Core Insights - Salesforce (CRM) reported first-quarter fiscal 2026 non-GAAP earnings of $2.58 per share, exceeding the Zacks Consensus Estimate by 1.6%, with a year-over-year improvement of 5.7% [1] - The company's fiscal first-quarter revenues reached $9.83 billion, surpassing the Zacks Consensus Estimate by 0.95%, and reflecting a year-over-year increase of 7.7% [1][2] Financial Performance - Revenues from Subscription and Support, which account for 94.6% of total revenues, increased 8.3% year over year to $9.3 billion, while Professional Services and Other revenues decreased 3% to $532 million [3] - Non-GAAP operating income rose 8.6% to $3.17 billion, with the non-GAAP operating margin expanding by 20 basis points to 32.3% [6] Segment Performance - Sales Cloud revenues grew 7% year over year to $2.1 billion, Service Cloud revenues increased 7% to $2.3 billion, Marketing & Commerce Cloud revenues rose 4% to $1.3 billion, and Platform & Other revenues were up 14% to $2.0 billion [4] - Revenues from the Integration and Analytics division grew 10% year over year to $1.5 billion [4] Geographic Performance - Revenues from the Americas, which represent 66.3% of total revenues, increased 7% year over year to $6.5 billion, while EMEA revenues grew 9% to $2.3 billion and Asia Pacific revenues rose 11% to $1.0 billion [5] Cash Flow and Balance Sheet - Salesforce ended the fiscal first quarter with cash, cash equivalents, and marketable securities totaling $17.41 billion, up from $14 billion in the previous quarter [7] - The company generated an operating cash flow of $6.5 billion and a free cash flow of $6.3 billion during the quarter [7] Future Guidance - For Q2 fiscal 2026, Salesforce projects total sales between $10.11 billion and $10.16 billion, indicating 8-9% growth year over year, with a consensus estimate currently at $10.02 billion [9] - The company anticipates non-GAAP earnings per share in the range of $2.76-$2.78 for Q2, with a consensus mark of $2.72, reflecting a year-over-year growth of 6.3% [10] - For fiscal 2026, Salesforce expects revenues between $41 billion and $41.3 billion, an increase from the previous guidance of $40.5-$40.9 billion [10][11]

Core Viewpoint - Salesforce Inc reported strong first-quarter results, but its shares declined due to margin concerns despite raised full-year revenue guidance [1][2]. Financial Performance - Salesforce's total revenue for the first quarter was $9.83 billion, reflecting a year-on-year growth of 7.6%, driven by an 8.3% increase in subscription revenue [4][6]. - The company reported earnings of $2.58 per share, with subscription and support revenue growing by 9% in constant currency terms [6]. Margin Analysis - Analysts noted an "uncharacteristic" miss on operating margins, despite total revenue surpassing consensus expectations [6]. - Salesforce's margins have typically expanded in tough demand environments, and the current trend may continue due to management's focus on profitable growth [3]. Growth Metrics - Data Cloud and AI annual recurring revenue exceeded $1 billion, showing a growth of over 120% [5]. - Current remaining performance obligation (cRPO) grew by 12.1% year-on-year, reaching $29.6 billion, although the second-quarter growth guidance was slightly below market expectations [5][6]. Analyst Ratings - Goldman Sachs maintained a Buy rating and raised the price target from $340 to $385 [8]. - Needham and Bank of America Securities also maintained Buy ratings with price targets of $400 and $350, respectively [8]. - JPMorgan reiterated an Overweight rating with a price target of $380 [8].

Marc Benioff, Chairman & CEO of Salesforce, speaking on CNBC's Squawk Box outside the World Economic Forum in Davos, Switzerland on Jan. 22nd, 2025.Salesforce shares slumped about 6% despite topping Wall Street's fiscal first-quarter estimates and lifting its full-year guidance due to artificial intelligence tailwinds.The sales and customer service software giant said it now expects $11.27 to $11.33 in adjusted earnings per share and $41.0 billion to $41.3 billion in revenue for the fiscal year. That's up f ...

Core Insights - Salesforce's stock price is rebounding from April lows, driven by its leadership in AI-assisted data management and CRM services, indicating sustainable growth potential [1] - The company is expected to accelerate growth in the next fiscal year through acquisitions like Informatica, which will enhance cash flow and capital returns [2] - Analysts have mixed responses to Salesforce's Q1 results, with equal price target reductions and increases, but the stock remains rated as a Moderate Buy with a consensus price target of $345, suggesting a potential 25% gain [3][6] Financial Performance - Salesforce reported a revenue growth of 7.7% to $9.83 billion, exceeding MarketBeat's consensus by nearly 100 basis points, driven by strong performance in core business and new offerings [6] - Total spending on Data Cloud and AI-related services grew by 120% year-over-year, with over 60% of new deals including these services [6] - The company improved its gross and operating margins, although increased marketing and taxes slightly impacted cash flow, which grew by only 4% compared to the previous year [7] Shareholder Returns - The dividend yield stands at 0.64%, accounting for less than 15% of the F2026 earnings forecast, complemented by share buybacks that reduced the share count by an average of 1.5% for the quarter [8][9] - Salesforce's balance sheet shows no red flags, with ample cash, low leverage, and a net cash position, indicating a strong financial condition [10] Market Outlook - The stock has pulled back, creating a potential buying opportunity for investors who missed earlier entry points, with a favorable growth outlook and positive analyst sentiment suggesting a rebound is likely [11][12] - Despite being rated as a Moderate Buy, Salesforce is not among the top stocks recommended by leading analysts, indicating a competitive landscape for investment opportunities [13]

Core Viewpoint - Salesforce is positioned as a stronger investment option compared to Adobe, driven by its focus on AI, unified platform strategy, and favorable earnings outlook [19]. Salesforce Overview - Salesforce dominates the customer relationship management market, maintaining the largest share according to Gartner [2]. - The company has expanded its platform through acquisitions, aiming to become a broader enterprise software provider focused on AI, data, and collaboration [3]. - AI is central to Salesforce's growth strategy, with the introduction of Einstein GPT in 2023 to enhance automation and customer experiences [4]. - The launch of Agentforce has generated $100 million in annualized revenues within two quarters, with over 4,000 customers utilizing it [5]. - Salesforce's annual recurring revenue (ARR) from Data Cloud has grown over 120% year over year [5]. - Despite an 8% year-over-year revenue growth in Q1 fiscal 2026, which is slower than previous years, adjusted EPS rose 6%, indicating operational soundness [6]. Adobe Overview - Adobe reported a 10% revenue increase to $5.71 billion in Q1 fiscal 2025, with non-GAAP EPS growing 13.4% to $5.08 [7]. - The company leads in creative software, with AI contributing significantly to growth, adding over $125 million in ARR last quarter [8]. - Adobe is expanding its AI offerings with tools like GenStudio and Firefly Services, aimed at enhancing marketing efficiency [9]. - The company plans to monetize Firefly through tiered pricing within Creative Cloud and is increasing sales efforts to various sectors [10]. - However, Adobe's second-quarter guidance indicates potential margin pressure, with expected non-GAAP EPS between $4.95 and $5.00, down from Q1 [11]. Earnings Estimates Comparison - Salesforce's earnings estimates have remained stable over the past 60 days, indicating confidence in its earnings stability [12]. - In contrast, Adobe's earnings estimates have been lowered, raising concerns about near-term profitability [12]. - Long-term earnings growth projections show Salesforce with a CAGR of 12.7%, slightly better than Adobe's 12.4% [14]. Price Performance and Valuation - Over the past year, Salesforce stock has increased by 26.7%, while Adobe shares have decreased by 7.5%, reflecting stronger investor confidence in Salesforce [16]. - From a valuation perspective, Salesforce trades at 6.32 times forward sales, compared to Adobe's 7.17 times, suggesting more upside potential for Salesforce [17].

Investment Rating - The investment rating for Salesforce Inc. is "Buy" with a 12-month price target of $340, indicating an upside potential of 22.7% from the current price of $277.19 [8][6]. Core Insights - Salesforce reported a Subscription Revenue growth of 8.3% YoY, exceeding the FactSet Consensus of 7.4%. The Operating Margin (OpM) was 32.3%, slightly below the consensus of 32.5% [1]. - The company raised its FY26 Total Revenue guidance to 8.6% YoY in USD and 8% in constant currency (CC), compared to previous guidance of 7.4% and 7.8% [1]. - Key growth drivers include a strong performance in the Data Cloud and AI segment, which reached $1 billion in Annual Recurring Revenue (ARR), growing 120% YoY [1]. - The company closed 8,000 Agentforce deals, including 4,000 paid deals, indicating robust demand [1]. - The Platform and Other segment, which includes Data Cloud and Slack, showed accelerating momentum with a 14% YoY growth [1]. - Current Remaining Performance Obligations (cRPO) grew by 12.1% YoY, with the highest net new dollars added since F1Q23 [1]. - EMEA region showed stabilization with a 9% YoY growth [1]. Summary by Sections Financial Performance - Subscription Revenue for F1Q26 was $9,255 million, with a YoY growth of 8.3% [9]. - Non-GAAP Operating Income was reported at $3,179 million, with an Operating Margin of 32.6% [9]. - Free Cash Flow Margin reached 64.0%, indicating strong cash generation capabilities [9]. Guidance and Expectations - For F2Q26, Salesforce expects Revenue growth of 8.7% in USD and 7.5% in CC, above the consensus of 7.4% [1]. - The company anticipates a Subscription Revenue growth of 9.5% in both USD and CC for FY26, up from previous estimates [1]. Market Dynamics - The report highlights the importance of understanding the Create-and-Close business performance, which reflects the health of small and medium-sized businesses (SMBs) [2]. - The report also emphasizes the need to assess the broader spending environment and demand backdrop, particularly in relation to Data Cloud and Agentforce deals [2].

Core Insights - Salesforce reported Q1 fiscal 2026 results with sales of $9.83 billion and earnings per share of $2.58, surpassing consensus estimates of $9.75 billion and $2.53 respectively [1] - The company announced the acquisition of Informatica for $8 billion, marking its largest acquisition since Slack in 2021 [1] - Salesforce raised its full-year forecast for adjusted earnings per share to $11.27-$11.33 and revenue to $41.0 billion-$41.3 billion, exceeding market expectations [1] Financial Performance - Salesforce's revenues grew by 8% to $9.8 billion in the latest quarter compared to $9.1 billion a year earlier, while the S&P 500 saw a 4.8% improvement [9] - The company has achieved an average revenue growth rate of 12.7% over the last three years, compared to 5.5% for the S&P 500 [9] - Salesforce's operating income over the previous four quarters was $7.9 billion, with an operating margin of 20.4%, higher than the S&P 500's 13.2% [12] Valuation Metrics - Salesforce has a price-to-sales (P/S) ratio of 7.1, compared to 3.0 for the S&P 500, and a price-to-earnings (P/E) ratio of 27 against the benchmark's 26.4 [9] - The price-to-free cash flow (P/FCF) ratio stands at 20.6, slightly above the S&P 500's 20.5 [9] - At a stock price of $280, Salesforce is trading at 7 times its trailing revenues [12] Financial Stability - Salesforce's balance sheet is considered robust, with a debt of $11 billion and a market capitalization of $265 billion, resulting in a low debt-to-equity ratio of 4.3% compared to 19.9% for the S&P 500 [12] - Cash and cash equivalents amount to $11 billion, constituting 11% of total assets of $99 billion, which is moderate compared to the S&P 500's 13.8% [12] Downturn Resilience - Salesforce stock has shown more severe impacts during downturns compared to the S&P 500, with a decline of 58.6% from its peak in November 2021 to December 2022 [13] - The stock fully rebounded to its pre-crisis high by March 2024, indicating some resilience [13] - Overall, Salesforce's performance across key metrics is rated as very strong, with financial stability categorized as extremely strong [13]

Group 1 - Salesforce Inc reported first-quarter revenue of $9.83 billion, exceeding the consensus estimate of $9.75 billion [1] - The company reported adjusted earnings of $2.58 per share, surpassing analyst estimates of $2.55 per share [1] - Salesforce expects second-quarter revenue to be between $10.11 billion and $10.16 billion, above estimates of $10.01 billion [3] Group 2 - The company raised its fiscal-year 2026 revenue guidance to a range of $41 billion to $41.3 billion, compared to estimates of $40.83 billion [4] - Salesforce increased its full-year adjusted earnings guidance to between $7.15 and $7.21 per share, against estimates of $7.24 per share [4] - Following the earnings announcement, Salesforce shares fell 0.4% to close at $276.03 [4] Group 3 - RBC Capital analyst downgraded Salesforce from Outperform to Sector Perform, lowering the price target from $420 to $275 [9] - Bernstein analyst maintained an Underperform rating on Salesforce, raising the price target from $243 to $255 [9] Group 4 - CEO Marc Benioff highlighted the company's unified enterprise AI platform, which includes Agentforce, Data Cloud, Customer 360 apps, Tableau, and Slack [2]

Market Overview - US stock index futures rose before the market opened, with Dow futures up 0.39%, S&P 500 futures up 0.88%, and Nasdaq futures up 1.34% [1] - European indices also showed positive movement, with Germany's DAX up 0.13%, UK's FTSE 100 up 0.05%, France's CAC40 up 0.63%, and the Euro Stoxx 50 up 0.50% [2][3] Commodity Prices - WTI crude oil increased by 0.40% to $62.09 per barrel, while Brent crude oil rose by 0.26% to $64.49 per barrel [3][4] Corporate News - Nvidia (NVDA.US) reported Q1 revenue of $44.1 billion, a 69% year-over-year increase, with data center revenue at $39.1 billion, up 73% year-over-year [11] - Salesforce (CRM.US) exceeded Q1 expectations with revenue growth of 8% to $9.8 billion and raised its revenue guidance for FY2026 [12] - C3.ai (AI.US) reported a 26% increase in revenue to $10.87 million for Q4 FY2025, with a positive outlook for FY2026 [13] - HP (HPQ.US) lowered its full-year earnings forecast due to tariff costs and economic weakness, with Q2 revenue of $13.2 billion, exceeding expectations but EPS falling short [14] - Li Auto (LI.US) reported a net profit of 647 million RMB for Q1 2025, a 9.4% increase year-over-year, with total vehicle deliveries of 92,864 units [15] - Futu Holdings (FUTU.US) saw Q1 revenue grow by 81.1% to 4.695 billion HKD (approximately $603 million), with net profit increasing by 97.7% [16] Economic Data and Events - Upcoming economic data includes the revision of the US Q1 GDP annualized rate and initial jobless claims for the week ending May 24 [17]

Group 1 - Goldman Sachs states that the acquisition of Informatica by Salesforce enhances AI capabilities, reaffirming a buy rating and a target price of $340 [1]