Salesforce Gains on Strong Results and Upbeat Forecast

• Salesforce (CRM) reported Q1 EPS of $2.58, beating estimates by $0.03, with revenues up 7.6% year-over-year to $9.83 billion.
• Current remaining performance obligations (cRPO) grew 12% to $29.6 billion, reflecting strong demand for Salesforce’s cloud solutions.
• The company issued upbeat Q2 EPS guidance of $2.76 – $2.78 and revenue of $10.11 – $10.16 billion, both above consensus, and raised FY26 guidance to $11.27 – $11.33 EPS and $41.00 – $41.30 billion in revenue.
• The planned acquisition of Informatica (INFA) aims to enhance Salesforce’s AI and data platform, with no FY26 financial impact expected.

Salesforce (CRM) shares climbed 1.34% to $279.73 in after-hours trading on Wednesday, reflecting investor confidence in the company’s robust first-quarter performance and optimistic outlook for fiscal 2026. The enterprise software giant reported Q1 earnings per share of $2.58, excluding non-recurring items, surpassing the consensus estimate of $2.55 by $0.03, while revenues grew 7.6% year-over-year to $9.83 billion, aligning closely with the $9.75 billion expected. Current remaining performance obligations (cRPO), a key indicator of future revenue, rose 12% (11% in constant currency) to $29.6 billion, signaling sustained demand for Salesforce’s cloud-based solutions. The company’s guidance further bolstered sentiment, projecting Q2 EPS of $2.76 – $2.78, above the $2.74 consensus, and revenues of $10.11 – $10.16 billion, exceeding the $10.02 billion estimate. For FY26, Salesforce raised its EPS guidance to $11.27 – $11.33, topping the $11.17 consensus, and forecasted revenues of $41.00 – $41.30 billion, surpassing the $40.82 billion expected, with the high end reflecting a $400 million increase.

The company’s strategic focus on artificial intelligence (AI) continues to drive its growth trajectory. CEO Marc Benioff highlighted the strength of Salesforce’s unified enterprise AI platform, emphasizing Agentforce, Data Cloud, Customer 360 apps, Tableau, and Slack, all integrated on a single foundation. This ecosystem positions Salesforce to capitalize on the growing demand for AI-driven productivity tools, enabling businesses to streamline operations and accelerate growth. The recent announcement of a definitive agreement to acquire Informatica (INFA), a leader in master data management (MDM) and extract, transform, load (ETL) solutions, underscores Salesforce’s commitment to enhancing its data and AI capabilities. Although the acquisition, expected to close in early FY27, will not impact FY26 guidance, it promises to create a powerful synergy between Salesforce’s AI-powered customer relationship management (CRM) platform and Informatica’s data integration expertise, potentially redefining enterprise data management.

Salesforce’s ability to exceed earnings expectations and raise guidance reflects its resilience in a competitive cloud software market. The 7.6% revenue growth and 12% cRPO increase demonstrate strong customer adoption across industries, particularly as businesses prioritize digital transformation and AI integration. The company’s Q2 and FY26 guidance suggests confidence in sustained momentum, driven by its comprehensive portfolio and strategic acquisitions. While the Informatica deal is not yet factored into financial projections, it signals Salesforce’s long-term vision to dominate the AI and data platform space.

Investors appear encouraged by the company’s execution and forward-looking strategy, though the modest after-hours gain suggests some caution as the market awaits further details on the Informatica integration and broader economic conditions. Salesforce’s focus on building a “digital labor force” through AI innovation positions it as a leader in the evolving enterprise software landscape, with significant growth potential as AI adoption accelerates globally.

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