EPS of $1.96 increased by 33.1% from previous year
Gross margin of 78.1%
Net income of 1.89B
"N/A" - N/A
Salesforce Inc (FOO.F) QQ2 2026 Results: Revenue Growth, Solid Margin Expansion, and a Robust Balance Sheet in a Cloud CRM Market
Executive Summary
Salesforce Inc. reported QQ2 2026 results with solid top-line momentum and a strong balance sheet. Revenue reached USD 10.236 billion, up 9.8% year over year and 4.1% quarter over quarter, driven by continued demand for its cloud-based CRM suite and expanding analytics and integration capabilities. The company delivered gross profit of USD 7.994 billion, yielding a gross margin of approximately 78.1%, while operating income stood at USD 2.332 billion (operating margin ≈ 22.8%). Net income was USD 1.887 billion, translating to earnings per share of USD 1.97 (diluted USD 1.96). Free cash flow amounted to USD 605 million, and net cash provided by operating activities was USD 740 million, underscoring healthy cash generation amid working capital timing effects.
The balance sheet remains remarkably strong, with total assets of USD 97.6 billion and total stockholders’ equity of USD 61.3 billion. The company carries a net cash position (net debt of negative USD 7.6 billion), supported by substantial cash and short-term investments (USD 15.37 billion combined). Deferred revenue sits at USD 16.56 billion, indicating durable customer commitments and revenue recognized over multiple periods. Cash flow was helped by non-cash items such as stock-based compensation (USD 793 million) and depreciation & amortization (USD 817 million), but was offset by a sizable working capital outflow of roughly USD 3.02 billion, reflecting timing in receivables, payables, and other current assets and liabilities.
Looking ahead, management commentary (where disclosed) suggests a continued focus on expanding high-value platform use, AI-enabled capabilities across the CRM stack, and cross-sell opportunities across Sales Cloud, Service Cloud, Marketing, and Tableau/MuleSoft/Slack. While formal forward guidance is not provided in the dataset, the revenue growth trajectory and margin profile position Salesforce to sustain earnings quality, supported by a strong cash-generating engine. Investors should monitor platform adoption metrics, AI monetization progress, and operating efficiency improvements that could lift margins further while maintaining a healthy investment pace in R&D and go-to-market initiatives.
Cash flow and balance sheet highlights:
- Net cash provided by operating activities: USD 0.74 billion
- Free cash flow: USD 0.605 billion
- Cash and cash equivalents: USD 10.365 billion; Cash and short-term investments: USD 15.372 billion; Total liquidity substantial
- Net debt: USD -7.564 billion (net cash position)
- Deferred revenue: USD 16.556 billion (long-duration contractual obligations)
- Total assets: USD 97.6 billion; Total liabilities: USD 36.245 billion; Stockholders’ equity: USD 61.328 billion
- Share repurchases: USD -2.225 billion; Common stock issued: USD 0.232 billion; Dividends paid: USD 0.399 billion; Net financing activity negative USD 2.503 billion
- Major expense line items: R&D USD 1.481 billion; SG&A USD 4.177 billion; Sales & Marketing USD 3.443 billion; D&A USD 0.817 billion
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
10.24B
9.77%
4.14%
Gross Profit
7.99B
11.55%
5.68%
Operating Income
2.33B
30.79%
20.08%
Net Income
1.89B
32.05%
22.45%
EPS
1.97
33.11%
22.36%
Key Financial Ratios
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Transcript data not provided in the dataset. As a result, thematic highlights and management quotes from the QQ2 2026 earnings call could not be extracted. If transcript material becomes available, the highlights would typically cover themes such as: strategy execution on cross-sell within the Customer 360 platform, AI-enabled product enhancements (Einstein/AI features across Sales, Service, and Analytics), progress on Slack integration and user adoption, guidance on revenue mix (subscription vs. usage-based), and comments on margin discipline and efficiency initiatives. In the absence of transcript content, investors should rely on the disclosed quarterly results and any published management commentary for quantitative cues on catalysts and risk.
N/A
— N/A
N/A
— N/A
Forward Guidance
Forward guidance is not explicitly provided in the dataset. Based on the reported quarterly results and the broader cloud software environment, investors could consider the following framework: a continued multi-year revenue growth trajectory anchored by recurring software subscriptions, with potential for margin expansion as the company scales and improves operating efficiency. Key catalysts may include deeper monetization of AI-enabled features, greater penetration of Slack within enterprise workflows, and stronger cross-sell across the Salesforce Cloud portfolio (Sales Cloud, Service Cloud, Marketing, Commerce, Tableau, MuleSoft). Potential risks include macro headwinds impacting large enterprise IT spend, competitive pressure from peers, and execution risks in integrating and monetizing a broad product suite. Monitoring points: (1) gross and operating margins progression, (2) contribution from AI-driven products and cross-sell velocity, (3) cash conversion cycle and working capital dynamics, (4) share buyback activity and capital allocation signals, and (5) any updated guidance or long-term operating targets by management.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
FOO.F Focus
78.10%
N/A
N/A
N/A
307.F
51.10%
11.80%
1.86%
121.88%
MSF.F
68.70%
45.50%
7.96%
32.58%
NVD.F
75.10%
62.10%
28.50%
42.88%
SAP.DE
72.80%
23.50%
2.13%
60.95%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Quantitatively, QQ2 2026 shows solid revenue growth (YoY +9.8%) with healthy gross margins (~78%) and positive earnings contribution, alongside a net cash position and meaningful free cash flow. Qualitatively, the key drivers of Salesforce’s value lie in its multi-product platform, cross-sell opportunities, and AI-enabled enhancements that can increase customer lifetime value and reduce churn. The absence of explicit forward guidance in the dataset suggests a cautious stance toward near-term forecasting, but the balance sheet strength and cash generation support an optimistic longer-term thesis provided growth in core CRM and analytics continues. Investors should monitor: (1) the trajectory of AI-driven monetization and cross-sell effectiveness; (2) incremental margin improvements and operating expense discipline; (3) changes in deferred revenue and working capital dynamics; (4) progress in Slack integration and Tableau/MuleSoft adoption. If these catalysts materialize, Salesforce could sustain mid-to-high single-digit revenue growth with expanding margins and robust FCF yield; downside risks include a slower-than-expected IT spend cycle and competitive pressures that could compress margins or cap growth.
Key Investment Factors
Growth Potential
Large and expanding total addressable market within CRM, analytics, and integration. Ongoing cross-sell across Sales Cloud, Service Cloud, Marketing, Commerce, Tableau, and MuleSoft, combined with Slack's integration into enterprise workflows, supports durable revenue growth and higher lifetime value per customer.
Profitability Risk
Key risks include macro-level IT spending volatility, potential customer concentration in large enterprises, competition from incumbent and emerging CRM/ERP vendors, and the need to sustain operating leverage amid continued investments in R&D and go-to-market initiatives. A high level of deferred revenue indicates long-term commitments but requires ongoing renewal to avoid revenue attrition.
Financial Position
Strong liquidity with a net cash position (net debt negative USD 7.56 billion) and sizable cash/short-term investments (USD 15.37 billion). Balance sheet benefits from durable subscription revenue, but goodwill/intangible assets are substantial (USD 55.11 billion), which could pose impairment risk if growth trends deteriorate. Free cash flow generation remains positive (USD 605 million) despite working capital headwinds.
SWOT Analysis
Strengths
Large, diversified product portfolio (Sales Cloud, Service Cloud, Marketing, Commerce, Tableau, MuleSoft, Slack) supporting high installed-base revenue.
Healthy gross margin around 78% and robust EBITDA contribution.
Strong balance sheet with substantial liquidity and a net cash position.
Durable, high-visibility revenue driven by subscription-based ARR and long-term contracts; substantial deferred revenue base.
Positive earnings power evidenced by net income of USD 1.887B and an EPS of USD 1.96–1.97.
Weaknesses
Operating cash flow modest relative to net income due to working capital outflows (change in working capital ~USD -3.02B).