Salesforce Stock Drops Despite Strong Earnings; Informatica Acquisition Raises⁢ Concerns

⁢ Updated⁢ May 30, 2025
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Salesforce (CRM) experienced a stock⁣ dip of approximately 5% Thursday, ⁣a day after releasing its first-quarter earnings.The customer relationship management (CRM) provider’s results initially seemed positive, featuring solid ⁤figures and an increased full-year outlook. though, the market reacted negatively, likely due to the company’s $8 billion acquisition of ⁣Informatica, an AI-powered cloud data management firm.

The company posted‍ record first-quarter revenue of $9.8 billion, an 8% year-over-year increase, surpassing analysts’ estimates⁣ of⁢ $9.7 billion. Subscription and support revenue accounted for $9.3 billion of this total, also up 8% from the previous year. The current remaining performance obligation,or backlog,rose 12% to $29.6 billion.

Net income saw a slight increase to $1.54 billion, compared to $1.53 billion in the same‍ quarter last⁤ year. Earnings ⁢per share rose about 2% to $1.59. Adjusted net income reached $2.5⁣ billion, a 4% increase, with adjusted earnings up 6% to $2.58 per share, exceeding estimates of $2.54.

Salesforce’s strong performance was fueled by $1 billion in data cloud and AI ⁣annual⁤ recurring⁣ revenue, marking a 120% year-over-year increase. Approximately 60% of the top 100 deals in the first quarter included data cloud and AI components. The company has also closed over 8,000 deals for its Agentforce AI CRM platform since its launch last fall, which has handled over 750,000 ‍requests, reducing case volume by 7%.

“We’ve built⁢ a deeply unified enterprise AI platform—with agents, data, apps, and a metadata platform—that is unmatched in the industry,” Marc Benioff, chair and⁢ CEO,‍ Salesforce, said. “With Agentforce, Data Cloud, ⁣our Customer 360 apps, tableau, and Slack all built on one trusted, unified foundation, companies of every size can build a digital labor force—boosting productivity, reducing costs, ⁣and accelerating growth.”

Alongside its earnings report, Salesforce raised its full fiscal year revenue guidance by ⁤$400 million, projecting a range of $41.0 billion to ⁤$41.3 billion, representing 8% to 9% growth. Subscription revenue growth⁣ guidance also‍ increased to 9.5% from the previous⁢ 8.5%.The company maintained its operating margin outlook at ‍21.6% but raised earnings projections to $7.15 ‍to $7.21 ⁣per share, up from the previous $6.95 to $7.03.

Marc Benioff described the Informatica acquisition as transformational, stating that Informatica’s data foundation and Master Data Management (MDM) services will enhance Salesforce’s Agentforce AI platform.

“Together, we’ll supercharge Agentforce, Data cloud, Tableau, MuleSoft, and Customer 360, enabling autonomous agents to act with intelligence, context, and confidence across every enterprise,” Benioff said. “This is a transformational step in delivering enterprise-grade AI that is safe,responsible,and deeply integrated with ‍the world’s data.”

Salesforce anticipates earnings accretion ⁤in the second year following the transaction’s completion.Though, some investors remain‍ skeptical. RBC Capital, for example, reduced‍ its price target ⁤for Salesforce shares from $420 to $275.

“Stepping back,while we like the margin expansion story at Salesforce‍ and the valuation is undemanding,deal risk with Informatica has tipped the scales for us,” RBC analyst Rishi Jaluria ⁤said.

Analysts expressing concern about the deal questioned the necessity of the acquisition and voiced reservations about prioritizing growth through acquisitions over organic expansion.

analysts still rate Salesforce as a buy, with a ⁢median price⁢ target of $370 per share, suggesting nearly 40% growth. Year-to-date, the stock is down⁢ approximately 20% to $265 per share, with a P/E ratio⁢ of 43 and a forward P/E of 24.

What’s‍ next

The market will be watching closely ‍to see how Salesforce integrates Informatica ⁢and whether the acquisition truly enhances ‍its AI capabilities and ⁤drives future growth.