Salesforce Borrowed $25 Billion to Buy Its Own Stock and Cut Its Cash Flow Growth Guidance in Half
The software giant retired a tenth of its share count in a single stroke. The bill shows up in fiscal 2027 cash flow.
Overview
Salesforce (NYSE: CRM) made one of the biggest capital-allocation decisions in software this year, and it came in two parts.
In March, the company entered a $25 billion accelerated share repurchase -- the largest such deal in history, by its own description -- funded with a $25 billion debt issuance. Then, reporting fiscal first-quarter results in late May, it told investors that fiscal 2027 operating and free-cash-flow growth would come in around 4% to 5%, half the 9% to 10% it had guided to in February, specifically to reflect the cost of that debt.
Details
Borrowing $25 billion to buy your own stock is an aggressive move for any company. For Salesforce, which spent years funding buybacks comfortably out of its own cash flow, it marks a change in posture.
Source
Originally published at www.fool.com.