Salesforce, Inc.
CRM · NYSE
Next quarter
Expected to report Dec 2, 2026 — estimated from last year’s reporting date.
Consensus is $2.41 EPS for Oct 2026 across 12 estimates, ranging $2.37 to $2.48.
CRM Jul 2026
- 110.64%
- +22.58%
- $2.35
- $4.95
- —
- $11.35B
Reported results
- $11.35B
- 76.65%
- $2.33B
- 20.55%
- $3.53B
- $4.29
Highlights
- Revenue: Q2 FY27 revenue was $11.35 billion, up 11% year over year and about 2% from $11.13 billion in Q1; subscription and support revenue rose 12% to $10.82 billion.
- Demand: Current remaining performance obligation accelerated to $33.5 billion, up 14% year over year versus 13% in Q1 and 10% a year ago; total RPO was $66.3 billion, up 11%.
- AI and data: Agentforce and Data 360 ARR reached nearly $3.9 billion, up more than 210% year over year; Agentforce ARR exceeded $1.5 billion, up more than 240%.
- Usage: Agentforce and Slack delivered 3.2 billion agentic work units in Q2, up 97% sequentially; Data 360 ingested 104 trillion records, up 355% year over year.
- Profitability: GAAP operating income was $2.33 billion, essentially flat year over year, with GAAP operating margin declining to 20.5% from 22.8%; non-GAAP margin was 34.1% versus 34.3%.
- EPS and investments: The supplied analyst dataset records EPS of $4.95 versus $2.35 expected, a 110.64% surprise; the filing reports GAAP diluted EPS of $4.29 and non-GAAP diluted EPS of $5.90, including a $2.43 GAAP benefit from strategic investment gains.
- Cash generation: Operating cash flow increased 71% to $1.27 billion and free cash flow rose 81% to $1.10 billion, despite $1.58 billion of cash use from the decline in unearned revenue.
- Guidance: Salesforce raised FY27 revenue guidance by $200 million to $46.1-$46.4 billion, including $200 million from pending Contentful and Fin acquisitions and a $100 million FX headwind.
- Capital allocation: The company had repurchased $27.3 billion of stock year to date, primarily through its $25 billion ASR, and had $39.5 billion of debt outstanding at July 31.
Analysis
Salesforce's Q2 FY27 was principally a demand and AI-monetisation quarter, with revenue of $11.35 billion up 11% year over year and roughly 2% sequentially. The supplied analyst dataset shows EPS of $4.95 against $2.35 expected, while the company's filing reports GAAP diluted EPS of $4.29 and non-GAAP diluted EPS of $5.90. GAAP EPS was more than double the $1.96 reported a year ago and below the $6.67 recorded in Q1, which included the first-quarter effect of strategic investment gains. Revenue growth accelerated from 9% constant currency in the year-ago quarter but moderated from 12% in Q1.
The operating business showed improving forward demand: cRPO growth accelerated to 14% constant currency, and management said net new annual order value growth was its strongest in four years. AI and data indicators were substantially stronger than the consolidated growth rate, with Agentforce and Data 360 ARR nearing $3.9 billion and Agentforce ARR above $1.5 billion. The trade-off was lower reported operating leverage, as GAAP margin fell to 20.5% and AI-related hosting and technology costs rose. Net income was also heavily influenced by a $2.61 billion strategic investment gain, including a $2.7 billion unrealized gain on Anthropic. Salesforce raised full-year revenue guidance by $200 million, but $200 million of the increase depends on the pending Contentful and Fin acquisitions.
AI and data momentum
- ARR: Agentforce and Data 360 ARR reached nearly $3.9 billion, up more than 210% year over year. Agentforce ARR exceeded $1.5 billion, up more than 240%; the definition now includes Slackbot and Headless 360.
- Revenue mix: Data 360, Headless Platform, and Other revenue was $3.62 billion, up 20% constant currency, while Agentforce Apps revenue was $7.19 billion, up 8% constant currency.
- Production usage: Agentforce and Slack delivered 3.2 billion agentic work units during the quarter, up 97% sequentially and bringing cumulative delivery to 7.0 billion.
- Data consumption: Data 360 ingested 104 trillion records, up 355% year over year, including 82 trillion through Zero Copy, up 731%; it also processed 22 terabytes of unstructured data.
- Commercial traction: Bookings from Agentforce One Edition and Agentforce for Apps more than doubled sequentially, while Slackbot users grew more than 150% sequentially.
Demand and revenue
Revenue increased $1.11 billion year over year to $11.35 billion, with almost all of the growth coming from subscription and support revenue. Management attributed the increase primarily to new business, upgrades and additional subscriptions rather than pricing. Informatica contributed $456 million of quarterly revenue, meaning reported growth included a material acquisition contribution. Professional services revenue declined 4% to $525 million as demand for larger, multi-year transformation engagements remained weaker.
- Geography: Americas revenue rose 10% constant currency to $7.40 billion, Europe increased 13% to $2.76 billion and Asia Pacific grew 12% to $1.17 billion.
- Forward coverage: cRPO was $33.5 billion, up 14% year over year in constant currency and ahead of the 13% growth in Q1; total RPO was $66.3 billion.
- Renewals: The reported attrition rate was approximately 8% as of July 31, excluding Slack self-service, Informatica and current-year acquisitions.
Margins and cash flow
The core operating result was less exceptional than the headline EPS. GAAP operating income was $2.33 billion, essentially unchanged from $2.33 billion a year ago and slightly below $2.35 billion in Q1. GAAP operating margin fell to 20.5% from 22.8% a year ago, while non-GAAP margin was comparatively stable at 34.1% versus 34.3%. Higher hosting and generative AI technology costs, greater amortization from acquisitions and $94 million of restructuring charges offset revenue growth.
- Cash generation: Operating cash flow rose to $1.27 billion from $740 million, and free cash flow increased to $1.10 billion from $605 million.
- Working capital: The quarter included a $1.58 billion reduction in unearned revenue, while accounts receivable consumed $1.40 billion of cash.
- Cost structure: Research and development increased 14% to $1.69 billion, sales and marketing rose 12% to $3.86 billion, and general and administrative expense declined 1% to $725 million.
Guidance and acquisitions
Salesforce raised FY27 revenue guidance to $46.1-$46.4 billion, representing 11%-12% reported growth and approximately 11% constant-currency growth. The $200 million increase comprises $100 million of higher organic growth, $200 million from the pending Contentful and Fin acquisitions, and a $100 million foreign-exchange headwind. Subscription and support revenue growth guidance was raised to slightly above 12%.
- Q3 outlook: Revenue is expected at $11.42-$11.50 billion, up 11%-12%, including slightly more than four percentage points from Informatica; cRPO growth is expected at approximately 14% and excludes Contentful and Fin.
- Pending deals: Contentful is expected to cost approximately $1.5 billion in cash and Fin approximately $3.6 billion; both are expected to close independently in Q3, subject to customary conditions and regulatory approvals.
- Profit outlook: FY27 GAAP operating margin guidance was reduced to 20.1%, while non-GAAP margin was maintained at 34.3%; free cash flow and operating cash flow growth remain guided to approximately 4%-5%.
Investment gains and leverage
The quarter's $3.53 billion of GAAP net income was not a clean measure of recurring operating earnings. Salesforce recorded $2.61 billion of gains on strategic investments, including a $2.7 billion unrealized gain on its Anthropic investment, partly offset by $285 million of impairments. The gain contributed $2.43 to GAAP diluted EPS. The strategic investment portfolio increased to $11.3 billion from $7.6 billion at January 31, with Anthropic representing approximately $5.1 billion, or 45% of the portfolio.
- Debt: Debt carrying value rose to $39.3 billion from $14.4 billion at fiscal year-end after the March issuance of $25 billion of senior notes and a $6 billion term loan.
- Interest burden: Quarterly interest expense increased to $473 million from $67 million and is expected to remain higher throughout FY27 because of the new financing.
- Valuation risk: Salesforce said a 10% decline in the enterprise value of its five largest private investments would reduce portfolio carrying value by approximately $641 million.
Shareholder returns
Salesforce continued to prioritize share reduction alongside its dividend. The $25 billion ASR initially delivered approximately 103 million shares at an average price of $198.34, with final settlement expected in October 2026. The company repurchased a further $84 million of stock during the quarter, paid $364 million in dividends and retained authorization to repurchase $22.9 billion of additional shares as of July 31.
- Share count: Diluted weighted-average shares fell to 821 million from 962 million a year ago, and the ASR contributed approximately $0.57 to diluted EPS in the first six months.
- Liquidity: Cash, cash equivalents and marketable securities totaled $11.4 billion at quarter-end, alongside an undrawn $5.0 billion revolving credit facility.
- Dividend: The quarterly dividend was $0.440 per share, up from $0.416 in the year-ago quarter.
