-GAAP operating margin is the proportion of non-GAAP income from operations as a percentage of GAAP revenue. Non-GAAP income from operations excludes the impact of the following items: stock-based compensation expense, amortization of acquisition-related intangibles, and charges associated with the Company's restructuring initiatives and acquisition-related costs. Non-GAAP net income per share excludes, to the extent applicable, the impact of the following items: stock-based compensation expense, amortization of purchased intangibles, charges associated with the Company's restructuring initiatives and acquisition-related costs, and income tax adjustments. These items are excluded because the decisions that give rise to them are not made to increase revenue in a particular period, but instead for the Company’s long-term benefit over multiple periods.
As described above, the Company excludes or adjusts for the following in its non-GAAP results and guidance:
The Company presents constant currency information to provide a framework for assessing how the Company's underlying business performed excluding the effect of foreign currency rate fluctuations. To present constant currency revenue growth rates, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the weighted average exchange rate for the quarter being compared to rather than the actual exchange rates in effect during that period. To present current remaining performance obligation growth rates on a constant currency basis, current remaining performance obligation balances in local currencies in previous comparable periods are converted using the United States dollar currency exchange rate as of the most recent balance sheet date.
The Company defines the non-GAAP measure free cash flow as GAAP net cash provided by operating activities, less capital expenditures.
Other Metrics: The Company defines Agentforce and Data 360 annual recurring revenue ("ARR") as the annualized recurring value of active Data 360 and certain generative artificial intelligence ("AI") subscription agreements, including those for Agentforce and generative AI products and features, that were executed at the end of the reporting period. The Company defines Informatica Cloud ARR as the annualized recurring value of active Informatica Cloud subscription agreements that were executed at the end of the reporting period. The Company defines Public Sector ARR as the annualized recurring value of active Public Sector Industry cloud subscription agreements that were executed at the end of the reporting period.
The Company defines Net New Annual Order Value ("NNAOV") as the net change in the annual order value of our customer subscription agreements during a given period. NNAOV is calculated as the sum of: (i) the annualized contract value from new and existing customers who enter into subscription agreements during the period; less (ii) the reduction in annualized order value from customer cancellations, non-renewals, or downgrades during the period.
The Company defines an Agentic Work Unit ("AWU") as a measure of discrete tasks executed by AI agents in production across the Salesforce platform, including Agentforce and Slack. AWUs represent the conversion of generative AI capabilities into measurable business outputs, such as resolving customer cases, updating records or triggering automated workflows.