CRM · Forward model · Bear case

The Bear case, 20 quarters out

Model as of 2026-08-31

Each segment is projected from its own operating driver, rolled up into consolidated cash flow, and discounted back to a fair value per share. The assumptions below are editable — change them and every number on this page moves with them.

Salesforce publishes a two-way revenue split and nothing finer. The cloud-level breakdown people still quote - Sales, Service, Platform and Other, Marketing and Commerce, Integration and Analytics - appears in neither the quarterly release, the 10-Q, nor the FY2026 10-K; the company stopped publishing it. So this model has two verticals because two is what is disclosed, and every quarter of both is a reported figure that sums exactly to the reported total: $10,820M plus $525M is $11,345M for the three months ended 31 July 2026, to the dollar. Cost of revenue is STILL disclosed on those same two lines in the Q2 FY2027 release - $2,021M and $628M - which is why both gross margins here remain reported rather than assumed. That was the disclosure this revision went looking for and it is intact; if it ever goes, this model has to be re-cut on the consolidated gross margin with a single blended vertical, and the professional services loss, which is the more interesting of the two numbers, would disappear from view entirely. The subscription driver is Salesforce's own forward measure: current remaining performance obligation, the contracted revenue due in the next twelve months, times the rate it converts to revenue. That conversion was 32.3% this quarter and has held between 31% and 33% across two years, so it is a measured relationship rather than a guess, and both halves move on their own slider. Agentforce is deliberately not a vertical. Its ARR now exceeds $1.5bn, but it is disclosed as ARR, not revenue, and that ARR is already earning inside the Subscription and support line above - a separate line would count the same dollars twice, the same reason the Uber model keeps autonomy inside Mobility. Note too that the Agentforce ARR definition was widened effective this quarter to include Slackbot and Headless 360, so the disclosed growth rate is not like-for-like. Agentforce appears here where it honestly can: in the growth rate of the contracted book, and in the scenarios. What this model labels EBITDA is closer to Salesforce's non-GAAP operating income than to either EBITDA or GAAP operating income. Operating expenses are not split by revenue stream, so all research and development, sales and marketing and general and administrative sits in one overhead figure, left at 42.6% of revenue. On the new margins that nets down to a 34.05% non-GAAP operating margin - which is almost exactly the 34.1% Salesforce actually reported this quarter, and 0.25 points below the 34.3% it still guides to for the full year. Read the exit multiple against that, not against EBITDA. Two balance-sheet notes. Net cash is NEGATIVE $27.885bn: $8,310M of cash plus $3,093M of marketable securities against $39,288M of noncurrent debt and no current debt. That is the same definition as the previous cut, checked by reproducing the old negative $27,443M from the April balance sheet ($8,935M plus $2,902M less $39,280M) before applying it here. Interest expense on that debt was $473M in the quarter against $67M a year ago. And the share count of 821 million is the diluted figure from the July quarter, down 14.7% year on year after $27.3bn of buybacks in six months funded by $24.8bn of new debt; the $25bn accelerated repurchase is still not finally settled, with settlement now expected in October 2026 and the company saying it expects to retire at least 14% of shares outstanding through the programme, so holding the count flat still understates every case. Finally, the guidance residual, which is the honest weak point of this cut: the first projected quarter comes out 1.0% above the top of Salesforce's October revenue guide while FY2027 comes out 0.3% below the bottom of its full-year guide. Both cannot be fixed with one flat growth rate because the October quarter is seasonally flat and the January quarter jumps, and this spec carries no seasonality array. The rate is left where it was and the gap is reported. The basis quarter is the three months ended 31 July 2026.

Where each case comes from

From cash flow to fair value

The projected path

Every row is projected. A year-over-year change is shown only where the quarter it compares against exists — an em dash means there is no comparable quarter, not a flat year.

Model revisions

Assumptions are marked to reality as each quarter prints. Every change is appended here, with the fair value the model produced at the time, so the model's own history stays visible.