Salesforce Posts 10% Revenue Gain in Q2

Key Points

• Revenue (GAAP) rose 10% year over year to $10.2 billion in Q2 FY2026.

• Adjusted operating margin expanded to 34.3% in Q2 FY2026. This was the 10th consecutive quarterly increase in operating margin.

• AI and Data Cloud annual recurring revenue exceeded $1.2 billion in Q2 FY2026, up 120% year-over-year, but overall topline growth held steady at 10%.

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Salesforce (NYSE:CRM), provider of cloud-based customer relationship management software, reported its Q2 FY2026 earnings on Sept. 3, 2025. The period delivered $10.2 billion in revenue, a 10% year-over-year increase. Adjusted earnings per share landed at $2.91. Adjusted operating margin rose to 34.3%. This marked the 10th consecutive quarter of operating margin expansion.

While the business demonstrated robust efficiency and growing adoption of its AI and data-driven products, overall revenue growth stayed at the same pace as recent quarters. Management raised full-year FY26 revenue guidance and maintained guidance for operating cash flow, citing ongoing strength in its subscription businesses and the early success of artificial intelligence initiatives.

Source: Salesforce. Note: Fiscal 2026's second quarter ended July 31, 2026. Fiscal 2025's Q2 ended July 31, 2024.

Business Overview and Recent Strategic Focus

Salesforce operates a suite of software products delivered over the cloud, helping organizations manage customer relationships, sales, support, and marketing. Its platform integrates data from different sources, providing a unified view for customer engagement. Subscription and support services make up the majority of revenue.

In recent years, Salesforce has prioritized artificial intelligence and automation integration, launching products like Agentforce, an AI tool that deploys autonomous agents for sales and support tasks. The expansion of its Data Cloud, which connects and analyzes information across the customer journey, is a key pillar. The company also focuses on creating industry-specific solutions to serve sectors like healthcare, financial services, and public organizations, and maintains a strong partner ecosystem leveraging its AppExchange marketplace. Key success factors for Salesforce include driving adoption of AI capabilities, expanding within existing customer accounts, delivering efficient operations, and strengthening its position with targeted industry offerings.

Quarter in Review: Financial Results and Operational Highlights

The quarter saw revenue rise to $10.24 billion, which came in above the high end of company expectations and suggests stable customer demand. Subscription and support revenue grew 11% year over year (GAAP, Q2 FY2026). The fastest growth among major units came from Platform and Other, which saw revenue increase 16.7% year over year. Professional services, including consulting and implementation, noted a revenue decline of 3%.

Adjusted operating margin climbed to 34.3%, marking the 10th straight quarter of operating margin expansion. Non-GAAP earnings per share of $2.91 also topped internal guidance. This reflects cost discipline even while investing in research and development, especially for AI initiatives.

Salesforce’s push into artificial intelligence received further validation this quarter. Annual recurring revenue from Data Cloud and AI solutions surpassed $1.2 billion, up 120% year-over-year compared to Q2 FY2025 for Q2 FY2026. Over 12,500 Agentforce deals have closed since launch, with more than 6,000 converted to paid arrangements. Salesforce closed more than 60 deals greater than $1 million each that included both Data Cloud and AI features. Despite rapid growth in these areas, management noted that a large portion of this demand is coming from expansion within the company’s existing customer base, not from entirely new accounts.

On the bookings front, the current remaining performance obligation, or CRPO—a measure of near-term revenue under contract—grew 10% in constant currency, though not a sharp uptick. The largest enterprise deals again cut across multiple product lines, especially Platform and Service. Revamped industry-specific offerings helped the company secure notable wins in healthcare and public sector, mentioning firms like Pfizer and the U.S. Army as customers. Marketing and Commerce, which includes marketing automation tools and digital commerce platforms, saw only 4% constant currency growth, continuing a slower trend first observed in prior quarters.

Free cash flow for the quarter was $605 million, down nearly 20% year over year. Salesforce returned $2.6 billion to shareholders, mostly through share repurchases and $399 million in dividend payments. The board approved a $20 billion increase in the company’s authorized repurchase program, taking it to $50 billion in total.

This period did not see material one-time events impact the results directly, though the company’s pending $8 billion acquisition of data integration software provider Informatica remains open as of the end of Q1 FY2026 and is expected to close in fiscal 2027. Integration costs and the financial implications of this deal are likely to become relevant in future reporting periods.

Outlook and What’s Ahead

Salesforce raised the low end of its FY2026 GAAP revenue guidance to a new range of $41.1 billion–$41.3 billion, representing 8.5% to 9% year-over-year growth. Guidance for Q3 FY2026 is GAAP revenue of $10.24–$10.29 billion and non-GAAP earnings per share of $2.84–$2.86. Non-GAAP operating margin guidance also ticked up slightly to 34.1%. The company’s outlook assumes CRPO growth will remain slightly above 10 %. Forecasts for operating cash flow growth have also increased, now expected at approximately 12% to 13%.

Company leadership highlighted ongoing plans to expand sales capacity, push further into global and small- to mid-sized markets, and continue cross-selling new features to its existing customer base. Management reiterated its focus on increasing the share of AI-driven and industry-tailored revenue, though for now most of these AI sales are derived from current accounts. The expected closing and eventual integration of Informatica in the next fiscal year presents additional risks and opportunities to track in future quarters.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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Motley Fool Markets Team is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. The Motley Fool takes ultimate responsibility for the content of these articles. Motley Fool Markets Team cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool has positions in and recommends Pfizer and Salesforce. The Motley Fool has a disclosure policy.