Salesforce NYSE: CRM reported fiscal 2027 second-quarter revenue of $11.35 billion, up 11% from a year earlier and above the high end of its constant-currency guidance, while highlighting growing demand for its AI products and raising its full-year revenue outlook.
Chief Operating and Financial Officer Robin Washington said subscription and support revenue totaled $10.82 billion, increasing 12% year over year on a reported basis and 11% in constant currency. Current remaining performance obligations, or CRPO, reached $33.5 billion, up 14% in constant currency and one percentage point ahead of the company’s guidance.
Salesforce generated $1.1 billion in free cash flow during the quarter, up 81% from a year earlier. Its non-GAAP operating margin was 34.1%, while GAAP operating margin was 20.5%.
AI Products Drive Bookings and Usage
Chair, CEO and Co-founder Marc Benioff pushed back against concerns that generative AI could weaken demand for traditional software applications, referring to the debate as the “SaaSpocalypse.” He said Salesforce’s net new annual contract value growth was its strongest in four years, attrition was near its lowest level, and contract terms improved across new business and renewals.
Washington said Agentforce annual recurring revenue reached $1.5 billion, while the company’s AI and data ARR was nearing $4 billion. The number of accounts with agents in production grew 70% sequentially, according to Benioff.
Customers generated 3.2 billion Agentforce work units during the quarter, a 97% increase from the prior quarter, Washington said. She added that bookings from Agentforce 1 Edition and Agentforce for apps more than doubled sequentially.
Miguel Milano, Salesforce’s president and chief operating officer, said the company added 2,000 paying customers in production for Agentforce, up 70% quarter over quarter. He said about half of Agentforce bookings came from customers replenishing their usage credits.
Milano also said Salesforce is offering customers multiple pricing approaches, including per-user, per-agent, consumption-based and outcome-based arrangements. He said customers beginning an “agentic journey” with Salesforce have, on average, reached about twice the company’s annual contract value, with the potential to reach three to four times that level.
- Slackbot reached 1 million active users five months after launch, with users up 150% sequentially.
- Upgrades to premium Slack editions tripled following the Slackbot launch.
- Salesforce’s internal help agent handled more than 5 million customer conversations, resolving 64% autonomously.
- Slackbot generated 8.1 million hours of annualized productivity gains for Salesforce employees, more than double the prior quarter.
Claudeforce Partnership With Anthropic
Before the earnings call, Benioff and Anthropic CEO Dario Amodei announced Claudeforce, a product combining Anthropic’s Claude AI model and Cowork interface with Salesforce data, applications, workflows and governance controls.
Benioff said the offering is designed to create a personalized interface that can analyze and act on information within Salesforce. He described it as part of an “enterprise harness” that includes data, applications and business semantics, agents, and user interfaces.
Amodei said Anthropic has used Salesforce internally and that the combined product could help enterprises use Claude with information managed in Salesforce. In one example, he described asking Claude for information about major sales accounts and their risks, with the underlying account data sourced from Salesforce.
Milano said Salesforce expects to make Claudeforce generally available in September and plans for its sales organization to demonstrate the product at Dreamforce. He said customers will need to upgrade to the company’s premium editions to access the offering.
Benioff said Salesforce will work with Anthropic’s sales organization to bring Claudeforce to customers. He also said Salesforce intends to expand access to its capabilities through other interfaces, including Slack, Claude, ChatGPT and Microsoft Teams.
Customer and Product Updates
Benioff cited expansions in AI investments by Deutsche Telekom, FIFA, NTT Data and Cisco. He also said Salesforce completed a multibillion-dollar contract expansion with the U.S. Army. The Army Human Resources Command expects to run as many as 55 million Agentforce conversations per month, he said.
The company said Agentforce IT Service, launched in November, has gained more than 450 customers, including NYU Langone Health and McAfee. Benioff also said Agentforce Life Sciences has more than 140 customers, including all five of the largest pharmaceutical companies, while Agentforce Operations is being used by companies including Kellogg’s and Dell.
During the call, Ohalo CEO David Friedberg said his company adopted Salesforce after deciding that AI coding tools could help it customize workflows but would not replace the need for a secure CRM, communications platform and other core systems. Friedberg said an employee used Claude and Cursor alongside Salesforce personnel to establish the company’s CRM system in less than a month.
Raised Fiscal 2027 Outlook
Salesforce raised its fiscal 2027 revenue guidance by $300 million in constant currency. The increase includes a $100 million boost tied to organic performance in Agentforce, Data 360 and Slack, as well as an expected $200 million contribution from the pending acquisitions of Contentful and Fin.
The company now expects fiscal 2027 revenue of $46.1 billion to $46.4 billion. Washington said the outlook includes a $100 million foreign-exchange headwind compared with prior guidance. Salesforce expects subscription and support revenue growth of slightly above 12% on a reported basis and slightly below 12% in constant currency.
Salesforce maintained its outlook for a non-GAAP operating margin of approximately 34.3% and expects GAAP operating margin of approximately 20.1%. It continues to forecast operating cash flow and free cash flow growth of roughly 4% to 5% for the year.
For the fiscal third quarter, Salesforce forecast revenue of $11.42 billion to $11.5 billion, representing approximately 11% to 12% growth in constant currency. The company expects CRPO growth of about 14% in constant currency and said that outlook does not include incremental contributions from Contentful and Fin because those transactions had not yet closed.
About Salesforce (NYSE:CRM)
Salesforce, founded in 1999 and headquartered in San Francisco, is a global provider of cloud-based software focused on customer relationship management (CRM) and enterprise applications. The company popularized the software-as-a-service (SaaS) model for CRM and has built a broad portfolio of products designed to help organizations manage sales, service, marketing, commerce and analytics through a unified, cloud-first platform.
Core offerings include Sales Cloud for sales automation, Service Cloud for customer support, Marketing Cloud for digital marketing and engagement, and Commerce Cloud for e-commerce.
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