Dive Brief:
- Salesforce is leaning on its Agentforce platform to sustain revenue growth and attract a larger portion of enterprise spending amid fierce competition in the AI market. During Q1 2027, the company drew in $11.13 billion in revenue, a 13% year-over-year jump.
- “Agentic AI is the biggest growth opportunity for our customers and for us at Salesforce,” CEO Marc Benioff said Wednesday during the company’s earnings call. “Since we brought CRM into the cloud, we’re seeing tremendous new innovation every single day.”
- Despite rapid growth in AI services delivery, analysts flagged slower growth in analytics software product Tableau and ecommerce platform Agentforce Commerce revenue during the call, pointing out stalled growth in current remaining performance obligations, a key metric for SaaS performance.
Dive Insight:
As enterprises hone their agentic AI adoption strategies, Salesforce has been positioning Agentforce as a key component. But the field of providers is rife with competition — including the largest hyperscalers.
Growth across Salesforce’s product line in the recent quarter was asymmetrical. Agentforce soared from $540 million in annual recurring revenue to over $1 billion in a few months. But executives admitted other portions of the business were lagging, offsetting some of that rapid growth.
“Our Q2 and FY27 revenue guidance reflect continued momentum in Agentforce, Data 360 and Slack, partially offset by ongoing weakness in Marketing and Commerce and increased softness in Tableau bookings and renewals,” said Robin Washington, chief financial and operating officer at Salesforce.
Washington also warned the company’s addition of on-premises revenue following the $8 billion acquisition of Informatica last year would bring greater license revenue volatility.
“They’re really struggling to move the needle on growth,” said Scott Bickley, advisory fellow at Info-Tech Research Group. “Typically, you’d see [current remaining performance obligations] and bookings growth exceed their guidance, and while they hit their guidance this quarter, they did not exceed it.”
As performance in some segments stall, the vendor is aiming to shore up its performance by focusing on an acceleration of net new annual order value, executives stressed during the call. It touted that Sales, Service and Slack represent more than 60% of Q1 net new AOV. The company also recorded a record of nearly 100 deals over $1 million in net new annual contract value during the quarter, including deals with food brand Chobani, luxury retailer LVMH and the U.S. Air Force.
“They want to be the control plane,” said Bickley. “And Salesforce is battling the ServiceNows and the SAPs and the Oracles of the world to carve out that space.”
For CIOs faced with a busy vendor ecosystem, it’s critical to set an intentional playbook to help guide AI adoption, Bickley said.
“It’s a tough position for the CIO to be in, because they have top-down pressure from their boards and the C-suite,” he said. “It’s time to take a step back, develop a comprehensive strategy of what business outcomes you want to influence, work through process improvement and then see how AI can assist in that process, but not necessarily think that it’s a magical solution.”
