Salesforce Posts Record Quarter, Silencing Fears of AI Disruption

Salesforce reported record second-quarter results late Wednesday and raised its full-year revenue guidance, delivering the software industry's most closely watched rebuttal yet to a year of investor anxiety that generative-AI agents would erode demand for traditional enterprise software.

The company posted adjusted earnings of $5.90 a share on revenue of $11.35 billion for the quarter ended July 31, according to Salesforce's second-quarter fiscal 2027 earnings release, filed the same day with the Securities and Exchange Commission as an 8-K current report. Both figures beat Wall Street's consensus estimates, and the company's current remaining performance obligation, a closely tracked measure of contracted future revenue, accelerated to 14 percent year-over-year growth in constant currency.

Shares jumped roughly 13 to 14 percent in extended trading following the release, a sharp reversal for a stock that had been down more than 20 percent for the year through the close of regular trading Wednesday.

The numbers

Net income rose 87 percent from a year earlier to $3.53 billion, according to the release, while GAAP diluted earnings per share climbed 119 percent to $4.29. Free cash flow jumped 81 percent to $1.1 billion, well ahead of what analysts had penciled in. Subscription and support revenue, the core of Salesforce's business, rose 12 percent to $10.8 billion, a total that included a $440 million contribution from Informatica, the data-management company Salesforce acquired earlier this year.

Salesforce raised its full-year revenue guidance to a range of $46.1 billion to $46.4 billion, up from a prior forecast, and said the increase reflected $100 million of organic growth alongside an expected $200 million contribution from two pending acquisitions — Contentful, a content-management platform, and Fin, an AI customer-support company — that the company said it now expects to close during the current quarter. Salesforce first disclosed the Contentful deal in a definitive agreement announced in June. For the current quarter, the company guided to revenue of $11.42 billion to $11.5 billion.

Results also got a boost from outside the core business: Salesforce recorded a gain of more than $2.6 billion tied to its strategic investment portfolio, driven largely by the rising valuation of its stake in AI developer Anthropic, according to the company's disclosures and reporting on the results. Salesforce's operating discipline also improved: GAAP operating margin came in at 20.5 percent and non-GAAP operating margin at 34.1 percent, and the company said operating cash flow rose 71 percent to $1.3 billion. It returned $364 million to shareholders in dividends during the quarter and continued executing against a $25 billion accelerated share-repurchase program.

On the data side, Salesforce said its Data 360 product ingested 104 trillion records during the quarter, up 355 percent from a year earlier, including 82 trillion records processed through a "zero copy" method that pulls data from other systems without duplicating it — a figure the company said had grown more than sevenfold year over year. Salesforce also disclosed 7 billion "Agentic Work Units," its internal measure of AI-agent task volume across Agentforce and Slack, delivered to date, with 3.2 billion of those completed in the second quarter alone, a 97 percent increase from the first quarter.

How Salesforce got here

The quarter capped a turbulent year for Salesforce's stock. Shares fell from above $300 in 2025 to a multiyear low near $146 in June, a decline investors and analysts increasingly attributed to what has been dubbed on Wall Street the "SaaSpocalypse" — a fear that AI agents and coding assistants from rivals such as OpenAI and Anthropic would let companies bypass traditional software subscriptions altogether, building or buying cheaper AI-native tools instead of paying for seat-based licenses to platforms like Salesforce's customer-relationship-management suite.

Chief Executive Marc Benioff has spent much of the year pushing back publicly on that narrative, arguing that Salesforce's advantage lies not in any single AI model but in the customer data, workflows and governance controls that sit underneath its platform — infrastructure he has said any AI agent still needs to be useful inside a real business.

"We just delivered one of our best quarters ever, outperforming across every key metric," said Marc Benioff, Salesforce's chair and chief executive, in the earnings release. "AI is delivering value across every layer of our platform. We're seeing incredible demand for our AI and data products, with ARR about to cross $4 billion."

Robin Washington, Salesforce's president and chief financial and operating officer, struck a similar note, saying in the release that new annual order volume growth was "the strongest it's been in four years," which she said keeps the company on track for a reacceleration of organic revenue growth in the second half of the fiscal year.

Who is affected

The results carry weight beyond Salesforce's roughly 150,000 corporate customers. As one of the largest enterprise-software companies by market value, Salesforce is treated by investors as a bellwether for the broader business-software sector, and its stock move rippled into shares of other SaaS companies that have faced similar AI-disruption concerns this year. Salesforce said its Agentforce and Data 360 products, the AI and data tools at the center of its pitch to skeptical investors, reached nearly $3.9 billion in combined annual recurring revenue, up more than 210 percent from a year earlier, with Agentforce alone surpassing $1.5 billion in ARR.

The company also said bookings from its premium Agentforce packages more than doubled from the prior quarter and that Slack, the workplace messaging platform Salesforce owns, delivered its fastest quarterly order growth since Salesforce acquired it, with Slackbot users up more than 150 percent quarter over quarter. Enterprise customers now weighing whether to expand, renew or cut back on Salesforce contracts — and the software vendors competing for the same AI-agent budgets — are likely to read the results as evidence that large incumbents can still convert AI hype into paying usage.

Reaction

Coverage of the results framed them explicitly as a rebuttal to the disruption narrative that has weighed on the stock. SiliconANGLE's writeup described the quarter as Salesforce "scoffing" at fears the SaaS business model was becoming obsolete, noting that nine of the top ten AI companies are now Salesforce or Slack customers, with their combined spending up 435 percent. Benioff has been characteristically blunt about the skepticism directed at his company this year, telling investors in comments reported by the financial press before the earnings release that Wall Street's fears of AI killing Salesforce were "dead wrong," even as the stock had been down more than 25 percent for the year at the time.

Analysts had been raising price targets on the stock in the run-up to the report on early signs of improving Agentforce adoption, and the scale of Wednesday's beat gave the more skeptical corners of the analyst community reason to reconsider their caution, though some noted the strong results were flattered in part by the one-time Anthropic-related investment gain rather than core subscription growth alone. Rebecca Wettemann, an analyst at the research firm Valoir, told SiliconANGLE that Slack is emerging as a critical interface for AI agents inside companies, while cautioning that Salesforce still faces what she described as a potential "Agentforce versus Slack identity problem" that could confuse customers about which product to buy for which use case.

What happens next

Salesforce said it expects the Contentful and Fin acquisitions to close independently during the current quarter, pending regulatory approval, and that both have been folded into its updated full-year guidance. The company's $25 billion accelerated share-repurchase program is due for final settlement in October. Salesforce executives are scheduled to detail more of the AI strategy at an Investor Day held alongside its Dreamforce conference in San Francisco on September 16, and the company will host a product-adoption webinar on September 1 to discuss uptake of its latest AI release.

For now, the quarter gives Salesforce a data point to counter a narrative that has dogged its valuation for much of 2026, though the durability of the rebound will depend on whether Agentforce and Data 360 revenue keeps compounding at anything close to its current pace once easier comparisons and the one-time investment gain roll off in future quarters.