Inline 4QFY26 results; strong AgentForce momentum to support 2HFY27 reacceleration

Inline 4QFY26 results; strong AgentForcemomentum to support 2HFY27 reacceleration Target PriceUS$320.00(Previous TPUS$392.00)Up/Downside60.4%Current PriceUS$199.47 Salesforcereported 4QFY26results: total revenue was up by 12% YoY toUS$11.2bn, and non-GAAP operating income grew by 16% YoY to US$3.8bn,both in line with Bloomberg consensusestimates. 4QFY26 cRPO grew by 13%YoY in constantcurrency(CC) to US$35.1bn,including 4ppts Informaticacontribution, also largely in line with the company guidance. Strong momentumof AgentForce and Data 360 was partially offset by the softness inmarketing,commerce, and Tableaubusinesses. Management guided total revenue toincrease by 10-11%YoY to US$45.80-46.20bn in FY27E, in line with theconsensus estimate.Managementisupbeat that organic revenue growth willreaccelerate in 2HFY27E, and update its FY30E revenue target of US$63bn(FY26-30E CAGR of 11%), supported by the strong AgentForce business. Weslightly trim our FY27-28 non-GAAP operating incomeforecastby 2-4% as thecompany steps up investment ininfrastructureand sales capacity. We lower ourtarget price to US$320.0 based on 15x FY27E EV/EBITDA (previous: US$392.0based on 21x FY26E EV/EBITDA), given that SaaSsector valuation declineddueto investor concerns on heightening competitive pressure from LLMproviders. That said, we remain upbeat on AgentForce momentum and expect2HFY27Ereaccelerationto support sentiment and valuation recovery. MaintainBUY. Software& IT Services Saiyi HE, CFA(852) 3916 1739hesaiyi@cmbi.com.hk Wentao LU, CFAluwentao@cmbi.com.hk Ye TAO, CFA(852) 3850 5226franktao@cmbi.com.hk Stock Data Expectorganic revenue growthtoreacceleratein 2HFY27E.cRPO wasup by 13% YoY in CC, and subscription revenue grew by 11% YoY toUS$10.7bn in CC in 4QFY26(both incl.4ppts Informatica contribution),primarily driven by the solid growth ofAgentForceand Data 360, but partiallyoffset by the weakness in marketing, commerce, and Tableaubusinesses.The strong AgentForce momentumledNet New AOVgrowthto accelerateand outpace AOV growthin 2HFY26, further boosting management’sconfidence in the reacceleration of organic revenue growth in 2HFY27E.Managementguided 1QFY27E total revenue growth of 10-11% in CC,includingc.4ppts Informatica contribution,which implies 6-7%organicrevenue growth. Strong AgentForce momentum.AgentForceand Data 360ARR grew byover 200% YoY to US$2.9bn in 4QFY26,includingUS$1.1bn InformaticaCloud ARR. AgentForce ARR was up by 169% YoY to US$800mn in4QFY26,underpinned by the strong execution and solid growth ofAgentForce consumption: 1) the companyclosed29,000 AgentForce dealssince launch, up by 50% QoQ; 2) the companyprocessedover 19tn tokens(up by 5x YoY) and 2.4bnAgentic Work Units(up by 57% QoQ)acrossAgentForce and Slack since launch; 3) solid consumption drove upsellopportunities,with over 60%of Agentforce and Data 360’s 4QFY26bookings comingfrom existing customer expansion. Source: FactSet Expect steady margin expansion in FY27E.Non-GAAP OPM rose by1.1ppt YoY to 34.2% in 4QFY26.ManagementguidedFY27E non-GAAPOPM to expand by 0.2ppt YoY to 34.3%, supported by AI-enhancedefficiency, but partially offset by investment ininfraand sales capacity. Business forecasts update and valuation Valuation We value Salesforce at US$320.0per share based on15x FY27E EV/EBITDA. Our targetEV/EBITDA is ata discount to the sector average (17x),given Salesforce earnings growthhas entered a more mature stage. Disclosures& Disclaimers Analyst CertificationThe research analyst who is primary responsible for the content of this research report, in whole or in part, certifies thatwith respect to the securities or issuer that the analyst covered in this report: (1) allof the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirms that neither the analyst nor his/her associates (as defined in the code of conduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior to the date of issue of this report; (2) willdeal in or trade in the stock(s) covered in this research report 3 business days after the date of issue of this report; (3)serve as an officer of any of the HongKong listedcompanies covered in this report; and (4) have any financial interests in the Hong Kong listed companies covered in this report. CMBIGM RatingsBUY : Stock with potential return of over 15% over next 12 months: Stock with potential returnof +15% to-10% over next 12 months: Stock with potential loss of over 10% over next 12 months: Stock is not rated byCMBIGM HOLDSELLNOT RATED :Industry expected to outperform the relevant broad market benchmark over next 12months:Industry expected to perform in-line with the relev