Salesforce reported better-than-expected earnings and revenue for its fiscal second quarter on Wednesday but issued cautious guidance for the next quarter, sending its stock down 4% in after-hours trading. The company’s performance highlights ongoing challenges even as it continues to expand its software offerings and pursue strategic acquisitions.
For the quarter, Salesforce posted adjusted earnings per share of $2.91, surpassing analyst expectations of $2.78. Revenue came in at $10.24 billion, beating the $10.14 billion consensus and marking a 10% increase from $9.33 billion a year earlier. Net income rose to $1.89 billion, or $1.96 per share, up from $1.43 billion, or $1.47 per share, in the same period last year.
Despite the strong quarterly results, management issued guidance for the fiscal third quarter calling for $2.84 to $2.86 in adjusted earnings per share on $10.24 billion to $10.29 billion in revenue, slightly below or in line with Wall Street expectations. Salesforce also maintained its full-year revenue forecast, targeting $41.1 billion to $41.3 billion, while raising its adjusted earnings outlook to $11.33 to $11.37 per share, above previous projections.
Company executives cited challenges in selling marketing and commerce products, as well as slower growth in its expiration base. “Revenue growth has been stuck in the single digits since mid-2024,” said Robin Washington, president and chief operating and financial officer, noting that Salesforce has yet to benefit from the artificial intelligence boom as strongly as some tech peers.
CEO and co-founder Marc Benioff pushed back against skepticism from social media and analysts, saying, “To hear some of this nonsense that’s out there in social media or in other places, and people say the craziest things, but it’s not grounded in any customer truth.”
Salesforce has also been taking steps to bolster its growth, including a planned $8 billion acquisition of Informatica, a data management software company, and the rollout of its Agentforce AI tool, which has already secured over 6,000 paid deals. Additionally, the company announced a $20 billion increase to its share buyback program, bringing the total to $50 billion.
Analysts note that Salesforce’s enterprise value to free cash flow ratio has fallen to a 10-year low amid concerns about AI-related disruption, though Jefferies maintains a buy rating on the stock. Despite these pressures, Salesforce’s continued investment in AI and cloud software underscores its focus on long-term growth and competitive positioning within the SaaS market.
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