Salesforce reported strong second-quarter results, exceeding analyst revenue and earnings forecasts. The company’s revenue reached $10.24 billion, a 10% year-over-year increase. This surpassed FactSet’s analyst consensus of $10.14 billion.
Marc Benioff, Salesforce‘s CEO, highlighted the significant growth of the company’s Data Cloud and AI products. These products achieved over $1.2 billion in annual recurring revenue, representing a substantial 120% year-over-year increase.
The company’s current remaining performance obligations (cRPO) also exceeded expectations, reaching $29.4 billion compared to the anticipated $29.2 billion. This signifies an 11% year-over-year growth.
Despite the positive second-quarter performance, Salesforce‘s guidance for the next quarter fell short of analyst projections. The company projected revenue between $10.24 billion and $10.29 billion for the third quarter, slightly below Wall Street’s expectations.
For the full fiscal year, Salesforce raised its lower revenue guidance to between $41.1 billion and $41.3 billion, indicating an 8.5% to 9% increase. This is a slight improvement on the previous forecast.
Following the earnings announcement, Salesforce‘s stock price experienced a 5.6% decline in after-hours trading. This reflects a broader investor sentiment of cautious optimism in the software industry, particularly regarding the impact of AI.
The stock’s year-to-date decline of 22% underscores investor demand for concrete evidence of AI driving revenue growth. One portfolio manager expressed the need for substantial revenue acceleration to counter concerns about AI’s competitive threat to established software models.
Benioff dismissed concerns about AI completely replacing software, characterizing such a notion as inaccurate. He instead positioned agentic AI as a natural extension of Software-as-a-Service (SaaS).
Salesforce‘s revenue growth accelerated in the second quarter, reaching 10% on a reported basis and 9% on a constant-currency basis, compared to 8% in the first quarter. The company is actively promoting its AI offerings, with its Agentforce platform showing significant traction, particularly among existing customers.
The company is also pursuing acquisitions to bolster its AI capabilities. Recent acquisitions, and the stated intention to continue acquiring promising AI technologies, reflect this strategy.
However, some analysts believe that Salesforce needs to demonstrate even stronger AI monetization and cRPO growth to fully satisfy investor expectations. The company’s current performance, while positive, hasn’t completely alleviated these concerns.
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