Salesforce borrows $25B for buyback as AI ARR jumps

Salesforce borrowed $25 billion to fund an accelerated share repurchase after reporting first-quarter fiscal 2027 results that beat revenue and profit estimates. The company reported rising AI-related annual recurring revenue while trimming full-year free cash flow growth and recording higher interest expense.

In Q1, Salesforce reported $11.1 billion in revenue, up 13% year over year, and adjusted earnings per share of $3.88 versus Street estimates of $3.12. Adjusted operating margin reached 34.8%. Management said it returned $27.5 billion to shareholders in the quarter, including dividends, and that the accelerated share repurchase (ASR) was financed with $25 billion of new debt.

Salesforce reported that annual recurring revenue for Agentforce and Data 360 rose to $3.4 billion, more than doubling year over year. The company said Agentforce processed 28.6 trillion tokens in the quarter and converted them into 3.8 billion Agentic Work Units, a metric the company uses to measure autonomous AI actions delivered to customers. Public sector ARR exceeded $2 billion, up 23% year over year, and Slack’s Protocol product reached 1 million active users within six weeks of launch.

Quarterly interest expense increased to $317 million from $68 million a year earlier, reflecting an additional roughly $249 million in recurring interest cost each quarter. Management lowered full-year free cash flow growth guidance to 4–5% from a prior range of 9–10%. Free cash flow measures cash remaining after operating costs and capital spending.

Salesforce noted contributions from a recent $8 billion acquisition of Informatica and other commercial wins. The company said $444 million of the quarter’s revenue was tied to Informatica; excluding that contribution, the legacy SaaS business-now presented as Agentforce Apps-grew about 7% in constant currency and roughly 8.7% on an organic basis.

Analysts adjusted price targets after the results. One firm trimmed its target to $236 from $252 while maintaining a buy rating; another kept a $250 target. Options market activity shifted toward put buying: the put-call volume ratio rose to about 0.76 from 0.33 two weeks earlier, indicating increased hedging or downside bets.

Shares traded near $177.50 after the report and have been moving inside a downward channel since January, recently testing resistance near $183. Technical indicators noted a 20-day exponential moving average near $178.35 as a short-term level of interest.

Annual recurring revenue is the subscription income a company expects to bill over a year from current contracts. Agentic Work Units count AI-driven actions delivered to customers rather than traditional seat-based licenses.

In a post, CEO Marc Benioff wrote: “Agentforce processed 28.6 trillion tokens — up 152% quarter over quarter — and converted them into 3.8 billion Agentic Work Units for our customers, up 111% quarter over quarter.”