01—Abstract
Summary
Summary of the 10-Q filed May 29, 2025. Cited figures are marked; the original filing is the authoritative source.
Salesforce, Inc. reported solid performance for the first quarter of fiscal year 2026, with total revenues reaching $9.8 billiona, an 8% increase year-over-year.
Subscription and support revenues continue to be the primary driver, accounting for 95% of total revenue and growing by 8% to $9.3 billionb. Income from operations saw a healthy increase to $1.9 billion, resulting in an improved operating margin of approximately 20%, up from 19% in the prior year period. This operational efficiency contributed to a slight increase in diluted earnings per share to $1.59 from $1.56 in the comparable quarter.
The company also demonstrated strong cash flow generation, with $6.5 billionc in cash provided by operating activities. This robust operational performance, combined with prudent expense management, including $36 million in restructuring charges for the quarter, reflects a continued focus on profitable growth.
The company ended the quarter with a healthy liquidity position, evidenced by $17.4 billiond in cash, cash equivalents, and marketable securities. Investors will likely view the 8% year-over-year revenue growth and improved operating margin as positive indicators of Salesforce's ongoing ability to expand its market leadership and drive shareholder value.
02—Key points
Key Highlights
- Total revenues increased 8% year-over-year to $9.8 billion.
- Subscription and support revenue grew 8% year-over-year to $9.3 billion, constituting 95% of total revenue.
- Income from operations increased to $1.9 billion, with operating margin improving to 20% from 19% in the prior year.
- Diluted net income per share rose to $1.59 from $1.56 in the prior year period.
- Cash provided by operating activities increased 4% year-over-year to $6.5 billion.
- Remaining Performance Obligation grew to $60.9 billion, an increase of 13% year-over-year, indicating strong future revenue potential.
- The company repurchased approximately $2.7 billion of its common stock during the quarter.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Salesforce, Inc. kept $0.16.
- Revenue$9.83B100.0%
- Cost of revenue−$2.27B23.0%
- Gross profit$7.56B77.0%
- Operating costs−$5.62B57.2%
- Operating income$1.94B19.8%
- Interest, other & tax−$401.0M4.1%
- Net income$1.54B15.7%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed May 29, 2025Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $9.83B$9.13B | +7.6% |
| Cost of Revenue | $2.27B$2.16B | +4.8% |
| Gross Profit | $7.56B$6.97B | +8.5% |
| R&D Expenses | $1.46B$1.37B | +6.7% |
| Operating Expenses | $5.62B$5.26B | +6.8% |
| Operating Income | $1.94B$1.71B | +13.6% |
| Interest Expense | $68.00M$69.00M | −1.4% |
| Net Income | $1.54B$1.53B | +0.5% |
| EPS (Basic) | $1.61$1.58 | +1.9% |
| EPS (Diluted) | $1.59$1.56 | +1.9% |
| Shares Outstanding (Basic) | 960.00M970.00M | −1.0% |
| Shares Outstanding (Diluted) | 970.00M985.00M | −1.5% |
05—Questions
Frequently Asked Questions
What is Salesforce's revenue performance for the first quarter of fiscal year 2026?
Salesforce reported total revenues of $9.8 billion for the first quarter ended April 30, 2025, representing an 8% increase compared to $9.1 billion in the same period last year. Subscription and support revenues, the company's primary revenue stream, also grew by 8% to $9.3 billion.
How did Salesforce's profitability fare in the latest quarter?
Profitability improved in the first quarter. Income from operations increased to $1.9 billion, up from $1.7 billion in the prior year. This resulted in an expansion of the operating margin to approximately 20% from 19% year-over-year. Diluted net income per share also saw a modest increase to $1.59 from $1.56.
What is the company's cash flow situation and liquidity?
Salesforce demonstrated strong cash flow generation, with net cash provided by operating activities reaching $6.5 billion for the quarter, a 4% increase year-over-year. The company maintains a robust liquidity position, holding $17.4 billion in cash, cash equivalents, and marketable securities as of April 30, 2025.
What is the significance of the Remaining Performance Obligation (RPO)?
The Remaining Performance Obligation (RPO) represents contracted future revenue that has not yet been recognized. Salesforce's RPO stood at $60.9 billion as of April 30, 2025, an increase of 13% year-over-year. This figure, particularly the current RPO of $29.6 billion, serves as a strong indicator of future revenue visibility and contractual commitments from customers.
06—Continue