Latest news with #Informatica
Globe and Mail
7 hours ago
- Business
- Globe and Mail
Salesforce's (CRM) $8Bn Informatica Acquisition Shakes Up AI Race
The market response to Salesforce's (CRM) recent $8 billion acquisition of Informatica is mixed. This move marks Salesforce's latest effort to strengthen its AI capabilities, particularly within its Agentforce platform. However, the company has faced criticism over past large acquisitions, like Slack, that didn't fully meet expectations. Reflecting this cautious sentiment, the stock's reaction to the announcement has been lukewarm at best. Confident Investing Starts Here: All in all, there are upsides and downsides to deals this size, leaving me cautiously optimistic on Salesforce's most recent splurge. Salesforce's Acquisition Strategy Under the Microscope For those unfamiliar, Salesforce is a leader in customer relationship management (CRM) software. The company has a track record of high-profile acquisitions, including Tableau for $15.7 billion in 2019, MuleSoft for $6.5 billion, and Own Company for $1.9 billion in 2024. In 2023, activist investors criticized Salesforce's aggressive acquisition strategy, urging the company to focus more on profitability and scale back on large deals. Since then, Salesforce has moderated its M&A activity, now targeting only acquisitions that align closely with its strategic goals. An Unlikely Match Made in AI Heaven Salesforce's acquisition of Informatica was initially unexpected, especially after the deal collapsed in April 2024 when the price was pegged at $11 billion. However, the two parties eventually reached an agreement, leading to the current deal. This acquisition comes as Salesforce's growth has slowed, shifting from years of double-digit gains to more modest single-digit increases. Informatica is widely regarded as a leader in AI-powered enterprise cloud data management, serving over 5,000 clients across numerous countries. This acquisition should help Salesforce strengthen its AI capabilities, particularly in automating and improving data preparation, quality, and governance. Salesforce is no stranger to AI—its Agentforce platform uses generative AI to create autonomous agents that handle complex tasks such as coaching sales reps and automating quoting processes without human involvement. Integration Challenges and Potential Pitfalls Make no mistake, this acquisition also has a clear financial motive: to reignite growth, a common playbook for large tech companies facing slowing organic expansion. However, this approach doesn't always yield the desired results. Informatica was a substantial company on its own, and merging two large organizations is a complex, time-consuming process that can take years. Consider Salesforce's previous integration challenges, like with Slack's ambitious 'Digital HQ' vision. Additionally, Informatica's appeal partly stemmed from its neutrality—it was platform-agnostic across various multi-cloud and multi-vendor environments. Customers might resist if Informatica is perceived merely as a gateway into the Salesforce ecosystem. Cultural clashes are another potential hurdle, something Salesforce knows well from past experiences. Salesforce Boosts Cash Firepower One thing is certain: Salesforce has plenty of cash to deploy. The company generated $13.1 billion in operating cash flow in fiscal year 2025 and projects $14.5 billion for fiscal year 2026. As the following chart shows, Salesforce has clearly made cash generation a top priority in recent years. Is Salesforce a Buy, Sell, or Hold? On Wall Street, CRM sports a Moderate Buy consensus rating based on 27 Buy, eight Hold, and two Sell ratings in the past three months. CRM's average price target of $349.09 implies an upside potential of 26.5%. Following Salesforce's Informatica acquisition, Bank of America Securities analyst Bradley Sills issued a Buy rating on CRM with a price target of $350. He believes the reasonably priced deal will enhance Salesforce's data capabilities. Regarding near-term financial implications, the analyst believes 'the acquisition is anticipated to be accretive to Salesforce's non-GAAP operating margin and free cash flow starting in the second year post-closing.' However, not everyone on Wall Street is as confident in the deal as Sills. DA Davidson expressed caution, noting 'Informatica's suboptimal execution track record and legacy technology offerings.' Cautious Optimism for Salesforce's Future The market's cautious reaction to Salesforce's latest acquisition is understandable, but a closer look shows the deal makes strong strategic and financial sense. The Informatica purchase accelerates Salesforce's AI capabilities and strengthens its position against other tech giants. It's also expected to improve operating margins and enhance growth prospects. That said, there are key challenges to monitor in the coming years. Salesforce must successfully integrate Informatica while preserving its reputation as a platform-agnostic data provider. Additionally, blending the two companies' cultures will be crucial to sustaining innovation, a reality often overlooked by investors but vital in business. While relying on M&A to drive growth isn't always ideal, it's sometimes necessary. To borrow a baseball analogy, Salesforce may look great 'on paper,' but we won't truly know how this deal plays out until the team has spent some time 'on the field.'
Entrepreneur
8 hours ago
- Business
- Entrepreneur
How Much Do Salesforce Employees Make? Median Salaries
Salesforce's first-quarter earnings report on Wednesday beat estimates, with revenue up 8% year-over-year to $9.83 billion. Earlier this week, the company also announced a deal to buy data management company Informatica for $8 billion, its biggest acquisition since it purchased Slack for $27.1 billion in 2021. "Sometimes you have a quarter when everything is going right for you," said Salesforce CEO and Board Chair Marc Benioff, 60, in an earnings call on Wednesday, per The Wall Street Journal. According to Salesforce's 2025 proxy statement, released in April, Benioff made over $55 million in the 2025 fiscal year, which ran from Feb. 1, 2024, to Jan. 31, 2025. His base salary was $1.55 million, and his bonus was $2,500, both unchanged from 2024. His stock awards increased by about $8 million, and his option awards by over $3 million from 2024. His $55 million compensation included over $4 million in personal security costs and over half a million dollars in aircraft usage. Meanwhile, Salesforce's median employee took home a total compensation of $178,949 in fiscal year 2025. Benioff made approximately 308 times more than the typical Salesforce employee. Related: Salesforce Has Used AI to Reduce Personnel Costs By $50 Million This Year. Here's Which Roles Are Affected. In the 2024 fiscal year, Salesforce's median employee received a salary of $164,985. That year, Benioff made $39.6 million, or 240 times more than the median. Salesforce CEO Marc Benioff. Photographer: Chris Ratcliffe/Bloomberg via Getty Images Salesforce's median salary is lower than Google, where a mid-level employee made $331,894 in 2024, and Nvidia, where a typical employee made $301,233. Meanwhile, Salesforce could be slowing down hiring in certain departments and accelerating hiring in others as it attempts to internally maximize its use of AI tools. The company's chief financial and operations officer, Robin Washington, said on a call with analysts on Wednesday that Salesforce has downsized "some" of its hiring needs thanks to AI. It's also hiring fewer customer service representatives and software engineers as its current staff use AI for greater productivity, but is growing its sales team by 22% this year. Related: Here's How Much 8 CEOs Made in 2024, From JPMorgan's Jamie Dimon to Disney's Bob Iger CEO Pay Is Rising A study released on Thursday by the Associated Press found that CEO pay increased by nearly 10% in 2024 due to higher profits and stock prices. The study, which was based on proxy statements filed with federal regulators by companies in the S&P 500, examined the pay of 344 executives. It found that the median pay package of CEOs in 2024 was $17.1 million, up from $16.3 million in 2023. The highest-earning CEO on the list was Patrick W. Smith, the CEO of taser-making company Axon, who took home $164.5 million. Other top-earning executives included General Electric's H. Lawrence Culp, Jr. ($87.4 million), Apple's Tim Cook ($74.6 million), and Netflix's Theodore A. Sarandos ($61.9 million). Most of those pay packages were comprised of stock or options awards. The study also found that the typical employee at an S&P 500 company earned $85,419 in 2024, a 1.7% year-over-year increase.
Yahoo
15 hours ago
- Business
- Yahoo
What it's like watching your company be acquired for $8 billion—20 years after leaving
In 2004, after cofounding and leading data management company Informatica for 12 years, Gaurav Dhillon stepped away from the company for good. This week, now roughly 20 years later, Informatica was acquired by Salesforce in an $8 billion deal. 'It's deeply satisfying,' said Dhillon. 'When you look back at it and now see all these people on LinkedIn who have Informatica skills, it gives me a thrill—even though [my current company] SnapLogic is a competitor now. There's a certain amount of sibling rivalry, where you have an older sibling and a younger sibling, and you can never be older than your older brother. But you can provide interesting, new products and sometimes be more successful.' Informatica's last two decades have been complicated. Started in 1993 and going public in 1999, Informatica was a Y2K darling that by the mid-2000s was struggling to find its future. Dhillon left over strategic disagreements with the board, believing Informatica's technology was falling behind, especially amid the shift to cloud-based solutions. After walking away in 2004, he founded competitor SnapLogic in 2006. Meanwhile, Informatica had a string of owners. In 2015, Permira and the Canada Pension Plan Investment Board bought Informatica for about $5.3 billion, and then the company went public again in 2021. There were rumors around a possible Salesforce acquisition last year that crystallized into this week, when Informatica became the latest purchase in Salesforce's string of deals. (Earlier this month, Salesforce announced plans to acquire There's tension in how Dhillon feels about the subject—gratitide for the runaway early success that shaped his life, and a nagging sense that things could have turned out differently. 'On one hand, we have this $8 billion outcome that's satisfying,' said Dhillon, who has no stake left in Informatica. 'On the other hand, who's buying who, right? I mean, I was one of Marc [Benioff's] first public company customers when he was starting Salesforce back in the day. So, you really have to continually double down on market opportunities to go forward. And this is what Informatica stopped doing that later led to the private equity years.' Dhillon's SnapLogic—whose backers over the years include Andreessen Horowitz, Floodgate, and Sixth Street Growth—is fashioned as a direct competitor to Informatica. (On its website, there's copy that reads: 'We left Informatica. You can, too.' The company raised its most recent funding round of $165 million in 2021 at a $1 billion valuation.) A lesson Dhillon brought to SnapLogic: Continuous innovation is essential. 'If you use the filter of 'We'll for sure make money in this fiscal year' to say yes or no to projects, you're going to run out of innovation,' he said. 'It's only a matter of time.' Ultimately, Dhillon told Fortune that he doesn't regret leaving Informatica behind. 'If you're graced with some success early in life, you have choice,' he said. 'And when we have choice, we have to engage passionately with big problems.' Sometimes, said Dhillon, a clean break is all you need. He thinks back to that point of no return, 20 years ago. 'We had recruited an Oracle executive on the board,' said Dhillon. 'And he said, 'Gaurav, make a clean break. It's probably the most difficult thing you can do for a while. But it's the best thing you can do, instead of hanging around as chairman. If they're going to do a clean reset and start to cash cow the business, let them do it.' And I'd worked 12 years of Sundays—I was ready to take a break.' Dhillon did, taking a year off learning Spanish at a university in Buenos Aires. And then he started over. See you Monday, Allie GarfinkleX: @agarfinksEmail: a deal for the Term Sheet newsletter here. Nina Ajemian curated the deals section of today's newsletter. Subscribe here. This story was originally featured on Sign in to access your portfolio
Cision Canada
17 hours ago
- Business
- Cision Canada
CPP Investments to Exit Investment in Informatica through Salesforce Transaction
TORONTO, May 30, 2025 /CNW/ - Canada Pension Plan Investment Board (CPP Investments) has agreed to support Salesforce's proposed acquisition of Informatica, an AI-powered enterprise cloud data management company, in which it has been a major investor since 2015. Informatica announced on May 27, 2025, that it has entered into a definitive agreement to be acquired by Salesforce in an all-cash transaction at an equity value of approximately US$8 billion, net of Salesforce's current investment in Informatica. CPP Investments initially invested in Informatica when it partnered with global investment firm Permira to take the company private. In October 2021, Informatica completed its IPO on the New York Stock Exchange under the ticker symbol INFA. Salesforce's acquisition is expected to generate US$2.7 billion (C$3.7 billion) of net proceeds for CPP Investments upon the completion of the transaction. "We are pleased with the outcome of this transaction, which is a testament to the hard work, dedication, and innovation of the Informatica team over the last decade. We are proud to have supported the company's successful transformation into a leader in AI-powered cloud data management," said Sam Blaichman, Managing Director and Head of Direct Private Equity at CPP Investments. "Informatica has been a long-standing and successful investment for the CPP Fund, producing solid returns for CPP contributors and beneficiaries. We are confident Informatica will continue to thrive under Salesforce's stewardship and look forward to witnessing its future achievements." Under the terms of the agreement, Salesforce will acquire all the outstanding shares of common stock of Informatica, and holders of Informatica's Class A and Class B-1 common stock will receive US$25 in cash per share. The transaction is subject to the satisfaction of customary closing conditions, including the receipt of required regulatory approvals. CPP Investments' Private Equity department invests in a wide range of private equity assets globally, both indirectly through externally managed funds and directly alongside partners, with net assets totaling approximately C$146.5 billion as at March 31, 2025. Private Equity continues to seek return premiums by investing in less-liquid assets and focusing on long-term value creation through commitments to funds, secondary markets, and direct investments in private companies. About CPP Investments Canada Pension Plan Investment Board (CPP Investments™) is a professional investment management organization that manages the Canada Pension Plan Fund in the best interests of the more than 22 million contributors and beneficiaries. In order to build diversified portfolios of assets, we make investments around the world in public equities, private equities, real estate, infrastructure and fixed income. Headquartered in Toronto, with offices in Hong Kong, London, Mumbai, New York City, San Francisco, São Paulo and Sydney, CPP Investments is governed and managed independently of the Canada Pension Plan and at arm's length from governments. At March 31, 2025, the Fund totalled C$714.4 billion. For more information, please visit or follow us on LinkedIn, Instagram or on X @CPPInvestments.
Time of India
a day ago
- Business
- Time of India
Salesforce raises annual results forecast on strong cloud spending
Salesforce raised its revenue and adjusted profit forecasts for fiscal 2026 on Wednesday, as the enterprise software provider benefits from strong cloud spending while ramping up monetisation of its artificial intelligence agents. Cloud spending from major enterprises has remained resilient even amid global macroeconomic uncertainty over the past few months, as companies invest heavily in artificial intelligence to modernize their digital infrastructure. Shares of the company were up around 1.5% in extended trading. Higher cloud spending bodes well for Salesforce's efforts to ramp up monetization for its AI agent platform, Agentforce , as it bets big on agentic technology to spur adoption of its software offerings. The company said it closed over 8,000 deals since launching Agentforce, with half of them already paid. Its Data Cloud and AI annual recurring revenue has exceeded $1 billion. While Agentforce's monetization has underperformed investors' expectations, "experts have cited a multi-billion dollar revenue opportunity by the end of 2026, with the expectation that Agentforce will ultimately become Salesforce's largest revenue contributor," said Third Bridge analyst Charlie Miner. Salesforce bought data management platform Informatica for about $8 billion on Tuesday to bolster its data tools. The company's re-entry into big-ticket M&A after years on the sidelines sparks concerns about Salesforce's ability to return to double-digit growth without relying on acquisitions. "The acquisition of Informatica represents an attempt by the company to compensate for the slowing organic growth," said Gil Luria, analyst at D.A. Davidson. The company expects fiscal 2026 revenue to be between $41 billion and $41.3 billion, compared with its prior forecast range of $40.5 billion to $40.9 billion. It raised its full-year forecast for adjusted earnings per share to a range of $11.27 to $11.33, compared to its previous forecast of $11.09 to $11.17 per share. The company reported first-quarter revenue of $9.83 billion, beating estimates of $9.75 billion, according to data compiled by LSEG.
