Salesforce Breaks Slump, AI Fears Fade Amid Q2 Strength
Salesforce's Q2 results have brought an end to its year-long slump, as the company's AI fears start to fade. The software giant reported a net revenue of $11.35 billion, beating consensus and topping all segments and regions.
The core segment, subscription and service, saw a 12% increase in revenue, while annual recurring revenue approached $40 billion with a 210% year-over-year growth. Agentic Work Units (AWUs), which measure agentic traffic, rose by 97% sequentially.
Margin was a significant strength, despite one-offs in Q2. Pre-tax gains on investments contributed billions to the bottom line, amplified by reduced share count and fiscal discipline. Adjusted net income grew by more than 100%, bringing adjusted earnings per share to $5.90, exceeding forecasts by over $2.60.
The company's cash from operations and free cash flow remain solid, sufficient to sustain growth while returning capital to shareholders. Salesforce remains on track with its aggressive share repurchase plans, with a 12.5% reduction in average share count at the end of the first fiscal half.