Second-quarter revenue rose 11%, ignoring currency moves, to $11.3bn (as expected). Growth was driven by a 11% increase in Subscription and Support, which more than offset a low-single-digit decline in the smaller Professional Services division.
Underlying operating profit rose 10% to $3.9bn ($3.8bn expected).
Free cash flow rose 81% to $1.1bn as cash generation improved significantly. Net debt, including lease liabilities, stood at $30.3bn at the end of the quarter.
The group returned $364mn to shareholders in dividends and continues to execute its $25bn share repurchase programme which is expected to complete in October 2026.
Third-quarter revenue is expected to be $11.4-11.5bn, while full-year revenue guidance was upgraded to $46.1-46.4bn.
The shares were up 13.0% in after-hours trading.
Our view
Salesforce gave investors a cleaner quarter and a little more confidence that AI is not about to pull the rug from under the business. Revenue was broadly in line, guidance moved higher, and Agentforce continues to build momentum. But the debate has shifted from whether AI is an immediate threat to whether it can drive genuine organic acceleration, and that remains unclear.
Salesforce is a cloud platform giant that helps businesses manage customer relationships, sales, service, marketing and commerce in one place. Over time, it has become deeply embedded in enterprise workflows, giving it strong customer relationships and a valuable base of data to build from. That matters because customers are more likely to adopt AI tools from platforms they already trust and use every day.
There are two main levers for growth. The first is deeper penetration of the existing customer base through better bundling, price increases and more effective use of Salesforce’s data assets. There is a clear link between annual recurring revenue per customer and the number of cloud products adopted. The strategic aim is to pull customers deeper into the ecosystem, making switching harder and creating more opportunities to sell additional products.
Artificial intelligence is the second lever. Agentforce lets customers build AI agents that analyse data, make decisions and act alongside human workers. Data Cloud helps bring fragmented data together, giving those AI tools a stronger foundation. Momentum is building, with Agentforce annual recurring revenue now above $1.5bn. But the revenue base is relatively small, and investors are waiting to see whether usage translates into faster and broader subscription growth.
Software stocks have been under sustained pressure, driven by fears that AI-native competitors could replicate parts of their services at a lower cost. Salesforce’s scale, integration and customer trust are meaningful advantages, and recent order trends help calm the worst of those fears. But parts of the legacy portfolio remain under pressure, while the seat-based pricing model is likely to face more scrutiny over time.
Cost discipline has materially improved cash flow in recent years, supporting buybacks, the dividend and selective acquisitions - none of which are guaranteed. The current $25bn buyback is meaningful, but a faster acquisition pace could make the balance between growth investment and shareholder returns harder to judge.
All in, Salesforce offers a strong product suite and deep ties with its customers. There’s low-hanging upside if software sentiment improves or AI starts to move the growth needle. But this is now a mature business, and the market still needs proof that AI can do more than soften disruption risks and start lifting organic growth.
Environmental, social and governance (ESG) risk
The technology industry is low risk in terms of ESG, though some segments are more exposed, like Electronic Components (environmental risks) and data monetisers (social risks). Business ethics tend to be a material risk within the tech sector, ranging from anti-competitive practices to intellectual property rights.
Historically, the sector has flown under the radar when it comes to regulatory oversight, but more recently, we’ve seen regulators keen to get involved given the high-profile of some of the “big tech” names. Other key risk drivers include labour relations, data privacy, product governance and resource use.
According to Sustainalytics, Salesforce’s management of material ESG issues is strong.
Salesforce’s nominating and corporate governance committee periodically reviews the company’s ESG initiatives, and its cybersecurity team conducts regular assessments and operates 24/7 for incident response. The company also conducts annual employee surveys, runs an apprenticeship program. There’s also an audit committee overseeing compliance and ethics, supported by a third-party hotline for anonymous reporting.
Salesforce key facts
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This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
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