Salesforce’s Strong Results and $8B Informatica Deal Unpacked
Explore Salesforce’s fiscal 2026 surge, $8 billion Informatica acquisition, and raised forecasts, revealing how cloud and AI investments reshape its growth amid market skepticism.
Key Takeaways
- Salesforce beat Q1 revenue and EPS expectations with $9.83B revenue and $2.58 EPS
- Announced $8B Informatica acquisition, its largest since Slack in 2021
- Raised full-year fiscal 2026 revenue forecast to $41B–$41.3B, surpassing Wall Street estimates
- Subscription and support revenue grew 9% year-over-year, highlighting cloud strength
- Introduced AI marketplace AgentExchange and saved $50M by reassigning 500 support workers
Salesforce, the cloud CRM powerhouse, just flexed its financial muscles with a strong fiscal first quarter and an ambitious $8 billion acquisition of data management firm Informatica. This deal marks Salesforce’s biggest since the $27.1 billion Slack buyout in 2021, signaling a bold push into AI and data-driven services. Despite economic headwinds and activist investor concerns over spending, Salesforce raised its full-year revenue and earnings forecasts, reflecting confidence in its cloud and AI growth engines. CEO Marc Benioff’s vision of integrating Informatica’s capabilities with Salesforce’s vast distribution network aims to unlock new customer value. Yet, Wall Street remains cautiously optimistic, balancing upbeat bookings and margin gains against slowing subscription growth in core clouds. Let’s unpack how Salesforce’s latest results and strategic moves are reshaping its growth story in 2025 and beyond.
Surpassing Expectations
Salesforce kicked off fiscal 2026 with a bang, posting $9.83 billion in revenue for the first quarter—an 8% year-over-year increase that edged past analyst forecasts of $9.75 billion. Adjusted earnings per share came in at $2.58, beating estimates by a few cents and signaling solid profitability. Subscription and support revenue, the backbone of Salesforce’s business, grew 9% to $8.76 billion, reflecting steady demand for cloud services. CEO Marc Benioff’s upbeat tone during earnings calls contrasted with the cautious market mood, highlighting strong bookings and cash flow growth. The company’s current remaining performance obligation (cRPO), a forward-looking revenue metric, rose 10% to $26.5 billion, suggesting a healthy pipeline of contracted business. These numbers tell a story of resilience amid economic headwinds, with Salesforce’s cloud offerings continuing to attract customers despite broader market uncertainties.
Yet, beneath the surface, some core clouds showed signs of slowing growth. Sales and service clouds grew 7% each, down from 9% in the prior quarter, while marketing cloud growth halved to 4%. This deceleration sparked debate among analysts about the sustainability of Salesforce’s subscription momentum. Still, operational efficiency gains, including a record 32.3% adjusted operating margin and a free cash flow margin soaring to 64.1%, helped offset growth concerns. Salesforce’s ability to balance top-line gains with margin expansion paints a nuanced picture: growth is steady but requires sharper execution and innovation to accelerate.
Strategic Informatica Acquisition
Salesforce’s announcement to acquire Informatica for $8 billion marks a strategic pivot toward data management and AI integration. Informatica, founded in 1993 and a public company since 1999, specializes in cleaning and managing data—a crucial step for companies deploying AI agents that rely on vast, accurate datasets. Benioff revealed he had envisioned this union for two decades, underscoring the long-term strategic fit. Unlike past mega-deals like Slack, which raised activist investor eyebrows over spending, this acquisition was generally well-received. Analysts at Stifel noted Salesforce is paying a reasonable multiple, and the deal is expected to be easier for investors to digest.
Informatica’s cloud subscription revenue surged 30% annually to $848 million, signaling strong growth potential. However, Informatica’s distribution scale is modest compared to Salesforce’s global reach. Benioff emphasized that Salesforce’s vast salesforce can amplify Informatica’s offerings worldwide, unlocking new markets and customer segments. This acquisition aligns with Salesforce’s broader AI ambitions, complementing its AgentExchange marketplace and internal AI tools like Agentforce, which has already saved $50 million by reassigning 500 support staff. The Informatica deal is more than a purchase; it’s a calculated step to build an AI-powered data ecosystem that could redefine Salesforce’s competitive edge.
Raising Fiscal 2026 Forecast
Buoyed by strong quarterly results and strategic momentum, Salesforce raised its full-year fiscal 2026 guidance. The company now expects revenue between $41 billion and $41.3 billion, surpassing earlier forecasts and Wall Street consensus of roughly $40.8 billion. Adjusted earnings per share guidance also climbed to a range of $11.27 to $11.33, above prior estimates and analyst expectations. This optimism reflects confidence in Salesforce’s ability to sustain growth despite macroeconomic headwinds.
Management highlighted an anticipated 9% growth in subscription and support revenue, partly fueled by AI initiatives like Agentforce. However, caution remains around marketing and commerce software segments, which face softness and slower contract renewals. CFO Robin Washington noted these headwinds but emphasized margin expansion goals achieved two years ahead of schedule. Salesforce’s disciplined approach—cutting 10% of headcount and disbanding its M&A committee—signals a focus on profitable growth rather than unchecked spending. The raised guidance, combined with operational discipline, suggests Salesforce is navigating a delicate balance between growth ambitions and market realities.
AI and Cloud Growth Drivers
Artificial intelligence and cloud services are the twin engines propelling Salesforce’s growth story. The company’s data cloud and AI businesses now generate over $1 billion in annual recurring revenue, up 120% year-over-year—a staggering leap that highlights AI’s central role. Salesforce’s AgentExchange marketplace for AI agents debuted in the first quarter, enabling customers to deploy AI-powered tools tailored to their needs. Internally, the Agentforce AI agent has already delivered tangible savings by reassigning 500 customer support workers, saving $50 million.
This AI push is not just hype; it’s reshaping Salesforce’s product portfolio and customer value proposition. However, the transition to AI-driven offerings also introduces complexity. While the platform business accelerated growth to 14%, core clouds like sales, service, and marketing showed slower gains. Analysts note that subscription growth is decelerating, reflecting a shift in customer spending patterns and contract dynamics. Still, Salesforce’s ability to leverage its massive distribution network to scale AI and cloud solutions could unlock new revenue streams and deepen customer relationships, positioning it well for the evolving tech landscape.
Market Reaction and Analyst Views
Salesforce’s earnings beat and raised guidance sparked mixed reactions on Wall Street. Shares rose nearly 4% in after-hours trading but remain down about 17% year-to-date, reflecting lingering investor caution. Analysts praised the strong bookings growth—16.3% current bookings growth more than doubled estimates—and the 11% growth in current remaining performance obligation (cRPO), signaling a robust contract pipeline.
Yet, some analysts expressed skepticism about slowing subscription growth in core clouds and macroeconomic uncertainties. Piper Sandler maintained a Neutral rating despite raising its price target, citing concerns over a CFO transition and Salesforce’s multi-year shift from traditional applications to AI agents. Jefferies highlighted margin improvement opportunities, noting Salesforce trades at a discount to peers with a forward free cash flow multiple of 19x versus 28x. This valuation gap suggests potential upside if Salesforce can accelerate growth and margin expansion. Overall, the market is watching closely as Salesforce balances innovation, disciplined spending, and evolving customer demands in a competitive cloud software arena.
Long Story Short
Salesforce’s recent earnings report and $8 billion Informatica acquisition paint a picture of a company doubling down on cloud and AI innovation while navigating a complex market landscape. The beat on revenue and earnings, coupled with raised guidance, underscores Salesforce’s operational strength and strategic clarity. Yet, the stock’s year-to-date dip and analyst caution remind us that growth isn’t guaranteed in a shifting economic environment. Salesforce’s move to integrate Informatica’s data management with its AI tools like Agentforce could be a game-changer, helping customers tame messy data and unlock AI’s potential. For investors and customers alike, the story is one of transformation — blending disciplined margin expansion with bold bets on future tech. As Salesforce steers through 2025, its ability to convert these investments into sustained subscription growth will be the ultimate test. For now, the company’s optimism and action offer a compelling narrative of resilience and ambition in the cloud software arena.