CRM’s Cash Flow Strength: Can It Sustain Big Shareholder Returns?
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Salesforce, Inc. CRM is demonstrating strong cash-generating ability, giving it financial flexibility to return more capital to shareholders. Its growing free cash flow, ongoing share repurchases and dividend payments provide a solid foundation for investor returns.
In the second quarter of fiscal 2026, Salesforce’s operating cash flow jumped 71.5% year over year to $1.27 billion, while free cash flow increased 81.5% to $1.10 billion. In the first half of fiscal 2027, the company generated operating and free cash flows of $7.97 billion and $7.65 billion, respectively. This improvement highlights the strength of its subscription-based business, which provides recurring revenues and supports consistent cash generation.
Salesforce is putting this cash to work. The company paid $364 million in dividends during the quarter and continued its $25 billion accelerated share repurchase (ASR) program. This $25 billion ASR transaction represents the first half of a larger $50 billion share repurchase program authorized by the company’s board of directors in February 2026.
Management expects the buyback to reduce outstanding shares by at least 14%. This could provide a meaningful boost to earnings per share while increasing the ownership stake of remaining shareholders. Through the first half of fiscal 2027, Salesforce’s capital returns totaled $27.9 billion. The share count was down 141 million shares, or 15%, year over year.
Nevertheless, investors should be cautious about assuming that such strong cash flow growth will continue. Salesforce expects fiscal 2027 operating cash flow and free cash flow growth of approximately 4%-5%. This is considerably slower than the increase registered in the last reported quarter. Expanding Agentforce and Data 360 will require continued investment to support future growth.
Salesforce appears capable of maintaining substantial shareholder returns, although slower cash flow growth could limit the scope for significantly larger payouts in the near term.
How Do Rivals Fare Against Salesforce on Cash Returns?
Microsoft Corporation MSFT is a strong benchmark for Salesforce’s cash-generation and shareholder-return strategy. In the first quarter of fiscal 2027, the company generated $58 billion in operating cash flow.
During the first quarter, Microsoft returned $11.1 billion to shareholders through dividends and share repurchases. Its substantial cash generation gives it considerable flexibility to reward investors while funding growth.
Oracle Corporation ORCL offers a contrasting picture. The company generated a record operating cash flow of $23 billion in the first quarter of fiscal 2027. However, aggressive capital investment to support cloud infrastructure growth and customer demand pushed free cash flow into negative territory at $5.4 billion.
