"During the earnings call in late February, CEO Marc Benioff indicated that he views current market conditions as an attractive opportunity to buy back shares. According to him, this effectively utilizes available capital, and taking on debt is a logical choice in this case. He also emphasized that he believes the stock is undervalued and that management therefore wants to repurchase as many shares as possible."
"Part of the share buyback is financed with bonds maturing in 2028 and having terms of several decades. In total, approximately half of the program is funded by debt. Salesforce expects free cash flow of approximately $16 billion this year, which provides the flexibility to meet these obligations over time."
"According to Benioff, the share structure has been diluted in recent years due to major acquisitions, including Slack and Tableau. The current buyback is intended to partially correct that effect and restore the value per share."
Salesforce announced a $50 billion share repurchase program financed through a combination of debt and cash flow, with obligations extending through 2066. CEO Marc Benioff stated the company views current market conditions as favorable for buybacks and believes the stock is undervalued. Approximately half the program is funded by debt, including bonds maturing in 2028. The company expects $16 billion in free cash flow this year to support obligations. Salesforce has already repurchased 103 million shares through an accelerated program and aims to complete remaining repurchases by fiscal 2027. Benioff indicated the buyback aims to reverse share dilution from acquisitions like Slack and Tableau. The announcement occurs amid sector-wide pressure from AI concerns affecting traditional software models.
#share-buyback-program #corporate-debt-financing #stock-valuation #software-industry-pressure #capital-allocation-strategy
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