Salesforce — Q2 Fiscal 2027 Earnings Summary

Financial Performance

• Total revenue reached $11.3 billion, up 11% year-over-year (Y/Y) and in constant currency (CC), including $456 million from Informatica.
• Subscription and support revenue was $10.8 billion, up 12% Y/Y and 11% in CC, including $440 million from Informatica.
• Current remaining performance obligation (cRPO) was $33.5 billion, up 14% Y/Y and in CC.
• Remaining performance obligation (RPO) was $66.3 billion, up 11% Y/Y.
• GAAP operating margin was 20.5%; non-GAAP operating margin was 34.1%.
• GAAP diluted net income per share was $4.29, up 119% Y/Y; non-GAAP diluted net income per share was $5.90, up 103% Y/Y.
• Operating cash flow was $1.3 billion, up 71% Y/Y.
• Free cash flow was $1.1 billion, up 81% Y/Y.
• Net income was $3.5 billion for the quarter; non-GAAP net income was $4.8 billion.

Guidance and Future Outlook

• Raised full-year FY27 revenue guidance to $46.1 billion to $46.4 billion, representing 11% to 12% Y/Y growth and 11% in CC.
• The $200 million increase in full-year guidance (or $300 million in CC) reflects $100 million organic growth, $200 million from pending Contentful and Fin acquisitions, and a $100 million FX headwind.
• Initiated third-quarter FY27 revenue guidance of $11.42 billion to $11.5 billion, up 11% to 12% Y/Y and in CC, including slightly above 4 percentage points from Informatica.
• Initiated third-quarter FY27 cRPO growth guidance of approximately 14% Y/Y and in CC, excluding pending acquisitions.
• Updated full-year FY27 GAAP operating margin guidance to 20.1% and maintained non-GAAP operating margin guidance at 34.3%.
• Maintained full-year FY27 operating cash flow growth and free cash flow growth guidance of approximately 4% to 5% Y/Y.
• Expects final settlement of the $25 billion accelerated share repurchase (ASR) in October 2026.
• Anticipates closing definitive agreements to acquire Contentful and Fin independently in the third quarter of FY27; these acquisitions are incorporated into revenue guidance but excluded from cRPO guidance.
• Expects a reduced currency tailwind for the business relative to prior guidance due to a strengthening U.S. dollar.

Business Segments and Product Lines

• Agentforce and Data 360 annual recurring revenue (ARR) reached nearly $3.9 billion, up over 210% Y/Y.
• Agentforce ARR exceeded $1.5 billion, up over 240% Y/Y; effective Q2 FY27, this includes AI offerings Slackbot and Headless 360.
• Delivered 7.0 billion Agentic Work Units (AWUs) to date across Agentforce and Slack, with 3.2 billion in Q2, growing 97% quarter-over-quarter (Q/Q).
• Slack delivered its fastest quarterly Net New Annual Order Value (NNAOV) growth since acquisition, with Slackbot users growing over 150% Q/Q.
• Bookings from Agentforce One Edition and Agentforce for Apps more than doubled Q/Q.
• Data 360 ingested 104 trillion records in Q2, up 355% Y/Y, including 82 trillion via Zero Copy, up 731% Y/Y, and processed 22 terabytes of unstructured data.
• Subscription and support revenue growth by service offering (excluding hedging gains) was 8% for Agentforce Apps and 20% for Data 360, Headless Platform, and Other.

Market and Competitive Landscape

• Management stated AI is delivering value across every layer of the platform with incredible demand for AI and data products.
• ARR for AI and data products is approaching $4 billion.
• The company describes itself as the world's #1 AI CRM.
• NNAOV growth for the quarter was the strongest in four years.

Risks and Challenges

• Risks include uncertainties regarding AI technologies and their integration, the effect of acquisitions (Informatica, pending Contentful and Fin), and the ability to retain key personnel.
• Potential risks involve data center capacity, reliance on third-party infrastructure, and service performance or security breaches.
• Regulatory risks include evolving government regulations on data privacy, cybersecurity, cross-border data transfers, and ESG matters.
• Financial risks include fluctuations in the fair value of the strategic investment portfolio, foreign currency exchange rates, and the ability to execute share repurchase programs.
• Operational risks include the pace of innovation, customer attrition, and the ability to meet long-term revenue targets.

Management Commentary and Tone

• Marc Benioff, Chair and CEO, described the quarter as "one of our best quarters ever," noting outperformance across every key metric.
• Benioff highlighted that AI is unlocking data, workflows, and governance through "AIforce," the company's trusted enterprise harness.
• Robin Washington, President and CFO, stated that AI is amplifying the power and value of the platform and that NNAOV growth is the strongest in four years, keeping the company on track for second-half organic revenue reacceleration.
• The tone is confident, emphasizing the scale of AI adoption and the successful integration of Informatica.

Analyst Questions and Answers

• No specific analyst questions and answers are included in the provided text.

Other Key Points

• Returned $364 million in dividends to shareholders during the quarter.
• Continued execution against a $25 billion accelerated share repurchase program.
• The company revised its disaggregated revenue disclosure presentation in Q1 FY27 into two categories: Agentforce Apps, and Data 360, Headless Platform, and Other.
• GAAP tax provision is expected to be approximately 21.8% for Q3 FY27 and 22.3% for full-year FY27.
• Non-GAAP tax rate is projected at 20.5% for FY27.
• Capital expenditures are expected to be approximately 1.5% of revenue for full-year FY27.
• An Investor Day will be held on September 16, 2026, in conjunction with Dreamforce.
• A Product Adoption & Momentum webinar is scheduled for September 1, 2026.