Top 4 Takeaways from the Salesforce Earnings Call

After Salesforce (CRM) reported first-quarter fiscal 2025 revenues that topped analyst estimates and offered weaker-than-expected second-quarter guidance, executives joined the customer relationship management (CRM) company’s call to discuss shopping environment. revenue prospects, role in the era of artificial intelligence (AI) and mergers and acquisitions (M&A) strategy.

“Measured purchasing behavior”

Salesforce chief operating officer (COO) Brian Millham said the company continues to see “measured purchasing behavior,” noting that the stronger booking momentum seen in the fourth quarter faded as the company “saw extended deal cycles, deal compression and high control budget levels.” in the first quarter.

Milliham added that some “intentional changes” were made this quarter to “increase long-term productivity and provide a better customer experience, which also played a role in reducing booking performance.”

Still “confident” in meeting 2025 budget guidelines

Salesforce provided weaker-than-expected guidance for the second quarter, but maintained its guidance for the full 2025 fiscal year.

Asked why the company didn’t lower its full-year forecast to make expectations more conservative, Salesforce’s chief financial officer (CFO) Amy Weaver said: “We are confident we will stay within our target range.”

Salesforce CEO Marc Benioff added that the company stands to benefit from an “AI transformation” as its enterprise customers build AI-powered tools.

Data is “gold” for companies looking to create enterprise AI tools

“The one thing that every enterprise needs to make AI work is customer data, as well as the metadata that describes it,” Benioff said, emphasizing Salesforce’s position to capitalize on the AI ​​boom.

He called data “the new gold for those enterprises” looking to leverage AI in their businesses, and said Salesforce represents one of the “largest repositories of enterprise customer service desk data and metadata” in the world.

Benioff called out Microsoft (MSFT)-backed OpenAI, saying the company has “amazing engineering” and a great user interface for its AI offering, but said the early AI leader “stole data” to do it.

Some media, e.g New York Times (NYT) has filed lawsuits against OpenAI, alleging that the company trained its artificial intelligence models using their content without permission. Since then, OpenAI has signed several deals with companies including Reddit (RDDT) and News Corp (NWSA) to license their content for training purposes.

Benioff said that unlike consumers, enterprise AI systems depend on internal data, and Salesforce helps its enterprise customers connect to that data.

Open to merger and acquisition opportunities

Asked about the company’s M&A strategy, Benioff said Salesforce is open to M&A opportunities that will add to its offerings.

Salesforce “continues to look at these opportunities and believes that we will not hesitate to pursue M&A for any particular reason if it is within our framework,” Benioff said, adding that if an M&A opportunity is outside of our framework, the company “will be extremely careful.”

In April, reports emerged that Salesforce was in advanced talks with Informatica to purchase the data management software provider. Informatica later stated that the company was not acquired by Salesforce.

Weaver said Salesforce will “always be opportunistic” and will prioritize data and drive shareholder value.

Salesforce shares fell nearly 16% to $229.05 in extended trading Wednesday at 7:20 p.m. ET after the company’s earnings announcement.