CRM's Cash Flow Strength: Can It Sustain Big Shareholder Returns? Anirudha Bhagat Wed, November 11, 2026 at 11:03 AM EST 3 min read CRM +1.91% MSFT -2.27% ORCL +9.27% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Salesforce, Inc. CRM is demonstrating strong cash-generating ability, giving it financial flexibility to return more capital to shareholders. Its growing free cash flow, ongoing share repurchases and dividend payments provide a solid foundation for investor returns.
In the second quarter of fiscal 2026, Salesforce's operating cash flow jumped 71.5% year over year to $1.27 billion, while free cash flow increased 81.5% to $1.10 billion. In the first half of fiscal 2027, the company generated operating and free cash flows of $7.97 billion and $7.65 billion, respectively. This improvement highlights the strength of its subscription-based business, which provides recurring revenues and supports consistent cash generation.
Salesforce is putting this cash to work. The company paid $364 million in dividends during the quarter and continued its $25 billion accelerated share repurchase (ASR) program. This $25 billion ASR transaction represents the first half of a larger $50 billion share repurchase program authorized by the company's board of directors in February 2026.
Management expects the buyback to reduce outstanding shares by at least 14%. This could provide a meaningful boost to earnings per share while increasing the ownership stake of remaining shareholders. Through the first half of fiscal 2027, Salesforce's capital returns totaled $27.9 billion. The share count was down 141 million shares, or 15%, year over year.
Nevertheless, investors should be cautious about assuming that such strong cash flow growth will continue. Salesforce expects fiscal 2027 operating cash flow and free cash flow growth of approximately 4%-5%. This is considerably slower than the increase registered in the last reported quarter. Expanding Agentforce and Data 360 will require continued investment to support future growth.
Salesforce appears capable of maintaining substantial shareholder returns, although slower cash flow growth could limit the scope for significantly larger payouts in the near term.
Microsoft Corporation MSFT is a strong benchmark for Salesforce's cash-generation and shareholder-return strategy. In the first quarter of fiscal 2027, the company generated $58 billion in operating cash flow.
During the first quarter, Microsoft returned $11.1 billion to shareholders through dividends and share repurchases. Its substantial cash generation gives it considerable flexibility to reward investors while funding growth.
Oracle Corporation ORCL offers a contrasting picture. The company generated a record operating cash flow of $23 billion in the first quarter of fiscal 2027. However, aggressive capital investment to support cloud infrastructure growth and customer demand pushed free cash flow into negative territory at $5.4 billion.
During the first quarter, Oracle paid $1.57 billion in dividends but did not repurchase shares. This highlights how rising capital spending can limit shareholder returns, even when operating cash flow is strong.
Salesforce shares have declined 19.4% year to date, while the Zacks Internet – Software industry has fallen 2.7%.
From a valuation standpoint, CRM trades at a forward price-to-earnings ratio of 13.19, significantly below the industry's average of 26.92.
The Zacks Consensus Estimate for Salesforce's fiscal 2027 earnings implies a year-over-year increase of approximately 33.6%, while estimates for fiscal 2028 indicate a 4.1% decline. Estimates for fiscal 2027 and 2028 earnings have been revised upward in the past 30 days.
Salesforce currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
