Salesforce Inc (NYSE: CRM) is a “durable business” that will remain strong during a recession, according to Bret Taylor. He’s the co-CEO of the California-based cloud company.
Highlights from Taylor’s interview on CNBC
This morning on CNBC’s “Squawk Box Europe”, Taylor said Salesforce has a history of surviving economic downturns and this time was unlikely to be any different.
Since the dot-com bubble burst, we’ve grown into an enduring business. We navigated the great financial crisis and the pandemic. We have $42 billion in remaining performance obligations, which is a measure of the durability of our business.
In May, the American software company reported market-beating results for the fiscal Q1 and raised its earnings guidance for the full year. The stock is down nearly 30% for the year.
Salesforce helps customers cut costs
Traditionally, IT spend tends to decelerate during a recession. But Bret Taylor is convinced Salesforce has a business that’s even more relevant in an economic slowdown. He noted:
Digital technology is more relevant in a downturn. Because fundamentally, it’s about productivity, driving cost savings, and automation. Our customers are interested in digitizing but they’re equally interested in cash flow and cost savings.
He quoted examples of ADT (home security company) and Stellantis (car manufacturer) – both of which have reaped significant cost savings as Salesforce customers. Last week, Salesforce launched a cloud-based service for creating and selling NFTs.
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