salesforce(US:CRM) Goldman Sachs·2025-05-29 14:12Investment Rating - The investment rating for Salesforce Inc. is "Buy" with a 12-month price target of $340, indicating an upside potential of 22.7% from the current price of $277.19 [8][6]. Core Insights - Salesforce reported a Subscription Revenue growth of 8.3% YoY, exceeding the FactSet Consensus of 7.4%. The Operating Margin (OpM) was 32.3%, slightly below the consensus of 32.5% [1]. - The company raised its FY26 Total Revenue guidance to 8.6% YoY in USD and 8% in constant currency (CC), compared to previous guidance of 7.4% and 7.8% [1]. - Key growth drivers include a strong performance in the Data Cloud and AI segment, which reached $1 billion in Annual Recurring Revenue (ARR), growing 120% YoY [1]. - The company closed 8,000 Agentforce deals, including 4,000 paid deals, indicating robust demand [1]. - The Platform and Other segment, which includes Data Cloud and Slack, showed accelerating momentum with a 14% YoY growth [1]. - Current Remaining Performance Obligations (cRPO) grew by 12.1% YoY, with the highest net new dollars added since F1Q23 [1]. - EMEA region showed stabilization with a 9% YoY growth [1]. Summary by Sections Financial Performance - Subscription Revenue for F1Q26 was $9,255 million, with a YoY growth of 8.3% [9]. - Non-GAAP Operating Income was reported at $3,179 million, with an Operating Margin of 32.6% [9]. - Free Cash Flow Margin reached 64.0%, indicating strong cash generation capabilities [9]. Guidance and Expectations - For F2Q26, Salesforce expects Revenue growth of 8.7% in USD and 7.5% in CC, above the consensus of 7.4% [1]. - The company anticipates a Subscription Revenue growth of 9.5% in both USD and CC for FY26, up from previous estimates [1]. Market Dynamics - The report highlights the importance of understanding the Create-and-Close business performance, which reflects the health of small and medium-sized businesses (SMBs) [2]. - The report also emphasizes the need to assess the broader spending environment and demand backdrop, particularly in relation to Data Cloud and Agentforce deals [2].