Salesforce delivers record Q2 FY2026 results with $10.2bn revenue, expands margins, and raises FY26 outlook

ByInvestment Club

Overview

Salesforce reported strong second quarter fiscal 2026 results, exceeding guidance across all metrics. Revenue grew double digits with broad-based strength across subscription and support, while operating margins expanded for the tenth consecutive quarter. The company emphasized accelerating adoption of its Data Cloud and Agentforce AI platform, with ARR surpassing $1.2bn, reflecting rapid enterprise transformation into AI-driven “agentic enterprises”.

“We delivered an outstanding quarter to close out the first half of the year, with strong performance across revenue, margin, cash flow, and cRPO — and we remain on track for fiscal 2026 to be a record year with nearly $15 billion in operating cash flow. These results reflect the success of our customers — like Pfizer, Marriott, and the U.S. Army — who are transforming into agentic enterprises, where humans and AI agents work side by side to reimagine workflows, accelerate productivity, and deliver customer success”, said Marc Benioff, Chair and CEO, Salesforce.

Q2 FY2026 vs. Q2 FY2025:

  • Total revenue was $10.2bn (+10% YoY and +9% CC), with broad-based subscription and support growth.
    • Subscription & support revenue rose to $9.7bn (+11% YoY), reflecting expansion across core clouds and AI adoption.
  • Current remaining performance obligation (cRPO) reached $29.4bn (+11% YoY), supporting strong visibility.
  • GAAP operating margin expanded to 22.8% from 19.1%, while non-GAAP operating margin improved to 34.3% from 33.7%.
  • GAAP net income increased to $1.89bn ($1.96 per diluted share), up from $1.43bn ($1.47 per share) a year ago.
  • Non-GAAP net income rose to $2.80bn ($2.91 per diluted share), up from $2.50bn ($2.56 per share).
  • Operating cash flow was $740m (down from $892m a year ago), with free cash flow at $605m.
  • Salesforce returned $2.6bn to shareholders, including $2.2bn in share repurchases and $399m in dividends. Authorized repurchase program increased by $20bn to $50bn.
  • Data Cloud and AI ARR surpassed $1.2bn (+120% YoY).
  • Agentforce adoption accelerated, with 12,500 deals closed since launch, more than 6,000 of which are paid.
  • Over 40% of Data Cloud and Agentforce Q2 bookings came from existing customers, demonstrating strong upsell momentum.
  • Closed more than 60 $1m+ deals including both Data Cloud and AI, with Service and Platform present in all top 10 deals.
  • Agentforce handled over 1.4m requests on help.salesforce.com during the quarter.

For Q3 FY2026, Salesforce expects revenue of $10.24bn-$10.29bn (+8-9% YoY), GAAP EPS of $1.60-$1.62, and non-GAAP EPS of $2.84-$2.86. For FY2026, guidance was raised: revenue of $41.1bn-$41.3bn (+8.5-9% YoY), GAAP operating margin of 21.2%, and non-GAAP margin of 34.1%. Free cash flow is projected to grow 12-13% year-over-year to nearly $15bn. Management highlighted sustained momentum in AI and Data Cloud adoption as central to Salesforce’s long-term growth strategy.

Salesforce shares dropped nearly -5% in the session following the release of Q2 results, despite the company once again beating Wall Street’s main estimates. The decline was driven by investor disappointment with the revised Q3 outlook, which overshadowed the stronger-than-expected performance. Technically, the stock fell further below the 50-day SMA ($256.34), confirming its position in a bearish zone, while the 200-day SMA ($289.51) remains well above current levels as a distant resistance. The RSI sits at 43.75, in neutral territory, suggesting that downside pressure could persist in the medium term. Year-to-date, Salesforce is down more than -26%, continuing a clear downward trajectory despite consistently exceeding earnings expectations earlier in the year.

Source: TradingView

Author: Ionuț-Adrian Lazar

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