Stable performance, conference call explains "AI impact," but "SaaS giant" Salesforce shares still plunge.

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Performance is solid, buybacks are even stronger, and Salesforce’s AI story is becoming more concrete, yet the company still hasn’t dispelled the market’s deep concerns about AI disrupting the traditional software industry.

On February 25 local time, Salesforce released its financial report for the fourth quarter of fiscal year 2026 and held a conference call. The company’s quarterly revenue reached $11.12 billion, up 12% year-on-year, basically in line with market expectations. Agentforce's annual recurring revenue surged 169% year-on-year to $800 million. At the same time, the company announced a $50 billion stock buyback plan and raised its quarterly dividend, with management characterizing this as an "excellent buying opportunity."

However, its guidance for full-year organic subscription revenue growth is only 8%, below investors’ expected threshold of 10%, leaving doubts about whether Salesforce can regain growth momentum in the AI era. So far this year, Salesforce's stock price has fallen 25%, and the entire software sector remains under pressure due to the narrative of AI disruption.

Shares fell about 5% after hours on Wednesday.

Conference Call Response to "AI Impact"

Facing the core concern of “Will AI make SaaS replaceable?”, Salesforce introduced a new AI metric: “Agentic Work Units” (AWU), defined as each independent task completed by an AI agent. The company stated it has so far consumed nearly 20 trillion tokens and delivered 2.4 billion AWUs.

Vice President of Investor Relations Mike Spencer explained: “Tokens are just the number of times you ‘knock’ on a large model, but that doesn’t necessarily represent value created for the customer.” His subtext: Rather than measuring AI by “how many words are processed,” it’s better to prove billable value through “how much work is done for the customer.”

CEO Marc Benioff also emphasized in the earnings press release: “Agentic AI is a tailwind for our business. We are steadily advancing toward our $63 billion revenue target for FY2030.”

In the conference call, he refuted the “SaaS apocalypse” theory in more straightforward language: “If there is a ‘SaaSpocalypse,’ I think it would be eaten by ‘SaaSquatch’—because so many companies are using SaaS, and ‘Agent-as-a-Service’ makes SaaS even stronger.”

Benioff was blunt about the current stock performance, saying “I’ve never seen performance like this, but clearly this isn’t a rational market,” and described the large-scale buyback as an “excellent buying opportunity.”

Steady Performance, Key Metrics Beat Expectations

Salesforce’s fourth-quarter revenue was $11.12 billion, up 12% year-on-year, roughly in line with the FactSet market consensus of $11.19 billion, of which $399 million came from the acquisition of Informatica completed last year.

Forward-looking metrics were also strong. Current Remaining Performance Obligations (cRPO), representing expected revenue for the next year, reached $35.1 billion, beating the market consensus of $34.5 billion, up 16% year-on-year; Total Remaining Performance Obligations (RPO) reached $72.4 billion, up 14% year-on-year.

For the current quarter, the company gave revenue guidance of $11.03–$11.08 billion, slightly above analysts’ expectation of $11.01 billion. Its fiscal year 2027 total revenue guidance range is $45.8–$46.2 billion, about 10–11% growth from last year’s $41.5 billion, with Informatica contributing about 3 percentage points.

Growth Concerns Remain, Organic Growth Is Key

Despite overall solid data, CFO Robin Washington acknowledged in the conference call that revenue growth was dragged down by “continued softness in marketing and commerce business” and “Tableau’s underperformance.”

The guidance for full-year organic subscription revenue growth is only 8%, the biggest source of market disappointment. Evercore ISI analyst Kirk Materne wrote in a post-earnings report, "Given that the organic subscription guidance is only 8%, it’s not surprising that shares dipped slightly after hours." He added that a rebound of organic subscription growth to 10% will be key for Salesforce to rebuild investor confidence.

Management said organic revenue growth is expected to accelerate in the second half of the current fiscal year. Washington, President and CFO, said the $50 billion stock buyback plan reflects the company’s “commitment to continue creating significant value for shareholders,” and the quarterly dividend has also been raised nearly 6% to 44 cents per share.

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