Salesforce Inc (CRM) Q3 2026 Earnings Call Highlights: Strong Revenue Growth and AI-Driven Expansion
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GuruFocus News
Fri, December 5, 2025 at 12:04 AM GMT+1 4 min read
[CRM
+3.66%](/quote/CRM/ "CRM")
This article first appeared on GuruFocus.
* Revenue: $10.26 billion, up 9% year over year, 8% in constant currency.
* Non-GAAP Operating Margin: 35.5%.
* Current Remaining Performance Obligation (cRPO): $29.4 billion, up 11% year over year.
* Operating Cash Flow: $2.3 billion, up 17% year over year.
* Free Cash Flow: $2.2 billion, up 22% year over year.
* Agentforce and Data ARR: Nearly $1.4 billion, up 114% year over year.
* Agentforce ARR: Approximately $540 million, up 330% year over year.
* Data 360 Records Ingested: 32 trillion records, up 119% year over year.
* Zero-Copy Data Integration: 15 trillion records, up 341% year over year.
* Public Sector Solutions ARR Growth: 50% year over year in Q3.
* Subscription and Support Revenue Growth: 10% year over year in nominal, 9% in constant currency.
* Revenue Attrition: Approximately 8%.
* GAAP Operating Margin: Up 130 basis points.
* Net New AOV Growth: Outpaced AOV growth for the first time since fiscal year 2022.
* Geographic Performance: Strong growth in North America and EMEA, constrained in Asia Pacific.
* Industry Performance: Strong in business services, healthcare, life sciences, retail, and consumer goods.
* Is CRM fairly valued? Test your thesis with our free DCF calculator.
Release Date: December 03, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
* Salesforce Inc (NYSE:CRM) reported strong Q3 revenue of $10.26 billion, up 9% year over year, with a non-GAAP operating margin of 35.5%.
* Agentforce and Data 360 ARR reached nearly $1.4 billion, up 114% year over year, showcasing significant growth in AI-driven products.
* The company has increased its sales capacity by 23%, positioning itself for future growth and capturing demand across all market segments.
* Salesforce Inc (NYSE:CRM) has successfully integrated Informatica, enhancing its data foundation and contributing to a projected $10 billion business next year.
* The company reported a strong operating cash flow of $2.3 billion, up 17% year over year, with expectations to finish the year with nearly $15 billion in operating cash flow.
Negative Points
* Salesforce Inc (NYSE:CRM) faces challenges with a faster-than-anticipated mix shift to cloud for Tableau and on-prem revenue timing in Tableau and MuleSoft, affecting predictability.
* The Asia Pacific region, particularly Australia and India, showed constrained business growth compared to other regions.
* There is ongoing concern among investors about the potential impact of generative AI on the SaaS-based application layer, with fears of customers building DIY solutions.
* The company is experiencing weaknesses in marketing and commerce segments, partially offsetting growth in other areas.
* Salesforce Inc (NYSE:CRM) is dealing with complexities in pricing and packaging for Agentforce, requiring a flexible approach to meet diverse customer needs.
Q & A Highlights
Q: Can you discuss the perception that generative AI might harm SaaS-based applications, and how Salesforce is addressing this concern? A: Miguel Milano, President and Chief Revenue Officer, explained that while there is a perception that generative AI could lead enterprises to build their own solutions, the reality is different. Customers are realizing the complexity of building AI solutions and are turning to Salesforce for its comprehensive platform that integrates data, context, and deterministic workflows. This shift is driving significant demand for Salesforce's offerings.
Q: How is Salesforce managing the expansion of its sales team and ensuring productivity? A: Miguel Milano highlighted that Salesforce has increased its sales capacity by 20% and plans to end the year with a 15% increase in enabled capacity. This expansion is supported by robust training and enablement programs, aligning with the growing demand for Salesforce's solutions. The company is seeing strong pipeline growth and is well-positioned to capture market opportunities.
Q: What is Salesforce's competitive advantage in infrastructure, especially with the acquisition of Informatica? A: Marc Benioff, Chairman and CEO, emphasized that Salesforce's data infrastructure, comprising Informatica, Data 360, and MuleSoft, is a key competitive advantage. This infrastructure supports AI accuracy and reliability by providing a comprehensive data foundation. Salesforce leverages existing data centers to maintain margins and cash flow while integrating deeply with its applications.
Q: How is Agentforce impacting other Salesforce clouds, such as Slack and Service Cloud? A: Marc Benioff noted that Agentforce acts as an accelerator for Salesforce's core applications, enhancing their value. The integration of AI with these applications, demonstrated at Dreamforce, is driving customer excitement and adoption. This integration is expected to extend across all Salesforce products, boosting their functionality and appeal.
Q: How is Salesforce addressing pricing concerns for Agentforce, and how does it plan to monetize in scenarios where headcount may stabilize or decline? A: Miguel Milano explained that Salesforce offers flexible pricing models, including agentic enterprise license agreements (AELAs) and seat-based SKUs, to meet diverse customer needs. These models provide predictability and flexibility, allowing customers to adjust investments as needed. Salesforce's approach ensures that customers can leverage Agentforce effectively, even in changing workforce scenarios.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.