Salesforce co-CEO steps down, Benioff makes a $1 billion acquisition

Daniel Fowler
February 28, 2020

All of the executives, including Marc Benioff, heaped praise on him and hinted that Block had something in mind for the next phase of his career besides his role as advisor.

Benioff praised Block's almost seven-year tenure at the company and said he was happy that the "incredible leader and close friend" would stay on as a direct advisor to him.

In after-hours buying and selling on Tuesday, Salesforce's stocks fell as little as 3.5% to $175.00, amid investor worries that Block's fast departure generally is a distraction.

Salesforce forecast first-quarter revenue between $4.88 billion and $4.89 billion, compared with analysts' estimates of $4.84 billion, according to IBES data from Refinitiv. The software company will announce earnings February 25 and analysts tracked by Zacks Investment Research are expecting EPS of $0.12 - but some, are more bullish in the long-run.

Salesforce will pay $1.33 billion in cash to acquire cloud and mobile software company Vlocity, which builds industry-specific software natively in the Salesforce platform. That startup will boost Salesforce's vertical-alignment strategy and deepen industry relationships, Block said. But it does fix Benioff's close to general keep watch over of the corporate-he's additionally chairman-that he based 21 years in the past. It is now a critical component to Salesforce achieving "our own holy grail" of creating the single source of truth for its customers.

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The company's total revenue rose 34.6 per cent to U.S.$4.85 billion, above estimates of U.S.$4.75 billion.

But there's more opportunity for Tableau "to monetize that in a more aggressive way" by adding ISVs into the mix, Benioff said.

The acquisition was small by Salesforce's standards and it might be the last one for a while, following its massive $15.7 billion Tableau acquisition.

Another closely watched metric from Salesforce is their current remaining performance obligation (CRPO) guidance which is revenue the company has under contract but that hasn't been recognized on the books yet as the obligation is forthcoming.

"Salesforce is living proof that stakeholder capitalism works when we value all stakeholders", the chief executive said.

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