Salesforce turbocharges $25 billion stock buying spree with debt, cuts cash flow guidance in half

Key Points:

• Salesforce launched its largest-ever accelerated share repurchase (ASR) program worth $25 billion, part of a $50 billion buyback authorization, reducing its diluted share count by 10% year over year and boosting first-quarter earnings per share.
• To fund the ASR, Salesforce issued $25 billion in debt, which led to a significant reduction in its full-year free cash flow growth outlook from 9-10% down to 4-5%, reflecting a five percentage-point headwind from the debt.
• Despite the debt impact, Salesforce slightly raised its full-year revenue guidance to between $45.9 billion and $46.2 billion, expecting organic revenue growth in the second half of fiscal 2027 driven by sales, service, Slack, and Agentforce.
• The company reported strong first-quarter fiscal 2027 results with $11.1 billion in revenue, up 13% year-over-year, and GAAP earnings per share of $2.42, both exceeding guidance and significantly boosted by the share repurchase.
• Salesforce CEO Marc Benioff emphasized the importance of returning value to investors amid challenging market conditions, noting the stock is down 16% year to date amid concerns over AI’s impact on software-as-a-service vendors.