Salesforce’s Q2 Results Squash 'SaaSpocalypse' Fears: On Track for H2 Organic Revenue Reacceleration

by

Shares of Salesforce Inc (NYSE: CRM) rallied in early trading on Thursday, after the company reported upbeat second-quarter results.

Here are some key analyst takeaways:

  • BTIG analyst Allan Verkhovski reiterated a Buy rating, while raising the price target from $255 to $300.
  • DA Davidson analyst Gil Luria reiterated a Neutral rating, while lifting the price target from $175 to $200.
  • Guggenheim Securities analyst John DiFucci reiterated a Buy rating, while raising the price target from $228 to $270.
  • Needham analyst Scott Berg reaffirmed a Buy rating and price target of $400.
  • Cantor Fitzgerald analyst Matthew VanVliet reiterated an Overweight rating and price target of $250.
BTIG: Salesforce delivered "clean" results for the fiscal second quarter, Verkhovski said in a note. He highlighted:

  • Constant currency revenue beat of $76 million
  • Accelerating cRPO (current remaining performance obligation) growth
  • Strongest NNAOV (net new average order value) growth in four years
  • Attrition at near historic lows
This was "a narrative-changing quarter," as strong financial results were paired with "a clearer message that the company is well-positioned and still in the early innings of benefiting from AI," the analyst wrote. The results were accompanied by a $100 million increase in organic revenue guidance for fiscal 2027, he further stated.

DA Davidson: Salesforce's results modestly exceeded expectations, with total revenue of $11.345 billion above consensus of $11.326 billion, Luria said. Although the company posted 11% year-on-year revenue growth in constant currency terms, this was 6.4% excluding Informatica contributions, representing a deceleration from 8.7% in the prior quarter, he added.

Management raised its full-year total revenue guidance to $46.1-$46.4 billion, from its previous projection of $45.9-$46.2 billion, which implies around 11% growth, the analyst stated. He further noted shares climbed due to:

  • The company's earnings release
  • The launch of "Claudeforce" through an expanded partnership with Anthropic
  • Usage metrics suggesting that Salesforce is benefiting from the rising adoption of its AI offerings
Guggenheim Securities: Salesforce's results "went a long way" in dispelling SaaSpocalypse concerns (fear of AI and autonomous AI agents threatening the traditional Software-as-a-Service model), DiFucci said. The company not only exceeded most estimates for the quarter but also raised its annual guidance by more than the beat, he added.

Constant currency cRPO growth of 14% year-on-year came in higher than consensus of 13%, driven by strong bookings and near record-low attrition, the analyst stated. NNAOV growth was the strongest in four years, keeping the company "on track for second half organic revenue reacceleration," he further wrote.

Needham: Salesforce reported revenue of $11.345 billion and non-GAAP earnings of $5.90 per share, above Needham's estimates of $11.301 billion and $3.26 per share, respectively, Berg said. RPO came in at $66.3 billion, representing 11% year-on-year growth, he added.

"We view Salesforce's expanded Anthropic partnership and launch of Claudeforce as a meaningful counterpoint to broader 'SaaSpocalypse' concerns," the analyst wrote. Management raised its revenue guidance for fiscal 2027 to $46.1-$46.4 billion, implying 11.4% growth at the midpoint, he further stated.

Cantor Fitzgerald: Salesforce's second-quarter results "help quell" concerns around whether a reacceleration in growth is possible in the second half of the year, VanVliet said.

Claudeforce represents "the first-of its-kind partnership with large enterprise SaaS," the analyst stated. Claudeforce brings Salesforce's data inside Claude, where users can query this data and have agents execute it, he added.

"This new arrangement flips the dynamic," the analyst further wrote.

CRM Price Action: Shares of Salesforce had risen by 22.03% to $250.91 at the time of publication on Thursday.