Salesforce reported financial results for the fiscal second quarter that exceeded Wall Street expectations, driving an 18% jump in the company’s stock price during Thursday trading. The cloud software vendor posted quarterly revenue growth of 11% compared with the prior year, with the quarter ending on July 31. Net income reached $3.53 billion, or $4.29 per share, representing an 87% increase from the year-earlier period’s $1.89 billion, or $1.96 per share.
A significant portion of the earnings growth came from investment gains tied to the company’s stake in artificial intelligence startup Anthropic. Salesforce reported a $2.6 billion gain from strategic investments, reflecting Anthropic’s valuation at $965 billion following an equity funding round completed in May. The company also posted free cash flow of $1.10 billion, up 81% year-over-year and substantially exceeding analyst consensus expectations of $643.2 million. Similar investment gains from Anthropic holdings were noted by Alphabet and Microsoft during recent reporting periods.
Looking ahead, Salesforce provided guidance indicating adjusted earnings per share of $3.42 to $3.44 for the fiscal third quarter, with projected revenue of $11.42 billion to $11.50 billion. For the full year, the company raised its revenue forecast to $46.1 billion to $46.4 billion, implying 11% growth at the midpoint and slightly above analyst consensus. The company also announced a new plugin for Anthropic’s Claude artificial intelligence model designed to help salespeople compose emails and update records through chat functionality.
During the quarter, Salesforce signed a $1.6 billion contract with the U.S. Department of Veterans Affairs and announced plans to acquire customer service startup Fin for $3.6 billion. The company’s Agentforce AI products generated annualized revenue of $1.5 billion, representing 240% year-over-year growth. Chief Operating and Financial Officer Robin Washington noted some challenges in selling licenses for integration and analytics software. Salesforce’s leadership addressed investor concerns about generative artificial intelligence disrupting the traditional software industry, with co-founder and CEO Marc Benioff stating that dire predictions about AI’s threat to software companies have not materialized.
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