To The Moon

$Salesforce.com(CRM)$ is scheduled to report its fiscal Q2 2026 earnings after the market closes on Wednesday, September 3, 2025.

Here is an analysis of the upcoming report, including key metrics to watch and potential short-term trading opportunities.

Earnings Per Share (EPS): The consensus estimate for non-GAAP EPS is around $2.77, which would represent an 8.2% increase from the prior-year quarter. A significant beat here would be a positive sign, but investors will be more focused on how the company achieves this profitability.

Revenue: Analysts expect Q2 revenue to be in the range of $10.11 billion to $10.16 billion. This would mark an approximately 8.7% year-over-year increase. The market will be scrutinizing this figure, as CRM has faced concerns about slowing growth.

Salesforce (CRM) Fiscal Q1 2026 Earnings Summary

Salesforce reported its fiscal Q1 2026 earnings on May 28, 2025, delivering a strong performance that exceeded analyst expectations on both the top and bottom lines. The report was well-received by the market and helped to alleviate some concerns about slowing growth.

Key Financial Highlights:

Adjusted Earnings Per Share (EPS): Salesforce reported a non-GAAP EPS of $2.58, surpassing the consensus estimate of approximately $2.55. This marked a solid year-over-year increase.

Revenue: The company's revenue for the quarter was $9.83 billion, beating analyst estimates of $9.75 billion and representing a robust 8% year-over-year growth.

Subscription & Support Revenue: This core segment grew by 8% year-over-year, to $9.3 billion.

AI and Data Cloud: A major highlight was the performance of Salesforce's AI-enabled products. The company announced that its Data Cloud and AI annual recurring revenue had surpassed $1 billion, up more than 120% year-over-year. This demonstrated strong customer adoption of its new AI-driven solutions.

Remaining Performance Obligation (RPO): Current remaining performance obligation (cRPO), a key indicator of future revenue, grew by 12% year-over-year, which indicates a healthy and expanding pipeline of business.

Profitability: Salesforce showed continued progress in its profitability goals, with a non-GAAP operating margin of 32.3%.

Lessons Learned from the Guidance

The guidance provided by Salesforce for the remainder of fiscal 2026 was arguably the most significant aspect of the report, as it directly addressed investor anxieties and provided a clear path forward.

AI is a Meaningful Growth Driver: The company's decision to raise its full-year guidance was directly linked to the momentum in its AI and Data Cloud offerings. This is a critical lesson: for a mature technology company like Salesforce, innovation, particularly in a transformative area like AI, is essential to re-accelerate growth. The Q1 results proved that Salesforce’s AI strategy is not just a marketing slogan; it's a tangible driver of revenue and customer acquisition.

Growth and Profitability Can Co-Exist: For a while, Salesforce faced criticism for prioritizing growth at the expense of profitability. The Q1 results and the reaffirmed guidance on operating margins demonstrated a significant lesson: the company has found a balance. The cost-cutting measures and operational efficiencies implemented in previous quarters are paying off, allowing Salesforce to invest in high-growth areas like AI while still delivering on its profitability commitments.

The "Beat and Raise" Matters: In contrast to some of its past earnings reports where a beat was followed by a muted reaction, Salesforce's Q1 report was a classic "beat and raise" scenario. The company not only exceeded expectations for the quarter but also increased its full-year revenue and EPS forecasts. The lesson here is that in an environment of investor skepticism, a strong quarter is not enough; a confident and upward-revised outlook is what truly moves the stock and rebuilds investor trust.

Acquisitions Can Be Strategic and Targeted: The announcement of the Informatica acquisition around the time of the earnings report was also a strategic move. While it's a large deal, management's commentary suggested it was a targeted acquisition to strengthen their data integration capabilities, which are crucial for their AI strategy. This reinforces the lesson that even large, established companies continue to use strategic acquisitions to fill technology gaps and maintain their competitive edge.

Key Metrics and Analyst Expectations

Salesforce's Q2 earnings report will be closely watched by investors, as the company is considered a bellwether for the broader enterprise software and cloud computing markets. The company has a mixed track record of stock performance after earnings, even after beating expectations, so the guidance and key business metrics will be paramount.

AI and Cloud Adoption: Salesforce's performance will be heavily influenced by its success in integrating generative AI into its product suite. Investors will be looking for commentary on the adoption and revenue contribution of its AI-enabled solutions, such as "Agentforce," and how they are driving new customer growth and expansion within existing accounts.

Subscription and Support Revenue: This is the core of Salesforce's business, and it is expected to be a primary driver of top-line growth. Analysts are forecasting this segment to be around $9.61 billion, an increase of 9.6% year-over-year. Any significant deviation from this could impact the stock.

Remaining Performance Obligation (RPO): RPO is a key forward-looking metric that represents future revenue under contract that has not yet been recognized. Investors will pay close attention to the RPO, as it provides a strong indicator of future growth and the health of the company's backlog. The total RPO is expected to reach approximately $59.84 billion.

Operating Margin: Salesforce has been focused on cost-restructuring initiatives, including workforce reductions. The company's ability to expand its non-GAAP operating margin will be a key indicator of its profitability and efficiency.

Fiscal 2026 Guidance: The company's outlook for the remainder of the fiscal year will be the most significant factor. Any adjustments to its full-year revenue and EPS guidance will likely dictate the stock's short-term movement.

Salesforce (CRM) Price Target

Based on 49 analysts from Tiger Brokers offering 12 month price targets for Salesforce in the last 3 months. The average price target is $346.14 with a high forecast of $442.00 and a low forecast of $225.00. The average price target represents a 35.08% change from the last price of $256.25.

Short-Term Trading Opportunities

Salesforce's stock can be highly volatile following its earnings reports. Historically, the stock has had a slightly higher chance of a negative one-day return post-earnings, with a median decline of -5.5% over the last five years. This is despite a history of often beating analyst expectations.

The "Guidance is King" Factor: As with many tech companies, the market's reaction will hinge less on the beat/miss of the current quarter's numbers and more on the guidance for the next quarter and the full fiscal year. If Salesforce provides a strong, optimistic outlook, it could send the stock higher, regardless of the Q2 results.

Potential for a "Sell-the-News" Reaction: Even if Salesforce beats on both revenue and EPS, the stock could still fall if the guidance is perceived as weak or if the growth in key areas like the AI business is not as strong as investors had hoped. The recent underperformance of the stock relative to its peers suggests that the market has high expectations that may be difficult to meet.

Leveraging Options: Short-term traders could consider options strategies to capitalize on the expected volatility. A long straddle or strangle could be profitable if the stock makes a large move in either direction. Alternatively, a credit spread could be used by traders who believe the stock will stay within a certain range or will only move in one direction.

CRM Bear Call Spread Setup (Post-Earnings)

• Underlying Price: $256.25

• Implied Volatility Percentile: ~81% pre-earnings

• Outlook: Bearish to neutral; expecting CRM to stay below resistance or retrace after earnings pop

Spread Structure (Sept 19 Expiry)

• Max Risk: $2,883

• Max Reward: $117

• Breakeven: $291.17

• Loss Probability: ~11.9%

• Technical Bias: CRM rated 100% Sell on short-term signals

Why This Setup Works

• High IV Rank: Premiums are rich post-earnings, ideal for credit spreads

• Wide Strike Distance: $30 spread gives breathing room and low loss probability

• Bearish Technicals: CRM is in oversold territory, but trend continuation is supported

• Risk-Defined: No naked exposure, suitable for IRAs or conservative overlays

Given the stock's recent underperformance and the mixed sentiment, this earnings report could be a pivotal moment. The outcome will depend on whether Salesforce can demonstrate a viable path to re-accelerating growth and delivering on its profitability promises.

Technical Analysis - Exponential Moving Average (EMA)

The recent underperformance from CRM with negative momentum, though the bulls are trying to gain control, we are seeing some challenges, as there have been pullbacks concern for AI related stocks, CRM have manage to trade above the 50-day period but below the 200-day period.

So if CRM could provide an earnings beat and gave a positive outlook for growth, we could see a new highs coming from CRM after its earnings.

Summary

Salesforce (CRM) is scheduled to report its fiscal Q2 2026 earnings after the market closes on September 3, 2025. The company is a key indicator for the cloud and enterprise software sectors, and its recent stock performance has been a source of investor concern.

Analysts are forecasting revenue between $10.11 billion and $10.16 billion and non-GAAP EPS of approximately $2.77.

Investors will be focused on:

Growth Drivers: Commentary on the performance of the company's AI-enabled solutions, such as "Agentforce," and the overall contribution of its Data Cloud products.

Forward-Looking Metrics: The Remaining Performance Obligation (RPO) will be a critical metric to gauge the health of the company's backlog and its future revenue prospects.

Fiscal 2026 Guidance: The company’s updated outlook for the full fiscal year will be the most significant factor influencing the stock’s post-earnings movement.

Given the stock's recent underperformance and high market expectations for its AI strategy, a post-earnings "sell-the-news" reaction is a possibility, even if the company beats on its top and bottom lines. Traders should be prepared for significant volatility.

Appreciate if you could share your thoughts in the comment section whether you think CRM could experience a ‘sell-the-news’ market reaction even though there is a positive outlook guidance with earnings beat.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.