Salesforce stock jumped 14% in extended trading on Wednesday following the release of fiscal second-quarter results that exceeded Wall Street forecasts on multiple fronts.
The cloud software company reported revenue growth of 11% year-over-year for the quarter ended July 31, reaching levels above consensus expectations. Net income climbed 87% to $3.53 billion, or $4.29 per share, compared with $1.89 billion, or $1.96 per share in the prior-year period. A significant portion of the earnings beat stemmed from a $2.6 billion gain recognized on strategic investments, primarily related to Salesforce’s stake in artificial intelligence startup Anthropic, which had raised funding valuing it at $965 billion in May. Free cash flow showed particularly strong performance, surging 81% to $1.10 billion, substantially exceeding the StreetAccount consensus estimate of $643.2 million. Other major technology firms including Alphabet and Microsoft have similarly reported gains from their Anthropic investments in recent weeks.
Looking ahead, Salesforce guided for fiscal third-quarter revenue between $11.42 billion and $11.50 billion, positioning above LSEG consensus expectations of $11.41 billion. The company raised its full-year revenue guidance to a range of $46.1 billion to $46.4 billion, implying 11% growth at the midpoint, slightly above LSEG consensus of $46.11 billion and higher than prior guidance of $45.9 billion to $46.2 billion.
Operational momentum extended beyond financial metrics. Annualized revenue from Agentforce AI products exceeded $1.5 billion, representing 240% year-over-year growth, though the expansion rate moderated from the previous quarter’s over 200% pace. Current remaining performance obligation reached $33.5 billion, surpassing StreetAccount consensus of $33.22 billion. During the quarter, Salesforce announced a $1.6 billion contract with the U.S. Department of Veterans Affairs and plans to acquire customer service startup Fin for $3.6 billion. The company also unveiled Claudeforce, a new plugin for Anthropic’s Claude that enables salespeople to compose emails and update records through chat.
Despite the strong quarterly showing, Salesforce shares remained down 22% year-to-date as of Wednesday’s close, significantly trailing the S&P 500’s 12% gain over the same period, reflecting ongoing investor uncertainty about generative artificial intelligence’s implications for traditional software vendors.
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