Salesforce postQ: AI momentum, stronger bookings support H2 reacceleration

Salesforce Inc. (NYSE: CRM) delivered a stronger-than-expected second quarter, with revenue broadly in line with Visible Alpha consensus. Strength in subscription and support revenue, Agentforce and Data 360 helped offset weaker professional services, while earnings and cash flow significantly exceeded consensus.

Looking at earnings summaries compiled by S&P Global Pronto NLP, together with Visible Alpha pre-quarter consensus expectations and revised outlook, here are the key takeaways.

Key takeaways

Revenue was broadly in line, with subscription and support revenue slightly ahead. Q2 revenue increased 10.8% year-on-year to $11.3 billion. Subscription and support revenue rose 11.7% to $10.8 billion and modestly exceeded expectations. Agentforce Apps revenue increased 7.6% to $7.2 billion, 0.3% above consensus, while Data 360, Headless Platform and other revenue grew 20.3% to $3.6 billion, also slightly ahead. Professional services revenue declined 3.8% to $525 million, 2.2% below expectations.

Europe outperformed while the Americas lagged consensus. Americas revenue increased 9.9% to $7.4 billion but was 1.3% below expectations. Europe was the strongest region, with revenue rising 13.8% to $2.8 billion, 5% above consensus. Asia-Pacific revenue was 1.1% below expectations.

cRPO growth accelerated, although total RPO remained below expectations. Total billings reached $9.8 billion, 0.4% above consensus. Current RPO rose 13.9% year-on-year to $33.5 billion, 0.2% above expectations, while non-current RPO increased 7.5% to $32.8 billion, 3.6% below consensus. Total RPO rose 10.7% to $66.3 billion, 1.7% below expectations.

Profitability and cash generation materially exceeded expectations. Non-GAAP operating income increased 10.3% to $3.9 billion, with a 34.1% operating margin. Non-GAAP net income rose 73.3% to $4.8 billion, while diluted EPS reached $5.90, 79.7% above consensus. GAAP net income increased 86.9% to $3.5 billion, with GAAP diluted EPS of $4.29. The reported EPS benefit included gains from Salesforce’s strategic investment portfolio.

Cash flow also beat expectations. Operating cash flow increased 71.5% to $1.3 billion, 48.6% above consensus, while free cash flow rose 81.5% to $1.1 billion, 60% above expectations. Capital expenditure increased 26.7% to $171 million, 2.6% above consensus.

Guidance 

For Q3 FY2027:

• Salesforce guided revenue of $11.42 billion–$11.50 billion, implying 11%–12% year-on-year growth and broadly matching Visible Alpha preQ consensus of $11.42 billion at the low end.
• Non-GAAP diluted EPS guidance of $3.42–$3.44 was modestly above the $3.37 consensus expectations, while GAAP diluted EPS guidance of $1.81–$1.83 was below the $1.90 preQ consensus.
• cRPO growth is expected at approximately 14% year-on-year.

For FY2027:

• Revenue guidance was raised. Salesforce increased its FY2027 revenue outlook to $46.1 billion–$46.4 billion from $45.9 billion–$46.2 billion previously, broadly in line with the $46.2 billion preQ consensus. The $200 million increase includes $100 million of organic growth and $200 million from the pending Contentful and Fin acquisitions, partly offset by a $100 million foreign-exchange headwind.
• Non-GAAP diluted EPS guidance was raised significantly to $16.67–$16.71, well above the $14.13 pre-quarter consensus. GAAP diluted EPS guidance of $10.21–$10.25 was also above the $8.17 consensus.
• Salesforce raised its subscription and support revenue growth outlook to slightly above 12% year-on-year, while maintaining non-GAAP operating margin guidance at approximately 34.3%. GAAP operating margin guidance was updated to 20.1%.

Key highlights from Salesforce at Deutsche Bank 2026 Technology conference

Bookings momentum is improving. cRPO and net-new AOV exceeded expectations in Q2, supporting management’s view of H2 revenue reacceleration. Roughly half of recent Agentforce bookings came from existing customers expanding usage.

AI is scaling quickly. Salesforce expects AI adoption to increasingly shift from experimentation to production.

Data is the foundation of the AI strategy. Informatica, Data 360, MuleSoft and Tableau are being positioned as the data, connectivity and analytics stack supporting enterprise AI deployments.

Salesforce sees room to grow without sacrificing margins. The company is expanding consumption and outcome-based pricing while maintaining more than 95% ratable revenue and expects to maintain or improve gross margins.

The long-term target remains unchanged. Salesforce reiterated its approximately $63 billion FY2030 revenue target, supported by organic growth, consumption, Informatica and M&A.

Share price reaction

Salesforce shares jumped following the earnings release, reflecting optimism around improving bookings momentum, accelerating cRPO growth and the increasing contribution from AI products. The expanded Anthropic partnership and Claudeforce initiative added to the AI narrative, helping shift attention away from concerns over slowing core SaaS growth.

This article was published by Visible Alpha, part of S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.