Salesforce cleared Wall Street's second-quarter expectations and deepened its ties with AI lab Anthropic
Salesforce reaffirmed that it's on track for organic revenue reacceleration in the second half of the year.
Investors were impressed by Salesforce's artificial-intelligence progress in the latest quarter as the software giant reported an earnings beat driven by growing demand for the company's agentic AI tools.
The company posted $11.35 billion of revenue for the second quarter of fiscal 2027, growing 11% from a year before and surpassing Wall Street estimates of $11.33 billion.
Salesforce (CRM) shares popped 11% in the extended session.
"AI is delivering value across every layer of our platform," Salesforce CEO Marc Benioff said in a press release. "We're seeing incredible demand for our AI and data products, with ARR about to cross $4 billion." Annual recurring revenue from the company's Agentforce and Data 360 products grew over 210% relative to a year earlier, reaching just shy of $3.9 billion.
Adjusted earnings per share of $5.90 cleared the $3.27 consensus estimate thanks to a large paper gain on the company's strategic investments. Stripping out the gain on investments, Salesforce's adjusted earnings would be $3.37.
Salesforce's venture portfolio includes notable investments such as Anthropic, Databricks and Stripe. Salesforce and Anthropic also announced a strategic partnership called "Claudeforce" on Wednesday. This integrates Claude directly into Salesforce's platform.
While Salesforce shares are down 23% so far this year, they've begun to stage a comeback over the past month. The stock has risen 33% from its recent low at the end of July as investors have started taking a second look at the AI bear thesis that has gripped software names.
Salesforce also showed promise with its pipeline of future business. Current remaining performance obligations, or the value of signed contracts expected to convert into revenue within the next 12 months, amounted to $33.5 billion. Wall Street analysts were expecting $33.4 billion.
The company has been signaling for organic revenue to reaccelerate in the back half of this calendar year. Salesforce CFO and COO Robin Washington shared that net new annual order value, which reached its strongest growth in four years, is keeping the company on track.
For the fiscal third quarter, Salesforce guided for revenue between $11.42 billion and $11.5 billion, beating the $11.415 billion anticipated by analysts polled by FactSet. The company raised full-year guidance to between $46.1 billion and $46.4 billion. Analysts were expecting $46.112 billion.
-Christine Ji
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