Analyst(s): Keith Kirkpatrick
Publication Date: February 28, 2025
Salesforce’s Q4 FY 2025 results highlight strong AI and Data Cloud adoption, with Agentforce gaining traction. However, muted FY 2026 guidance has raised concerns about the pace of AI-driven revenue growth. Investors are watching for clearer signals of acceleration.
What is Covered in this Article:
- Agentforce adoption grows, but revenue impact remains limited in FY 2026 as enterprises take a measured AI approach.
- Data Cloud expansion accelerates, driving $900 million in recurring revenue and reinforcing AI strategy.
- Margin growth slows, with FY 2026 guidance at 34% as AI investments take priority.
- FY 2026 revenue outlook disappoints, reflecting macro pressures and cautious enterprise IT spending.
- Leadership shifts add uncertainty, raising execution risks in AI monetization and go-to-market strategy.
The News: Salesforce Inc. (NYSE: CRM) reported its Q4 FY 2025 results, with revenue reaching $10 billion (-0.4% below consensus estimates), an 8% year-on-year (YoY) increase (9% in constant currency). Subscription and support revenue grew 8% YoY to $9.5 billion. Non-GAAP income from operations was $3.3 billion (+0.5% above consensus estimates), up 13% YoY, while the non-GAAP operating margin expanded to 33.1% from 31.4% in Q4 FY 2024. Non-GAAP net income increased 20% YoY to $2.7 billion (+6.3% above consensus), and non-GAAP diluted earnings per share (EPS) rose 21% YoY to $2.78, exceeding consensus estimates of $2.61. Salesforce’s total remaining performance obligation (RPO) grew 11% YoY to $63.4 billion, while current RPO (cRPO) rose 9% YoY to $30.2 billion.
“We closed out the year with strong results and our relentless focus on profitable growth drove record-breaking revenue, margin, and cash flow, setting a strong foundation for the company into FY 2026,” said Amy Weaver, President and CFO of Salesforce. “Our capital return program continued to deliver incredible value to our shareholders, returning $21 billion since inception.”
Salesforce Q4 FY 2025 Results Deliver Strong AI Growth, but FY 2026 Outlook Disappoints
Analyst Take: Salesforce’s latest earnings report highlights a solid quarter driven by strong AI adoption, expanding recurring revenue, and continued margin growth. However, its FY 2026 outlook fell short of expectations, raising concerns about near-term growth. While Agentforce and Data Cloud continue to scale, the company faces challenges in translating AI enthusiasm into meaningful financial gains amid leadership transitions and shifting enterprise IT spending trends. Balancing profitability with ongoing investments in AI innovation remains a key priority.
Agentforce Gains Traction but Faces Monetization Challenges
Since its launch in October 2024, Salesforce’s Agentforce platform has gained traction, adding 3,000 paying customers, including major enterprises like Pfizer, Singapore Airlines, and Equinox. Positioned as a multi-billion-dollar product line, Agentforce is being embedded across Salesforce’s broader ecosystem, including Sales Cloud, Service Cloud, and Slack, to streamline automation and improve customer interactions.
Despite this early momentum, Agentforce is still in its infancy. Initial deployments are focused on integration and onboarding, meaning its financial impact in FY 2026 is expected to be modest, with more significant contributions likely in FY 2027. Additionally, Salesforce’s potential shift from seat-based pricing to a usage-based model introduces revenue variability, as enterprises remain cautious, prioritizing ROI validation before large-scale AI investments.
To accelerate adoption, Salesforce is deepening AI integration across its ecosystem and strengthening cloud partnerships with Google and AWS. The effectiveness of these initiatives in driving AI adoption and revenue growth will be closely watched in the coming quarters.
Data Cloud Momentum Strengthens Recurring Revenue Growth
Salesforce’s Data Cloud continues to scale rapidly, surpassing 50 trillion stored records – doubling YoY. Nearly half of the Fortune 100 now use both AI and Data Cloud, highlighting its growing role in enterprise AI adoption. As companies pivot toward AI-driven data strategies, Salesforce is embedding Data Cloud deeper into its platform, enhancing automation and long-term contract value.
Data Cloud, alongside Agentforce, has become a key driver of recurring revenue, generating $900 million in annual recurring revenue (ARR) – more than double the previous year. While it remains a smaller portion of Salesforce’s overall subscription business, its rapid expansion signals a shift toward usage-based AI services as a long-term growth engine.
Margin Expansion Continues but Slower Than Before
Salesforce reported a non-GAAP operating margin of 33.1% for Q4 FY 2025, up from 31.4% the prior year, driven by efficiency improvements and cost controls. For the full year, margins expanded to 33%, compared to 30.5% in FY 2024. While past gains stemmed from aggressive cost-cutting, including workforce reductions, future margin expansion will rely more on AI adoption and revenue growth.
For FY 2026, Salesforce expects its non-GAAP operating margin to reach 34%. With increasing investments in AI and the scaling of Agentforce, profitability gains will depend on how effectively Salesforce monetizes its AI-driven innovations.
Muted FY 2026 Guidance Raises Concerns
Salesforce’s FY 2026 revenue forecast of $40.5 billion to $40.9 billion fell below analyst expectations of $41.5 billion, reflecting a more measured growth outlook. Subscription and support revenue is projected to grow 8.5% YoY, maintaining a steady trajectory but signaling caution amid shifting enterprise IT spending.
Despite strong AI and Data Cloud adoption – with AI-driven ARR soaring 120% YoY – Salesforce’s outlook suggests a prudent approach, factoring in macroeconomic pressures and cautious enterprise investment in AI. Management also anticipates a 10% YoY increase in cRPO, accounting for a $100 million foreign exchange headwind.
Leadership Transitions Add to Uncertainty
The departures of CFO Amy Weaver and COO Brian Millham add another layer of uncertainty to Salesforce’s near-term execution. Their exits, coupled with the appointment of Robin Washington as Chief Financial & Operating Officer – a consolidation of two key roles – raise questions about strategic continuity.
This leadership transition comes at a critical juncture as Salesforce navigates AI monetization and evolving enterprise priorities. Execution risks remain, particularly in aligning AI expansion efforts with sales strategy, and investors will be closely watching how the company adapts to these structural changes.
Final Thoughts
Salesforce’s Q4 FY 2025 results highlight strong momentum in AI adoption and Data Cloud expansion, with Agentforce showing early success. However, its cautious FY 2026 guidance reflects a tempered growth outlook shaped by leadership changes, macroeconomic pressures, and the complexities of AI monetization. While margin expansion continues, future gains will likely be more gradual as Salesforce prioritizes AI-driven investments. Moving forward, the company’s ability to convert AI adoption into sustained revenue acceleration will be a key factor in investor confidence and long-term growth.
Read the full Salesforce Q4 FY 2025 earnings release on the Salesforce website.
Daniel Newman and his co-host of The Six Five Webcast, Patrick Moorhead of Moor Insights and Strategy discusses Salesforce’s earnings in their latest episode. Check it out here and be sure to subscribe to The Six Five Webcast so you never miss an episode.
Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
Other insights from The Futurum Group:
Salesforce Q3 FY25: Agentforce Momentum, AI Advancements, and Strategic Insights
Salesforce Pitches New Agentforce 2.0 as a Digital Labor Platform
Agentforce 2.0 and the Future of SaaS – A Recap from The Six Five Webcast
Author Information
Keith has over 25 years of experience in research, marketing, and consulting-based fields.
He has authored in-depth reports and market forecast studies covering artificial intelligence, biometrics, data analytics, robotics, high performance computing, and quantum computing, with a specific focus on the use of these technologies within large enterprise organizations and SMBs. He has also established strong working relationships with the international technology vendor community and is a frequent speaker at industry conferences and events.
In his career as a financial and technology journalist he has written for national and trade publications, including BusinessWeek, CNBC.com, Investment Dealers’ Digest, The Red Herring, The Communications of the ACM, and Mobile Computing & Communications, among others.
He is a member of the Association of Independent Information Professionals (AIIP).
Keith holds dual Bachelor of Arts degrees in Magazine Journalism and Sociology from Syracuse University.
