Salesforce (NYSE:CRM) Posts Quarterly Earnings Results, Beats Expectations By $2.63 EPS

Salesforce (NYSE:CRM) released its earnings results on Wednesday. The CRM provider reported $5.90 EPS for the quarter, topping the consensus estimate of $3.27 by $2.63, FiscalAI reports. Salesforce had a net margin of 21.99% and a return on equity of 23.35%. The company had revenue of $11.35 billion during the quarter, compared to analysts’ expectations of $11.33 billion. During the same quarter last year, the business earned $2.91 EPS. The business’s revenue was up 10.8% on a year-over-year basis. Salesforce updated its FY 2027 guidance to 16.670-16.710 EPS and its Q3 2027 guidance to 3.420-3.440 EPS.

Here are the key takeaways from Salesforce’s conference call:

• Salesforce reported a record quarter, with Q2 revenue of $11.35 billion, up 11% year over year and above the high end of guidance. CRPO rose 14% in constant currency to $33.5 billion, driven by strength in Slack, Agentforce, and Data 360.
• AI adoption continued to accelerate, with Agentforce ARR reaching $1.5 billion, 2,000 additional paying customers entering production, and agentic workloads reaching 3.2 billion AWUs, up 97% quarter over quarter. Management said 50% of Agentforce bookings came from customers replenishing consumed credits.
• The company raised FY2027 revenue guidance by approximately $300 million in constant currency to $46.1 billion-$46.4 billion, including $100 million of organic growth and an expected $200 million contribution from the planned Contentful and Fin acquisitions. Management also reiterated expectations for organic revenue reacceleration in the second half.
• Profitability and capital returns were strong, with $1.1 billion in free cash flow, up 81% year over year, and continued execution of the $25 billion accelerated share repurchase program. Non-GAAP operating margin was 34.1%, while management maintained full-year guidance of approximately 34.3%.
• Management acknowledged continued volatility in licensed revenue and a $100 million foreign-exchange headwind to the fiscal-year outlook. Despite the revenue increase, full-year operating and free-cash-flow growth is expected at only approximately 4%-5%, and GAAP operating margin guidance was updated to about 20.1%.

Salesforce Trading Up 22.6%

Shares of CRM opened at $252.15 on Friday. Salesforce has a twelve month low of $146.32 and a twelve month high of $269.11. The company has a current ratio of 0.79, a quick ratio of 0.79 and a debt-to-equity ratio of 1.15. The firm has a market capitalization of $206.51 billion, a P/E ratio of 22.99, a PEG ratio of 1.11 and a beta of 1.16. The firm’s 50-day moving average is $179.14 and its two-hundred day moving average is $182.03.

Wall Street Analyst Weigh In

A number of brokerages recently commented on CRM. Truist Financial restated a “buy” rating and issued a $300.00 price objective (up from $280.00) on shares of Salesforce in a research report on Thursday. JPMorgan Chase & Co. boosted their target price on Salesforce from $250.00 to $265.00 and gave the stock an “overweight” rating in a research report on Thursday. Morgan Stanley increased their target price on Salesforce from $185.00 to $235.00 and gave the stock an “equal weight” rating in a research note on Thursday. Daiwa Securities Group decreased their price target on Salesforce from $295.00 to $280.00 and set a “buy” rating on the stock in a research note on Tuesday, June 2nd. Finally, Wall Street Zen lowered Salesforce from a “buy” rating to a “hold” rating in a report on Saturday, August 1st. Three analysts have rated the stock with a Strong Buy rating, twenty-six have issued a Buy rating, fifteen have issued a Hold rating and three have assigned a Sell rating to the company. Based on data from MarketBeat, Salesforce currently has a consensus rating of “Moderate Buy” and a consensus price target of $261.15.

Institutional Investors Weigh In On Salesforce

Several institutional investors have recently modified their holdings of the company. Brighton Jones LLC raised its holdings in Salesforce by 13.7% during the fourth quarter. Brighton Jones LLC now owns 25,668 shares of the CRM provider’s stock worth $8,582,000 after purchasing an additional 3,102 shares during the last quarter. Revolve Wealth Partners LLC grew its holdings in Salesforce by 12.6% in the fourth quarter. Revolve Wealth Partners LLC now owns 1,827 shares of the CRM provider’s stock valued at $611,000 after purchasing an additional 205 shares during the last quarter. Bison Wealth LLC grew its holdings in Salesforce by 9.0% in the fourth quarter. Bison Wealth LLC now owns 2,234 shares of the CRM provider’s stock valued at $747,000 after purchasing an additional 184 shares during the last quarter. Sivia Capital Partners LLC increased its position in shares of Salesforce by 3.7% in the second quarter. Sivia Capital Partners LLC now owns 2,958 shares of the CRM provider’s stock valued at $807,000 after buying an additional 106 shares in the last quarter. Finally, United Bank increased its position in shares of Salesforce by 5.2% in the second quarter. United Bank now owns 10,198 shares of the CRM provider’s stock valued at $2,781,000 after buying an additional 500 shares in the last quarter. Hedge funds and other institutional investors own 80.43% of the company’s stock.

Key Headlines Impacting Salesforce

Here are the key news stories impacting Salesforce this week:

• Positive Sentiment: Raised outlook and earnings beat: Salesforce reported adjusted EPS of $5.90, well above the $3.27 consensus, while revenue increased 10.8% year over year to $11.35 billion. Management raised fiscal 2027 revenue guidance to $46.1 billion-$46.4 billion and provided third-quarter EPS guidance above analyst expectations. Salesforce raises annual revenue forecasts on AI product momentum
• Positive Sentiment: Anthropic partnership strengthens AI strategy: Salesforce and Anthropic introduced “Claudeforce,” integrating Claude with Salesforce data, workflows, governance and CRM tools. The companies say the integration will allow sellers and agents to use Salesforce capabilities directly within Claude, potentially improving AI adoption and monetization. Salesforce and Anthropic Announce Claudeforce
• Positive Sentiment: Operating indicators showed momentum: Constant-currency remaining performance obligations accelerated 14%, while Agentforce and Data 360 annual recurring revenue approached $3.9 billion. Management also said AI usage on the platform has risen substantially, countering the “SaaSpocalypse” thesis that AI agents will replace incumbent software.
• Neutral Sentiment: Analyst reactions were broadly constructive but mixed: JPMorgan, Mizuho, BMO, Truist and Monness raised targets or maintained bullish ratings, with targets ranging from $260 to $300 or higher. UBS, Wells Fargo, Morgan Stanley and Citi also lifted targets but retained neutral or equal-weight ratings, reflecting valuation and execution concerns.
• Negative Sentiment: Earnings quality remains a concern: Strategic investment gains contributed approximately $2.53 of the $5.90 adjusted EPS, including an estimated $2.7 billion unrealized gain tied to Salesforce’s Anthropic investment. Such gains may not recur, and skeptics warn that Anthropic’s control of the AI orchestration layer could limit Salesforce’s long-term strategic upside. Salesforce Stock Just Soared. Thank Anthropic.

Salesforce Company Profile

Salesforce, founded in 1999 and headquartered in San Francisco, is a global provider of cloud-based software focused on customer relationship management (CRM) and enterprise applications. The company popularized the software-as-a-service (SaaS) model for CRM and has built a broad portfolio of products designed to help organizations manage sales, service, marketing, commerce and analytics through a unified, cloud-first platform.

Core offerings include Sales Cloud for sales automation, Service Cloud for customer support, Marketing Cloud for digital marketing and engagement, and Commerce Cloud for e-commerce.