CRM · Q2 2026 Earnings

Bullish

Salesforce

Reported September 3, 2025

30-second summary

30-second take: Revenue grew 10% YoY to $10.24B in Q2, beating the top end of the prior guide, with non-GAAP EPS of $2.91 ($0.13–0.15 above guide) and Data Cloud + AI ARR crossing $1.2B at +120% YoY. Management raised FY26 non-GAAP EPS, operating cash flow growth (to ~12–13% from ~10–11%), and free cash flow growth (to ~12–13% from ~9–10%) — a meaningful upgrade in cash conversion. The quieter story: FY26 GAAP EPS was cut by ~$0.14 at the midpoint and GAAP operating margin lowered 40bps to 21.2%, the cost of Informatica deal-related charges and continued AI investment.

Headline numbers

EPS

Q2 FY2026

$2.91

Revenue

Q2 FY2026

$10.24B

+10.0% YoY

Gross margin

Q2 FY2026

78.0%

Free cash flow

Q2 FY2026

$0.60B

Operating margin

Q2 FY2026

22.8%

Key financials

Q2 FY2026

Metric	Q2 FY2026	YoY	Q1 FY2026	QoQ
Revenue	$10.24B	+10.0%	$9.83B	+4.1%
EPS	$2.91	—	$2.58	+12.8%
Gross margin	78.0%	—	76.9%	+110bps
Operating margin	22.8%	—	19.8%	+300bps
Free cash flow	$0.60B	—	$6.30B	-90.4%

Guidance

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q2 FY2026	$10.11B to $10.16B	$10.236B	+$0.076B to +$0.126B above guide	Beat
Revenue YoY growth	Q2 FY2026	8% to 9% nominal	10% actual YoY	+1 to +2 pts above guide	Beat
GAAP EPS	Q2 FY2026	$1.80 to $1.82	$1.96	+$0.14 to +$0.16 above guide	Beat
Non-GAAP EPS	Q2 FY2026	$2.76 to $2.78	$2.91	+$0.13 to +$0.15 above guide	Beat

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
GAAP Operating Margin	FY2026	21.6%	21.2%	-0.4 pts	Lowered
Non-GAAP Operating Margin	FY2026	34.0%	34.1%	+0.1 pts	Raised
GAAP EPS	FY2026	$7.15 to $7.21	$6.99 to $7.03	-$0.16 to -$0.12 (midpoint -$0.14)	Lowered
Non-GAAP EPS	FY2026	$11.27 to $11.33	$11.33 to $11.37	+$0.04 at low end, +$0.04 at high end (midpoint +$0.04)	Raised
Operating Cash Flow growth	FY2026	Approximately 10% to 11%	Approximately 12% to 13%	+1.0 to +2.0 pts	Raised
Free Cash Flow growth	FY2026	Approximately 9% to 10%	Approximately 12% to 13%	+2.0 to +3.0 pts	Raised

Reaffirmed unchanged this quarter: Revenue ($41.1B to $41.3B), Revenue YoY growth (8.5% to 9% nominal, 8% constant currency)

Segment performance

Q2 FY2026

Segment	Q2 FY2026	YoY
Sales	$2.267B	+9.0%
Service	$2.458B	+9.0%
Platform and Other	$2.084B	+17.0%
Marketing and Commerce	$1.365B	+4.0%
Integration and Analytics	$1.516B	+13.0%
Subscription & Support Revenue	$9.7B	—
Subscription & Support Revenue Growth (YoY)	11% (9% CC)	—

Platform metrics

Q2 FY2026

Segment	Q2 FY2026
Current Remaining Performance Obligation (cRPO)	$29.4B
cRPO Growth (YoY)	11% (10% CC)
Data Cloud and AI Annual Recurring Revenue	$1.2B+
Data Cloud and AI ARR Growth (YoY)	120%
Agentforce Deals Closed	12,500+ (6,000+ paid)

Profitability

Q2 FY2026

Segment	Q2 FY2026
Non-GAAP Operating Margin	34.3%

Other KPIs

Q2 FY2026

Segment	Q2 FY2026	YoY
Americas	$6.736B	+9.0%
Europe	$2.429B	+7.0%
Asia Pacific	$1.071B	+11.0%

Management tone

Narrative arc: Pilot-to-platform (Q1 FY26) → Agentic enterprise as operating model (Q2 FY26).

The arrival framing is new. Last quarter Benioff claimed AgentForce leadership after six months; this quarter he declared the transformation complete and inevitable: "the agentic enterprise, the real manifestation of what AI was meant to be, well, that agentic enterprise has arrived." Combined with "I've never been more excited about anything in my entire career" — language that exceeds his cloud/mobile/social conviction marks — this is a confidence escalation that goes beyond product milestones into civilizational framing. The signal: management believes the secular tailwind is no longer a thesis to defend but a backdrop to operate against.

Data Cloud has been reframed from strategic capability to the strategic business. Q1's repeating phrase was "every AI transformation is a data transformation"; this quarter Benioff went further: "the data business is probably the most strategic and most important business for Salesforce going forward. And already it's a $7 billion business." Naming a $7B run-rate for a business that wasn't a P&L line a year ago, and elevating it above Sales/Service Cloud in stated importance, signals an internal capital and attention shift that will eventually surface in disclosure.

AgentForce moved from proof-of-concept to flywheel evidence. Q1 cited 4,000 paying customers and 30 reorders; this quarter the framing shifted to mix: "40% of our agent force new bookings this quarter came from existing customers extending their investment with Salesforce... how the flywheel is really working." Reorder rate is no longer the metric — expansion attach is. That's how management thinks about it once a product is past initial validation.

ITSM is being launched as a new core category, not partnered into. "It's an application area that we just haven't gone to before. But I'm very excited that next month... we're launching our own agentic IT service platform... It's agent first and it's Slack first." Salesforce hasn't entered a truly new application category in years; doing it agentic-first signals the company sees AgentForce as the wedge that makes greenfield expansion economic for the first time since the Slack acquisition.

Government posture shifted from steady-state customer base to expansion vector. With FedRAMP High certification and the Army committing to an agentic HR front door, Benioff's line — "in the 21st century, agents just aren't optional... They're mission critical" — positions public sector as accelerating, despite the company flagging public sector as "measured in spending" in the risk section. The internal contradiction tells you management sees the certification as the gating event that unlocks DOD penetration ahead of broader public-sector budget recovery.

Recurring themes management leaned on this quarter:

Agentic enterprise as fundamental business transformation and industry paradigm shiftData Cloud emergence as most strategic business with exponential growth (140% customer growth, 326% rows accessed growth)Proven AgentForce adoption with measurable ROI: 6,000+ paid deals, 60% increase in pilot-to-production conversion, 40% bookings from existing customersSalesforce as customer zero internally validating all agentic capabilities (1.5M support conversations, 77% resolution rate, sales agent qualifying leads)Portfolio-wide agentic transformation across all products (Sales, Service, Field Service, Commerce, Marketing, Tableau, ITSM)Disciplined margin expansion continuing (10 consecutive quarters) while investing aggressively in data and AI adoption

Risks management surfaced:

Geographic weakness in UK and Japan markets constraining growthWeakness in marketing and commerce product lines with slower growth in exploration baseRetail and consumer goods sector and public sector remaining measured in spendingInformatica acquisition closing timing uncertainty creating guidance variability and no contribution factored inForeign exchange headwinds previously greater than current $300M tailwind assumption

Q&A highlights

Cash Rangan · Goldman Sachs

Is SaaS defensible against disruption from AI-native apps and custom-built AI? When will Data Cloud and AgentForce inflect the top line?

Management characterized the transformation as extension rather than elimination of SaaS. AgentForce has driven 1.5M agent conversations and 1.5M human conversations in nine months. AI accuracy at 90%+ with proper architecture enables human-agent collaboration. Revenue acceleration depends on deepening adoption across customer base; early days in adoption cycle with confidence in AI monetization strategy.

1.5 million agent conversations in nine months1.5 million human conversations in same periodAI accuracy in 90s range with proper architecture40% of Q2 revenue growth from existing customers increasing consumption

Keith Weiss · Morgan Stanley

What technology or implementation catalyst drove 60% increase in pilot-to-production conversion? What does a production AgentForce deal look like versus pilots?

Key product innovations enabled conversion: determinism in agents (avoiding 'prompt doom loop'), specialized UI treatments, and AgentForce Command Center for observability at scale. Real examples: DirectTV moved pilot to production in 2 months leveraging Data Cloud and 10,000 agents; Falabella achieved 25% call volume reduction, 10 NPS point increase, 70% shift to WhatsApp, and nearly tripled business size post-pilot.

60% increase in pilot-to-production conversionDirectTV: pilot to production in 2 months with 10,000 agentsFalabella: 25% call volume reduction, NPS +10 points, 70% digital shift to WhatsAppFalabella: nearly tripled business post-pilot, planning to double again

Brent Thill · Jefferies

Does $20B buyback addition signal leaning harder into buyback, or does this allow balance with M&A? What's the strategy between buyback and acquisitions?

Management employs 'trinity' framework: buybacks, dividends, and strategic inorganic innovation. Salesforce generated $15B cash flow this year with expectation of larger next year. Balanced approach with disciplined M&A framework. Key acquisitions: Regrello (agentic supply chain) and BluePrints, plus major pending Informatica acquisition. Every AI transformation is fundamentally a data transformation requiring AI foundation of Data Cloud + MuleSoft + Informatica.

$15 billion cash flow generated this year$20 billion additional buyback authorizationNine months of due diligence on Regrello before acquisitionRegrello customer Dell automated 20,000 users in supply chain

Kirk Matern · Evercore

With AI handling more work, is mid-market becoming more durable growth source? What's the create-and-close dynamic you mentioned?

Salesforce operates six-segment strategy: Enterprise (Fortune 100), SMB (0-200 employees), Mid-market (200-3,000 employees), General Business (1,000-10,000), Government, and ISVs. AI is making SMB look like mid-market; mid-market growing significantly faster than expected. AE capacity increased 20% year-over-year; investing more in low/mid-market than high-end. Create-and-close deals drove 40% of Q2 ACV from existing Data Cloud and AgentForce customers with shorter cycles.

20% AE capacity increase year-over-year40% of Q2 ACV from create-and-close existing customer dealsPipeline growth in high teens; big deals approaching 20% growthSix-segment market strategy (up from historical five)

Mark Murphy · JP Morgan

Why has Salesforce reduced support headcount by ~40% while others hold flat? What firepower does redeploying support roles to sales create for growth?

Salesforce differentiates by coupling software transformation with organizational restructuring—the agentic enterprise requires both. Three reasons others lag: timing, FUD/misinformation in market, and fear of organizational change. Customers (Adeko, Schneider Electric, European banks) are rebuilding entire business models and product strategies around agentic capabilities. Company is restructuring itself, removing poor performers and fundamentally reshaping how it operates, not just building software but changing company structure.

~40% reduction in support headcountRestructuring combines software and organizational transformationCustomer examples: Adeko (France), Schneider Electric (20-year customer), European banks rethinking entire business modelsFocus on change management alongside technology deployment

Answers to last quarter's watch list

cRPO acceleration above 12%. cRPO grew 11% nominal (10% CC) to $29.4B — slightly above the ~10% guide but not above the prior 12% print. Management explicitly said cRPO "will continue to be impacted by the cumulative effect of the measured sales performance that started in Q2 fiscal year 23," meaning the FY23-cohort drag has not been retired.

Continue monitoring

AgentForce paying-customer count and reorder rate. Paid deals reached 6,000+ (from ~4,000 in Q1) and total deals 12,500+ (from 8,000) — paid deal count up ~50% QoQ. Reorder rate as a specific metric was replaced with the more telling "40% of new bookings from existing customers" framing, which is a cleaner expansion signal.

Resolved positively

Data Cloud + AI ARR holding >$1B and >100% growth. $1.2B+ at +120% YoY, holding the line management drew last quarter on a larger base. Benioff separately quantified the broader "data business" at $7B with Data Cloud customer growth of 140% and rows-accessed growth of 326%.

Resolved positively

AE capacity build to +22% by year-end. AE capacity is +20% YoY this quarter, on track for the +22% year-end target. Mid-market is growing faster than expected and investment is skewing low/mid-market, but management is holding the FY non-GAAP margin target at 34.1% (slightly raised), so productivity is keeping pace with capacity.

Continue monitoring

Marketing & Commerce stabilization. +4% YoY versus +3.3% in Q1 — marginal improvement but still flagged in the risk commentary as a soft spot ("weakness in marketing and commerce product lines"). Two consecutive quarters below 5% raises real questions about the cloud's strategic role.

Resolved negatively

Informatica deal close timeline and 2-year accretion commitment. Management now expects close in Q4 FY26 or early FY27 — versus the prior "early FY27 (February 2026)" framing this is essentially in-line, possibly slightly earlier. Informatica is explicitly excluded from FY26 guidance "given the variability and potential closing timing." No change to the 2-year accretion commitment was disclosed. The $0.14 FY26 GAAP EPS cut and 40bps GAAP margin cut are partly deal-related charges.

Continue monitoring

What to watch into next quarter

Whether GAAP margin cuts continue or stabilize. GAAP operating margin guide was cut 40bps to 21.2% this quarter on Informatica-related charges and AI investment. Watch the FY26 GAAP margin guide next quarter — a second consecutive cut would signal cost discipline is slipping rather than absorbing one-time items.

Marketing & Commerce growth crossing 5%. Three consecutive quarters at +3–4% YoY makes this a structural issue, not cyclical. Watch the Q3 print: a fourth quarter under 5% should trigger questions about strategic positioning or a portfolio decision.

Data Cloud + AI ARR cadence above $1.5B at >100% growth. $1.0B → $1.2B+ in one quarter at +120%. Watch whether disclosure continues at this granularity and whether the growth rate compresses meaningfully — a deceleration below 100% on a $1.5B+ base would weaken the flywheel narrative.

Agentforce paid deal count above 8,000. Paid deals grew ~50% QoQ to 6,000+. Another +50% QoQ would confirm production-readiness has cleared the bottleneck management identified; a sharp deceleration would suggest the pilot-to-production conversion gain was a one-time step.

cRPO retiring the FY23-cohort drag commentary. Management is still explicitly invoking the FY23 measured-sales hangover as a cRPO headwind. The first quarter management drops that language is the first hard signal new bookings are outrunning the legacy drag — watch the Q3 cRPO commentary closely.

Informatica close timing slipping past early FY27. Already pushed from "early FY27 (Feb 2026)" to "Q4 FY26 or early FY27." Further slippage would invite scrutiny on the $8B price and the 2-year accretion path, especially given the GAAP EPS cut already absorbing deal-related costs.

Sources

Salesforce Q2 FY26 Press Release (Form 8-K Exhibit 99.1), filed September 3, 2025 — https://www.sec.gov/Archives/edgar/data/1108524/000110852425000083/crm-q2fy26xexhibit991.htm
Salesforce Q2 FY26 earnings call commentary (management prepared remarks and Q&A)
Tapebrief Q1 FY26 CRM brief — prior quarter watch list and guidance baseline

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