Salesforce, Inc. (CRM): Results of Operations and Financial Condition
Salesforce, Inc. (CRM) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 Salesforce Delivers Record Second Quarter Fiscal 2027 Results cRPO growth accelerates to 14% Y/Y CC; Raises FY27 revenue guidance by $200M, $300M in CC SAN FRANCISCO, Calif. - August 26, 2026 - Salesforce (NYSE: CRM), the world's #1 AI CRM, today announced results fo
How this was made
The 30-second read
Why it matters
The earnings beat and guidance raise suggest stronger demand for AI‑driven CRM solutions, likely supporting the stock.
Market read
Large‑cap SaaS leader delivers record results, raises guidance, and signals continued AI growth, impacting tech sector sentiment.
What to watch
Potential FX headwinds and integration risk of pending Contentful and Fin acquisitions.
Salesforce Delivers Record Second Quarter Fiscal 2027 Results; cRPO growth accelerates to 14% Y/Y CC and full year FY27 revenue guidance is raised by $200M, $300M in CC.
Revenue grew 11% Y/Y and in constant currency, cRPO growth accelerated to 14% Y/Y and in constant currency, operating cash flow grew 71% Y/Y, and Salesforce raised full-year revenue guidance. GAAP net income and EPS also increased sharply, though the quarter included $2.6 billion of gains on strategic investments.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenueGAAP | $11.3 billion | – | up 11% Y/Y and in CC |
| Subscription and support revenueGAAP | $10.8 billion | – | up 12% Y/Y and 11% in CC |
| Professional services and other revenueGAAP | $525 million | – | – |
| Total cost of revenuesGAAP | $2,649 million | – | – |
| Gross profitGAAP | $8,696 million | – | – |
| Research and development expenseGAAP | $1,687 million | – | – |
| Sales and marketing expenseGAAP | $3,859 million | – | – |
| General and administrative expenseGAAP | $725 million | – | – |
| Restructuring expenseGAAP | $94 million | – | – |
| Total operating expensesGAAP | $6,365 million | – | – |
| Income from operationsGAAP | $2,331 million | – | – |
| GAAP operating marginGAAP | 20.5% | – | – |
| Non-GAAP income from operationsnon-GAAP | $3,872 million | – | – |
| Non-GAAP operating marginnon-GAAP | 34.1% | – | – |
| Gains on strategic investments, netGAAP | $2,613 million | – | – |
| Interest expenseGAAP | $(473) million | – | – |
| Net incomeGAAP | $3,526 million | – | – |
| Non-GAAP net incomenon-GAAP | $4,844 million | – | – |
| Diluted net income per shareGAAP | $4.29 | – | up 119% Y/Y |
| Diluted net income per sharenon-GAAP | $5.90 | – | up 103% Y/Y |
| Current remaining performance obligationother | $33.5 billion | – | up 14% Y/Y and in CC |
| Remaining performance obligationother | $66.3 billion | – | up 11% Y/Y |
| Agentforce and Data 360 annual recurring revenueother | nearly $3.9 billion | – | up over 210% Y/Y |
| Agentforce annual recurring revenueother | exceeded $1.5 billion | – | up over 240% Y/Y |
| Agentic Work Units delivered to dateother | 7.0 billion | – | – |
| Agentic Work Units delivered in Q2other | 3.2 billion | growing 97% Q/Q | – |
| Operating cash flowGAAP | $1.3 billion | – | up 71% Y/Y |
| Free cash flownon-GAAP | $1.1 billion | – | up 81% Y/Y |
| Capital expendituresother | $171 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Agentforce AppsAgentforce Apps comprises Agentforce Sales, Agentforce Service, Agentforce Marketing, Agentforce Commerce, Agentforce Apps Flex Credits and Slack. | $7,193 million | – | 8% constant currency growth |
| Data 360, Headless Platform, and OtherIncludes Data 360, Data 360 and Platform Flex Credits, Headless Platform, Informatica, Agentforce Mulesoft, Agentforce Tableau and Other. | $3,618 million | – | 20% constant currency growth |
| AmericasGeographic revenue disclosure. | $7,404 million | – | 10% constant currency growth |
| EuropeGeographic revenue disclosure. | $2,764 million | – | 13% constant currency growth |
| Asia PacificGeographic revenue disclosure. | $1,168 million | – | 12% constant currency growth |
| Professional services and otherRevenue category reported separately from subscription and support. | $525 million | – | – |
Q3 FY27 and full year FY27 outlook
- RevenueQ3 FY27 GAAP revenue of $11.42 - $11.5 billion, up 11% - 12% Y/Y and in CC, including slightly above 4pts Informatica contribution. Full year FY27 GAAP revenue of $46.1 billion - $46.4 billion, up 11% - 12% Y/Y and approximately 11% in CC, including slightly above 3pts Informatica contribution.
- Tax rateGAAP tax provision expected to be approximately 21.8% for the three months ended October 31, 2026 and 22.3% for the year ended January 31, 2027. Non-GAAP tax provision uses a long-term projected tax rate of 20.5%.
- NoteQ3 FY27 GAAP diluted net income per share of $1.81 - $1.83; non-GAAP diluted net income per share of $3.42 - $3.44.
- NoteQ3 FY27 cRPO growth of approximately 14% Y/Y and in CC, with $100M Y/Y FX; excludes any contribution from the pending Contentful and Fin acquisitions.
- NoteFull year FY27 subscription and support revenue growth of slightly above 12% Y/Y and slightly under 12% in CC, including slightly above 3pts Informatica contribution.
- NoteFull year FY27 GAAP operating margin of 20.1% and non-GAAP operating margin of 34.3%.
- NoteFull year FY27 GAAP diluted net income per share of $10.21 - $10.25; non-GAAP diluted net income per share of $16.67 - $16.71.
- NoteFull year FY27 operating cash flow growth of approximately 4% - 5% Y/Y and free cash flow growth of approximately 4% - 5% Y/Y.
- NoteFull year FY27 non-GAAP capital expenditures of approximately 1.5% of revenue.
- NoteGuidance incorporates the pending Contentful and Fin transactions in all metrics except cRPO and is conditional upon closing; both transactions are expected to close independently in the coming weeks during Q3 FY27.
- NoteFinal settlement of the $25 billion ASR is expected in October 2026.
Capital returns
- Returned $364 million in dividends to shareholders during Q2 FY27.
- Repurchased $84 million of common stock during Q2 FY27.
- Repurchased $27,332 million of common stock during the six months ended July 31, 2026.
- Continued to execute against the $25 billion accelerated share repurchase.
- 103 million shares were initially delivered under the ASR.
- Final settlement of the $25 billion ASR is expected in October 2026.
What drove it
- Subscription and support revenue included a $440 million Informatica contribution, while total revenue included a $456 million Informatica contribution.
- cRPO growth accelerated to 14% Y/Y and in constant currency from 13% constant currency growth as of April 30, 2026.
- Data 360, Headless Platform, and Other delivered 20% constant currency growth, compared with 8% for Agentforce Apps.
- Bookings from Agentforce One Edition and Agentforce for Apps more than doubled Q/Q.
- Slack delivered its fastest quarterly NNAOV growth since acquisition, while Slackbot users grew over 150% Q/Q.
- Data 360 ingested 104 trillion records, up 355% Y/Y, including 82 trillion via Zero Copy, up 731% Y/Y, and processed 22 terabytes of unstructured data.
Concerns
- GAAP operating margin was 20.5%, compared with 22.8% in the prior-year quarter; non-GAAP operating margin was 34.1%, compared with 34.3%.
- GAAP net income included $2,613 million of gains on strategic investments, which increased GAAP diluted net income per share by $2.43 and non-GAAP diluted net income per share by $2.53.
- Interest expense was $(473) million, compared with $(67) million in the prior-year quarter.
- Restructuring expense was $94 million, compared with $4 million in the prior-year quarter.
- Full-year FY27 guidance is conditional upon the closing of the Contentful and Fin acquisitions, which are incorporated in all guided metrics except cRPO.
- Salesforce expects a reduced currency tailwind relative to prior guidance because the U.S. dollar strengthened in Q2. Retail guidance reflects a $200M Y/Y FX impact for full-year revenue and $100M Y/Y FX for Q3 cRPO growth.
What to watch
- Whether Q3 FY27 cRPO growth is approximately 14% Y/Y and in constant currency, excluding pending Contentful and Fin contributions.
- The timing of the expected independent closings of Contentful and Fin during Q3 FY27 and their impact on guidance.
- Whether organic growth supports the stated second-half organic revenue reacceleration; the full-year guidance raise includes $100 million of organic growth.
- The final settlement of the $25 billion ASR expected in October 2026 and any Q3-Q4 FY27 open-market repurchase activity.
- The progression of Agentforce ARR, Agentforce and Data 360 ARR, Slack NNAOV growth, and adoption of premium Agentforce SKUs.
- Full-year FY27 operating cash flow and free cash flow growth against the approximately 4% - 5% Y/Y guidance.
Balance sheet and cash flow
- Cash and cash equivalents were $8,310 million as of July 31, 2026, versus $7,327 million as of January 31, 2026.
- Marketable securities were $3,093 million as of July 31, 2026, versus $2,238 million as of January 31, 2026.
- Strategic investments were $11,324 million as of July 31, 2026, versus $7,591 million as of January 31, 2026.
- Noncurrent debt was $39,288 million as of July 31, 2026, versus $10,439 million as of January 31, 2026; current debt was $0 million versus $4,000 million.
- Unearned revenue was $18,787 million as of July 31, 2026, versus $24,317 million as of January 31, 2026.
- Net cash provided by operating activities was $1,269 million in Q2 FY27, versus $740 million in Q2 FY26.
- Capital expenditures were $171 million in Q2 FY27, versus $135 million in Q2 FY26.
- Free cash flow was $1,098 million in Q2 FY27, versus $605 million in Q2 FY26.
- Net cash used in financing activities was $622 million in Q2 FY27, versus $2,503 million in Q2 FY26.
Analysis
Salesforce reported $11.3 billion of revenue, up 11% Y/Y and in constant currency, with subscription and support revenue of $10.8 billion, up 12% Y/Y and 11% in constant currency. Informatica contributed $456 million to total revenue and $440 million to subscription and support revenue. Demand indicators improved as cRPO reached $33.5 billion, up 14% Y/Y and in constant currency, accelerating from the 13% constant currency growth reported as of April 30, 2026. Total RPO was $66.3 billion, up 11% Y/Y.
The product mix favored Data 360, Headless Platform, and Other, which posted 20% constant currency growth on $3,618 million of revenue, versus 8% growth for Agentforce Apps on $7,193 million. Management highlighted nearly $3.9 billion in Agentforce and Data 360 ARR, up over 210% Y/Y, and Agentforce ARR exceeding $1.5 billion, up over 240% Y/Y. Operational adoption indicators included 3.2 billion Q2 Agentic Work Units, up 97% Q/Q, strong Slack NNAOV growth, and bookings from two premium Agentforce SKU groups that more than doubled Q/Q.
Profitability was mixed beneath the strong top-line and booking indicators. GAAP operating income was essentially unchanged at $2,331 million, and GAAP operating margin declined to 20.5% from 22.8%. Non-GAAP operating margin was 34.1%, compared with 34.3%. GAAP net income rose to $3,526 million and GAAP diluted EPS rose to $4.29, but gains on strategic investments of $2,613 million contributed $2.43 to GAAP diluted EPS. Interest expense increased to $(473) million from $(67) million, while restructuring expense increased to $94 million from $4 million.
Cash generation strengthened in the quarter, with operating cash flow of $1,269 million, up from $740 million, and free cash flow of $1,098 million, up from $605 million. Salesforce returned $364 million through dividends and continued its $25 billion ASR, with $84 million of Q2 common-stock repurchases and $27,332 million of repurchases for the first six months. Cash and cash equivalents stood at $8,310 million, while noncurrent debt was $39,288 million following $24,842 million of debt issuance net of issuance costs during the first six months.
The company initiated Q3 FY27 revenue guidance of $11.42 billion to $11.5 billion, up 11% to 12% Y/Y and in constant currency, and approximately 14% cRPO growth guidance. It raised full-year FY27 revenue guidance to $46.1 billion to $46.4 billion, up 11% to 12% Y/Y and approximately 11% in constant currency. The stated $200M raise, or $300 million in constant currency, consists of $100 million of organic growth, $200 million from the pending Contentful and Fin acquisitions, and a $100M FX headwind. Full-year GAAP operating margin guidance was updated to 20.1%, non-GAAP operating margin guidance was maintained at 34.3%, and operating cash flow and free cash flow growth guidance remained approximately 4% to 5% Y/Y.
Management, verbatim
We just delivered one of our best quarters ever, outperforming across every key metric.
Marc Benioff, Chair and CEO, Salesforce
AI is delivering value across every layer of our platform. We’re seeing incredible demand for our AI and data products, with ARR about to cross $4 billion.
Marc Benioff, Chair and CEO, Salesforce
NNAOV growth is the strongest it's been in four years, keeping us on track for second-half organic revenue reacceleration.
Robin Washington, President and Chief Financial and Operating Officer, Salesforce
Not in the filing
stated, not guessed- Previous-quarter outlook was not provided, so comparison of Q2 FY27 actual results against prior guidance is unavailable.
- Reported gross margin was not provided. The filing reports gross profit and total cost of revenues, but no gross-margin percentage.
- Standalone net income guidance was not provided.
- Standalone operating expense guidance was not provided.
- Consensus estimates, analyst expectations, price targets, and share-price reaction were not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Salesforce filed an SEC Form 8‑K reporting its Q2 FY27 earnings and updated guidance.
Ticker impact
Salesforce reported Q2 FY27 results with revenue $11.3B (+11% YoY) and raised full-year FY27 revenue guidance to $46.1‑$46.4B, up 11‑12% YoY.
Potential upside of 5‑8% in the near term as investors price in higher revenue expectations.
Guidance raise of $200M and solid margin expansion are material for a large-cap SaaS leader.
Market effects
Boosts outlook for the broader enterprise software and AI‑enabled CRM sector.
Positive for U.S. tech equities, especially cloud and SaaS stocks.
Reinforces global AI adoption trends, may lift related overseas SaaS firms.
Counterpoint
If the guidance upgrade is already priced in, the stock could face a short‑term pullback.
Key entities
- ExecutiveMarc Benioff
Chair and CEO of Salesforce, quoted on results.
