CRM software giant Salesforce (NYSE: CRM) reported Q2 CY2025 results exceeding the market’s revenue expectations, with sales up 9.8% year on year to $10.24 billion. The company expects next quarter’s revenue to be around $10.27 billion, close to analysts’ estimates. Its non-GAAP profit of $2.91 per share was 4.7% above analysts’ consensus estimates.

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StockStory’s Take

Salesforce’s second-quarter results outpaced Wall Street expectations on both revenue and non-GAAP profitability, but the market reacted negatively amid concerns about future growth rates. Management pointed to robust deal activity in AI-powered offerings, including substantial expansion among existing customers, as a core driver of the quarter. CEO Marc Benioff highlighted a significant shift toward what he referred to as the "agentic enterprise," emphasizing rapid adoption of AI agents across sales, service, and data products. Despite strong operating margin expansion and notable large customer wins, investor reaction suggests skepticism about the sustainability of these trends.

Looking ahead, Salesforce’s updated guidance is underpinned by expectations for continued momentum in its AI and data cloud products, as well as ongoing expansion in the small and mid-market segments. Management emphasized upcoming product launches and the scaling of agentic capabilities as critical to driving further adoption. CFO Robin Washington noted, “We are reallocating resources and ruthlessly prioritizing our investments to accelerate data and AI adoption and drive further growth.” The company is also betting on increased customer usage of its consumption-based models and flexible pricing to support its revenue trajectory.

Key Insights from Management’s Remarks

Management attributed the quarter’s performance to rapid uptake of its AI agent solutions, robust execution in mid-market and small business segments, and expansion into new product categories.

• AI agent adoption acceleration: Salesforce reported a 60% quarter-over-quarter increase in customers moving from pilot to production with its AgentForce platform, highlighting a growing appetite for AI-powered automation in sales and customer service. Management cited examples like DIRECTV and Falabella quickly expanding their use cases and demonstrating measurable efficiency gains.

• Data Cloud as growth engine: The Data Cloud business saw a 140% year-over-year increase in customers, with over half of the Fortune 500 now leveraging the platform. Management described it as the “heart and soul” of the company’s AI strategy, enabling more accurate and actionable insights for both agents and human users.

• Mid-market and SMB momentum: Salesforce saw notable strength in its small and mid-sized business segments, attributing this to AI making these customers more competitive and able to scale quickly. Leadership described a deliberate organizational shift to invest more resources in these faster-growing segments, with new packaging and sales strategies tailored for their needs.

• New product category expansion: The company announced an upcoming entry into IT service management (ITSM), launching a Slack-integrated, AI-powered platform aimed at democratizing access to IT automation. Management believes this product could address a much broader market than traditional ITSM solutions.

• Strategic M&A activity: Recent acquisitions, such as Convergence AI, Bluebirds, and Regrello, were highlighted as part of Salesforce’s effort to accelerate innovation and expand its agentic and data capabilities. The pending Informatica deal is positioned as key to building an “AI foundation” with Data Cloud and MuleSoft.

Drivers of Future Performance

Salesforce expects AI and data-driven product adoption, new product launches, and strategic investments to shape revenue and margin performance over the next year.

• AI and Data Cloud momentum: Management believes that continued rapid adoption of AgentForce and Data Cloud will be the primary engines of growth, as more customers integrate AI agents into core workflows. Leadership cited strong existing customer expansion and successful pilot-to-production conversions as supporting factors.

• Shift to consumption-based models: The company is rolling out flexible payment options and usage-based pricing, aiming to lower barriers to adoption and encourage experimentation. CFO Robin Washington described these changes as central to capturing deeper customer value and driving recurring revenue.

• Macro and segment risks: While the technology, communications, and media segments are performing well, management acknowledged measured growth in retail, consumer goods, and public sector verticals. Geographic variability remains, with strength in the U.S. and parts of Europe but more caution in the UK and Japan. A slower pipeline for marketing and commerce products also tempers overall growth expectations.

Catalysts in Upcoming Quarters

In the coming quarters, our team will be watching (1) adoption rates and revenue contribution from new agentic products like the ITSM platform; (2) evidence of sustained expansion in small and mid-sized customer segments; and (3) progress on integrating acquired technologies such as Regrello and Informatica. The impact of flexible consumption-based pricing and broader macroeconomic trends will also be key indicators for Salesforce’s execution.

Salesforce currently trades at $242.24, down from $256.50 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).

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