Salesforce Launches $25 Billion Buyback, Halves FY27 Cash Flow Growth Outlook to 4%-5%
Updated
Updated · Fortune · May 27
Salesforce Launches $25 Billion Buyback, Halves FY27 Cash Flow Growth Outlook to 4%-5%
8 articles · Updated · Fortune · May 27
$25 billion of new debt funded Salesforce’s largest-ever accelerated share repurchase, prompting the company to cut fiscal 2027 free cash flow growth guidance to 4%-5% from 9%-10%.
103 million shares were delivered upfront in the ASR, reducing diluted share count 10% year over year and lifting first-quarter EPS by 23 cents on an adjusted basis and 14 cents under GAAP.
Q1 revenue rose 13% to $11.1 billion, above guidance, while current remaining performance obligations reached $33.6 billion, up 14%, and Salesforce nudged full-year revenue guidance slightly higher to $45.9 billion-$46.2 billion.
Management framed the buyback as a response to investor anxiety over AI’s threat to software vendors, with the stock down 16% this year and 36% below its 52-week high.
Is Salesforce's $25B buyback a true power move or a costly distraction from the existential threat of AI?
With AI poised to eliminate software seats, can the SaaS industry invent a new way to charge before it's too late?