“For us, I think the market doesn’t fully realize how committed we are to growth and margins,” Benioff told Yahoo Finance Live at the software giant’s Dreamforce conference in San Francisco before winding down several of the company’s recent initiatives.
Benioff also didn’t rule out making big deals in the future, echoing the sentiment of Salesforce Co-CEO Bret Taylor, but did point to two ambitious goals the company announced at the conference.
Salesforce has committed to 25% operating margin by calendar year 2025, the first time Salesforce has committed to a public operating margin target. If hit, it would represent a remarkable increase from the 2022 target of 20.4%.
The company also expects revenue to reach $50 billion by 2025, a huge increase compared to Wall Street estimates of $31 billion for this year.
“We want to grow our revenue,” Benioff said. “We want to increase our margins. We want to increase our market share. We want to increase our customer success. We want to bring people together. It all has to do with each other.”
In general, investors on the ground at the conference reacted positively to the news.
“A faster pace of innovation on the product side, more detailed overviews of major opportunities within the customer base, strong commitments to improve efficiency and an increasing focus on shareholder value point to a sustainable 25%+ EBIT CAGR and work to improve investor confidence in those goals,” Morgan Stanley analyst Keith Weiss wrote in a note to clients.
Salesforce showed “solid progress towards rebuilding investor credibility,” Weiss added. “During the 2022 Investor Day, the Salesforce management team took on discussions with investors, properly addressing key concerns.”
Weiss reiterated a buy equivalent Overweight advice on Salesforce stock with a price target of $273.