10-QPeriod: Q2 FY2027

Salesforce, Inc. Quarterly Report for Q2 Ended Jul 31, 2026

Filed August 27, 2026For Securities:CRM

Summary

Salesforce, Inc. reported strong revenue growth for the six months ended July 31, 2026, with total revenues reaching $22.48 billion, a 12% increase year-over-year. This growth was primarily driven by its subscription and support segment, which constitutes 95% of total revenue. The company also saw a significant increase in net income and diluted earnings per share, bolstered by substantial gains from strategic investments, particularly in Anthropic PBC. Despite a considerable increase in debt to fund strategic initiatives and share repurchases, Salesforce maintained a healthy operating income and strong cash flow from operations. The company is actively investing in AI and agentic technologies, evidenced by acquisitions like Qualified.com and pending acquisitions of Contentful and Fin, positioning it for future innovation. However, investors should note the substantial debt load and the ongoing legal proceedings, particularly the Backpage litigation, which present potential risks.

Key Highlights

  • 1Total revenues increased by 12% to $22.48 billion for the six months ended July 31, 2026.
  • 2Subscription and support revenue, the primary revenue driver, grew by 13% to $21.41 billion for the six months ended July 31, 2026.
  • 3Net income significantly increased to $5.63 billion for the six months ended July 31, 2026, up from $3.43 billion in the prior year period.
  • 4Diluted earnings per share surged to $6.67 for the six months ended July 31, 2026, compared to $3.55 in the prior year period, benefiting from strategic investment gains and share repurchases.
  • 5Cash provided by operating activities increased by 10% to $7.97 billion for the six months ended July 31, 2026.
  • 6Total remaining performance obligation, a key indicator of future revenue, stood at $66.3 billion as of July 31, 2026, an 11% increase year-over-year.
  • 7The company significantly increased its debt, with total noncurrent debt rising to $39.29 billion as of July 31, 2026, largely due to recent debt issuances.

Frequently Asked Questions

The substantial increase in net income and diluted EPS for the six months ended July 31, 2026, was primarily driven by significant gains from strategic investments, particularly an unrealized gain of $3.0 billion related to the investment in Anthropic PBC. Additionally, the company's accelerated share repurchase program, which reduced the number of outstanding shares, also contributed to the EPS growth.

Salesforce significantly increased its debt during the period. Noncurrent debt rose from $10.44 billion as of January 31, 2026, to $39.29 billion as of July 31, 2026. This increase is largely due to the issuance of $25.0 billion in Senior Notes and a new $6.0 billion term loan, which were used for strategic acquisitions, share repurchases, and to refinance existing debt.

Salesforce is heavily investing in AI and agentic technologies. This is evident in their focus on 'Agentforce Apps' and 'Data 360, Headless Platform, and Other' revenue segments, the acquisition of Qualified.com, and planned acquisitions of Contentful and Fin. The company views AI as a transformative technology that will enhance customer experiences and operational efficiency.

Yes, Salesforce is involved in ongoing legal proceedings, notably the Backpage litigation, where plaintiffs allege facilitation of sex trafficking through the company's CRM software. While the company believes it has strong defenses and that current matters are not expected to have a material adverse impact, such litigation carries inherent uncertainties and potential financial and reputational risks.