Salesforce, Inc. (CRM.US) Q2 performance and guidance exceeded expectations; CEO refuted the "end of SaaS" theory. Stock rose 13% after hours.

On Wednesday after the U.S. stock market closed, Salesforce, Inc. (CRM.US) saw its stock price rise nearly 13%. This surge followed the company's announcement of better-than-expected second-quarter performance and guidance, as well as a deepened collaboration with AI company Anthropic PBC, demonstrating to investors its capability to secure a position in the AI wave. Performance and Guidance Exceed Expectations The financial report revealed that for the second quarter ending July 31, Salesforce, Inc. achieved a revenue of $11.3 billion, a year-on-year increase of 11%, meeting market expectations; adjusted earnings per share were $5.90, surpassing the market's general forecast of $3.27. The current remaining performance obligations (cRPO), an indicator of future sales, amounted to $33.5 billion, up 14% year-on-year; total remaining performance obligations reached $66.3 billion, up 11%. Salesforce, Inc. expects third-quarter revenue for the period ending in October to be approximately $11.5 billion, slightly above analysts' average expectations; current remaining performance obligations are projected to grow around 14%, higher than the analysts' average expectation of 13%. The company also raised its fiscal 2027 revenue guidance to between $46.1 billion and $46.4 billion, reflecting an 11% to 12% year-on-year growth. Salesforce, Inc. Chief Financial and Operating Officer Robin Washington stated in a statement that even without considering the impact of acquisitions, the company anticipates accelerated revenue growth in the second half of the year. She also noted that new order volume has reached its highest level in four years. Salesforce, Inc. European Revenue Maintains Double-Digit Year-on-Year Growth Agentforce Annualized Revenue Aiming for $1.5 Billion, Expanding Cooperation with Anthropic As a leader in the customer management software sector, the company has faced pressure to demonstrate its ability to maintain a competitive edge against AI companies and products. On Wednesday, Salesforce, Inc. stated that its AI tool Agentforce is designed to handle tasks without human intervention, and is expected to contribute approximately $1.5 billion in revenue this year, an increase from the $1.2 billion reported in the previous quarter. Data shows that in the second quarter, the annual recurring revenue (ARR) for Salesforce, Inc.'s core AI products, Agentforce and Data 360, together approached $3.9 billion, a year-on-year increase of over 210%. Salesforce, Inc. Chairman and CEO Marc Benioff remarked in the financial report, We have just delivered one of our best quarterly performances ever, with all key metrics performing exceptionally well. AI is creating value at every level of our platform. Demand for our AI and data products is strong, and ARR is about to exceed $4 billion. The company also announced an expansion of its collaboration with Claude's developer, Anthropic. Salesforce, Inc. will integrate its products into Claude, enabling sales personnel to access customer information and sales cycle data through the AI application. Salesforce, Inc. financial executive Mike Spencer stated in an interview that when customers access Salesforce, Inc. data through Claude, both parties will incur consumption bills, and this integration should help drive Salesforce, Inc. customers to upgrade to higher-tier subscription packages. Valoir analyst Rebecca Wettemann described the performance as "encouraging." Salesforce, Inc. not only needs to outperform expectations on data but also needs to break the narrative that AI is eroding its business. CEO Rebuts SaaS Apocalypse Theory During the earnings call following the report release, Benioff directly addressed the so-called SaaS apocalypse theory. He refuted skeptics who believe AI will lead to customer attrition or demands for steep price cuts. He pointed out that Salesforce, Inc.'s customer attrition rate is near historical lows, and contract terms are continuously improving. This absurd notion of a SaaS apocalypse, I think its time to put that to rest, Benioff stated. Earlier this year, software stocks, including Salesforce, Inc., faced a wave of selling due to market concerns about the impact of AI on traditional software businesses. Notably, Benioff is not the only software executive to actively counter market negativity during earnings calls recently. Leaders from companies such as ServiceNow and Oracle Corporation are also adopting increasingly proactive strategies to reshape market narratives. To enhance its AI customer service capabilities, Salesforce, Inc. announced in June this year the acquisition of AI startup Fin for $3.6 billion. This transaction is seen as a key move for the company to defend against competition from startups like Sierra, founded by Bret Taylor, former Co-CEO of Salesforce, Inc. and current chairman of OpenAI.