Salesforce acquires Slack over $27 billion in a combination of shares and cash. Salesforce exceeded Wall Street estimates in the third quarter, but revenue growth slowed. Salesforce profit forecast for the 4th quarter below analyst expectations.
Salesforce (CRM) on Tuesday published its quarterly report and forecasts and announced the largest deal in its history in app purchase for official communication Slack (WORK).
Shares of Salesforce, an increase of 48.4% since the beginning of the year, down 4% in after-hours trading on Tuesday.
The Salesforce report for the third quarter of 2021 fin. year
Company corporate software reported earnings per share 3rd quarter (ended 31 October) of $1.74, which is significantly better than the previous indicators and at $0.99 better than the analyst estimate of $0,75.
Total revenue of Salesforce increased by 20% to $5,42 billion, which is third consecutive quarterly decline in growth, but above average analytical predictions of $5.25 million Statistics quarterly revenues and profits with Salesforce for the last 2 years available here.
Income cloud for Sales Cloud sales rose 12% to $1.3 billion in Income support and customer Service Cloud rose 21% to $1.4 billion.
Unit Platform & Other, which includes the cloud platform to create applications in Heroku and Lightning, a software module MuleSoft API management and data visualization Tableau, brought $1.6 billion, which is 24% higher than last year.
The quarter was marked for Salesforce the fact that its stock has been added to the index of “blue chips” Dow Jones August 31.
Salesforce announced Work.com for Schools, a tool for interaction of teachers with students, as well as software Salesforce Meetings, which allows you to use the data stored on the services of Salesforce, during video conferencing, which can be held in different apps (Zoom, Google Hangouts).
Forward-looking statements Salesforce
Salesforce expects earnings per share in the fourth quarter of 2021 will be $0,73–$0,74, it is below average analytical predictions of $0,86.
Salesforce expected revenues for the fourth quarter of 2021 amount $5,665 billion – $5,675 billion, better than analysts ‘ forecast of $5,52 billion.
According to the forecasts in Salesforce, revenue for the first quarter of 2022 will be $5,86 billion– $5,715 billion.
For the entire 2022 fin. year the company expects to receive $25,45 billion– $25,55 billion, including $600 million in revenue from Slack, assuming the deal closes at the end of the second quarter.
Mark Hawkins, CFO of Salesforce, coming in 2014 from Autodesk, where he was chief financial officer of the company, will retire on January 31. Amy weaver, President, and chief chief legal officer of Salesforce, will be the successor to Hawkins.
Buying Salesforce Slack
Rumors about the future deal between Salesforce and Slack appeared last week on Wednesday, causing shares of Salesforce fell by 6.3% over the week, the action Slack grew by 46.5%.
According to a statement by the companies on Tuesday, Salesforce intends to acquire the company Slack for the cash-flow and stock.
“In accordance with the terms of the agreement, the shareholders of the Slack gets $26, and 79 in cash and 0,0776 Salesforce common stock for each share of Slack, which represents a cost of approximately $27.7 bn, based on the closing price of the ordinary shares in Salesforce on November 30, 2020,” – said in a press release.
This is a record size of the deal for Salesforce, whose biggest purchase to this point was worth $15.3 billion for the company in data visualization Tableau. The deal will also become one of the largest in the industry, along with IBM buying Red Hat in 2018 for $34 billion, and Microsoft buying the company LinkedIn in 2016 for $27 billion.
With the purchase of a Slack service for official communications with more than 130,000 paid customers, Salesforce will expand its portfolio of business applications that can attract new customers to other cloud services of Salesforce.
Slack, in turn, will use the large user base of Salesforce, which will allow the company to better compete with alternative application Teams from Microsoft. Experts point out that the competition between Salesforce and Microsoft will increase after the completion of the transaction.
