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Back of Napkin

Salesforce, Inc. CRM

Three-pass checkedFresh as companies report

Salesforce just reported its first accelerating quarter in three years, raised the full-year guide, and the stock jumped about 10% overnight, and even after the jump it costs roughly 13 times trailing free cash flow.

The setup turns on whether the acceleration is real demand or a definition: reported growth of 11% carries a fresh acquisition inside it, while the organic number the bulls need shows up first in bookings, not revenue.

CRM · price with moving averages

Daily · 6MWeekly · 3Y
$135$196$257$318$379 Sep '23Apr '24Nov '24Jun '25Jan '26Aug '26 BID
EMAs82140

Source: market data.

The business

Salesforce rents business software by subscription: the system of record for sales teams, customer service desks, marketing departments and, since the Informatica deal closed this quarter, data plumbing. The new product is Agentforce, AI agents that do support and sales tasks instead of merely assisting a human. The moat is switching costs on the customer's own workflow and data, deepened by three decades of integrations. Customers pay annually in advance, which is why cash flow runs ahead of profit.

Inside the complete Back of Napkin

  1. 01The business
  2. 02The numbers
  3. 03Management
  4. 04How it fails or surprises you
  5. 05The shape of the payoff
  6. 06Closing thoughts
  7. 07Methodology

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