Key Highlights
- Adjusted earnings per share reached $5.90, crushing analyst expectations of $3.27 by 80%
- Quarterly revenue totaled $11.35 billion, representing 11% year-over-year growth
- Free cash flow skyrocketed 81% to reach $1.1 billion
- Shares climbed 12.68% in extended trading to $231.70
- Annual revenue forecast elevated to a range of $46.1 billion to $46.4 billion
Cloud software giant Salesforce delivered fiscal Q2 2027 financial results on Wednesday evening that significantly exceeded Wall Street projections. Shares surged 12.68% in after-hours trading, climbing to $231.70 from the regular session closing price of $205.62.
The company’s adjusted earnings per share of $5.90 dramatically outpaced the Street’s $3.27 projection. An 80% earnings beat represents a remarkable upside surprise for an enterprise of Salesforce’s magnitude.
Quarterly revenue registered at $11.35 billion, marking an 11% increase from the same period last year and aligning with consensus estimates of $11.33 billion. The figure represents a new quarterly revenue milestone for the CRM leader.
The company’s subscription and support segment, representing its primary revenue stream, expanded 12% to $10.82 billion. Cloud revenue potential, a forward-looking indicator of contracted business, climbed to $33.5 billion, representing 14% growth in constant currency terms.
Free cash flow jumped an impressive 81% year over year to $1.1 billion. Operating cash flow increased 71% to $1.3 billion, while non-GAAP operating margin registered at 34.1%.
Artificial Intelligence Business Accelerates
The company’s Agentforce platform generated annual recurring revenue exceeding $1.5 billion, reflecting growth of more than 240% compared to the prior year. When combined with Data 360, total AI-related ARR approached $3.9 billion, surging more than 210%.
Salesforce processed 3.2 billion Agentic Work Units during Q2, jumping 97% sequentially. Slackbot adoption climbed over 150% from the previous quarter, while Slack recorded its most robust net-new annual order value expansion since the platform’s acquisition.
Chief Executive Marc Benioff unveiled Claudeforce, a new offering developed alongside Anthropic. “This is the number one AI in the world, Anthropic, and the number one CRM, Salesforce, coming together for the first time,” he stated.
Forward Projections Upgraded
Management increased its fiscal year 2027 revenue forecast to a range of $46.1 billion to $46.4 billion, representing a $300 million elevation from previous expectations.
Looking to Q3, the enterprise expects revenue between $11.42 billion and $11.5 billion, translating to 11% to 12% annual growth. Third-quarter current remaining performance obligations growth is projected to maintain approximately 14%.
Management maintained its full-year non-GAAP operating margin projection at roughly 34.3%. Annual operating and free cash flow growth remains targeted at approximately 4% to 5%.
Salesforce is implementing a $25 billion accelerated share buyback initiative, aiming to repurchase at least 14% of shares outstanding at an average cost of $176 per share.
Total remaining performance obligations hit $66.3 billion, climbing 11% year over year.
Analyst sentiment currently reflects a Moderate Buy rating on CRM stock, derived from 25 buy recommendations, nine hold ratings, and two sell ratings issued over the last three months. The consensus price target stands at $238.94.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
