(Reuters) -Salesforce expanded its stock buyback program by $10 billion and announced a new dividend, but its lower-than-expected annual revenue forecast pushed shares down 4% in after hours trading.
The company’s downbeat forecast signals a likely slowdown in cloud and tech spending as clients grapple with high interest rates and rising inflation, compelling them to keep a lid on costs.
The company expects revenue between $37.7 billion to $38 billion for full-year 2025, compared with analysts’ estimate of $38.62 billion, according to LSEG data.
Warnings of a slow economy prompted Salesforce to cut about 700 employees, or roughly 1% of its global workforce, last month, adding to the slew of layoffs across the tech and media industry.
However, Salesforce beat revenue estimates for fourth-quarter revenue as it benefited from higher cloud spending, joining other cloud giants like Amazon.com and Microsoft.
The company reported revenue of $9.29 billion for the quarter ended Jan. 31, beating analysts’ estimate of $9.22 billion.
In early 2023, Salesforce had become a target for activist investors to push for changes resulting in cost cuts, increased share buybacks and a dismantled mergers and acquisition committee.
Salesforce expects adjusted profit between $9.68 to $9.76 per share for the full-year, compared with estimates of $9.57 per share.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Maju Samuel and Shailesh Kuber)
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