Co-Founder, Chairman & CEO, Salesforce Inc
Salesforce.com CEO Marc Benioff: Next-Generation AI | Mad Money | CNBC
Salesforce topped its second-quarter earnings estimates after the market close, boasting developments in artificial intelligence and new high-flying clients. Jim Cramer sat down with CEO Marc Benioff for more.
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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 (22 segments)
✨ AI-enhanced transcript with speaker attribution
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Jim Cramer0:05
What do you make of Salesforce.com, the king of cloud computing, after its record performance announced after the close? Okay, the company just delivered a one cent earnings beat off of the 32 cent faces, higher than expected revenues up 26% year. This is not a small company, people. Dramatic increase in its marketing cloud and its business in Europe on top of that. Salesforce just hit an annual revenue run rate of over $10 billion, faster than any other enterprise software company in history. Management raised full year sales guidance in a pretty dramatic way. Don't take it from me, let's take it with Marc Benioff, the visionary founder, chairman and CEO of Salesforce.com, to find out more about this record quarter. As always, posterous, Mr. Benioff, welcome back to Mad Money.
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Marc Benioff0:44
Jim, thanks so much for having me. Great to be with you.
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Jim Cramer0:47
All right, you hit the $10 billion mark, but the deferred is even much bigger than that. But looks like every region was incredible, the marketing cloud was incredible, Europe was great. Are these some big orders that you got, or just a huge multitude of large size?
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Marc Benioff1:04
Well, Jim, you can see the business is doing just fantastic. Salesforce just exceeded the $10 billion revenue run rate faster than any other enterprise software company in history. And in addition to that, just like you mentioned, we have $15 billion in on and off the balance sheet deferred revenue. That is the predictor of our future revenue growth. That is revenue that we have signed but not yet recognized. Incredible numbers. Okay, you know, now we can clearly see we are fast tracking to $20 billion, and that's all that's on my mind right now. Right here, right now, ahead of even I am. I have never been more excited about getting to 20 because 10 is behind me. You always have to be looking forward to the future and seeing what's coming.
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Jim Cramer1:49
Well, you know, I'm confused. I mean, first, we have a terrific chart here about who's the undisputed CRM market leader, and it shows you with 18.1%, ranked number one for the fourth consecutive year. But you know, your good friend Larry Ellison, who is brilliant, in his most recent conference call he said, 'Who sold more than $2 billion in cloud annually recurring revenue? This is the second in a row that we sold more cloud ARR than Salesforce.com.' My head is spinning. Who's right here?
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Marc Benioff2:16
I think the numbers are right, Jim. And you can see we just pounded Oracle in the quarter. And you can see it in the market share numbers, you can see it right there in that chart that you've gone to many times, that Salesforce is considerably larger than Oracle and the spread continues to go. And you can also see it in these top-line growth numbers. Look at that growth, Jim. We are forecasting now 24% growth for the year. We raised our revenue guidance by $100 million for the second quarter in a row. That's incredible. And I've got dreams of 25%.
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Jim Cramer2:50
All right, well, your 25%, I think people have to recognize that the market size here is much more dramatic than when you and I first started talking about 10 years ago. The cost of the CRM market in 2020, how could it be more than $50 billion?
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Marc Benioff3:05
Well, Jim, the forecasts are that the CRM market is going to one trillion dollars, and that is what we are getting excited about, and that is what is really motivating a lot of this growth. You can see it on the chart that's on the screen here. The CRM market has gone from being an also-ran market in enterprise software to the largest and most important market in enterprise software. It used to be operating systems, it used to be databases, it used to be other things in enterprise software. Now it's all about CRM, and we are number one in the fastest growing segment in enterprise software. That is growing our revenue so dramatically.
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Jim Cramer3:38
You've got some interesting new clients now. I do want to talk about Airbus briefly, one that surfaced very quickly. Our Department of Veterans Affairs, David Shulkin, okay, Dr. Shulkin is trying to really get this department, which everybody knows has issues, up to snuff. So he brings in you to try to help fix the VA.
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Marc Benioff4:00
Well, yes, we did. We closed a very large agreement with the Veterans Administration this quarter, Jim. And we're going to help them build great systems to support our veterans. Nobody deserves high quality systems to provide customer relationships more than our veterans. And we are delighted to work with the US government building a system that supports our veterans.
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Jim Cramer4:19
Now, the US government itself, is it that we find is better? You always say keep an open mind. Are we still open-minded toward the US government given some of the most recent news events?
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Marc Benioff4:31
Well, one thing we're really open-minded about is this is the quarter they really started buying again. They just have not been buying that much in the previous quarters. And now that the budget and all these things are kind of behind us, we see agencies like the VA able to buy again. And that is very exciting for companies like Salesforce. So they're really... and it doesn't matter really necessarily who's president in that case, and it's not necessarily a conscience issue whether you do work for the president.
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Jim Cramer4:56
Well, I think it's important to do work for our veterans, and that's something that we're absolutely doing right now.
Okay, now you have this, we've talked about Einstein many times. You're saying that Einstein helped Airbus to use artificial intelligence to more accurately understand its customers. So what is Airbus doing with AI that makes it so that they might do better than somebody else?
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Marc Benioff5:20
What a great question, Jim. I mean, here we are, we've been talking now online here with you for more than a decade, and we've talked about the emergence of the cloud. And I think everybody understands how important the cloud is. It is the single most transformative technology in enterprise software today. I think everybody understands mobility, because everybody's got a cell phone and lots of apps, and seeing how they've moved off of PCs and onto mobility. Now we're really seeing this incredible new capability that's driving so much growth in enterprise software: artificial intelligence. And Salesforce is the first to deliver artificial intelligence in all of our products, helping our customers do machine learning and machine learning in tologies and deep learning using Einstein. Einstein is Salesforce's AI platform that is really the next generation of Salesforce's products. And it's in the hands of all of our customers right now, making a huge difference. It gives them the ability to make much smarter decisions about their business each and every day. And you can see that with the customer that you mentioned, Airbus, where we signed a very large agreement this quarter to help them take all the customer and machine data that they have and make much smarter decisions with it.
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Jim Cramer6:32
What was the largest order that you landed this quarter?
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Marc Benioff6:36
Well, actually, Jim, that company and that customer has asked us not to name them, like many of our customers. But I can tell you it was one of the largest automobile manufacturers in the world. They signed a wall-to-wall agreement with us in sales and service and marketing and commerce, in all these areas. Very, very exciting. And I'll tell you another great company that I'm super excited about is Louis Vuitton. And Jim, you know we've been talking about the great services that we've been doing for Louis Vuitton, automating their retail stores and helping them to get connected to their customers in one-on-one relationships. Well, now you probably saw they launched the new Louis Vuitton watch. And this watch is fantastic, Jim. And one of the things that's exciting about this watch is that it has a one-on-one relationship with every customer that wears it. And the LV Pass app behind the Louis Vuitton watch here is built on Salesforce. So now they have a super high luxury retail brand, and it's all connected with Salesforce.
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Jim Cramer7:34
All right, well, I've got my Apple watch off, I'll look into a Louis Vuitton watch. One last question. You are the leader in talking about equality, as far as I'm concerned, and conscience as the CEO. You know that there's been the disbanding of two different councils with President Trump. There are people who can come forward and say, 'Listen, for good in my conscience, I cannot work with this man.' Where are you? If he called you right now and said, 'Look, I need your advice, Marc, will you help me?'
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Marc Benioff8:06
Well, you know that I've worked with three administrations, and I have a set of core values. You mentioned one of them, equality. Another one is love. And the things that are important to me, you know, don't change. Administrations change, Jim. And yes, I went to the White House and he asked me, 'Well, what should we do?' And I said, 'Focus on apprenticeships.' Because with all of this artificial intelligence that's happening, we're gonna have more job displacement than ever. We need to make sure we do more job retraining. And that's why we're working to have a five million apprenticeship dream. But for the CEOs who call me and say, 'Well, what should I do? Should I resign? Should I stay? Should I go?' I don't really know what to tell them, because I didn't join any of the councils. Because I really learned a long time ago the best thing I can do is just give my best advice. And the best way that I can give my best advice is not to be encumbered with any job with any administration.
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Jim Cramer8:58
All right, let's leave it at that. Marc Benioff, congratulations on a record quarter. Chairman, CEO of Salesforce.com. Good to see you, sir.
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Marc Benioff9:05
Jim, thanks so much. Fun as always.
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Jim Cramer9:07
Yep, the stock's been a horse. You see why? It's not fun going higher. It might expect gifted. Oh yeah. Jim Cramer here from TheStreet, buddy. Thanks for watching. See me, see you 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.