Salesforce Forecasts $11.5 Billion Q3 Sales as Anthropic Tie-Up Bolsters AI Push

Q: How much of this massive earnings beat relies on a fragile startup paper gain rather than actual software sales?

A large part of the EPS shock came from a non-operating paper gain, not from a sudden surge in core software sales. Salesforce’s headline profit was boosted by a $2.6 billion gain tied to its Anthropic stake. Net income rose to $3.53 billion from $1.89 billion a year earlier, so roughly three-quarters of the year-over-year increase in net income came from that investment mark-up alone. That helps explain why adjusted EPS of $5.90 looked so outsized versus expectations: the quarter included a valuation event that is not the same as selling more CRM subscriptions. The operating business was still solid, but much less dramatic. Revenue grew 11% to $11.35 billion, only slightly above estimates, and guidance was modestly ahead of consensus rather than wildly higher. The stronger fundamental signals were elsewhere: free cash flow rose 81% to $1.10 billion, current remaining performance obligation reached $33.5 billion, and Agentforce AI annualized revenue topped $1.5 billion, up 240% year over year. That means the “beat” should be split in two. The earnings beat was heavily flattered by an unrealized gain that could reverse or disappear in future quarters if Anthropic’s valuation changes. But the business beat on revenue, cash flow, bookings and guidance suggests the quarter was not purely cosmetic. So the clean takeaway is that the profit spike was unusually dependent on a fragile paper gain, while the underlying software business showed steady—not explosive—improvement.

3 articles · Updated · Bloomberg · Aug 26

Salesforce said fiscal third-quarter sales will reach about $11.5 billion, topping analysts’ average estimate and sending the stock higher in extended trading.
A 14% rise in current remaining performance obligations also beat the 13% consensus, signaling stronger future demand through October.
The outlook came with a deeper partnership with Anthropic, which helped reassure investors that Salesforce can stay competitive in enterprise AI.
That follows a strong prior quarter in which Salesforce posted $11.35 billion in revenue, unveiled the Claudeforce plugin and booked a $2.6 billion gain on its Anthropic investment.