Salesforce Q2 FY26 Filing: Steady Growth and Rising Profitability

Salesforce, a titan in the customer relationship management (CRM) space, recently opened its books with its latest quarterly report. For anyone tracking the health of the cloud software industry, these filings are a must-read. Let's break down the key takeaways from the company's second-quarter fiscal 2026 10-Q filing to see how the business is performing.

Steady Growth at the Top Line

Salesforce continued its growth trajectory, posting total revenues of $10.2 billion for the three months ending July 31, 2025, a solid 10% increase from the same period last year. For the first six months of its fiscal year, revenues reached $20.1 billion.

The engine of this growth remains its Subscription and Support segment, which brought in $9.7 billion for the quarter, up 11% year-over-year. A closer look at this core segment reveals where the momentum is strongest:

• Platform and Other: This segment, which includes tools for building and running applications, was the standout performer with 17% growth, hitting $2.1 billion in revenue.
• Integration and Analytics: This area also showed strong double-digit growth of 13%.
• Sales and Service Clouds: The company's flagship products delivered steady 9% growth each.
• Marketing and Commerce: This segment saw more modest growth at 4%.

To visualize how Salesforce's revenue is generated and where the money goes, the following flow diagram breaks down the company's income statement for the quarter.

The Bottom Line: A Focus on Profitability

While revenue growth is crucial, the more compelling story in this report is Salesforce's increasing focus on operational efficiency and profitability.

Gross profit for the quarter was nearly $8.0 billion, yielding a gross margin of 78%, a slight improvement from 77% last year. More significantly, the company is managing its operating costs effectively. Total operating expenses as a percentage of revenue decreased to 55% from 58% in the prior-year quarter.

This discipline translated directly to the bottom line. Income from operations jumped to $2.3 billion, a substantial increase from $1.8 billion a year ago. Ultimately, Salesforce reported a net income of $1.9 billion, or $1.96 per diluted share, up from $1.4 billion, or $1.47 per share, in Q2 of the previous year.

Returning Value to Shareholders

A clear sign of Salesforce's maturity and financial strength is its commitment to returning capital to its shareholders. During the first six months of the fiscal year, the company demonstrated this in two key ways:

• Share Repurchases: It bought back approximately 18 million shares of its own stock for roughly $4.9 billion.
• Dividends: It paid out $801 million in dividends.

What Lies Ahead?

Looking forward, Salesforce maintains significant revenue visibility. The company's Remaining Performance Obligation (RPO) — a key metric for subscription businesses that represents all future revenue under contract — stood at a formidable $59.9 billion at the end of the quarter. While this is slightly down from the start of the fiscal year, the majority of the noncurrent portion is expected to be recognized over the next one to three years, providing a stable foundation for future revenue.

In summary, Salesforce's latest financial report paints a picture of a company skillfully navigating the transition from a pure growth story to a more balanced one, delivering both top-line expansion and impressive bottom-line results. As it continues to manage its costs and reward shareholders, its performance remains a key bellwether for the entire software-as-a-service (SaaS) industry.