Core Insights - Salesforce Inc. reported stronger-than-expected fiscal second-quarter results, with revenue reaching $10.2 billion and earnings per share at $2.91, but issued a cautious revenue and earnings guidance for the third quarter that fell below Wall Street forecasts [1][3] - The company experienced an 11% growth in current remaining performance obligations (cRPO), driven by contributions from Sales and Service Cloud and a significant increase in Agentforce customers [2][8] - Despite the quarterly performance, management maintained its fiscal 2026 revenue guidance at $41.1–$41.3 billion and EPS at $11.33–$11.37, indicating a cautious growth outlook [3] Financial Performance - Revenue for the quarter was $10.2 billion, exceeding consensus estimates, while annual recurring revenue from Data Cloud and AI products reached $1.2 billion [1][2] - Operating margins were reported at 34.3%, with a constant-currency revenue growth of 9% [5] - The company expanded its share repurchase program by $20 billion, reflecting a commitment to capital returns [3] Analyst Ratings and Insights - Needham analyst Scott Berg reiterated a Buy rating with a price target of $400, noting a 20% year-over-year increase in sales headcount as a potential future growth driver [4] - Canaccord Genuity's David Hynes maintained a Buy rating but reduced his price target from $350 to $300, describing the quarter as "steady, not spectacular" [5] - KeyBanc's Jackson Ader reiterated an Overweight rating while lowering his price target from $440 to $400, highlighting strong subscription growth and the upcoming Dreamforce event as a potential catalyst [6] Growth Drivers - Salesforce's Data Cloud and Agentforce saw a robust 120% year-over-year growth in annual recurring revenue, with a 50% sequential growth in paid users for Agentforce [5][6] - The number of enterprises piloting Agentforce increased significantly from 20 to 120, with a 60% quarter-over-quarter conversion rate [8] - Analysts anticipate an AI-driven acceleration in sales, with Bank of America Securities' Brad Sills maintaining a Buy rating and a price target of $325 [7][8]

Investment Rating - The investment rating for Salesforce Inc. is "Buy" with a 12-month price target of $340, indicating an upside potential of 22.7% from the current price of $277.19 [8][6]. Core Insights - Salesforce reported a Subscription Revenue growth of 8.3% YoY, exceeding the FactSet Consensus of 7.4%. The Operating Margin (OpM) was 32.3%, slightly below the consensus of 32.5% [1]. - The company raised its FY26 Total Revenue guidance to 8.6% YoY in USD and 8% in constant currency (CC), compared to previous guidance of 7.4% and 7.8% [1]. - Key growth drivers include a strong performance in the Data Cloud and AI segment, which reached $1 billion in Annual Recurring Revenue (ARR), growing 120% YoY [1]. - The company closed 8,000 Agentforce deals, including 4,000 paid deals, indicating robust demand [1]. - The Platform and Other segment, which includes Data Cloud and Slack, showed accelerating momentum with a 14% YoY growth [1]. - Current Remaining Performance Obligations (cRPO) grew by 12.1% YoY, with the highest net new dollars added since F1Q23 [1]. - EMEA region showed stabilization with a 9% YoY growth [1]. Summary by Sections Financial Performance - Subscription Revenue for F1Q26 was $9,255 million, with a YoY growth of 8.3% [9]. - Non-GAAP Operating Income was reported at $3,179 million, with an Operating Margin of 32.6% [9]. - Free Cash Flow Margin reached 64.0%, indicating strong cash generation capabilities [9]. Guidance and Expectations - For F2Q26, Salesforce expects Revenue growth of 8.7% in USD and 7.5% in CC, above the consensus of 7.4% [1]. - The company anticipates a Subscription Revenue growth of 9.5% in both USD and CC for FY26, up from previous estimates [1]. Market Dynamics - The report highlights the importance of understanding the Create-and-Close business performance, which reflects the health of small and medium-sized businesses (SMBs) [2]. - The report also emphasizes the need to assess the broader spending environment and demand backdrop, particularly in relation to Data Cloud and Agentforce deals [2].