After Salesforce posted its first revenue miss since 2006, CEO Marc Benioff told CNBC’s Jim Cramer how the market for enterprise software companies has changed since the pandemic.
“You can’t control the buying environment. The reality is, you’re going to have heterogeneous buying environments, it’s going to happen,” Benioff said. “And we’re in this post-pandemic reality where the buying environment has — and we’ve talked about this now for a few quarters — been very measured for enterprise software companies. Not just a company like Salesforce but many companies.”
Salesforce posted weaker-than-expected guidance, and its revenue came in at $9.13 billion, less than the $9.17 billion analysts expected, according to LSEG. The company released earnings after Wednesday’s close, and shares dipped as low as 16% in after-hours trading.
Benioff said that during the pandemic, companies “aggressively” bought enterprise software. And since then, they’ve worked to “absorb a lot of the technology that they’ve put in” while, at the same time, there’s the artificial intelligence boom going on. He suggested that “those things have to be rationalized for these companies.”
However, Benioff said he’s pleased with Salesforce’s cash flow and margins, as well as what its products can do for customers like FedEx and Air India.
“It’s been a complete financial transformation,” Benioff said. “But, not only that, it’s also a complete transformation of the product line for customers, giving them this incredible new capability with artificial intelligence.”
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Disclaimer The CNBC Investing Club Charitable Trust holds shares of Salesforce.