Salesforce launches record 25 billion dollar share buyback

15:40

By: Dakir Madiha

Salesforce launches record 25 billion dollar share buyback

Salesforce announced the largest accelerated share repurchase ever executed by a company, committing 25 billion dollars to buy back its own stock as part of a broader 50 billion dollar repurchase program approved earlier this year.

The company said it paid the 25 billion dollars to a consortium of major banks and received an initial delivery of about 103 million Salesforce shares. The transaction represents the immediate execution of half of the buyback program authorized by the company’s board in February 2026.

Chief executive Marc Benioff said the aggressive repurchase reflects strong confidence in the company’s long term prospects. Robin Washington, Salesforce’s president and chief operating and financial officer, said the accelerated share repurchase demonstrates confidence in the company’s growth trajectory and cash flow generation.

The initial 103 million shares delivered Monday represent about 80 percent of the total shares expected to be repurchased through the agreement, based on Salesforce’s closing stock price on March 11, when the accelerated share repurchase contracts were finalized.

The final number of shares will be determined using the volume weighted average price of Salesforce stock during the life of the transaction, adjusted by a discount. The final settlement is expected to occur in the third or fourth quarter of the company’s fiscal year 2027.

Banks participating in the transaction include Banco Santander, Bank of America, Citibank, JPMorgan Chase, and Morgan Stanley. J. Wood Capital Advisors served as an adviser for the deal.

To finance the buyback, Salesforce issued 25 billion dollars in senior bonds divided across eight tranches with maturities ranging from 2028 to 2066. Coupon rates on the bonds range between 4.5 percent and 6.7 percent. The bond offering closed on March 13 and generated approximately 24.885 billion dollars in net proceeds.

The company also secured a five year term loan of 6 billion dollars to refinance existing debt linked to its acquisition of Informatica.

If completed as expected, the share repurchase could remove roughly 14 percent of Salesforce’s outstanding shares, a significantly higher proportion than the 3 to 4 percent typically associated with buyback programs at large technology companies.

Salesforce shares had fallen about 26 percent since the start of the year when the board approved the 50 billion dollar repurchase authorization. The announcement came shortly after the company reported fiscal year 2026 revenue of 41.5 billion dollars alongside its fourth quarter earnings results in late February.

The debt funded buyback has drawn mixed reactions from analysts. Some investors question whether taking on 25 billion dollars in new debt would be better spent on expanding artificial intelligence capabilities as competition intensifies across the software industry.

According to D.A. Davidson analyst Gil Luria, Salesforce returned about 99 percent of its free cash flow to shareholders in the fourth quarter alone.

The company expects operating cash flow of at least 16 billion dollars for fiscal year 2027 and said it can manage the new debt while continuing to invest in products such as Agentforce, its artificial intelligence agent platform.