Salesforce delivered exceptional financial performance in Q2 FY26, with total revenue growing 10% year-over-year to $10.2 billion, or 9% in constant currency. This growth was primarily driven by subscription and support revenue, which increased 11% year-over-year to $9.7 billion (9% in constant currency), representing 95% of total revenue and highlighting the strength of Salesforce’s recurring revenue model.

Operating performance showed remarkable improvement, with GAAP operating margin expanding significantly to 22.8% from 19.1% in the prior year, marking the tenth consecutive quarter of operating margin expansion. Non-GAAP operating margin also improved to 34.3% from 33.7%, demonstrating the company’s continued focus on operational efficiency while investing in growth initiatives.

Net income performance was outstanding, with GAAP net income increasing 32% to $1.89 billion, translating to diluted earnings per share of $1.96 compared to $1.47 in Q2 FY25. Non-GAAP diluted earnings per share reached $2.91, up from $2.56 in the prior year, reflecting strong operational leverage and margin expansion.

Current remaining performance obligation (cRPO) grew 11% year-over-year to $29.4 billion (10% in constant currency), providing strong visibility into future revenue streams. This metric represents contracted revenue that has not yet been recognized and indicates healthy customer demand and renewal rates across the platform.

While free cash flow decreased 20% to $605 million in Q2, this was primarily due to seasonal billing patterns typical of Salesforce’s business model. The company remains on track to deliver approximately $15 billion in operating cash flow for the full fiscal year, demonstrating the underlying strength of its cash generation capabilities.

Sales Cloud revenue reached $2.27 billion, growing 9% year-over-year (8% constant currency). The segment continued to benefit from strong demand for AI-powered sales automation and the integration of Agentforce capabilities, helping customers transform their sales processes with intelligent automation.

Service Cloud generated $2.46 billion in revenue, also growing 9% year-over-year (8% constant currency). The platform’s AI-driven customer service capabilities, enhanced by Agentforce, are helping organizations deliver superior customer experiences while reducing operational costs. Service Cloud was featured in all Q2 Top 10 deals, highlighting its strategic importance to large enterprise customers.

Platform and Other showed the strongest growth at 17% year-over-year (16% constant currency), reaching $2.08 billion. This growth was driven by exceptional performance in Data Cloud and AI offerings, which collectively achieved over $1.2 billion in annual recurring revenue, up 120% year-over-year. Platform was also included in all Q2 Top 10 deals, demonstrating its critical role in enterprise digital transformation.

Marketing and Commerce revenue grew 4% year-over-year (3% constant currency) to $1.37 billion. While growth was more modest, the segment continued to benefit from increased digital marketing spend and the integration of AI capabilities to improve campaign effectiveness and personalization.

Integration and Analytics revenue increased 13% year-over-year (12% constant currency) to $1.52 billion, driven by growing demand for data integration and analytics capabilities as organizations seek to unlock insights from their expanding data ecosystems.

Salesforce’s AI and Data Cloud initiatives represent the company’s most significant growth drivers, positioning it as a leader in the enterprise AI transformation:

Agentforce Platform

• Deal Volume: Over 12,500 deals closed since Agentforce launch, with more than 6,000 being paid deals
• Customer Expansion: Over 40% of Data Cloud and Agentforce Q2 bookings came from existing customer expansion
• Large Deals: Closed over 60 deals greater than $1 million that include both Data Cloud and AI
• Internal Adoption: On help.salesforce.com, Agentforce has handled over 1.4 million customer service requests

Agentforce represents a paradigm shift in enterprise AI, enabling organizations to become “agentic enterprises” where humans and AI agents work collaboratively. The platform seamlessly integrates with Customer 360 applications, Data Cloud, and Einstein AI to create what Salesforce calls a “limitless workforce.”

Data Cloud Growth

Data Cloud and AI annual recurring revenue exceeded $1.2 billion, representing 120% year-over-year growth. This exceptional performance reflects the increasing recognition among enterprises that unified data platforms are essential for AI success. Data Cloud serves as the foundation for Agentforce and other AI capabilities, providing the data infrastructure necessary for intelligent automation.

The platform’s success is demonstrated by its inclusion in major enterprise deals, with Data Cloud being a component in over 60 deals exceeding $1 million in Q2. This indicates that large organizations are making strategic investments in data unification as a prerequisite for AI transformation.

Customer Success Stories

Major customers including Pfizer, Marriott, and the U.S. Army are transforming into agentic enterprises using Salesforce’s AI platform. These organizations are reimagining workflows, accelerating productivity, and delivering superior customer success through the integration of human expertise with AI agent capabilities.

Americas revenue reached $6.74 billion, growing 9% year-over-year. The region, which represents approximately 66% of total revenue, showed strong performance driven by continued enterprise digital transformation initiatives and AI adoption. Large enterprise customers are increasingly investing in comprehensive Salesforce platforms to support their agentic enterprise transformations.

Europe generated $2.43 billion in revenue, with reported growth of 11% year-over-year and 7% in constant currency. The region continues to show strong momentum despite macroeconomic uncertainties, with European enterprises increasingly recognizing the competitive advantages of AI-powered customer relationship management and data unification.

Asia Pacific delivered exceptional performance with $1.07 billion in revenue, growing 14% year-over-year (11% constant currency). This region represents the highest growth rate geographically, reflecting the rapid digital transformation occurring across Asian markets and the strong demand for cloud-based enterprise solutions.

The geographic distribution demonstrates Salesforce’s successful global expansion strategy, with strong growth across all major regions. The company’s ability to localize its offerings while maintaining platform consistency has enabled it to capture market share in diverse economic environments.

Salesforce achieved remarkable profitability improvements in Q2 FY26, demonstrating the operational leverage inherent in its business model:

• GAAP Operating Margin: Expanded to 22.8% from 19.1% in the prior year, representing a 370 basis point improvement and marking the tenth consecutive quarter of operating margin expansion
• Non-GAAP Operating Margin: Improved to 34.3% from 33.7%, demonstrating continued operational efficiency gains
• Gross Profit Margin: Remained strong at 78% of revenue, consistent with the prior year period
• Operating Leverage: Revenue growth of 10% drove significantly higher operating income growth, showcasing the scalability of the platform

The margin expansion was achieved despite continued investments in research and development, which increased to $1.48 billion (14% of revenue) compared to $1.35 billion in Q2 FY25. These investments are focused on AI and Agentforce development, positioning Salesforce for long-term competitive advantages in the enterprise AI market.

Sales and marketing expenses were $3.44 billion (34% of revenue), up from $3.22 billion in the prior year, reflecting strategic investments in market expansion and the introduction of Agentforce to enterprise customers. Despite these increased investments, the company achieved improved overall profitability through operational efficiency gains.

General and administrative expenses remained well-controlled at $734 million (7% of revenue), demonstrating disciplined cost management while supporting business growth. The company’s restructuring initiatives continue to drive organizational efficiency and margin improvement.

Stock-based compensation expense totaled $793 million in Q2, consistent with the company’s strategy of using equity compensation to attract and retain top talent in the competitive technology sector. This investment in human capital is essential for maintaining Salesforce’s innovation leadership in AI and cloud computing.

Salesforce maintains a robust financial position that provides significant flexibility for strategic investments and shareholder returns:

• Cash and Marketable Securities: $15.4 billion in cash, cash equivalents, and marketable securities as of July 31, 2025
• Total Assets: $97.6 billion, reflecting the company’s substantial asset base and strong market position
• Stockholders’ Equity: $61.3 billion, demonstrating a strong balance sheet foundation
• Long-term Debt: $8.4 billion, providing financial leverage while maintaining conservative debt levels
• Unearned Revenue: $16.6 billion, representing future revenue from contracted but not yet delivered services

The company’s cash generation capabilities remain exceptional, with operating cash flow expected to reach approximately $15 billion for the full fiscal year, representing growth of 12-13% year-over-year. This strong cash flow profile supports both organic growth investments and significant shareholder returns.

In Q2 FY26, Salesforce returned $2.6 billion to shareholders, including $2.2 billion in share repurchases and $399 million in dividends. The company announced a significant $20 billion increase to its existing share repurchase program, bringing the total authorized amount to $50 billion, demonstrating confidence in its long-term prospects and commitment to returning capital to shareholders.

The strong balance sheet provides Salesforce with strategic flexibility to pursue acquisitions that enhance its platform capabilities, particularly in AI and data analytics. The company’s financial strength also enables it to make substantial investments in research and development to maintain its competitive position in the rapidly evolving enterprise software market.

Working capital management remains efficient, with the company effectively managing the seasonal nature of its billing cycles while maintaining strong collection performance. The substantial unearned revenue balance provides visibility into future cash flows and revenue recognition.

Salesforce’s strategic initiatives center on establishing leadership in the enterprise AI transformation through its comprehensive agentic enterprise platform:

Agentforce Revolution

• Digital Labor Platform: Agentforce represents the first digital labor solution for enterprises, seamlessly integrating with Customer 360 applications
• Trusted AI Foundation: Built on Einstein AI and Data Cloud to ensure secure, reliable, and compliant AI operations
• Limitless Workforce: Enables organizations to scale their capabilities by combining human expertise with AI agent productivity
• Cross-Platform Integration: Works across all Salesforce clouds and can integrate with third-party systems

Product Innovation Pipeline

Salesforce continues its tradition of major product releases three times per year, with the Summer 2025 release introducing significant enhancements across the platform. These innovations result from substantial research and development investments and are designed to help customers drive cost savings, boost efficiency, and build trust.

The company’s innovation strategy focuses on making AI accessible and practical for businesses of all sizes, with particular emphasis on industry-specific solutions that address unique sector challenges and opportunities.

Customer Success Transformation

Salesforce is helping customers transform into “agentic enterprises” where AI agents and humans collaborate to reimagine workflows and accelerate productivity. This transformation is evidenced by major customers like Pfizer, Marriott, and the U.S. Army implementing comprehensive AI-powered solutions.

Platform Ecosystem Expansion

The company continues to expand its ecosystem through strategic partnerships and integrations, ensuring that Salesforce platforms can serve as the central nervous system for enterprise digital transformation. This includes enhanced connectivity with third-party applications and industry-specific solutions.

Environmental, Social, and Governance (ESG) initiatives remain a priority, with the company publishing regular stakeholder impact reports that detail progress on sustainability, equality, and community impact goals. These initiatives are increasingly important to enterprise customers who are incorporating ESG considerations into their vendor selection processes.

Salesforce provided strong guidance for Q3 FY26 and raised its full-year outlook, reflecting confidence in continued momentum:

Q3 FY26 Guidance

• Revenue expected to be $10.24 – $10.29 billion, representing 8-9% year-over-year growth and 8% in constant currency
• GAAP diluted earnings per share of $1.60 – $1.62
• Non-GAAP diluted earnings per share of $2.84 – $2.86
• Current remaining performance obligation growth slightly above 10% (slightly above 9% in constant currency)

Full-Year FY26 Guidance

• Revenue guidance raised to $41.1 – $41.3 billion, representing 8.5-9% year-over-year growth and approximately 8% in constant currency
• Subscription & support revenue growth of approximately 9.5% (approximately 9% in constant currency)
• GAAP operating margin of 21.2%
• Non-GAAP operating margin raised to 34.1%
• Operating cash flow growth raised to approximately 12-13% year-over-year
• GAAP diluted earnings per share of $6.99 – $7.03
• Non-GAAP diluted earnings per share of $11.33 – $11.37

The guidance reflects management’s confidence in the company’s ability to deliver strong financial performance while continuing to invest in growth initiatives. The raised operating cash flow guidance to approximately 12-13% growth demonstrates the underlying strength of the business model and cash generation capabilities.

The outlook assumes continued strong performance in AI and Data Cloud offerings, with Agentforce adoption expected to accelerate as more enterprises embark on their agentic transformation journeys. The company expects to benefit from the increasing recognition that AI-powered customer relationship management is essential for competitive advantage.

Management expressed confidence that fiscal 2026 will be a record year with nearly $15 billion in operating cash flow, highlighting the exceptional cash generation capabilities of the Salesforce platform and subscription model.