6 days ago
Salesforce CEO Rejects SaaSpocalypse After Strong Quarterly Results
Some people worry that artificial intelligence could replace software companies.
Salesforce CEO Marc Benioff said those worries are “nonsense.”
He argued that advanced AI systems need customer-management software rather than replacing it.
Salesforce reported stronger-than-expected results for its latest quarter.
Its revenue was $11.35 billion, and its free cash flow grew sharply.
The company also raised its expected revenue for the full year.
Benioff said nine of the 10 leading AI companies use Salesforce and Slack.
Salesforce and Anthropic also introduced Claudeforce, which lets Claude work with customer information stored in Salesforce.
Salesforce CEO Marc Benioff called fears of an AI-driven software collapse “nonsense.”
Salesforce reported second-quarter revenue of $11.35 billion, exceeding the $11.32 billion estimate.
The company’s free cash flow rose 81% year over year to $1.1 billion.
Salesforce raised its annual revenue forecast to between $46.1 billion and $46.4 billion.
Salesforce shares rose more than 13% in extended trading after the results and guidance.
- Who
- Salesforce and its CEO Marc Benioff, along with Anthropic and its Claude AI system.
- What
- Salesforce reported better-than-expected quarterly results, raised its guidance, and rejected the “SaaSpocalypse” narrative.
- Where
- The results were discussed in an interaction with CNBC’s Jim Cramer.
- When
- The results and Claudeforce announcement were reported on Wednesday; the quarter was Salesforce’s second quarter of fiscal 2027.
- Why
- Benioff said the results show that AI is strengthening Salesforce’s business rather than replacing or cannibalizing it.
AI Could Replace Software
AI Strengthens Software
Impact of frontier AI models
AI Could Replace Software
Fears across the software industry suggest that advanced AI models could replace services provided by software companies, contributing to major market losses.
AI Strengthens Software
Benioff said frontier models depend on CRM systems and do not replace them, arguing that Salesforce’s results demonstrate AI is expanding demand for its products.
Evidence from Salesforce’s results
AI Could Replace Software
The broader “SaaSpocalypse” narrative reflects concerns that AI could reduce spending on software platforms.
AI Strengthens Software
Salesforce reported stronger-than-expected revenue and cash flow, raised its guidance, and said spending by leading AI companies on Salesforce and Slack had surged 435%.
Key facts
- Quarterly revenue
- $11.35 billion, compared with an estimate of $11.32 billion
- Free cash flow
- $1.1 billion, up 81% year over year
- Annual revenue guidance
- $46.1 billion to $46.4 billion
- Next-quarter EPS guidance
- $3.42 to $3.44, above the $3.38 estimate
- Next-quarter revenue guidance
- $11.42 billion to $11.5 billion
- Share-price reaction
- Salesforce shares rose more than 13% in extended trading
- AI-platform usage
- Benioff said nine of the 10 leading AI companies use Salesforce and Slack, with spending up 435% year over year
Quotes
Marc Benioff
Salesforce chief executive officer describing the SaaSpocalypse narrative
“They do not replace them.”
CNBC TV 18
“nonsense”
CNBC TV 18
Sources
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