Salesforce CEO 'SaaSquatch' Benioff says his company will monster the SaaSpocalypse
Selling so many agents they've cooked up a way to measure what they do
Even by the somewhat offbeat standards of the Salesforce Ohana, the CRM giant just delivered a strange earnings announcement.
Speaking on the company’s Q4 earnings call, CEO Marc Benioff boasted that his company is a mythical Sasquatch, aka “Bigfoot,” set to tuck into a buffet of juicy customers waiting to buy agentic AI.
“If there is a SaaSpocalypse, I think it might be eaten by the SaaSquatch because there are a lot of companies using a lot of SaaS because SaaS just got a lot better with agents as a service,” he said, referring to the theory that sinking values for SaaS companies reflect the fact that AI has damaged their business models.
Which is a rather odd metaphor as the Sasquatch myth suggests the creature is reclusive and nocturnal, rather than rapacious.
Benioff also crowed about winning 180 customers for his new Agentforce IT Service, which analysts see as the biggest threat yet to ServiceNow’s ITSM dominance in the enterprise.
“We just launched Salesforce ITSM in October and in just a few months [chief revenue officer] Miguel [Milano] has won over 180 customers, but I especially love five customers who got to leave the purgatory of ServiceNow like SunRun, Cornerstone, Cool Systems and there are others too that we’re not allowed to mention, but I might mention them anyway, who are leaving ServiceNow for the new Salesforce IT services,” Benioff said.
But then, before the CFO Robin Washington was allowed to run through the numbers for the quarter and the year, Benioff broke from the usual earnings call format by chatting with Wyndham Hotels CEO Geoffrey Ballotti, bantering about mango sorbet with SharkNinja CEO Mark Barrocas, and telling the handful of analysts on the line about the drinks he shared at home Tuesday night with his neighbor Workday CEO Aneel Bhusri, who he said was very impressed with Slackbot.
“He couldn’t believe everything that was happening between our two companies,” Benioff said.
Despite the banter, news of a 5.8-percent increase in quarterly dividend to 44 cents, and a promise to repurchase $50 billion in stock, Salesforce stock slipped 5.6 percent in afterhours trading.
Analyst Keith Weiss with Morgan Stanley said Salesforce’s current remaining performance obligations came in at $35.1 billion, which was “disappointing” to analysts who expected a “little bit of a beat” in the measure of unrecognized revenue.
“I think that’s stoking some concerns with investors. Can Salesforce do both? Can we grow a big Agentforce business and sustain the growth and momentum in the broader Salesforce portfolio? Can we bring along the entirety of the business?” Weiss asked. “And what gives you confidence in that acceleration in the back half of the year.”
Salesforce guidance from a year ago bet that revenue would land between $40.5 and $40.9 billion for growth of seven to eight percent. Full year revenue came in at $41.5 billion, about $600 million over the upper range of its growth guidance. However that over achievement was undercut by Salesforce’s acquisition of Informatica which contributed $399 million to that total, meaning organic revenue growth was actually around $200 million. Revenue for the year’s final quarter landed at $11.2 billion, a twelve percent year-over-year jump.
Benioff told Weiss he was “proud” of the numbers they put up.
“This fiscal year is far better than I expected it at the beginning of the year,” Benioff said. “In the third and fourth quarter Miguel’s numbers far exceeded my expectations and to your point Agentforce is also exceeding our expectations. Could we sell more? Could we renew more? Can we do more? Can we do this? Can we do all these various things? We absolutely can, but we’re grateful for what we’ve been able to achieve so far.”
Benioff said Salesforce is underlevered and after achieving $15 billion in free cash flow last year – and expecting to make $16.5 billion in free cash this year – plans share buybacks to ensure it uses cash correctly.
“We’re not using debt effectively. I think now is the opportunity to take some of that stock back out of the market and these are great prices. I’m sure you would agree with that and we want to use our capital correctly and I think debt is a great way to do that and I think our stock is a great price and I want [company president] Robin [Washington] to buy as much of it as she possibly can.”
The company laid off 1,000 employees earlier this month, and Benioff stoked widespread employee outrage in a meeting by making a joke about US Immigration and Customs Enforcement Agents tracking workers.
Token metrics
The company also debuted new metrics called Agent Work Units (AWUs) developed by Salesforce chief marketing officer Patrick Stokes to measure the productivity of its AI agents. Salesforce already tracks the tokens it uses – 19 trillion since it started counting – and token use by its customers, but wanted to measure tokens used to perform work.
“So what we did is we said: ‘What if we could look at those work units relative to the tokens?’ and we said: ‘Oh there’s a relationship between the two.’ We can start to see a ratio of tokens being consumed and work coming out and that ratio starts to become very interesting,” Stokes said.
Specifically, they measure discrete tasks executed by AI agents in production across the Salesforce platform, including Agentforce and Slack, according to the fine print. AWUs represent the conversion of generative AI capabilities into measurable business outputs, such as resolving customer cases, updating records or triggering automated workflows.
They can also measure this per customer to show how much work agents are performing. ®