Summary
Salesforce grew FY2025 second-quarter revenue 8.4% year over year to $9.32 billion. Gross profit rose 10.4% to $7.17 billion, and gross margin improved to 76.8% from 75.4%. Operating income was $1.78 billion, up 20.8%, which lifted operating margin to 19.1% from 17.2% a year earlier. Year to date, revenue was $18.46 billion, up 9.5%.
Net income for the quarter was $1.43 billion, up 12.8%, and diluted EPS came in at $1.47, up 14.8% from $1.28. Non-GAAP operating margin was 33.7%, up 210 basis points year over year. Management credited the restructuring plan launched in January 2023 along with workforce and office space reductions that began in the first half of fiscal 2025. The employee actions tied to the restructuring plan were substantially complete in fiscal 2024, while the real estate actions are expected to run through fiscal 2026.
Cash generation stayed firm. Operating cash flow for the quarter was $892 million, up 10.4%. Over the first six months, operating cash flow reached $7.14 billion, up 34.7% from $5.30 billion a year earlier. Free cash flow, a non-GAAP measure, was $0.76 billion for the quarter, up 20%, and capital expenditures were $137 million, down 23.9% from $180 million. The company returned $4.3 billion through share repurchases and $0.4 billion through dividends in the quarter. Across the six months it repurchased roughly 25 million shares for about $6.5 billion and paid about $772 million in dividends, leaving $11.9 billion of repurchase authorization outstanding.
Backlog was solid but reflected measured buying behavior. Total remaining performance obligation was $53.50 billion, up 14.8% from the prior-year quarter. Current remaining performance obligation was $26.5 billion, up 10% year over year and up 11% in constant currency. Deferred revenue of $15.22 billion was up 6.9%. Among service offerings, Integration and Analytics grew fastest at 13%, followed by Service at 10%, Sales at 9% and Platform and Other at 9%, while Marketing and Commerce lagged at 6%. Europe grew 11%, Asia Pacific grew 9% and the Americas grew 7%.
Guidance for the third quarter of fiscal 2025 points to revenue growth of 7% year over year and non-GAAP diluted EPS of $2.42 to $2.44. Current remaining performance obligation growth is guided to 9% for that quarter. For the full fiscal year, revenue growth is guided to 8% to 9% year over year and non-GAAP operating margin to 32.8%. Non-GAAP diluted EPS for the full year is guided to $10.03 to $10.11. Operating cash flow growth guidance for the full year was raised to 23% to 25%, and subscription and support revenue growth is expected to be slightly below 10% for the year, or approximately 10% in constant currency.
The quarter carried real friction. MD&A flagged elongated sales cycles, additional deal approval layers and deal compression, and warned that slower growth in new and renewal business would pressure remaining performance obligation and revenue. Professional services revenue fell 6% in the quarter, which management attributed to less demand for larger, multi-year transformation engagements and delayed projects. The attrition rate was approximately eight percent as of July 31, 2024, excluding Slack self service. Foreign currency movements trimmed revenue by about one percent in the quarter. Restructuring charges were $99 million in the quarter and $107 million year to date, with $150 million to $300 million of future cash payments still expected. President and CFO Amy Weaver has decided to step down and will remain in the role until a successor is named. The company also noted that with most net operating loss and tax credit carryforwards used, cash taxes are expected to rise.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2025 | Q1 FY2025 | QoQ | Q2 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $9.32B | $9.13B | +2.1% | $8.60B | +8.4% |
| Gross profit | $7.17B | $6.97B | +2.8% | $6.49B | +10.4% |
| Gross margin | 76.8% | 76.3% | +0.5 pp | 75.4% | +1.4 pp |
| Research & development | $1.35B | $1.37B | -1.4% | $1.22B | +10.6% |
| Sales & marketing | $3.22B | $3.24B | -0.5% | $3.11B | +3.6% |
| General & administrative | $711.0M | $647.0M | +9.9% | $632.0M | +12.5% |
| Total operating expenses | $5.38B | $5.26B | +2.3% | $5.01B | +7.4% |
| Operating income (loss) | $1.78B | $1.71B | +4.3% | $1.48B | +20.8% |
| Operating margin | 19.1% | 18.7% | +0.4 pp | 17.2% | +2.0 pp |
| Net income (loss) | $1.43B | $1.53B | -6.8% | $1.27B | +12.8% |
| Net margin | 15.3% | 16.8% | -1.5 pp | 14.7% | +0.6 pp |
| Diluted EPS | $1.47 | $1.56 | -$0.09 | $1.28 | +$0.19 |
Risks
MD&A states that in the first half of fiscal 2025 the company continued to experience elongated sales cycles, additional deal approval layers and deal compression from macroeconomic factors and more measured customer buying behavior. Slower growth in new and renewal business, if sustained, could impact remaining performance obligation, revenues and ability to meet financial guidance and long-term targets.
Risk Factors state that Salesforce expects increased competition as AI technologies are integrated into its markets, and competitors may develop new AI offerings that disrupt workforce needs and negatively impact demand or incorporate AI more successfully. The company also notes generative AI creates risks around accuracy, bias, privacy, data provenance and increased computing costs that could impact profit margin.
The filing says the Restructuring Plan included workforce reductions substantially completed in fiscal 2024, with further targeted workforce and office space reductions initiated in the first half of fiscal 2025 and expected to be substantially complete in fiscal 2025. These actions and periodic sales organization changes could negatively impact employee retention, sales productivity and revenue growth.
MD&A reports that professional services and other revenues decreased 6% for the three months and 8% for the six months ended July 31, 2024, driven by less demand for larger multi-year transformation engagements and delayed projects. Management says these trends may continue in the near term.
Risk Factors state that Salesforce's strategic investment portfolio is subject to partial or complete loss of invested capital and significant fair value changes. MD&A reports losses on strategic investments of $37 million for the quarter ended July 31, 2024, primarily from $60 million of impairments on privately held equity investments.
MD&A reports the effective tax rate rose to 22% for the quarter ended July 31, 2024 from 15% a year earlier, and to 20% for the six months from 19%. The company also expects an increase in cash taxes as it has utilized most net operating loss and tax credit carryforwards, and is evaluating the OECD 15% global minimum tax.
Risk Factors describe evolving privacy and AI regulation, including the EU AI Act, Digital Services Act, GDPR, CCPA/CPRA and India's Digital Personal Data Protection Act 2023, plus cross-border data transfer uncertainty and data residency requirements. Compliance could require service changes, increase costs and expose Salesforce to fines, penalties and private litigation.
Risk Factors note customers have no obligation to renew and may renew for fewer subscriptions, shorter contract lengths or lower cost offerings, particularly in periods of economic uncertainty. As of July 31, 2024, the attrition rate excluding Slack self service was approximately eight percent, and slower renewal growth could reduce revenue and current remaining performance obligation.
MD&A states that foreign currency fluctuations negatively impacted revenue by approximately one percent for the six months ended July 31, 2024 compared with the prior-year period, and current remaining performance obligation by approximately one percent as of July 31, 2024. The U.S. Dollar strengthened significantly against the Euro, British Pound Sterling and Japanese Yen during fiscal 2024 and the first half of fiscal 2025.
SaaS KPIs
All quarters →Free cash flow
Non-GAAP operating margin
Billings and other
Current Remaining Performance Obligation
Attrition Rate
Total Remaining Performance Obligation
Summary, forecast, risks and KPIs are extracted from Salesforce, Inc.'s SEC filings for Q2 FY2025 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.