Salesforce, Inc. CRM

Key data

The business

Salesforce sells the software that a company's sales, service, and marketing departments run on. A representative logs a call, a manager watches a pipeline, a marketing team fires a campaign, and all of it lands in one customer database. Buyers are large enterprises paying per seat per month on multi-year contracts, which is where the switching costs and the $14.4B of free cash flow come from.

Over two decades the company bought its way into adjacent categories: Tableau for analytics, Slack for messaging, MuleSoft for integration, and most recently Informatica for data management, $9.3B of it closing in fiscal 2026 alone. What changed is the engine. Operating income went from $1.0B to $8.9B in three years on revenue up 32%, an activist-driven cost reset that is now largely finished, so growth has to come from revenue.

Business read. A per-seat cash machine with the margin already taken, now selling software that can reduce seats.

Things you might not know

Repurchases ran 3.6x the shares issued to employees: $12.6B of buybacks against $3.5B of stock compensation. Diluted share count fell from 974M to 956M, down 1.8% in a year and 4.1% over three. Most large software companies run this ratio the other way.

Tangible book value is negative $36.53 per share, the residue of twenty years of acquisitions, with debt to equity at 1.22x. Interest coverage is 20.8x and free cash flow covers everything, so the entire value here is the earnings stream and nothing underneath it.

The last four reported quarters beat consensus earnings by 5%, 14%, 25%, and 24%, with actuals of $2.91, $3.25, $3.81, and $3.88 against estimates of $2.78, $2.86, $3.05, and $3.13. Beating by a quarter twice running means guidance is conservative or estimates are stale.

Fundamentals

Every line grew faster than revenue last year, which is the cost reset finishing rather than demand accelerating. Quarterly comparisons are marked not disclosed because the source note works off fiscal-year filings and the next print lands 2026-08-26, four days out. The one sequential figure available is non-GAAP EPS, up 1.8% to $3.88.

Valuation

Peer set for this comparison: Oracle, SAP, Adobe, ServiceNow, and Workday, all enterprise application software on the same as-reported basis.

Consensus for the year ending January 2028 is $15.63 on a non-GAAP basis from 32 analysts, which puts the stock at 13.4x that number against 24.2x trailing GAAP. Peer medians were not pulled in the source run and are not estimated here, so the company column stands alone on a consistent as-reported basis.

Management

Compensation

The linchpins

Win big if

Growth holds near 10% while the per-share engine keeps running, in which case the return is the 8.6% free cash flow yield plus a roughly 2% annual share count reduction plus whatever modest growth survives, with no need to underwrite an acceleration. The first observable proof is the 2026-08-26 print, where consensus sits at $3.27 on $11.33B: revenue growth near 10% and full-year guidance moving up. The confirming signal is revenue per customer rising while customer count holds, which would show the agent products are additive to the seat base rather than a substitute for it.

Surprised down if

Automation eats the thing being billed, because Salesforce sells agent software into exactly the departments whose headcount that software can reduce, and a service seat that no longer exists cannot be renewed at any price. The first observable proof is growth decelerating below 8% on 2026-08-26, or management disclosing organic growth materially below the reported 9.6% once the $9.3B of acquisitions closed during fiscal 2026 is stripped out. The confirming signal is buybacks falling below $8B as cash gets redirected toward more deals, which would remove the per-share engine at the same moment the base slows.

Last word

Salesforce returned 99% of its free cash flow last year, which is one way to answer questions about growth.