Salesforce Q1 Earnings: Benioff Says Informatica Deal A Win For ‘Data Transformation’

“We are now just very well-positioned to take advantage of this multitrillion-dollar opportunity in AI and enterprise software and digital labor,” Salesforce CEO Marc Benioff said.

Salesforce CEO and co-founder Marc Benioff defended his pending purchase of data management vendor Informatica as a necessity for winning in the artificial intelligence market.

“Every AI transformation is a data transformation,” Benioff said. “When you look at these companies that are doing it right, they have got their data together. That is what is really the key–this ability to unify or harmonize or activate all the data across the entire enterprise.”

The CEO also said that Salesforce is on a sales force hiring spree while suggesting that more acquisitions could come–all while the company maintains margins and cash flow expectations. His comments came during the San Francisco-based enterprise applications vendor’s Wednesday quarterly earnings call, covering the three months ended April 30.

[RELATED: Salesforce To Buy Informatica: 5 Things To Know]

Salesforce Q1

During the call, Srini Tallapragada, Salesforce president and chief engineering officer, credited the vendor’s partner base with customer success help and understanding demands around latency, local residency and auditability.

“We are in a tight loop, not just with Salesforce, but also with a lot of our partners like Accenture, Deloitte,” Tallapragada said. “We are in very early stages. We are super excited. We’re obsessed about customer success. And the name of the game is mature the product, really focus on customer success.”

The vendor’s channel chief revealed to CRN that efforts to grow Salesforce’s partner ecosystem have resulted in reaching about 16,000 partners, 9,000 of them in consulting—more than 30 percent growth in total partners and around 50 percent growth in consulting partners compared with last summer.

‘ADAM’ Strategy A Differentiator

Salesforce raised its expected full fiscal year revenue by $400 million. It now expects between $41 billion and $41.3 billion in revenue for the fiscal year, representing 8 percent growth year over year ignoring foreign exchange. The vendor maintained its full-year expectations for operating margin and operating cash flow growth.

Salesforce executives also said to expect $10.11 billion to $10.16 billion in the second fiscal quarter, representing 7 percent to 8 percent growth year over year ignoring foreign exchange.

The company reiterated that it doesn’t expect the Informatica deal set to close early in its 2027 fiscal year to affect its 2026 revenue guidance.

Benioff said that his company differentiates itself in the AI marketplace with the “ADAM” framework–agents, data, applications and metadata–which “companies need to achieve the real promise of agentic AI.”

“Every company does say that they have agents, but without these four parts … you’re just not really able to deliver this complete experience for the enterprise, including delivering digital labor,” he said.

Benioff continued his attacks on customer relationship management (CRM) software rival Microsoft, saying that the tech giant issued “a false prophecy” in its promises of how the Copilot AI tool would advance over the years.

The error, according to Benioff, was in thinking consumer-grade AI of tools like ChatGPT, Google’s Gemini and Anthropic’s Claude could easily adapt to the needs of enterprises, calling those tools “packaged, highly controlled consumer experiences.”

“The enterprise has datasets that are highly controlled, highly governed and highly secured,” Benioff said. “These datasets are everything from your customer dataset to your financial dataset to your HR data set. And the reality is that on all enterprise data is available to all users. … (For example) you can’t see all the employees’ salary information.”

SMB Growth

Benioff noted a “surprise” in “very strong growth” in the small and medium business (SMB) segment that many solution providers work in, with double-digit new bookings growth.

Miguel Milano, Salesforce president and chief revenue officer, said that the company is investing in the lower end of the market.

Salesforce plans to hire another 1,000 to 2,000 salespeople to grow the company. Salesforce has 13,000 account executives (AEs) today, a record number in the vendor’s history and 14 percent growth year over year.

The number should be up 19 percent by the end of the quarter and 22 percent by the end of the year. But Benioff pledged to maintain margins and cash flow despite the hiring.

“Where we have not invested in distribution capability, we will invest aggressively–well, we already have,” Benioff said.

Informatica Deal, Future Deals

Benioff said the Informatica deal brings Salesforce the “No. 1 AI MDM and ETL” company, referring to the acquisition’s capabilities in master data management and the extract, transform and load data integration process. Salesforce was already a customer, partner and investor in the company.

“There’s just few technology companies I’ve just been more impressed with,” Benioff said. “We really love the company.”

Over the years, Informatica has rewritten the product for the cloud era and built new data engineering centers. Informatica has become “more important to our customers than ever before because of what’s happened with AI,” he said. Salesforce sees opportunities to bring in Informatica, Data Cloud, Tableau and other parts of its portfolio for better AI outcomes.

The CEO confirmed that Salesforce “walked away” from buying Informatica a year ago because the numbers were “not right.” The $8 billion Salesforce is expected to spend on the company is about 30 percent below the price that emerged during talks in 2024.

“We just want to be as disciplined as possible,” Benioff said. “This is a great price for a great company. … We can see how it can radically extend what we have done. Complement it. It’s incredibly additive. This ability to harmonize all of this data, it just is going to make everything better for our customers and give this platform that we have a lot more capability.”

Robin Washington, president and chief operating and financial officer, told analysts on the call that the deal fits Salesforce’s acquisition strategy. She expects the company will achieve accretion in free cash flow plus operating margins and earnings per share (EPS) not using Generally Accepted Accounting Principles (GAAP) by year two.

Benioff suggested more acquisitions akin to the size of the Own Co. deal announced late last year are on the horizon.

Agentforce Updates

Salesforce has done about 8,000 Agentforce deals across every industry, Benioff said on the call. The vendor has 4,000 paid Agentforce deals and $100 million in Agentforce annual recurring revenue (ARR). About 800 Salesforce customers are in production with Agentforce.

Agentforce reached more than $100 million in annual order value (AOV), “much faster than any product in our history, and we’re not even fully deployed on all geographies, currencies or languages,” the CEO said.

About 30 percent of Agentforce bookings also came from customers increasing their consumption, he said.

Salesforce has launched hundreds of pre-built Agentforce templates. Next month, Agentforce will gain the most rigorous level of authorization under the Federal Risk and Authorization Management Program (FedRAMP) to allow more government organizations to use the tool.

“No one else is delivering what we think digital labor is at this scale,” he said. “We are really delivering, at this point, probably more agents and more conversations and more capability to more enterprises than any other vendor in the world. I really see us as the No. 1 agent platform already, and it’s only been a few months.”

Agentforce’s Cross-Selling Boost

Agentforce has been proving a flywheel for Salesforce’s other products, including Data Cloud, which saw an ARR of more than $1 billion when combined with AI, growing more than 120 percent year over year.

Salesforce’s Data Cloud surpassed 22 trillion records ingested, up 175 percent year over year. About 60 percent of Salesforce’s top 100 deals included investments in both Data Cloud and AI.

Half of Data Cloud’s first fiscal quarter new bookings came from existing customers, Benioff said. “That’s really important because it really speaks to the adoption of the product and the incredible usage by the customers who have it,” he said.

Milano said Agentforce deals in the quarter on average saw four other cloud products included. A third of the top 100 deals included Agentforce and Data Cloud. The top six deals–averaging $34 million of total contract value (TCV) each--had Data Cloud and Agentforce as anchors.

Q1 In Depth

Salesforce reported $9.8 billion in revenue for the first fiscal quarter, up 8 percent year over year.

Salesforce transacted $2 billion of business through Amazon Web Services (AWS) across hundreds of transactions, tripling year over year, according to the vendor.

Subscription and support revenue was $9.3 billion, up 9 percent year over year ignoring foreign exchange. Current remaining performance obligation (cRPO) was $29.6 billion, up 11 percent year over year. First fiscal quarter operating cash flow was $6.5 billion, up 4 percent year over year. Free cash flow was $6.3 billion, up 4 percent year over year.

Salesforce’s stock traded at about $280 a share Wednesday after market close, up about 1 percent.