-=Slack Technologies (WORK) to be acquired by Salesforce (CRM) for approx. $27.7 bln

 

Slack beats by $0.06, beats on revs; company to be acquired by Salesforce in cash and stock deal 

Reports Q3 (Oct) earnings of $0.01 per share, $0.06 better than the S&P Capital IQ Consensus of ($0.05); revenues rose 38.8% year/year to $234.5 mln vs the $224.43 mln S&P Capital IQ Consensus.

Calculated Billings was $252.4 million, an increase of 36% year-over-year.

Over 142,000 Paid Customers, up 35% year-over-year.

123% net dollar retention rate.

1,080 Paid Customers with greater than $100,000 in annual recurring revenue, up 32% year-over-year.

Co to be acquired by Salesforce (CRM) in cash and stock deal valued at approximately $27.7 bln.

 Salesforce beats by $0.99, beats on revs; guides Q4 revs above consensus; guides Q1 (Apr) revs above consensus; guides FY22 revs, announces acquisition of Slack 

Reports Q3 (Oct) earnings of $1.74 per share, $0.99 better than the S&P Capital IQ Consensus of $0.75; revenues increased 20% year/year to $5.42 bln vs the $5.25 bln S&P Capital IQ Consensus.

Current Remaining Performance Obligation of Approximately $15.3 Billion, up 20% Year-Over-Year, 19% in Constant Currency.

Third quarter non-GAAP operating margin was 19.8%.

Co issues upside guidance for Q4, sees Q4 revs of $5.665-$5.675 bln vs. $5.53 bln S&P Capital IQ Consensus.

Co issues upside guidance for Q1 (Apr), sees Q1 (Apr) revs of $5.680-$5.715 bln vs. $5.65 bln S&P Capital IQ Consensus.

Co issues guidance for FY22, sees FY22 revs of $25.45-$25.55 bln. This includes approximately $600 mln related to the acquisition of Slack Technologies (WORK). The S&P Capital IQ Consensus is $24.5 bln.

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SAN FRANCISCO — Salesforce said on Tuesday that it would buy the workplace software company Slack for $27.7 billion in cash and stock, the latest in a wave of deals as the coronavirus pandemic boosts demand for tools that enable people to work remotely.

If completed, the acquisition will end Slack’s brief run as an independent publicly traded company — it went public in mid-2019 — and cap an acquisitive streak by Salesforce with its largest deal since it was founded 21 years ago.

The deal is the biggest bet among a recent spate of acquisitions made by tech companies to capitalize on the shift to remote work. Adobe said last month that it planned to acquire the work force management software company Workfront for $1.5 billion. In July, Atlassian, which sells tools for developers and project management, said it would buy the enterprise services business Mindville for an undisclosed amount.

Other firms focused on workplace collaboration products, including Airtable, Asana, Box, DocuSign, Dropbox and Smartsheet, may also be potential targets as highly valued software companies look to roll up the fragmented market for collaboration tools.

Shareholders will get $26.79 in cash and 0.0776 shares of Salesforce stock in exchange for each share of Slack, according to Tuesday’s deal announcement. Salesforce said it planned to incorporate Slack’s communication software into every aspect of its cloud software offerings.

Slack, which was founded in 2010 by Mr. Butterfield, grew quickly and previously attracted — and rejected — takeover offers from the likes of Google, Microsoft and Amazon. Its valuation was about $19.5 billion when it went public last year, but its shares later sank.

Demand for Slack’s products, which allow people to communicate and collaborate with one another, has increased as people work from home during the pandemic. 

In July, Slack filed a complaint against Microsoft with the European Commission, claiming Microsoft had unfairly bundled Teams with its suite of Microsoft Office work products. Microsoft has offered the software alongside Office since Teams was released in 2017.

Salesforce, which provides marketing and sales software, among other products, has been highly acquisitive as it looks to grow. Under Mr. Benioff, Salesforce has bought at least 60 companies, including 27 in the last five years, according to S&P Capital IQ.

In February, Salesforce paid $1.3 billion for Vlocity, a mobile software provider. Last year, it bought Tableau, a data analytics provider, for $15.3 billion; in 2018, it bought MuleSoft, a data integration company, for $6.5 billion; and in 2016, it bought Demandware, an e-commerce software maker, for $2.8 billion. It also invested $250 million in the data warehousing company Snowflake just before it went public in September.