CRM · Q2 FY2027
Salesforce, Inc. Q2 FY2027 earnings analysis
By SageNoodle ResearchNeutral
| Metric | Actual | Estimate | Result |
|---|---|---|---|
| Revenue | $11.35B | $10.24B (yr ago) | Beat |
| EPS | $4.29 | $1.96 (yr ago) | Beat |
| Free Cash Flow | $1.10B | $0.60B (yr ago) | Beat |
| Gross Margin | 76.7% | 78.1% (yr ago) | Miss |
| Operating Margin | 20.5% | 22.8% (yr ago) | Miss |
What changed
Revenue increased 10.8% year over year to $11.35 billion, while EPS more than doubled to $4.29 and free cash flow rose to $1.10 billion. The quality of the EPS increase is less clear because operating margin contracted 2.3 percentage points and gross margin fell 1.4 points. Net debt also reached $30.98 billion, up $0.64 billion sequentially and $32.91 billion from a net-cash position a year earlier.
Impact on the investment thesis
There was no prior fair value to revise. We initiate fair value at $280 per share: the quarter supports the cash-generation thesis, but margin compression, lower ROIC and substantially higher leverage prevent a more aggressive valuation.