Serial acquirer Salesforce (CRM) hasn't made any splashy acquisitions since its $27.7 billion purchase of workforce communication platform Slack in July 2021. But that doesn't mean deals are off the table.
"M&A will definitely be part of our future," Taylor told Yahoo Finance Live at the software giant's 20th annual Dreamforce conference in San Francisco on Wednesday.
Taylor explained that Salesforce has been laser-focused on expanding its profit margins to show investors the power of a business model rooted in integrating new companies. He noted that Salesforce aims to reach a 20.4% operating margin this year, in part fueled by deeper integration of previous acquisitions such as Slack, Mulesoft (acquired in 2018), and Tableau (acquired in 2019).
Salesforce has an eye toward making more "shareholder-friendly" deals in the future, Taylor said. That could help lift Salesforce's stock price.
Salesforce shares are down 41% year-to-date compared to a 16% drop for the Dow Jones Industrial Average as investors fret about the outlook for Big Tech and slowing global economies.
Wall Street appears to appreciate Salesforce's more stringent approach to deal-making.
"We think Salesforce is moving away from explicitly commenting on M&A so some could read that as negative (i.e. a big deal is brewing)," Evercore ISI analyst Kirk Materne said in a Dreamforce preview note to clients. "In our view, the company is well aware that a big deal is essentially a credibility killer as to the above statement on margins so we think the odds of something big (i.e. $10bn-$20bn) remain low in the near-term. We think a transaction that is smaller and does not impact the margin expansion (i.e. similar to Vlocity) would not be an issue at these levels."