Salesforce reported record first-quarter fiscal 2027 results and began its largest-ever accelerated share repurchase program. The company initiated a $25 billion accelerated share repurchase as part of a $50 billion authorization approved in February 2026. In the quarter, Salesforce returned $27.5 billion to shareholders, including $27.1 billion from the share repurchase and $365 million in dividends. The accelerated share repurchase delivered 103 million shares upfront and reduced the diluted share count by 10% year over year. The buyback increased first-quarter earnings per share and GAAP earnings per share. To fund the program, Salesforce issued $25 billion in debt, creating a headwind to operating cash flow and free cash flow growth and cutting the full-year cash flow growth outlook roughly in half.
"Salesforce really wants to counter the narrative that an AI-related "saaspocalypse" has endangered its growth. So, alongside its record first-quarter fiscal 2027 results on Wednesday, the cloud software giant commenced its largest-ever accelerated share repurchase at $25 billion. In doing so, the company juiced its earnings per share but cut its full-year cash flow growth outlook roughly in half to account for the debt issued to fund the block share repurchase."
"The $25 billion accelerated share repurchase (ASR) is part of a $50 billion stock buyback authorization the Salesforce board approved in February 2026. In the first quarter of fiscal 2027, Salesforce returned $27.5 billion to shareholders, including $27.1 billion in the mega-share block purchase plus $365 million in dividends. The ASR included upfront delivery of 103 million shares and drove Salesforce's diluted share count down 10% year over year."
"Salesforce CEO Marc Benioff said on Wednesday's earnings video vodcast that the company has "returned record levels to our investors," noting that it was especially important during "this unusual time." Salesforce's stock is down 16% year to date, and 36% below its 52-week high, as Wall Street frets that the advent of AI spells trouble for software-as-a-service vendors like Salesforce and ServiceNow."
"To fund the ASR, Salesforce issued $25 billion debt, which led to a five percentage-point headwind to operating cash flow and free cash flow growth for the full year. Benioff had signaled the company's new appetite for debt in the previous earnings call in February when he told investors that the company was "very under leveraged," and that "we want to use our capital correctly, and I think debt is a great way to do that.""
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