Salesforce (CRM) quarter year Salesforce Financial Results Summary
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Salesforce (CRM) Q2 2027: Record Revenue Growth and Strong Profitability — Very Positive
Salesforce (NYSE: CRM) reported impressive results for its second quarter of fiscal 2027, ending July 31, 2026. The company achieved revenue of $11.3 billion, reflecting an increase of $1.1 billion or +11% year-over-year (YoY). This performance marks a significant acceleration in growth, driven by robust demand for its AI and data products.
Key Financial Metrics
- Current Remaining Performance Obligation (cRPO): $33.5 billion, up 14% YoY in constant currency (CC).
- Remaining Performance Obligation (RPO): $66.3 billion, up 11% YoY.
- Subscription and Support Revenue: $10.8 billion, up 12% YoY and 11% in CC.
- GAAP Operating Margin: 20.5%.
- Non-GAAP Operating Margin: 34.1%.
- GAAP Diluted Net Income per Share: $4.29, up 119% YoY.
- Non-GAAP Diluted Net Income per Share: $5.90, up 103% YoY.
- Operating Cash Flow: $1.3 billion, up 71% YoY.
- Free Cash Flow: $1.1 billion, up 81% YoY.
- Dividends Returned to Shareholders: $364 million.
- Share Repurchase Program: Continued execution against a $25 billion accelerated share repurchase (ASR).
Analyst View
This quarter is undoubtedly a strong one for Salesforce shareholders. The company not only exceeded revenue expectations but also demonstrated significant improvements in profitability metrics. The GAAP diluted net income per share of $4.29 and non-GAAP diluted net income per share of $5.90 indicate that Salesforce is effectively managing costs while driving revenue growth. The operating cash flow and free cash flow figures further underscore the company's operational efficiency and financial health.
Salesforce's ability to raise its full-year revenue guidance by $200 million, now expecting between $46.1 billion to $46.4 billion, reflects confidence in sustained demand for its products, particularly in the AI space. The company anticipates revenue growth of 11% to 12% YoY for the full year, which is a positive indicator for future performance.
Market-Moving Updates
- Guidance Changes: Salesforce raised its full-year FY27 revenue guidance to $46.1 billion to $46.4 billion, up 11% - 12% YoY. The guidance incorporates contributions from pending acquisitions of Contentful and Fin.
- Third Quarter FY27 Revenue Guidance: Expected to be between $11.42 billion to $11.5 billion, also reflecting 11% - 12% YoY growth.
- Operating Margin Guidance: Updated full-year FY27 GAAP operating margin guidance to 20.1% while maintaining non-GAAP operating margin guidance of 34.3%.
Forward Catalysts
Investors should closely monitor Salesforce's upcoming Investor Day on September 16, 2026, during Dreamforce, where the company is likely to provide further insights into its strategic direction and product innovations. Additionally, the anticipated closing of the acquisitions of Contentful and Fin will be crucial for understanding how these integrations will enhance Salesforce's offerings and contribute to future growth.
In summary, Salesforce's Q2 FY27 results reflect a robust performance across key metrics, positioning the company favorably for continued growth in the competitive CRM landscape. The strong financial results, coupled with strategic acquisitions and a focus on AI, suggest a promising outlook for the remainder of the fiscal year.
Condensed Consolidated Statements of Operations
(in millions, except per share data)
Note: All amounts are in thousands.
| Three Months Ended | Six Months Ended | |||||
|---|---|---|---|---|---|---|
| July 31, 2026 | 2025 | July 31, 2026 | 2025 | |||
| Revenues | ||||||
| Subscription and support revenues | $ 10,820 | $ 9,690 | $ 21,413 | $ 18,987 | ||
| Professional services and other | 525 | 546 | 1,065 | 1,078 | ||
| Total revenues | 11,345 | 10,236 | 22,478 | 20,065 | ||
| Cost of revenues | ||||||
| Subscription and support revenues | 2,021 | 1,645 | 3,974 | 3,256 | ||
| Professional services and other | 628 | 597 | 1,245 | 1,251 | ||
| Total cost of revenues | 2,649 | 2,242 | 5,219 | 4,507 | ||
| Gross profit | 8,696 | 7,994 | 17,259 | 15,558 | ||
| Operating expenses | ||||||
| Research and development | 1,687 | 1,481 | 3,314 | 2,941 | ||
| Sales and marketing | 3,859 | 3,443 | 7,628 | 6,872 | ||
| General and administrative | 725 | 734 | 1,465 | 1,431 | ||
| Restructuring | 94 | 4 | 174 | 40 | ||
| Total operating expenses | 6,365 | 5,662 | 12,581 | 11,284 | ||
| Income from operations | 2,331 | 2,332 | 4,678 | 4,274 | ||
| Interest expense | -473 | -67 | -790 | -135 | ||
| Gains (losses) on strategic investments | 2,613 | 6 | 3,171 | -57 | ||
| Other income | 81 | 135 | 214 | 298 | ||
| Income before provision for income taxes | 4,552 | 2,406 | 7,273 | 4,380 | ||
| Provision for income taxes | -1,026 | -519 | -1,640 | -952 | ||
| Net income | $ 3,526 | $ 1,887 | $ 5,633 | $ 3,428 | ||
| Basic net income per share | $ 4.30 | $ 1.97 | $ 6.67 | $ 3.58 | ||
| Diluted net income per share | $ 4.29 | $ 1.96 | $ 6.67 | $ 3.55 | ||
| Shares used in computing basic net income per share (millions) | 820 | 956 | 844 | 958 | ||
| Shares used in computing diluted net income per share (millions) | 821 | 962 | 845 | 966 |
Condensed Consolidated Balance Sheets
(in millions)
Note: All amounts are in thousands.
| July 31, 2026 | January 31, 2026 | |
|---|---|---|
| Assets | -unaudited | |
| Current assets: | ||
| Cash and cash equivalents | $ 8,310 | $ 7,327 |
| Marketable securities | 3,093 | 2,238 |
| Accounts receivable, net | 6,320 | 14,339 |
| Costs capitalized to obtain revenue contracts, net | 2,074 | 2,075 |
| Prepaid expenses and other current assets | 2,286 | 2,243 |
| Total current assets | 22,083 | 28,222 |
| Property and equipment, net | 3,042 | 3,120 |
| Operating lease right-of-use assets, net | 1,787 | 2,003 |
| Noncurrent costs capitalized to obtain revenue contracts, net | 2,870 | 2,985 |
| Strategic investments | 11,324 | 7,591 |
| Goodwill | 59,250 | 57,941 |
| Intangible assets acquired through business combinations, net | 6,142 | 6,815 |
| Deferred tax assets and other assets, net | 3,122 | 3,628 |
| Total assets | $ 109,620 | $ 112,305 |
| Liabilities and stockholders’ equity | ||
| Current liabilities: | ||
| Accounts payable, accrued expenses and other liabilities | $ 7,018 | $ 8,253 |
| Operating lease liabilities, current | 531 | 548 |
| Unearned revenue | 18,787 | 24,317 |
| Debt, current | 0 | 4,000 |
| Total current liabilities | 26,336 | 37,118 |
| Noncurrent debt | 39,288 | 10,439 |
| Noncurrent operating lease liabilities | 1,924 | 2,189 |
| Other noncurrent liabilities | 3,694 | 3,417 |
| Total liabilities | 71,242 | 53,163 |
| Stockholders’ equity: | ||
| Common stock | 1 | 1 |
| Treasury stock, at cost | -55,022 | -32,228 |
| Additional paid-in capital | 66,029 | 68,835 |
| Accumulated other comprehensive income | 263 | 313 |
| Retained earnings | 27,107 | 22,221 |
| Total stockholders’ equity | 38,378 | 59,142 |
| Total liabilities and stockholders’ equity | $ 109,620 | $ 112,305 |
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