Key Highlights
- Adjusted earnings per share reached $5.90, crushing Wall Street’s $3.27 projection by 80%
- Quarterly revenue climbed to $11.35 billion, representing 11% growth year-over-year and meeting expectations
- Free cash flow jumped 81% to reach $1.1 billion
- Shares surged 12.68% in extended trading to $231.70
- Annual revenue forecast increased to a range of $46.1 billion to $46.4 billion
The cloud computing giant delivered fiscal second-quarter 2027 earnings after Wednesday’s closing bell that significantly exceeded analyst projections. Shares climbed 12.68% in after-hours activity to $231.70, compared to the regular trading close of $205.62.
The company’s adjusted earnings per share totaled $5.90, dramatically surpassing the Street’s $3.27 projection. This represents an 80% outperformance, marking an exceptional surprise for an enterprise of this magnitude.
Quarterly revenue totaled $11.35 billion, reflecting 11% annual growth and aligning with the consensus estimate of $11.33 billion. The figure represents a milestone as the company’s highest quarterly revenue on record.
The company’s bread-and-butter subscription and support segment increased 12% to $10.82 billion. Current remaining performance obligation, which represents contracted future business, climbed to $33.5 billion, marking 14% growth in constant currency terms.
Free cash flow experienced an impressive 81% year-over-year jump to $1.1 billion. Operating cash flow advanced 71% to $1.3 billion. The company’s non-GAAP operating margin registered at 34.1%.
Artificial Intelligence Offerings Drive Growth
The company’s Agentforce platform generated annual recurring revenue exceeding $1.5 billion, representing a surge of more than 240% year-over-year. When combined with Data 360, total AI-related ARR approached $3.9 billion, climbing more than 210%.
Salesforce processed 3.2 billion Agentic Work Units during the quarter, up 97% from the previous quarter. Slackbot adoption expanded more than 150% sequentially, while Slack achieved its most robust net-new annual order value growth since being acquired.
Chief Executive Marc Benioff announced a new offering called Claudeforce, developed in collaboration with 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-Looking Projections
The company elevated its fiscal 2027 annual revenue guidance to a range of $46.1 billion to $46.4 billion, representing a $300 million increase from previous projections.
For the third quarter, management projects revenue between $11.42 billion and $11.5 billion, indicating 11% to 12% annual expansion. Current remaining performance obligations growth for Q3 is anticipated to remain around 14%.
Management maintained its full-year non-GAAP operating margin forecast at approximately 34.3%. Annual operating and free cash flow growth is projected at roughly 4% to 5%.
Salesforce is implementing a $25 billion accelerated share buyback initiative, aimed at repurchasing at least 14% of shares outstanding at an average cost of $176 per share.
Total remaining performance obligations stood at $66.3 billion, up 11% from the prior year.
Analysts currently maintain a Moderate Buy rating consensus on CRM stock, reflecting 25 buy ratings, nine hold ratings, and two sell ratings over the most recent three-month period. The average analyst price target stands at $238.94.
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