Salesforce clears Wall Street's second-quarter expectations and deepens 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 on Wednesday 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's estimates of $11.33 billion.
Salesforce shares (CRM) popped 13% higher in the extended session. It's the biggest post-earnings jump for the stock since August 2024, when shares jumped 26%, according to Dow Jones Market Data.
"AI is delivering value across every layer of our platform," Salesforce CEO Marc Benioff said in a statement. "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, to 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 investment in Anthropic. Salesforce has been an investor in the AI company since its Series C funding round in 2023.
Stripping out the gain on investments, Salesforce's adjusted earnings would be $3.37 a share.
Salesforce and Anthropic also deepened their relationship through a strategic partnership called "Claudeforce" on Wednesday. This integrates Anthropic's 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.
"AI is amplifying the value of our entire platform," Robin Washington, chief financial and chief operating officer at Salesforce, told MarketWatch. The company has delivered over 7 billion agentic work units - a metric Salesforce uses to measure work completed by AI - across Agentforce and Slack, with 3.2 billion in the second quarter alone. Washington noted that higher usage of agentic work units is complementing core seat growth.
Most importantly, Salesforce's pipeline of future business served as an encouraging signal, according to a Wednesday note from Evercore ISI analyst Kirk Materne. 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. That marked 14% year-over-year growth and exceeded Wall Street's estimates of $33.4 billion.
After two quarters of 13% growth previously, Salesforce's cRPO acceleration is one of the "biggest highlights" of the report, Jefferies trading-desk analyst Jeffrey Favuzza wrote in a note.
The company has been signaling for organic revenue to reaccelerate in the back half of this calendar year. Washington said 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 third-quarter guidance calls for another quarter of 14% cRPO growth, according to Evercore's Materne.
The company raised full-year guidance to between $46.1 billion and $46.4 billion. Analysts were expecting $46.112 billion.