Salesforce Earnings Beat Expectations, But CRM Stock Falls After $8B Informatica Deal

Salesforce (NYSE: CRM) recorded a better expected Q1 earnings on Tuesday, which is run by the growing demand for its AI -powered cloud solutions. Despite strong financial results, the company’s stock dropped by more than 6% after the hour because investors reacted carefully to the announcement of $ 8 billion in acquisition of Salesforce Data Management Firm Informatica.

Salesforce Earnings Q1 2026: Key Highlights

Revenue: $9.83 billion (up 11% YoY)
Adjusted EPS: $2.58 (versus $2.55 expected)
Operating Margin: 32.1%, up from 27.6% a year ago
Remaining Performance Obligations (RPO): $53.4 billion, a 10% YoY increase
Free Cash Flow: $6.25 billion, up 43% YoY

“Our AI and Data Cloud segments are driving significant growth. We’ve closed more than 8,000 deals through Agentforce since launch,” said Marc Benioff, Salesforce CEO.

AI Strategy and Informatica Acquisition

The enterprise continues to pay the growing focus of salesforce on AI. The company revealed that its AI cloud and data cloud now account for over $1 billion in annual revenue. Tools, such as the Agent Force launched in October 2024, are watching a strong adoption as the enterprise works and workflow to automate.

However, the company’s decision to acquire Informatica (NYSE: INFA) for approximately $8 billion is leading to mixed reactions. While this step aims to enhance salesforce’s data integration and management capabilities, analysts are concerned about price tag and integration challenges.

“Salesforce has a mixed track record when it comes to large acquisitions like Slack and MuleSoft,” said analysts at RBC Capital Markets, which downgraded the stock and cut its target price from $420 to $275.

Market Reaction: CRM Stock Slips

Following the earnings call, CRM shares fell more than 6% in extended trading.

Current Price: $270.56 (as of pre-market, May 29, 2025)
52-Week Range: $193.68 – $318.71
Market Cap: ~$262 billion

Some investors remain bullish on Salesforce’s long-term AI potential, but others see short-term risks due to aggressive spending and acquisition moves.

Outlook: Salesforce Raises Full-Year Guidance

Despite the stock drop, Salesforce raised its full-year revenue outlook:

FY26 Revenue Forecast: $41.0 – $41.3 billion (up from $40.5 – $40.9 billion)

Q2 Revenue Guidance: $10.11 – $10.16 billion

“We’re executing a bold vision to become the No.1 AI CRM company,” Benioff added.

Bottom Line

Salesforce defeated both income and profit and gave another strong quarter. But investors on Informatica Deal are overweight on stock. Moving forward, the success of the AI strategy of salesfor AI and its ability to effectively integrate acquisition will be the key to regain the market confidence.