Salesforce, Inc. (CRM) reported significant non-GAAP operating margin expansion in fiscal 2026, with improvements of 20, 60, 240, and 110 basis points (bps) in the first through fourth quarters, respectively. Overall, the company’s operating margin increased 110 bps year-over-year to 34.1%. This growth is attributed to disciplined cost management, including workforce optimization and reduced discretionary spending.
Salesforce’s AI-powered “Agentforce” and Data Cloud products contributed substantially to revenue, generating $2.9 billion in recurring revenues in Q4 2026—a 200% year-over-year increase. Despite a slowdown in revenue growth from double-digit to single-digit percentages, Salesforce is prioritizing investments in AI over immediate profitability, projecting an operating margin of 34.3% for fiscal 2027.
Salesforce’s share price has fallen 34.5% over the past year, contrasting with a 10.4% decline in the Zacks Internet – Software industry. The forward price-to-earnings ratio stands at 13.63, significantly below the industry average of 26.13, with Zacks estimates indicating potential 4.8% and 11.9% earnings growth for fiscal 2026 and 2027, respectively.
