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CRM's Q2 EPS rose 13.7% to $2.91, topping estimates; revenues climbed 10% to $10.2 billion.
Subscription and Support revenues grew 11% to $9.7B, led by strong Platform and Integration growth.
CRM lifted FY26 revenues, EPS, and cash flow outlook, with $50B in repurchase authorization.
Salesforce (CRM - Free Report) reported second-quarter fiscal 2026 non-GAAP earnings of $2.91 per share, which beat the Zacks Consensus Estimate by 5.1%. The bottom line improved 13.7% year over year.
Salesforce’s fiscal second-quarter revenues of $10.2 billion surpassed the Zacks Consensus Estimate by 1.02%. This top line increased 10% year over year.
The growth in top and bottom lines reflected the benefits of CRM’s go-to-market strategy and sustained focus on customer success. The initiatives to integrate generative artificial intelligence (AI) into its offerings also boosted demand for Salesforce’s solutions during the reported quarter.
Salesforce’s Q2 Performance in Detail
Coming to CRM’s business segments, revenues from Subscription and Support (94.8% of total revenues) increased 11% year over year to $9.7 billion. Professional Services and Other (5.2% of total sales) revenues declined 3% to $546 million. Our estimates for Subscription and Support, and Professional Services and Other segments’ revenues were pegged at $9.6 billion and $546 million, respectively.
Under the Subscription and Support segment, Sales Cloud revenues grew 8% year over year to $2.3 billion. Revenues from Service Cloud increased 8% to $2.5 billion. Marketing & Commerce Cloud revenues rose 3% to $1.4 billion. Platform & Other revenues were up 16% to $2.1 billion. The Integration and Analytics division (which includes MuleSoft, Tableau, and Slack contributions) recorded 12% year-over-year growth to $1.5 billion
Our estimates for Sales, Service, Market & Commerce, Platform & Other, and Integration & Analytics services revenues were pegged at $2.28 billion, $2.48 billion, $1.4 billion, $1.99 billion and $1.45 billion, respectively.
Revenues from the Americas (65.5% of total revenues) increased 9% year over year to $6.74 billion. Sales in EMEA (23.5%) grew 7% to $2.4 billion, while the Asia Pacific (11%) region’s revenues rose 11% to $1.1 billion
Non-GAAP operating income was $3.51 billion, up 12% from the year-ago quarter’s $3.14 billion. Moreover, the non-GAAP operating margin expanded 60 bps to 34.3%, while the GAAP operating margin improved to 22.8%
Salesforce’s Balance Sheet & Other Details
Salesforce exited the fiscal second quarter with cash, cash equivalents and marketable securities of $15.37 billion, down from $17.41 billion at the end of the previous quarter. CRM generated an operating cash flow of $605 million and a free cash flow of $740 million, reflecting typical seasonality in collections
As of July 31, the current remaining performance obligation (cRPO) stood at $29.4 billion, up 11% year over year. The company returned $2.6 billion to shareholders, including $2.2 billion in share repurchases and $399 million in dividends, and expanded its repurchase program by $20 billion, bringing total authorization to $50 billion.
Salesforce’s Guidance for Q3 & FY26
Salesforce provided guidance for the third quarter of fiscal 2026. It projects total sales between $10.24 billion and $10.29 billion, which indicates 8-9% growth from the year-ago level. The Zacks Consensus Estimate for revenues is currently pegged at $10.3 billion.
The company expects non-GAAP earnings per share in the band of $2.84-$2.86, while GAAP EPS is anticipated to be between $1.60 and $1.62. The cRPO growth is projected to be slightly above 10% year over year. The Zacks Consensus Estimate for non-GAAP earnings is currently pegged at $2.85.
For fiscal 2026, Salesforce now expects revenues in the range of $41.1-$41.3 billion, up 8.5-9% year over year, compared with the prior guidance of $41.0-$41.3 billion. The Zacks Consensus Estimate for revenues is currently pegged at $41.2 billion.
Subscription and Support revenues are expected to increase approximately 9.5% year over year. The company now anticipates fiscal 2026 non-GAAP earnings per share in the range of $11.33-$11.37, slightly higher than the previous forecast of $11.27-$11.33. The Zacks Consensus Estimate for non-GAAP earnings is currently pegged at $11.3.
Non-GAAP operating margin is projected to expand to 34.1%, while GAAP operating margin is expected to be 21.2%. Salesforce raised its forecast for operating cash flow growth to 12-13% year over year from the previous guidance of 10-11%. The company expects free cash flow growth to be in the range of 12-13% year over year, up from the previous guidance of 9-10%.
Amphenol shares have gained 59.5% year to date. The Zacks Consensus Estimate for Amphenol’s full-year 2025 earnings is pegged at $3.02 per share, up by 4 cents over the past 30 days, indicating an increase of 59.8% from the year-ago quarter’s reported figure.
F5 shares have surged 22.9% year to date. The Zacks Consensus Estimate for F5’s full-year fiscal 2025 earnings is pegged at $15.38 per share, up by 0.8% over the past 30 days, indicating a gain of 15% from the year-ago quarter’s reported figure.
CrowdStrike shares have gained 20.4% year to date. The Zacks Consensus Estimate for CrowdStrike’s full-year 2026 earnings per share is pegged $3.67 per share, up by 4.9% over the past seven days, indicating a decline of 6.6% from the year-ago quarter’s reported figure.
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Salesforce Q2 Earnings Surpass Estimates, Revenues Rise Y/Y
Key Takeaways
Salesforce (CRM - Free Report) reported second-quarter fiscal 2026 non-GAAP earnings of $2.91 per share, which beat the Zacks Consensus Estimate by 5.1%. The bottom line improved 13.7% year over year.
Salesforce’s fiscal second-quarter revenues of $10.2 billion surpassed the Zacks Consensus Estimate by 1.02%. This top line increased 10% year over year.
The growth in top and bottom lines reflected the benefits of CRM’s go-to-market strategy and sustained focus on customer success. The initiatives to integrate generative artificial intelligence (AI) into its offerings also boosted demand for Salesforce’s solutions during the reported quarter.
Salesforce’s Q2 Performance in Detail
Coming to CRM’s business segments, revenues from Subscription and Support (94.8% of total revenues) increased 11% year over year to $9.7 billion. Professional Services and Other (5.2% of total sales) revenues declined 3% to $546 million. Our estimates for Subscription and Support, and Professional Services and Other segments’ revenues were pegged at $9.6 billion and $546 million, respectively.
Salesforce Inc. Price, Consensus and EPS Surprise
Salesforce Inc. price-consensus-eps-surprise-chart | Salesforce Inc. Quote
Under the Subscription and Support segment, Sales Cloud revenues grew 8% year over year to $2.3 billion. Revenues from Service Cloud increased 8% to $2.5 billion. Marketing & Commerce Cloud revenues rose 3% to $1.4 billion. Platform & Other revenues were up 16% to $2.1 billion. The Integration and Analytics division (which includes MuleSoft, Tableau, and Slack contributions) recorded 12% year-over-year growth to $1.5 billion
Our estimates for Sales, Service, Market & Commerce, Platform & Other, and Integration & Analytics services revenues were pegged at $2.28 billion, $2.48 billion, $1.4 billion, $1.99 billion and $1.45 billion, respectively.
Revenues from the Americas (65.5% of total revenues) increased 9% year over year to $6.74 billion. Sales in EMEA (23.5%) grew 7% to $2.4 billion, while the Asia Pacific (11%) region’s revenues rose 11% to $1.1 billion
Non-GAAP operating income was $3.51 billion, up 12% from the year-ago quarter’s $3.14 billion. Moreover, the non-GAAP operating margin expanded 60 bps to 34.3%, while the GAAP operating margin improved to 22.8%
Salesforce’s Balance Sheet & Other Details
Salesforce exited the fiscal second quarter with cash, cash equivalents and marketable securities of $15.37 billion, down from $17.41 billion at the end of the previous quarter. CRM generated an operating cash flow of $605 million and a free cash flow of $740 million, reflecting typical seasonality in collections
As of July 31, the current remaining performance obligation (cRPO) stood at $29.4 billion, up 11% year over year. The company returned $2.6 billion to shareholders, including $2.2 billion in share repurchases and $399 million in dividends, and expanded its repurchase program by $20 billion, bringing total authorization to $50 billion.
Salesforce’s Guidance for Q3 & FY26
Salesforce provided guidance for the third quarter of fiscal 2026. It projects total sales between $10.24 billion and $10.29 billion, which indicates 8-9% growth from the year-ago level. The Zacks Consensus Estimate for revenues is currently pegged at $10.3 billion.
The company expects non-GAAP earnings per share in the band of $2.84-$2.86, while GAAP EPS is anticipated to be between $1.60 and $1.62. The cRPO growth is projected to be slightly above 10% year over year. The Zacks Consensus Estimate for non-GAAP earnings is currently pegged at $2.85.
For fiscal 2026, Salesforce now expects revenues in the range of $41.1-$41.3 billion, up 8.5-9% year over year, compared with the prior guidance of $41.0-$41.3 billion. The Zacks Consensus Estimate for revenues is currently pegged at $41.2 billion.
Subscription and Support revenues are expected to increase approximately 9.5% year over year. The company now anticipates fiscal 2026 non-GAAP earnings per share in the range of $11.33-$11.37, slightly higher than the previous forecast of $11.27-$11.33. The Zacks Consensus Estimate for non-GAAP earnings is currently pegged at $11.3.
Non-GAAP operating margin is projected to expand to 34.1%, while GAAP operating margin is expected to be 21.2%. Salesforce raised its forecast for operating cash flow growth to 12-13% year over year from the previous guidance of 10-11%. The company expects free cash flow growth to be in the range of 12-13% year over year, up from the previous guidance of 9-10%.
Zacks Rank and Stocks to Consider
Currently, CRM carries a Zacks Rank #3 (Hold).
Amphenol (APH - Free Report) , F5 (FFIV - Free Report) and CrowdStrike (CRWD - Free Report) are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. Amphenol, F5 and CrowdStrike sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Amphenol shares have gained 59.5% year to date. The Zacks Consensus Estimate for Amphenol’s full-year 2025 earnings is pegged at $3.02 per share, up by 4 cents over the past 30 days, indicating an increase of 59.8% from the year-ago quarter’s reported figure.
F5 shares have surged 22.9% year to date. The Zacks Consensus Estimate for F5’s full-year fiscal 2025 earnings is pegged at $15.38 per share, up by 0.8% over the past 30 days, indicating a gain of 15% from the year-ago quarter’s reported figure.
CrowdStrike shares have gained 20.4% year to date. The Zacks Consensus Estimate for CrowdStrike’s full-year 2026 earnings per share is pegged $3.67 per share, up by 4.9% over the past seven days, indicating a decline of 6.6% from the year-ago quarter’s reported figure.