Salesforce CRM) stock came roaring back after the software giant posted a strong Q2 report after-market hours on Wednesday evening.
CRM shares spiked more than 20% on Thursday,marking their largest single-day jump since 2020, and are up another 3% in Friday’s trading session.
The rally reflects renewed confidence that Salesforce can turn artificial intelligence into a growth catalyst rather than be disrupted by AI.
Salesforce Crushes Q2 Earnings & Raises Guidance
Salesforce posted Q2 revenue of $11.34 billion, rising nearly 11% year over year and edging past the Zacks Consensus of $11.31 billion.
More eye-catching was Salesforce’s Q2 adjusted net income of $3.53 billion. This translated into adjusted EPS of $5.90, which soared 103% from $2.91 per share a year ago and crushed expectations of $3.27 by more than 80%.
However, it’s noteworthy that the enormous EPS beat was heavily boosted by gains on Salesforce’s strategic investments, including in artificial intelligence firm Anthropic. Excluding that benefit, underlying adjusted EPS was reportedly around $3.37, which still topped expectations but paints a more realistic picture of operating profitability.
Meanwhile, operating cash flow surged 71% to $1.3 billion and free cash flow jumped 81% to $1.1 billion. Current remaining performance obligations (cRPO), an important indicator of future sales, climbed 14% to $33.5 billion.
More importantly, management raised its current fiscal 2027 revenue guidance to $46.1-$46.4 billion (+11% growth), up from $45.9-$46.2 billion previously, and now forecasts adjusted EPS of $16.67-$16.71 (+33% growth), up from its prior $14.06-$14.12 outlook.
Q3 revenue is expected at $11.42-$11.5 billion, representing an 11%-12% increase.Of course, part of the dramatic full-year EPS increase reflects the strategic investment gains already realized. This makes the higher revenue outlook and sustained 14% cRPO growth arguably more important indicators of Salesforce’s underlying momentum, with the current Zacks Consensus sales forecast pictured below.
AI Momentum Accelerates With Anthropic & Claudeforce
Salesforce’s AI story is rapidly becoming measurable through its AI platform Agentforce and its supporting data foundation, Data 360.
Agentforce and Data 360 annual recurring revenue (ARR) reached nearly $3.9 billion, soaring more than 210% YoY, with Agentforce ARR surpassing $1.5 billion and increasing more than 240%.
