Salesforce Q2 Earnings Highlights:
Salesforce reported strong financial results for the second quarter, surpassing analysts’ expectations. The company posted an adjusted earnings per share (EPS) of $2.56, exceeding the estimated $2.35 and marking a 20.8% year-over-year increase. Revenue for the quarter came in at $9.33 billion, slightly above the expected $9.23 billion, representing an 8.4% year-over-year growth. Subscription and support revenue, a key segment for Salesforce, totaled $8.76 billion, surpassing the estimated $8.7 billion and reflecting a 9.5% increase compared to the previous year.
Q3 and FY25 Guidance:
Looking ahead, Salesforce provided guidance for the upcoming third quarter, expecting revenue between $9.31 billion and $9.36 billion, which would represent a 7% year-over-year growth, though slightly below the consensus estimate of $9.40 billion. For the full fiscal year 2025, Salesforce anticipates revenue in the range of $37.7 billion to $38.0 billion, reflecting an 8% to 9% year-over-year increase. The company also guided adjusted EPS between $10.03 and $10.11, with a non-GAAP operating margin projected at 32.8%. Operating cash flow growth for the year is expected to be between 23% and 25% year-over-year.
Operational Highlights:
Salesforce reported a non-GAAP operating margin of 33.7% for the quarter, an improvement of 210 basis points year-over-year, demonstrating the company’s focus on efficiency and profitability. The current remaining performance obligation (RPO), which represents future revenue under contract, stood at $26.5 billion, up 10% from the previous year. Operating cash flow for the quarter was $0.89 billion, reflecting a 10% year-over-year increase, while free cash flow was $0.76 billion, up 20% year-over-year. In terms of capital return, Salesforce repurchased $4.3 billion worth of its own shares and made $0.4 billion in dividend payments.
CEO Commentary:
Marc Benioff, Salesforce’s CEO, commented on the results, stating, “Salesforce delivered strong Q2 results across revenue, cash flow, and margins. Our focus on disciplined, profitable growth has led to record operating margins, and we are well-positioned to drive future success with our Agentforce AI platform and strategic investments in AI.” Benioff highlighted the company’s strategic initiatives, particularly in AI, as key drivers for future growth and success.
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