Highlights;
- Salesforce beat Q2 earnings ($2.91 vs. $2.78) and revenue ($10.24B vs. $10.14B), but issued weak guidance, causing a 4% stock drop.
- Annual revenue rose 10% to $10.24B; net income increased to $1.89B.
- The company faces challenges in marketing, commerce, and slower growth.
- Salesforce maintained its full-year revenue outlook but raised earnings guidance.
- It plans to acquire Informatica for $8B and expanded its buyback program to $50B.
- Despite AI investments, Salesforce lags in growth compared to peers.
Salesforce’s fiscal second-quarter earnings and revenue surpassed expectations, but the company’s disappointing guidance sent its stock tumbling 4% in after-hours trading.
Here’s how the company performed compared to LSEG consensus estimates:
- Adjusted earnings per share: $2.91 vs. $2.78 expected
- Revenue: $10.24 billion vs. $10.14 billion expected
Revenue grew 10% year-over-year to $10.24 billion, up from $9.33 billion the previous year. Net income also rose to $1.89 billion, or $1.96 per share, compared to $1.43 billion, or $1.47 per share, a year ago.
For the third quarter, Salesforce forecast adjusted earnings per share of $2.84 to $2.86 on revenue of $10.24 billion to $10.29 billion. Analysts had projected $2.85 per share on $10.29 billion in revenue.
The company maintained its full-year revenue outlook but raised its earnings guidance. It now expects adjusted earnings per share of $11.33 to $11.37 on revenue of $41.1 billion to $41.3 billion. This is slightly above the LSEG consensus estimate of $11.31 per share and $41.2 billion in revenue.
Salesforce is facing challenges in selling marketing and commerce products and slower growth in its customer base renewal rates, according to Robin Washington, the company’s president and chief financial officer. These issues come as Salesforce struggles to match the growth of its peers in the tech sector, despite its investments in artificial intelligence (AI) and software as a service (SaaS).
Marc Benioff, Salesforce’s co-founder and CEO, dismissed negative speculation about the company, stating, “To hear some of this nonsense that’s out there in social media or in other places, and people say the craziest things, but it’s not grounded in any customer truth.”
Salesforce’s stock has underperformed this year, falling 23% year-to-date, lagging behind most large-cap tech companies. However, analysts at Jefferies, who have a buy rating on the stock, noted that Salesforce’s enterprise value to free cash flow ratio has hit a 10-year low due to AI disruption fears.
The company is countering this pressure with its AI-driven Agentforce software, designed to automate customer service tasks. Benioff reported that Salesforce has secured over 6,000 paid deals for Agentforce.
During the quarter, Salesforce announced plans to increase the prices of certain products and agreed to acquire data management company Informatica for $8 billion. Additionally, the company expanded its share buyback program by $20 billion, bringing the total to $50 billion.
Source: https://www.cnbc.com/2025/09/03/salesforce-crm-q2-earnings-report-2026.html
