Salesforce reported first-quarter fiscal 2027 revenue of $11.1 billion, a 13% jump from last year, and beat earnings estimates with adjusted EPS of $3.88. The company also announced a $25 billion accelerated share repurchase and slashed its full-year free cash flow growth forecast. Higher interest expenses and slower growth in legacy software products tempered the strong showing in AI and public sector sales.
Record Shareholder Returns
Salesforce returned $27.5 billion to shareholders this quarter through a massive $25 billion accelerated share repurchase and dividends. The buyback, funded by new debt, pushed quarterly interest costs up to $317 million from just $68 million last year. That $249 million interest spike now represents a significant new cost line in the company's financials.
AI Product Momentum
Agentforce and Data 360 products drove $3.4 billion in annual recurring revenue, more than doubling year-over-year. Customers have burned through 3.8 billion Agentic Work Units across Agentforce and Slack to date. The system processed 28.6 trillion tokens in Q1 alone, a 152% quarterly jump that converted to 3.8 billion work units. Slack's Model Context Protocol hit 1 million active users within six weeks of launch.
Legacy Business Drag
The company's traditional SaaS applications grew only 7% in constant currency last quarter. Excluding the $444 million contribution from Informatica, organic growth lagged at 8.7%. Public sector sales surpassed $2 billion on 23% annual growth, but the core business slowdown became impossible to ignore. Full-year free cash flow growth guidance got cut to 4-5% from the original 9-10% forecast.
Market Reaction
Salesforce stock traded at $177.51 after hours following the report. Barclays slashed its price target to $236 while Jefferies held firm at $250. Options traders are piling into bearish positions as the stock tests the upper trendline of a falling channel formed since January. Next quarter's revenue guidance of $11.27 billion to $11.35 billion falls short of the $11.36 billion estimate.
