Salesforce Raises Full Year Revenue Guidance, Announces Plans to Acquire Informatica

Image: Salesforce’s shares have been choppy the past few years.

By Brian Nelson, CFA

Salesforce (CRM) recently reported better than expected first quarter fiscal 2026 results with revenue and non-GAAP earnings per share exceeding the respective consensus forecasts. First quarter revenue was $9.8 billion, up 8% year-over-year, with current remaining performance obligations advancing 12% year-over-year (11% in constant currency), to $29.6 billion. First quarter GAAP operating margin was 19.8%, while non-GAAP operating margin came in at 32.3%. Non-GAAP diluted net income per share was $2.58 versus $2.44 in the same period last year. Management had the following to say about the quarter:

We delivered strong Q1 results and are raising our guidance by $400 million to $41.3 billion at the high end of the range. We’ve built a deeply unified enterprise AI platform—with agents, data, apps, and a metadata platform—that is unmatched in the industry. 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. And, with our agreement to acquire Informatica (INFA), we will bring together the industry’s leading AI CRM and AI-powered MDM and ETL platform to create the most complete, intelligent AI and data platform for the enterprise.

I’m (CFO Robin Washington) pleased by our momentum as we capitalize on the exciting agentic AI opportunity. Our Q1 performance reflects solid execution, driven by our continued focus on innovation, operational excellence, and maximizing value for our customers and shareholders.

Salesforce returned $3.1 billion to shareholders in the quarter, including $2.7 billion in share repurchases and $402 million in dividends. First quarter operating cash flow was $6.5 billion, up 4% year-over-year, while free cash flow came in at $6.3 billion, up 4% year-over-year. Salesforce initiated second quarter fiscal 2026 revenue guidance calling for growth of 7%-8% in constant currency, while it raised its full-year revenue guidance to the range of $41-$41.3 billion, up 8% in constant currency and the range above the consensus forecast at the time of the report.

Salesforce maintained its full year GAAP and non-GAAP operating margin guidance, as well as its full year operating cash flow guidance of approximately 10%-11% year-over-year growth. Free cash flow is targeted at 9%-10% year-over-year growth for the full year, while non-GAAP earnings per share is expected in the range of $11.27-$11.33 versus consensus of $11.17 per share at the time of the report. We liked Salesforce’s strong first quarter fiscal 2026 results and its raised full year revenue guidance. We have no qualms with its announced acquisition of Informatica, but we don’t include shares in any newsletter portfolio. Shares yield 0.6% at the time of this writing.

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