Salesforce shares jumped 18% in Thursday trading after the company reported fiscal second-quarter results and guidance that exceeded Wall Street expectations [1]. Adjusted earnings per share came in at $5.90, significantly above the $3.27 expected by analysts, while revenue reached $11.35 billion, slightly surpassing the $11.32 billion consensus [1]. Net income soared to $3.53 billion, or $4.29 per share, marking an 87% increase from $1.89 billion, or $1.96 per share, a year earlier [1].
A major contributor to these results was a $2.6 billion gain from Salesforce's strategic investment in artificial intelligence startup Anthropic, which was recently valued at $965 billion following a funding round in May [1]. Salesforce's free cash flow also surged 81% to $1.10 billion, well above the $643.2 million expected by StreetAccount [1]. The company highlighted that other tech giants, including Alphabet and Microsoft, have also reported gains from their investments in Anthropic [1].
Looking ahead, Salesforce provided fiscal third-quarter guidance of $3.42 to $3.44 in adjusted earnings per share and revenue between $11.42 billion and $11.50 billion, both above analyst expectations [1]. For the full year, Salesforce now anticipates revenue of $46.1 billion to $46.4 billion, implying 11% growth at the midpoint, compared to the previous guidance of $45.9 billion to $46.2 billion [1].
The company also announced a new plugin for Anthropic's Claude AI that can compose emails, provide information, and update records for salespeople via chat [1]. During the quarter, Salesforce secured a $1.6 billion contract with the U.S. Department of Veterans Affairs and revealed plans to acquire customer service startup Fin for $3.6 billion, expecting the deal to close ahead of schedule in the fiscal third quarter [1]. Annualized revenue from Agentforce AI products topped $1.5 billion, up 240% year over year, though the company noted 'headwinds and volatility' in its integration and analytics software segment [1].
Salesforce reported $33.5 billion in current remaining performance obligation, exceeding analyst expectations of $33.22 billion [1]. Despite the strong results, Salesforce shares had been down 22% year to date as of Wednesday's close, compared to a 12% gain for the S&P 500, reflecting ongoing investor debate about the impact of generative AI on traditional software companies [1].
CONCLUSION
Salesforce delivered a robust quarter, driven by strong AI product growth and a significant gain from its Anthropic investment, resulting in an 18% share price surge. The company raised its guidance for the coming quarters and highlighted major new contracts and product innovations. Despite prior share price weakness, these results signal renewed investor confidence in Salesforce's AI strategy and growth outlook.