Salesforce scoffs at SaaSpocalypse fears with a crushing earnings beat
Shares of Salesforce Inc. jumped more than 13% in late trading after the customer relationship management software provider delivered strong second-quarter earnings and revenue and issued guidance that exceeded Wall Street’s expectations.
The company reported adjusted earnings of $5.90 per share, crushing the Street’s target of just $3.27 per share. Revenue rose 11% from the same period one year earlier to $11.35 billion, ahead of the $11.32 billion analyst forecast. All told, its net income jumped 87% to $3.53 billion at the end of the quarter, up from just $1.89 billion one year earlier.
Salesforce also gained more than $2.6 billion due to its strategic investment in the artificial intelligence startup Anthropic PBC. In May, that company announced it has raised equity funding that lifted its valuation to a stunning $965 billion. Salesforce was one of the main investors in that round. The company’s free cash flow also spiked, jumping 81% to $1.10 billion, well ahead of Wall Street’s projection of $643.2 million.
Looking at the current quarter, Salesforce said it sees earnings of between $3.42 to $3.44 per share, with revenue expected to be somewhere between $11.42 billion and $11.5 billion. Those numbers are both better than expected, with Wall Street modeling third-quarter earnings of just $3.38 per share on $11.41 billion in sales. The strong numbers and optimistic outlook also prompted Salesforce to lift its full-year guidance. It said it’s now targeting fiscal 2027 revenue of between $46.1 billion and $46.4 billion, which would imply growth of around 11% at the midpoint of that range. That’s up from its prior guidance of $45.9 billion to $46.2 billion in sales. Wall Street is projecting total revenue of $46.1 billion for the full year.
