Salesforce outlines FY27 targets, $25B buyback
Salesforce outlines strong margin and free cash flow expansion, aggressive capital returns and a $63B-plus FY30 revenue target at its 2026 Investor Day.
Rhea-AI Filing Summary
Salesforce, Inc. (CRM) used its September 16, 2026 Investor Day to lay out a detailed financial performance history, FY27 guidance and a longer-term FY30 revenue target, focusing on AI-driven growth and capital returns. Revenue rose from $26.5 billion in FY22 to $41.5 billion in FY26, while non-GAAP operating margin expanded from 18.7% to 34.1% over the same period.
The company targets FY27 revenue of $46.4 billion at the high end of guidance with a 34.3% non-GAAP operating margin, and describes being on track to grow free cash flow from about $5.3 billion in FY22 to an estimated $15 billion in FY27. Salesforce also highlights returning 190% of FY27 free cash flow, including a $25 billion accelerated share repurchase expected to reduce share count by at least 14%. Longer term, it reiterates a $63 billion+ FY30 revenue target, tied to growth in AI-related software spend and its “Agentic Enterprise” strategy.
Positive
- Revenue and margin expansion: Revenue grew from $26.5B in FY22 to $41.5B in FY26, while non-GAAP operating margin increased from 18.7% to 34.1%, showing substantial historical scaling and efficiency gains.
- Robust FY27 outlook: High-end FY27 guidance calls for $46.4B revenue and 34.3% non-GAAP operating margin, with the company stating it is on track to grow free cash flow to about $15B, roughly 3x FY22 levels.
- Shareholder returns and buybacks: The plan to return 190% of FY27 free cash flow, including a $25B accelerated share repurchase with an expected ≥14% share count reduction, signals a significant capital return commitment.
- Long-term growth ambition: A reiterated $63B+ FY30 revenue target implies an 11%+ compounded annual growth rate from FY26, anchored in expanding AI software spend and the Agentic Enterprise strategy.
Negative
- None.
Filing Explained
The September 16 8-K furnishes projections and a proposed buyback; it does not document completed share repurchases.
This Form 8-K furnishes Salesforce’s September 16 Investor Day presentation under Regulation FD, rather than reporting a completed financing or other completed capital action. The presentation describes a proposed $25 billion accelerated share repurchase and at least 14% expected share-count reduction, so the holder effect remains prospective.
The presentation’s revenue, margin, free-cash-flow and share-count statements include forward-looking projections subject to risks and assumptions. Its non-GAAP operating margin excludes stock-based compensation, purchased-intangible amortization, and restructuring and acquisition-related costs; its free cash flow is operating cash flow less capital expenditures.
The filing also states that the presentation is not deemed filed for Section 18 liability and is not incorporated by reference into other filings. This limits the filing’s status: it records management’s guidance and targets, while the expected capital-return and operating outcomes remain contingent rather than completed.
8-K Event Classification
2 items: 7.01, 9.01
2 items
Item 7.01
Regulation FD Disclosure
Disclosure
Material non-public information disclosed under Regulation Fair Disclosure, often investor presentations or guidance.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Revenue FY22: $26.5 billion
Revenue FY26: $41.5 billion
FY27 Revenue Guidance (high end): $46.4 billion
+5 more
8 metrics
Revenue FY22
$26.5 billion
GAAP revenue for fiscal year 2022
Revenue FY26
$41.5 billion
GAAP revenue for fiscal year 2026
FY27 Revenue Guidance (high end)
$46.4 billion
Full-year FY27 revenue guidance high end as of August 2026
Non-GAAP Operating Margin FY22
18.7%
Non-GAAP operating margin in fiscal year 2022
Non-GAAP Operating Margin FY26
34.1%
Non-GAAP operating margin in fiscal year 2026
Free Cash Flow FY22
$5.3 billion
Free cash flow (non-GAAP) in fiscal year 2022
Free Cash Flow FY26
$14.4 billion
Free cash flow (non-GAAP) in fiscal year 2026
Accelerated Share Repurchase Size
$25 billion
Largest ASR, part of FY27 capital return plan with ≥14% expected share count reduction
Key Terms
Non-GAAP operating margin, Free Cash Flow, Annual Recurring Revenue, Net New Annual Order Value, +2 more
6 terms
Non-GAAP operating margin financial
"Non-GAAP operating margin is the proportion of non-GAAP income from operations"
Non-GAAP operating margin is a way companies show how much profit they make from their main business activities, excluding certain expenses or income they consider unusual or non-recurring. It helps investors see how well the company is performing in its normal operations, without the effects of one-time costs or gains that might distort the picture.
Free Cash Flow financial
"The Company defines the non-GAAP measure free cash flow as GAAP net cash provided"
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
Annual Recurring Revenue financial
"The Company defines ("ARR") as the annualized recurring value of active subscription"
Annual recurring revenue is the predictable amount of money a company expects to earn each year from ongoing customer subscriptions or contracts. It helps businesses understand how much steady income they can count on, much like a subscription service that charges customers every month or year. This figure is important because it shows the company's stability and growth potential.
Net New Annual Order Value financial
"The Company defines Net New Annual Order Value ("NNAOV") as the net change"
Agentic Enterprise technical
"Defining the Agentic Enterprise Four layers of our platform power the Agentic"
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What revenue growth did Salesforce (CRM) report from FY22 to FY26?
Salesforce reported that revenue increased from $26.5 billion in FY22 to $41.5 billion in FY26. This reflects strong multi-year growth ahead of its FY27 guidance and FY30 revenue target.
What is Salesforce’s FY27 revenue and margin guidance from the Investor Day?
At Investor Day, Salesforce highlighted FY27 guidance with high-end revenue of $46.4 billion and a 34.3% non-GAAP operating margin. This builds on FY26 results of $41.5 billion revenue and a 34.1% non-GAAP margin.
How is Salesforce (CRM) projecting free cash flow growth through FY27?
Salesforce stated it is on track to grow free cash flow from about $5.3 billion in FY22 to approximately $15 billion in FY27, describing this as 3x free cash flow expansion over that period.
What capital return plans did Salesforce announce for FY27?
For FY27, Salesforce plans to return 190% of free cash flow, including a $25 billion accelerated share repurchase. The company expects this ASR to drive an at least 14% reduction in share count and an expected average share price of $182.
What long-term revenue target did Salesforce (CRM) provide for FY30?
Salesforce reiterated a $63 billion+ FY30 revenue target, which it states implies an 11%+ compounded annual growth rate from FY26 including Informatica. This target is tied to expanding AI-related software spending and its Agentic Enterprise framework.
How has Salesforce’s non-GAAP operating margin changed and what is the goal?
Non-GAAP operating margin increased from 18.7% in FY22 to 34.1% in FY26, and guidance calls for 34.3% in FY27. The company notes a 1,560 basis point expansion since FY22 as part of its profitable growth framework.
What are ARR and NNAOV as defined by Salesforce?
Salesforce defines Annual Recurring Revenue (ARR) as the annualized recurring value of active subscription agreements at period end. Net New Annual Order Value (NNAOV) is the net change in annual order value, adding new and expanded contracts minus cancellations, non-renewals, and downgrades.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________________________
FORM 8-K
________________________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported)
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(Exact name of registrant as specified in its charter)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
| Emerging growth company | ||||||||
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ | ||||
Item 7.01 Regulation FD Disclosure.
On September 16, 2026, Salesforce, Inc. (the “Company”) posted to its website an investor presentation used in the Company’s September 16, 2026 Investor Day event, including information regarding the Company’s financial performance, guidance, growth targets and projections, market opportunity, competitive position and economic model. A copy of the presentation is included with this Form 8-K for convenience and attached hereto as Exhibit 99.1.
The information in this Current Report on Form 8-K and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements about the Company’s financial and operating results, guidance and anticipated growth, which include, but are not limited to, expected GAAP and non-GAAP financial and other operating and non-operating results, including revenue, net income, net income per share, operating cash flow growth, operating margin, expected revenue growth, expected foreign currency exchange rate impact, expected current remaining performance obligation growth, expected tax rates or provisions, stock-based compensation expenses, amortization of purchased intangibles, shares outstanding, market growth, strategic investments, expected restructuring expense or charges and expected timing of product releases and enhancements. The achievement or success of the matters covered by such forward- looking statements involves risks, uncertainties and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, the Company’s results or outcomes could differ materially and adversely from those expressed or implied by our forward-looking statements. Readers are cautioned not to place undue reliance on such forward-looking statements. Further information on these and other factors that could affect the Company’s actual results or outcomes is included in the reports on Forms 10-K, 10-Q and 8-K and in other filings it makes with the Securities and Exchange Commission from time to time. These documents are available on the SEC Filings section of the Financials section of the Company’s website at investor.salesforce.com/financials/. Salesforce, Inc. assumes no obligation and does not intend to revise or update publicly any forward-looking statements for any reason, except as required by law.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |||||||
| 99.1 | Salesforce, Inc. Investor Presentation dated September 16, 2026 | |||||||
| 104 | Cover Page Interactive Data File—the cover page XBRL tags are embedded within the Inline XBRL document | |||||||
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: | September 16, 2026 | Salesforce, Inc. | |||||||||
| /s/ Robin Washington | |||||||||||
| Robin Washington President and Chief Operating and Financial Officer | |||||||||||
Welcome and Introduction Welcome to Investor Day at Dreamforce 2026
Mark Murphy EVP, Global Investor Relations
kThan ouy ALL HEADERS LEFT JUSTIFIED
Forward-looking statements This presentation contains forward-looking statements about, among other things, trend analyses and statements regarding future events, anticipated growth and industry prospects, and our strategies, expectations, or plans regarding product releases and enhancements. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties, and assumptions. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, results or outcomes could differ materially from those expressed or implied by these forward-looking statements. The risks and uncertainties referred to above include those factors discussed in Salesforce's reports filed from time to time with the Securities and Exchange Commission, including, but not limited to: our ability to meet the expectations of our customers; uncertainties regarding Al technologies and their integration into our product offerings; the effect of evolving domestic and foreign government regulations; regulatory developments and regulatory investigations involving us or affecting our industry; our ability to successfully introduce new services and product features, including related to AI and Agentforce; our ability to execute our business plans; our ability to meet our long-term revenue targets and profitable growth framework; the pace of change and innovation and our ability to compete in the markets in which we participate; our ability to maintain and enhance our brands; and expectations regarding contributions from acquired companies.
Agenda 1:05 PM – Defining the Agentic Enterprise, Patrick Stokes & Rohan Kumar 1:55 PM – Execution that Compounds, Miguel Milano & Alexa Vignone 2:50 PM – The Agentic Enterprise Opportunity, Robin Washington 3:15 PM – Marc Benioff + Leadership Q&A 4:00 PM - 5:00 PM – Investor Reception
The Agentic Enterprise Opportunity Robin Washington President and Chief Operating and Financial Officer
President and Chief Operating and Financial Officer Robin Washington
Thank you
Operational Excellence Capital Allocation Investing to scale profitable, long-term growth Continued free cash flow expansion FY30 profitable growth framework of 50 Growth Drivers Strong NNAOV re-accelerating organic revenue FY30 Revenue FY27 forecast 190% FCF return, ≥14% expected share count reduction, Strategic M&A ALL HEADERS LEFT JUSTIFIED Design Notes -Most important - doing what we said we would do, nod back to prior year -Edits needed: Financial Framework for the Agentic Enterprise $63B+ Progress Report Targets include the impact of Informatica and additional announced M&A to date.
The opportunity is expanding Software spend doubles by 2030, new categories of knowledge workers Design Notes -Most important - highlighting growth of the TAM through FY30 and that AI software is growing faster The Gartner content described herein (the “Gartner Content”) represents research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. ("Gartner"), and is not a representation of fact. Gartner Content speaks as of its original publication date (and not as of the date of this presentation, and the opinions expressed in the Gartner Content are subject to change without notice. Calculations performed by Salesforce. (1) AI Software, AI Platform, and Business AI Agents include AI spending for AI Software, AI Agents and Assistants (Business only), AI Platforms for Data Science and Machine Learning, and AI Application Development Platforms. Charts/graphics created by Salesforce based on Gartner insights. Source: Gartner, Inc. Forecast: AI Spending, Worldwide, 2025-2030, 2Q26, Kay Arnott, Jon Erensen, Amarendra et. al., 24 July 2026. (2) The non-AI software figures represent the total IT spending on Software minus AI Software, AI Platform, and Business AI Agents. Charts/graphics created by Salesforce based on Gartner insights. Source: Gartner, Inc. Market Databook, 2Q26, ,John Lovelock, Linglan Wang, Amarendra et al,, 25 June 2026. GARTNER is a trademark of Gartner, Inc. and/or its affiliates. $0T $0.5T $1.0T $1.5T 2025 2030 $2.0T 35% CAGR AI Soware, AI Platform and Business AI Agents1 $2.5T 3% CAGR Non-AI Soware2 56% of total soware spend is AI-related by 2030 $1.1T of incremental AI spend from 2025 to 2030 Last year’s TAM view
62% YoY CRM Seat Growth Top AI Sales & Service teams run on Salesforce. 100% Slack Adoption 100% of these leading AI companies rely on Slack to help in their daily work. ~5 Clouds Per Customer And climbing, with average cloud count +1.5 over last 2 years. +435% YoY ARR Growth Average Recurring Revenue from this cohort expanded 435% year-over-year. Forbes Top 50 AI Companies, top 10 filtered by latest valuation 9 of the top 10 AI companies are building and betting their future on Salesforce AI leaders build their businesses on Salesforce
Manufacturing Customer High correlation of AI adoption in scaled growth customers across industries Agentic enterprise expansion in action AI shows up in +80% of our top 100 growth stories x ARR Financial Services Customer Q2 FY25 Q2 FY27 A R R 2.3x ARR Automotive Customer Q2 FY25 Q2 FY27 A R R 1.3x ARR $36M $42M Cybersecurity Customer Q2 FY25 Q2 FY27 A R R 1.5x ARR $50M Agentforce & premium upgrades Q2 FY25 Q2 FY27 A R R 6.5x ARR $20M Public Sector Customer Q2 FY25 Q2 FY27 A R R 4.0x ARR $9M Professional Services Customer Q2 FY25 Q2 FY27 A R R 4.5x ARR $15M Agentforce, premium upgrades & flex credits, Data 360, & more Core licenses Agentforce, premium upgrades, Data 360, & more Core license Flex credits & more Core licensesData 360 & more Core licenses Agentforce, premium upgrades, Data 360, & more Core licenses Agentforce, premium upgrades, & more Core licenses More Core licenses & Data 360 Agentforce, premium upgrades & flex credits, Data 360, & more Core licenses Each customer ARR multiplier based on 2 year expansion from Q2 FY25 through Q2 FY27. Top 100 growth stories defined by largest absolute dollar increases in year over year ARR change as of Q2 FY27. Graphs are not anchored to same scale on Y axis.
Consumption flywheel driving usage and unlocking ARR expansion Monetizing the AI opportunity Q4 FY25 Q2 FY27Q2 FY26 Top 100 AWU Customers Top 100 customers with most all-time AWUs generated as of Q2 FY27. Outside of the top 100, ARR grows meaningfully faster as customers scale their AI usage across Salesforce >2x ARR uplift in 18 months since Agentforce launch A R R U pl if t ARR upli driven by AI, Data 360, Customer 360
Our vision of the AI opportunity Multi-year journey underpinned by pace of innovation and expanding monetization pathways Agentic Adopts Agentforce in support and core expansion, with some seat optimization 1.5x-2x ARR upli Pre-Agentic Expands to additional clouds, adopts Industries 1.2x ARR upli Fundamental Averages 3 clouds, primarily on mid-tier editions Agentic Enterprise Adopts Agentforce wall to wall internally and externally 3x-4x+ ARR upli Consumption Flywheel ARR “Annual recurring revenue” uplift based on compounding growth projections from cohort of customers in the Agentic scenario.
Financial Performance
To be pulled from DF deck - will need to overlay design $15B+ R&D Investments since FY24 Responsible M&A Framework
Slackbot users up over 150% Q/Q Leading AI companies run on Slack Now introducing: Slack Code Slackbot in Channels Slackbot Surfaces Slackbot Live Slack Revenue is accelerating Design Notes - Design needs to feel more cohesive with the rest of the deck. - Goal of the slide is to show how strong Slack growth is right now. The way the line chart is showing up doesn’t make the Slack growth look as strong as it is. Slack is the best interface for the Agentic Enterprise Q1’26 Q2’26 Q3’26 Q4’26 Q1’27 Q2’27 ~2.5x increase since acquisition Re ve nu e Yo Y
Driving durable revenue growth & margin expansion Non-GAAP Operating Margin Revenue 18.7% 34.3% FY22 FY23 FY24 FY25 FY26 FY27E Guidance $26.5B $46.4B Sales | $9B AOVService | $10B AOV Data 360 | $1B AOV FY27 Revenue guidance represents the high-end of guidance range as of August 2026. FY27 Non-GAAP Operating Margin guidance as of August 2026. AOV as of Q2 FY27. Design Notes - These 3 slides are trying to quickly hit through our key financial numbers. Let’s keep layouts similar (or mirrored of each other) to make the 3 a cohesive financial story. Our profitable growth is accelerating Growth drivers fuel acceleration Multi-Cloud Pricing & Packaging Upgrade Megacycle Balanced Portfolio Innovation GTM Capacity Operational excellence expands margins Invest with discipline Drive productivity with Customer Zero Simplify and scale the platform Investing to win the agentic enterprise, while delivering profitability On track to 1.75x Revenue 1,560bps margin expansion since FY22
Design Notes - These 3 slides are trying to quickly hit through our key financial numbers. Let’s keep layouts similar (or mirrored of each other) to make the 3 a cohesive financial story. Free cash flow fuels our future Profitable growth drives cash flow FY27 Free Cash Flow guidance as of August 2026, Free Cash Flow is a non-GAAP financial measure. Investing in our future Product Innovation Strategic M&A Go to Market Capacity Dividends and Buybacks Free Cash Flow Expansion Fr ee c a sh fl ow $ Bs $5B $15B FY22 FY23 FY24 FY25 FY26 FY27E On track to 3x free cash flow since FY22
Capital Allocation Innovation | M&A | Capital Returns
Responsible M&A Framework Accelerates Salesforce product differentiation strategy Best-in-class product with extensive ecosystem Represents an attractive customer opportunity Customer Success & Strategic Fit Strong ability to increase monetization Cultural and organizational alignment Opportunities to drive significant operational efficiencies Acceleration Clear timeline for value accretion Use of balance sheet / non-dilutive form of consideration Appropriate valuation Value
M&A Strategy drives innovation and growth Recent focus on Data, AI accelerators, and AI Labs OPTION 2 Design Notes - Need to adjust the design to make this more crisp / compelling. - Logos need to be adjusted to the same size across the board - Goal - Double down on our M&A framework which is the white boxed view, and then show how the addition of the AI labs strategy underpins Delivering scaled offerings for customer success Tailwind to growth, clear path to accretion IP & Talent to augment innovation Future product and innovation impact Tech & Talent Complementary products that accelerate product roadmap Modest tailwind to growth, absorb P&L impact Adjacencies Rationale Financial Impact Recent Acquisitions Scaled Doti AI Labs Top tier AI talent Frontier AI capabilities, accelerate AI product roadmap and unlock new opportunities Responsible M&A Framework
Salesforce Ventures & AI Labs accelerates our innovation ››Portfolio approach empowers innovation at startup speed, grounded in Trust and Customer Success. Venture positions in emerging AI categories as the landscape shifts Frontier talent and cultural alignment that compounds ACQUIRE Invest internally in AI Labs incubation unit BUILD INVEST ventures Design Notes - The logos feel a little disorganized here. Can we try something different with that part of the design? AI Ecosystem fuels customer success PARTNER ›› AI LABS Innovation Incubation Unit Acquisitions for the AI Era Best in class partnerships drive customer success Salesforce Ventures invests in future leadersventures
$60B+ cumulative shareholder returns to date Design Notes - Similar layout to the previous 3 but higher focus on the numbers down the left vs. the qualitative commentary on the left Our biggest bet in FY27 is Salesforce Capital returns underpin our confidence in the future FY27 Free Cash Flow guidance as of August 2026, Free Cash Flow is a non-GAAP financial measure. Expected return on invested capital calculation leverages CRM price as of market close on 8/31/2026 over the expected average price of shares to be repurchased through the ASR as of 8/31/2026. Capital Returned Accelerated Share Repurchase $25B largest ASR ever Over 40% return on our investment $182 expected average share price ≥14% expected share count reduction Share buybacks ($M) Total dividends ($M) 190% of Free Cash Flow returned in FY27 FY23 FY24 FY25 FY26 FY27
The future FY302 $63B+ The 30Bs 3 YEARS The 40Bs 2 YEARS The 50Bs 2 YEARS Sources: 1. Full Year FY27 Revenue guidance as of August 2026, reflecting the high end of the FY27 revenue guide of $46.1 to $46.4B. 2. Full year FY30 revenue target as of May 2026, implying a 11%+ FY26 to FY30 compounded annual growth rate (CAGR) including Informatica. Confident in our path to 63B+$
Execution that Compounds Strong demand + accelerating GTM capacity Many paths to monetize AI across portfolio AI makes Salesforce more valuable Defining the Agentic Enterprise Four layers of our platform power the Agentic Enterprise Every app is agent ready We are becoming a data company The Agentic Enterprise Opportunity Financial framework on track Opportunity is expanding Innovation drives the flywheel Winning the Agentic Enterprise Opportunity
Thank you
Non-GAAP Financial Measures This presentation includes information about non-GAAP operating margin and free cash flow (collectively the "non-GAAP financial measures"). These non-GAAP financial measures are measurements of financial performance that are not prepared in accordance with U.S. generally accepted accounting principles and computational methods may differ from those used by other companies. Non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with the Company's condensed consolidated financial statements prepared in accordance with GAAP. Management uses both GAAP and non-GAAP financial measures when planning, monitoring and evaluating the Company's performance. The primary purpose of using non-GAAP financial measures is to provide supplemental information that may prove useful to investors and to enable investors to evaluate the Company's results in the same way management does. Management believes that supplementing GAAP disclosure with non-GAAP disclosure provides investors with a more complete view of the Company's operational performance and allows for meaningful period-to-period comparisons and analysis of trends in the Company's business. Further, to the extent that other companies use similar methods in calculating non-GAAP financial measures, the provision of supplemental non-GAAP information can allow for a comparison of the Company's relative performance against other companies that also report non-GAAP operating results. Non-GAAP operating margin is the proportion of non-GAAP income from operations as a percentage of GAAP revenue. Non-GAAP income from operations excludes the impact of the following items: stock-based compensation expense, amortization of acquisition-related intangibles and charges related to restructuring initiatives and acquisition-related costs. The Company defines the non-GAAP measure free cash flow as GAAP net cash provided by operating activities, less capital expenditures. Constant currency information is provided as a framework for assessing how our underlying business performed excluding the effect of foreign currency rate fluctuations. To present constant currency revenue, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars at the weighted average exchange rate for the quarter being compared to for growth rate calculations presented, rather than the actual exchange rates in effect during that period. Other Metrics: The Company defines ("ARR") as the annualized recurring value of active subscription agreements that were executed at the end of the reporting period. The Company defines Net New Annual Order Value ("NNAOV") as the net change in the annual order value of our customer subscription agreements during a given period. NNAOV is calculated as the sum of: (i) the annualized contract value from new and existing customers who enter into subscription agreements during the period; less (ii) the reduction in annualized order value from customer cancellations, non-renewals, or downgrades during the period.
GAAP to Non-GAAP Financial Reconciliation (in millions) Non-GAAP income from operations FY22 FY23 FY24 FY25 FY26 Full Year FY27 Guidance2 GAAP income from operations $ 548 $ 1,030 $ 5,011 $ 7,205 $ 8,331 GAAP Operating Margin 20.1 % Plus: Plus: Amortization of purchased intangibles 1,624 1,951 1,869 1,651 1,687 Amortization of purchased intangibles3 4.4 % Stock-based compensation expense1 2,779 3,259 2,764 3,181 3,480 Stock-based compensation expense1,3 9.0 % Restructuring and acquisition-related costs1 0 828 988 461 658 Restructuring and acquisition-related costs1,3 0.8 % Non-GAAP income from operations $ 4,951 $ 7,068 $ 10,632 $ 12,498 $ 14,156 Non-GAAP operating margin 34.3 % Revenue 26,492 31,352 34,857 37,895 41,525 Non-GAAP operating margin 18.7 % 22.5 % 30.5 % 33.0 % 34.1 % (in millions) Free Cash Flow FY22 FY23 FY24 FY25 FY26 GAAP net cash provided by operating activities $ 6,000 $ 7,111 $ 10,234 $ 13,092 $ 14,996 (Capital expenditures) (717) (798) (736) (658) (594) Free Cash Flow $ 5,283 $ 6,313 $ 9,498 $ 12,434 $ 14,402 1. The percentages shown in the restructuring and acquisition-related costs line have been calculated based on charges associated with the Company's restructuring initiatives and acquisition-related costs. Stock-based compensation expense excludes stock-based compensation expense related to the Company's restructuring initiatives, which is included in the restructuring and acquisition-related costs line. 2. Full Year FY27 Free Cash Flow guidance reconciliation is unavailable without unreasonable efforts. 3. The percentages shown above have been calculated based on the midpoint of the low and high ends of the revenue guidance for full year FY27 provided August 26, 2026.