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Salesforce crushes Q2 estimates, lifts guidance, rejects ‘SaaSpocalypse’ fears

Salesforce smashed Q2 estimates, with adjusted EPS of $5.90 and revenue up 11% to $11.35B, while CEO Benioff rejected ‘SaaSpocalypse’ fears. Shares jumped 13% in late trading.

AI News Feed · 2026-08-27 17:43

Net income surged 87% to $3.53 billion, up from $1.89 billion a year earlier. Free cash flow jumped 81% to $1.10 billion, ahead of the projected $643.2 million. The results were aided by a $2.6 billion gain from Salesforce’s strategic investment in Anthropic PBC, an artificial intelligence startup that reached a $965 billion valuation after a funding round in May.

For the current quarter, Salesforce guided to adjusted earnings of $3.42 to $3.44 per share and revenue of $11.42 billion to $11.5 billion, both above analyst consensus. The company also raised its full-year fiscal 2027 revenue outlook to $46.1 billion to $46.4 billion, implying growth of about 11% at the midpoint. Analysts had projected $46.1 billion.

Chief Executive Marc Benioff dismissed the so-called “SaaSpocalypse” narrative as “nonsense” from the start. He said nine of the top 10 AI companies now use Salesforce and its Slack collaboration platform, with combined spending up 435% from a year earlier. “This is not the SaaSpocalypse,” Benioff insisted. “We’ve been hearing about this for the last two quarters, these dire predictions about the end of software and how the models eat everything, but none of them have come true for us.” The stock nevertheless remains down 22% year to date amid investor concerns that powerful AI models could reduce the need for traditional software subscriptions.

Benioff argued that AI models need the customer data, business context and workflows inside Salesforce. The company expanded its partnership with Anthropic by announcing a new plugin for Claude called “Claudeforce,” which enables the model to create emails on behalf of salespeople using information from Salesforce and Slack. “Salesforce is first and foremost in the data business,” he said.

Valoir analyst Rebecca Wettemann said Slack is emerging as a key interface for AI agents. “These agents need somewhere to live, and for Slack-native companies, Slack is the ideal place,” she said. However, she added that Salesforce now has a bit of an “Agentforce vs Slack” identity problem, which could result in customer confusion if unresolved. Agentforce is Salesforce’s native AI agent development platform, which generated $1.5 billion in annualized revenue, up 240% year over year.

Salesforce also disclosed a $1.6 billion contract with the U.S. Department of Veterans Affairs and announced plans to acquire customer service startup Fin for $3.6 billion. That deal should close in the current quarter.