CEO Marc Benioff says that Salesforce doesn't 'really see an M&A environment,' hinting that it won't be making any more big acquisitions any time soon

  • Salesforce CEO Marc Benioff said on the company's earnings call with analysts on Tuesday that he doesn't "really see an M&A environment" for the cloud software giant.
  • Benioff's comment suggest that Salesforce isn't considering another big acquisition at the moment.
  • He said Salesforce is focused on its own business right now, and making sure its recent large acquisitions of MuleSoft and Tableau are complementing its overall product vision. 
  • His comments come as Salesforce reported earnings that beat Wall Street estimates, as it raised its full-year revenue guidance to $20.7 to $20.8 billion. 
  • Got a tip? Contact this reporter via email at [email protected] or Signal at 925-364-4258. 
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With Microsoft and Oracle both apparently throwing their hats in the ring to buy viral video app TikTok, it seems like the time is ripe for enterprise companies to make big deals. 

But despite its acquisitive reputation, Salesforce seems to be staying above the fray — especially given its recent big-money deals for data integration company MuleSoft and data analytics provider Tableau, which cost Salesforce $6.5 billion for MuleSoft and over $15 billion for Tableau. 

Salesforce CEO Marc Benioff said on the company's earnings call with analysts on Tuesday that for a company like the cloud software giant, he doesn't "really see an M&A environment" right now, hinting that another big acquisition isn't in the cards. His remarks came as a response to an analyst's question on his view of the potential TikTok acquisition and if that indicates M&A appetites picking up. 

"We're not in a good M&A environment, I just don't see it," Benioff said. "Things always are changing but I think this isn't part of our plan right now, we don't see that. We see focusing on our business, focusing on these operational values, executing our business." 

Benioff said he feels "lucky" Salesforce was able to buy MuleSoft and Tableau when it did, because today the company would not have been able to buy them. He added that "it would not have worked for us financially," though he did not offer specifics. 

"We've made these two major plays to extend and complement our Customer 360 [strategy] and that's what we're focused on," Benioff said.

Salesforce also made a smaller, but notable acquisition of Vlocity for $1.3 billion in February, which is helping to double down on strategy to sell to specific industries. Salesforce was also recently said to be looking at acquisitions in the robotic process automation (RPA) space.

A rapid pace of growth

His comments come as Salesforce reported a big earnings beat for the second quarter, bringing in $5.15 billion in revenue, and reporting earnings per share of $1.40. Both were above Wall Street's estimates. 

And it seems like Salesforce is now anticipating rosier financial results for the rest of the year as well. It raised its full year revenue estimate slightly, forecasting $20.7 to $20.8 billion. This came after lowering the forecast in May from $21 billion down to $20 billion. 

Analysts previously speculated that Salesforce would have to do more acquisitions to keep up its rapid pace of growth, but Benioff's comments on Tuesday suggest the company is thinking otherwise. Those remarks came as a surprise to at least one analyst, who believes that Salesforce will still make deals if the timing and valuation were just right.

"I really would not count out M&A for Salesforce. That's the way this company is going to continue to grow," Rishi Jaluria, an analyst at D.A. Davidson, told Business Insider. "They have a good organic growth engine but they also do need acquisitions over time to continue growing at this sort of rate."

Benioff, for his part, touted Salesforce's ability to respond quickly to its customers, and told analysts that focus specifically is what helped it thrive during the last quarter, despite the broader economic turbulence. 

"We're not all over the field like a lot of our competitors, by the way," Benioff said on the call. He didn't name specific companies, but said some of its competitors compete across both the enterprise and consumer segments, in a possible jab at Microsoft. 

"We're not, we're singularly focused," he added.

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