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Salesforce's Data Cloud ARR Soars 120%: Is It the Next Sales Lever?
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Key Takeaways
CRM's Data Cloud ARR surged 120% YoY in Q1 FY26, crossing the $1 billion milestone.
Nearly 60% of CRM's top 100 deals in Q1 included both Data Cloud and AI features.
Half of the new Data Cloud bookings came from existing CRM clients, signaling strong satisfaction.
Salesforce, Inc.’s (CRM - Free Report) Data Cloud is showing rapid growth, with annual recurring revenues (ARR) soaring 120% year over year to cross the $1 billion mark in the first quarter of fiscal 2025. The platform, which helps companies bring together and organize their customer data from various sources, surpassed 22 trillion records in the last reported quarter.
In the first quarter, nearly 60% of Salesforce’s top 100 deals included both Data Cloud and artificial intelligence (AI) features. Of all the new Data Cloud bookings, half came from existing customers, suggesting strong demand and client satisfaction. These numbers depict that Data Cloud is becoming a key part of Salesforce’s broader platform.
Data Cloud is also closely tied to Agentforce, Salesforce’s new AI-based product. Together, they form the core of Salesforce’s push into digital labor and intelligent automation. For AI agents to work well, they need quality data, and that’s where Data Cloud plays a big role.
Salesforce is also using Data Cloud internally to boost efficiency. The platform has helped the company reduce lead routing time from 20 minutes to 19 seconds in Slack. We opine that if Salesforce can continue to deliver results with Data Cloud, it could become a major growth driver for the company in the years ahead.
How Salesforce’s Rivals Compare on Data Strategy
As Salesforce’s Data Cloud gains momentum, it faces tough competition from Microsoft Corporation (MSFT - Free Report) and Snowflake Inc. (SNOW - Free Report) , both active in enterprise data management.
Microsoft offers a strong alternative through its Azure Data services, which integrates its Power Platform, Dynamics 365 and Copilot AI tools. Microsoft has the advantage of broad enterprise reach and seamless integration across its ecosystem. Many businesses already use Azure for cloud storage and processing, making Microsoft a natural choice for managing and using enterprise data.
Snowflake is another major competitor, known for its powerful cloud-based data warehouse. Unlike Salesforce, Snowflake focuses only on data, allowing companies to store, process and share large volumes easily. It also supports multiple clouds and has strong analytics tools.
Salesforce’s Price Performance, Valuation and Estimates
Shares of Salesforce have plunged 18.1% year to date against the Zacks Computer – Software industry’s rise of 16.5%.
Image Source: Zacks Investment Research
From a valuation standpoint, CRM trades at a forward price-to-earnings ratio of 23.07, significantly below the industry’s average of 34.23.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Salesforce’s fiscal 2026 and 2027 earnings implies a year-over-year increase of approximately 10.8% and 11.5%, respectively. Estimates for fiscal 2026 and fiscal 2027 have been revised upward in the past 30 days.
Image: Bigstock
Salesforce's Data Cloud ARR Soars 120%: Is It the Next Sales Lever?
Key Takeaways
Salesforce, Inc.’s (CRM - Free Report) Data Cloud is showing rapid growth, with annual recurring revenues (ARR) soaring 120% year over year to cross the $1 billion mark in the first quarter of fiscal 2025. The platform, which helps companies bring together and organize their customer data from various sources, surpassed 22 trillion records in the last reported quarter.
In the first quarter, nearly 60% of Salesforce’s top 100 deals included both Data Cloud and artificial intelligence (AI) features. Of all the new Data Cloud bookings, half came from existing customers, suggesting strong demand and client satisfaction. These numbers depict that Data Cloud is becoming a key part of Salesforce’s broader platform.
Data Cloud is also closely tied to Agentforce, Salesforce’s new AI-based product. Together, they form the core of Salesforce’s push into digital labor and intelligent automation. For AI agents to work well, they need quality data, and that’s where Data Cloud plays a big role.
Salesforce is also using Data Cloud internally to boost efficiency. The platform has helped the company reduce lead routing time from 20 minutes to 19 seconds in Slack. We opine that if Salesforce can continue to deliver results with Data Cloud, it could become a major growth driver for the company in the years ahead.
How Salesforce’s Rivals Compare on Data Strategy
As Salesforce’s Data Cloud gains momentum, it faces tough competition from Microsoft Corporation (MSFT - Free Report) and Snowflake Inc. (SNOW - Free Report) , both active in enterprise data management.
Microsoft offers a strong alternative through its Azure Data services, which integrates its Power Platform, Dynamics 365 and Copilot AI tools. Microsoft has the advantage of broad enterprise reach and seamless integration across its ecosystem. Many businesses already use Azure for cloud storage and processing, making Microsoft a natural choice for managing and using enterprise data.
Snowflake is another major competitor, known for its powerful cloud-based data warehouse. Unlike Salesforce, Snowflake focuses only on data, allowing companies to store, process and share large volumes easily. It also supports multiple clouds and has strong analytics tools.
Salesforce’s Price Performance, Valuation and Estimates
Shares of Salesforce have plunged 18.1% year to date against the Zacks Computer – Software industry’s rise of 16.5%.
Image Source: Zacks Investment Research
From a valuation standpoint, CRM trades at a forward price-to-earnings ratio of 23.07, significantly below the industry’s average of 34.23.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Salesforce’s fiscal 2026 and 2027 earnings implies a year-over-year increase of approximately 10.8% and 11.5%, respectively. Estimates for fiscal 2026 and fiscal 2027 have been revised upward in the past 30 days.
Image Source: Zacks Investment Research
Salesforce currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.