Co-Founder, Chairman & CEO, Salesforce Inc
Salesforce CEO Marc Benioff: The Best Quarter Ever | Mad Money | CNBC
All eyes were on Salesforce when it reported a stellar quarter. Can it continue to dominate as the king of cloud?
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About Marc Benioff
Marc Benioff, the co-founder, chairman, and CEO of Salesforce, has been actively discussing the company's financial performance and its strategic pivot toward an "agentic enterprise." In the company's FY27 first quarter earnings call, Benioff reported that Agentforce, Salesforce's autonomous agent platform, has become an $800 million business, and he raised the midpoint of the company's FY27 revenue guidance to between $45.9 billion and $46.2 billion. He also announced a $25 billion accelerated share repurchase program, part of a larger $50 billion buyback authorization, which he described as a move to return shareholder value during a period of "incredible low prices." Benioff has characterized the current market environment as a "SaaS apocalypse," but stated that it is "not my first" such cycle, expressing confidence in Salesforce's position. Benioff has emphasized Slack's role as the central user interface for the AI ecosystem, stating that "Slack became the user interface to Salesforce but even to the whole AI ecosystem." He described Salesforce's strategy as a stack that includes large language models, a federated data layer (including the newly acquired Informatica), applications like sales and service, and the Agentforce orchestration layer. He has also discussed the importance of the Model Context Protocol (MCP), an open-source standard from Anthropic, as a foundational piece of AI infrastructure. In conversations about AI's broader impact, Benioff expressed concern about potential labor disruption from AI, stating he worries that it could operate "faster" and be "broader across the economy" than previous technological shifts. On political matters, Benioff described himself as "an American" rather than a Democrat or Republican, and advocated for "economic entanglement" with China as a path to a "no conflict deal."
Transcript (20 segments)
✨ AI-enhanced transcript with speaker attribution
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Jim Cramer0:06
After yet another vicious session, the worst day of the year for the averages, we finally got some decent news. Salesforce.com, king of cloud computing, just reported after the close and the results were pretty darned good by any estimation, even in a moment when it feels like the earnings of individual companies simply can't triumph over the broader forces that are cruelly pulling this market down. I think it's worth remembering that stocks are not just pieces of paper; they represent pieces of real companies, and some of these companies are doing quite well even as their stocks just keep getting hammered. For example, Salesforce, led by the visionary Marc Benioff, just delivered a 2-cent earnings beat off of 17 cents basis, meaningfully better than expected. Revenue up 24% year-over-year, higher than anticipated. Billings up 19.7% year-over-year. Plus, Salesforce raised its full-year revenue guidance, and they're on track to become the fastest enterprise software company to reach the $7 billion annual revenue rate later this year. Record revenues, a ton of money in the proverbial deferred revenue bank. So let's check in with Marc Benioff, the bankable founder, chairman, and co-CEO of Salesforce.com, to hear more about the record quarter and where his company is headed. Mr. Benioff, welcome back to Mad Money.
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Marc Benioff1:07
Jim, thanks for having me on the show.
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Jim Cramer1:09
All right, Mark, let's get right to it. You've blown past the $6.5 billion annual revenue rate. Now you're setting for the first time a $10 billion annual revenue rate. Where's this confidence coming from?
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Marc Benioff1:21
Jim, this is the best quarter we have ever had. You can just see these numbers are just incredible, and we just see having just an unbelievable year. You know, next year, Jim, we're going to be the fourth largest software company in the world. That's our goal, and you can see we're only going to be behind Microsoft, Oracle, and SAP at that point. Number four, and I'll tell you, Jim, we're not going to be number four for very long because Salesforce just has the momentum and it has the support of our customers, and that's why we're doing so well.
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Jim Cramer1:52
Now, I wanted to not bury the lead. I feel like I've done it a couple of times. There's two numbers you got to add together for people at home who want to look at things. You want to add the deferred revenue on the balance sheet, which is $3.03 billion, increased to 29, and then the unbilled off-balance sheet ended the quarter at $6.2 billion. Mark, you have $9.2 billion. That's, I could say, is in the bank, right?
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Marc Benioff2:13
Well, that's exactly right, Jim, and I'll tell you that that also shows you that we're not selling millions of dollars of customer relationship management solutions like Microsoft, Oracle, and SAP are. We're selling billions of dollars of customer relationship management systems, and that's why we're the number one customer relationship management vendor in the world, and that shows up in our deferred revenue. Now, more than $9 billion on and off the balance sheet, Jim, that's just incredible.
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Jim Cramer2:40
But is that, given where the stock is, is that the lowest ratio that you've had? In other words, the stock seems to be, in some ways, I know that people say, 'Jim, come on, the price-to-earnings multiple is gigantic,' but on an operating cash flow basis and a deferred revenue basis, the stock is actually less expensive than it's been the last time we talked.
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Marc Benioff2:58
Well, Jim, I'm going to leave the stock up to you, but I'll tell you what I focus on, which is, of course, number one, are customers happy? Are they thrilled? You know, we're coming into Dreamforce. Are they going to be delighted? And number two, we're focused on growing that top line, and you know we've talked about that each and every quarter that I've been on the show. And look at this, Jim, we have a clear trajectory to $10 billion in revenue and beyond. That's way beyond our expectations. I mean, it was only a few years ago when I was on the show we were talking about the billion-dollar Salesforce year. Now we can see hitting the $10 billion number, and we're going to go right through that too. We're the fastest enterprise software company ever to $7 billion. You can see that on the numbers today, and we're going to be the fastest growing enterprise software company ever to $10 billion. That's my dream, and then we just keep going from there. And I'll tell you why, Jim, it's because the cloud is happening, social is happening, mobile is happening, data is happening, and the Internet of Things is happening. And that means you need to be closer to your customer than ever before. And that's why great companies like Koch and General Electric and DuPont and so many great companies all over the world have made these huge commitments to Salesforce, because we're helping them get closer to their customers than ever before.
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Jim Cramer4:14
All right, let's talk about huge commitment. How many new, say, eight- or nine-figure deals this quarter?
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Marc Benioff4:24
Well, Jim, we continue to have record numbers of large deals, and you can see that in some of the marquee agreements that we signed during the quarter. And you know some of the customers, and I'll just tell you some of the customers that I've signed this year that I've just been so excited about include just incredible relationships with Coca-Cola.
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Jim Cramer4:44
Coca-Cola Germany, we should point out there.
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Marc Benioff4:46
Oh no, Jim, this is Coca-Cola all over the world. We have different relationships with a lot of, of course, Coca-Cola is a highly diversified company with different bottlers and as well as the main Coca-Cola company. We have agreements with many, many different Coca-Cola companies all over the world, and all of them together have made up a phenomenal story at Coca-Cola. We also, of course, have great relationships and really exciting momentum with so many other exciting customers, including General Electric, including DuPont, including Sony. I mean, it's just been awesome.
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Jim Cramer5:24
Well, now we just had a great quarter from Home Depot, which they don't point blank say Salesforce, but obviously they're getting more out of their customers and their contractors. I saw a great demo. You've got a new one that you're featuring on your website. Maybe there'll be at Dreamforce: Stanley Black & Decker, which tells me that you're not just going to the retail, you're going to the actual supplier to the retail to figure out what they want. Maybe people at home would understand: what is a tool company doing needing Salesforce?
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Marc Benioff5:52
Well, you know, tools are becoming smarter, Jim, and tools are becoming more connected, and tools are connected to the customer for the first time. And Stanley Black & Decker is a story where they want to be much closer to their customer than ever before. Sometimes they've been highly separated from the customer because maybe you're borrowing your brother-in-law's tools or your mother-in-law's tools or your sister-in-law's tools. I mean, I know that I sometimes have to walk across the street to my neighbor and I borrow their tools. They don't know I'm the customer. In this case, Stanley Black & Decker is going to know who the customer is when they're using the product, how they're using the product, if that customer needs support, how they can be more responsive to the customer, how they can upsell the customer. I mean, in the world of connected products, you have to be more connected to your customer than ever before. You have to connect with your customers in exciting new ways. That's the power of the Internet of Things.
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Jim Cramer6:45
One last question. These are truly great numbers, and they come on a day when they're sorely needing great numbers, particularly in tech. But we keep reading about how in San Francisco it's impossible to keep talent, that there's just bidding wars going for really small, smart people, that these unicorns are getting everybody. How are you able to keep your workforce happy and get the people you need from the top schools?
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Marc Benioff7:08
Well, Jim, we just have a world-class culture at Salesforce. You probably saw we just were awarded one of the most innovative companies in the world again by Forbes just a couple of weeks ago. We're Fortune Magazine's most admired software company. And during the quarter, Jim, we became a Fortune 500 company. And I'll tell you, it's our culture. It's our culture of giving back, generosity. It's our culture of volunteerism. It's what we're doing for the schools, for the hospitals. It's a unique feeling when you're working at Salesforce, and it's probably a feeling that you don't want to leave because you're not only helping customers be successful, you're helping the world be better. And that's what Salesforce is all about.
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Jim Cramer7:45
Well, Mark, I'll tell you, a breath of fresh air on the worst day of the year for the stock market. And we will certainly see you at Dreamforce coming up.
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Marc Benioff7:51
Jim, we can't wait to have you at Dreamforce. It's going to be the biggest, best, and most exciting Dreamforce ever. And Jim, did you hear the Foo Fighters are playing?
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Jim Cramer7:58
Well, there you go. I'll bring my kids then too. Marc Benioff, chairman and co-CEO of Salesforce. Thank you so much for calling in, Mark. Really appreciate it. Mad Money's back after the break.
Boo-yah! Jim Cramer here from Mad Money. Thanks for watching CNBC on YouTube. Click here to subscribe and get the jump on my exclusives with CEOs, plus market news, investing advice, and a whole lot more.