Brief Overview

  • Salesforce is relying on its Agentforce platform to sustain revenue growth and capture a larger share of enterprise spending in the competitive AI market. In the first quarter of fiscal 2027, the company reported revenue of $11.13 billion, up 13% year-over-year.
  • "Agentic AI is the biggest growth opportunity for our customers and for Salesforce," CEO Marc Benioff said on the company's earnings call Wednesday. "Since we brought CRM to the cloud, we see massive new innovation every day."
  • Despite rapid growth in AI service delivery, analysts on the call pointed to slowing revenue growth in analytics software product Tableau and e-commerce platform Agentforce Commerce, and noted stagnation in current remaining performance obligations, a key SaaS performance metric.

Deeper Insights

As enterprises refine their agentic AI adoption strategies, Salesforce has positioned Agentforce as a key component. But the vendor faces intense competition in this space, including from the largest hyperscalers.

Salesforce's product line growth was uneven in the latest quarter. Agentforce's annual recurring revenue jumped from $540 million to over $1 billion within a few months. But executives acknowledged that other business segments lagged, partially offsetting this rapid growth.

"Our second quarter and fiscal 2027 revenue guidance reflects continued momentum in Agentforce, Data 360, and Slack, partially offset by continued softness in Marketing and Commerce, and further weakness in Tableau bookings and renewals," said Robin Washington, Salesforce's Chief Financial and Operating Officer.

Washington also warned that the company's increased on-premise revenue following last year's $8 billion acquisition of Informatica will bring greater volatility in license revenue.

"They are really trying to drive growth," said Scott Bickley, consulting researcher at Info-Tech Research Group. "Typically, you see current remaining performance obligations and bookings growth exceed guidance, and while they met guidance this quarter, they didn't exceed it."

With some segments stagnating, the vendor is focused on strengthening performance by accelerating net new annual order value, executives emphasized on the call. They noted that Sales, Service, and Slack accounted for over 60% of net new AOV in the first quarter. The company also set a record with nearly 100 deals exceeding $1 million in net new annual contract value, including deals with food brand Chobani, luxury retailer LVMH, and the U.S. Air Force.

"They want to be the control plane," Bickley said. "Salesforce is competing with companies like ServiceNow, SAP, and Oracle for this space."

For CIOs facing a complex vendor ecosystem, developing a deliberate action plan to guide AI adoption is crucial, Bickley said.

"CIOs are in a tough spot because they face top-down pressure from the board and executive leadership," he said. "It's time to step back and develop a comprehensive strategy that defines the business outcomes you want to impact, make process improvements, and then see how AI can help in that process, but don't view it as a magical solution."