Salesforce Inc. delivered a solid earnings and revenue beat just one day after announcing a plan to acquire the data management software pioneer Informatica Inc. for $8 billion.

The company also delivered strong guidance for the current quarter and raised its full-year earnings and revenue forecast. Yet investors were nonplussed, and its stock rose only a little over a point after-hours.

In its first-quarter earnings report, the customer service software maker posted a profit before certain costs such as stock compensation of $2.58 per share, coming in ahead of the $2.54 analyst consensus estimate. Revenue for the period rose 7.5%, to $9.83 billion, surpassing Wall Street’s forecast of $9.75 billion.

All told, Salesforce posted a net profit of $1.54 billion in the quarter, just slightly higher than the $1.53 billion profit it generated in the year-ago quarter.

The report comes at a time of great uncertainty, with analysts still unsure about what kind of impact President Donald Trump’s sweeping tariffs on goods imported into the U.S. might have on Salesforce’s business. But in a conference call, Salesforce Chief Executive Marc Benioff (pictured) struck an optimistic tone, and was keen to point out the benefits that Informatica would bring to the company.

The Informatica acquisition will be the company’s most expensive since its $27.1 billion deal to buy Slack back in 2021. The purchase of Slack was the last in a string of expensive acquisitions made by the company back then, and it led to some activist investors pushing back, pressuring the company to reduce its spending at a time when revenue growth was slowing.

Salesforce consequently made significant cuts, reducing its headcount by about 10% in January 2023 while Benioff announced later that year that the board of directors had disbanded its mergers and acquisitions committee. Around the same time, Salesforce also started paying a dividend to shareholders.

Benioff’s decision to buy Informatica suggests Salesforce is now back in business in terms of acquisitions, and the initial reaction to the deal has generally been favorable.

Dave Vellante, chief analyst at theCUBE Research, noted that Salesforce is buying Informatica at a lower price than it was originally willing to pay. “Informatica did a good job when they went private in improving its margin profile — so Salesforce will be able to make this acquisition accretive in the near future,” he said.

On a conference call with analysts today, Benioff revealed that he has been looking to bring Informatica into the company’s fold for 20 years. He added that the companies most recently held talks over a merger last year, but walked away after failing to agree terms.

Informatica was founded in 1993 and sells one of the industry’s most popular ETL, or extract/transform/load, platforms. Companies use the software to move data between applications. One of the tasks that the platform can ease is the process of loading records from third-party systems into Salesforce.

The company went public for the first time in 1999, only to go private again in 2015 when it was bought out by Permira Funds and Canada Pension. It returned to the public market again in 2021, and in its most recent earnings report earlier this month it reported revenue of $403.9 million, up 4% from a year before, with annualized cloud subscription revenue growing at 30%, to $848 million.

The addition of Informatica will give Salesforce much more credibility in terms of data integration and governance, Valoir analyst Rebecca Wettemann told SiliconANGLE.

“It will make it easier for customers to plug in data from outside the Salesforce ecosystem and still get clean, AI-ready insights through Agentforce,” she said. “With Informatica, Salesforce isn’t just connecting data; it’s making a stronger case that it can be the enterprise’s trusted AI platform, not just a CRM giant.”

“Salesforce and Informatica have had a well-established partnership that enables their joint customers to synchronize data across various applications seamlessly,” said SiliconANGLE founder and co-CEO John Furrier. “The collaboration, now acquisition, helps in integrating Salesforce with third-party applications using Informatica’s robust data management platform.

Benioff said there’s a lot of potential for the acquisition in terms of artificial intelligence agents that require extensive amounts of data to operate. They’ll need to clean up that data first, and Informatica can help with that, he added.

“Look, Informatica is a small company,” Benioff told analysts. “They don’t have the distribution scale that we have. So that idea that we have the ability to really go out there and start to sell that product to all companies worldwide, to really show them that they need this, for this capability. Now, this is why I have this fever about growing.”

Not everyone was so enthusiastic about the deal, though. Howard Ma of Guggenheim Partners said in a note to clients that he saw a risk in terms of Salesforce’s ability to integrate Informatica’s software properly with its own platforms.

“Salesforce has a long history of taking many years to integrate acquired companies (e.g., ExactTarget, DemandWare, MuleSoft, Tableau, Slack), some of which have never been fully integrated from a technology perspective,” he said.

In any case, Salesforce continues to make progress in terms of AI agents. During the quarter, it debuted its new AgentExchange marketplace, where developers can sell their agents to other companies. In addition, the company said its own Agentforce agents have helped it internally. Robin Washington, the company’s president and chief operating and financial officer, said she was able to reassign 500 customer support staff after using agents to automate the work they used to perform, bringing in around $50 million in savings.

The company didn’t say much about Agentforce’s actual contribution in terms of revenue, but according Wettemann, that’s not entirely surprising, for it’s still a new platform and is currently in “land-and-expand” mode.

“Right now it’s more about adoption than dollars, so Salesforce is bundling it to build stickiness and trust before going big on monetization,” she pointed out. “Remember, it has only been available for a few months and not in all geographies. Expect real revenue impact to kick in in a few quarters, once usage scales and value-based pricing takes hold.”

For the current quarter, Salesforce is targeting earnings of between $2.76 and $2.78 per share on revenue of between $10.11 billion and $10.16 billion. That’s better than Wall Street’s targets of $2.73 in earnings and $10.1 billion in sales.

The company bumped up its annual forecast too. It’s now looking for earnings of $11.27 to $11.33 per share for the full year, with expected revenue of between $41 billion and $41.3 billion. That’s up from a prior forecast of $11.09 to $11.17 in earnings and $40.5 billion to $40.9 billion in revenue. Analysts are modeling earnings of just $11.16 per share on sales of $40.82 billion.

Washington reiterated guidance of 9% growth in subscription and support revenue, with some contribution from Agentforce. However, she admitted the company also sees some weakness in marketing and commerce software revenue, which could result in slower growth this year.

In the year to date, Salesforce’s stock is down 17%, while the S&P 500 Index has stayed flat.

Photo: Fortune Photo/Flickr