Salesforce borrows $25 billion to repurchase shares, says it will halve cash-flow growth guidance

Salesforce is turning to fresh financing to buy back shares, and the move is coming with a notable downgrade to its cash-flow growth expectations. In coverage published Tuesday, the company said it borrowed $25 billion to repurchase its own stock, retiring roughly a tenth of its share count in a single transaction.

A share buyback typically indicates that a company sees its stock as undervalued or wants to concentrate capital returns on existing investors. But buybacks can also reduce cash available for operations, technology investments, and other priorities. In Salesforce’s case, the company tied the buyback to a measurable change in its cash-flow outlook.

According to the same report, the $25 billion borrowing and the resulting share retirement will be reflected in Salesforce’s fiscal 2027 cash flow, and management also adjusted its guidance. The company’s forecast for cash-flow growth was cut “in half,” indicating that the financing-backed repurchase is likely to weigh on the rate of cash generation growth compared with what investors had expected.

The report’s framing matters for a company that has recently leaned into higher spending categories, including cloud infrastructure and ongoing development tied to its platform and artificial intelligence strategy. When buybacks expand quickly, investors often scrutinize whether management is trading away some future flexibility. Here, Salesforce appeared to be preempting that concern by explicitly revising guidance rather than waiting for later quarters to explain cash-flow performance.

Salesforce’s capital allocation approach has long centered on a combination of operating cash generation, ongoing investment, and periodic share repurchases. A borrowing-backed buyback is different from repurchases funded entirely out of current free cash flow. It can accelerate the reduction in share count even if operating cash conversion fluctuates, but it also introduces additional interest costs and a new cash requirement around debt service.

While Tuesday’s coverage provides a clear headline number, it does not spell out the mechanics in detail, such as the maturity profile of the debt, the interest rate or coupon terms, the specific repurchase schedule (for example, whether the company expects to complete the full amount immediately or over time), or the exact language of the “cash-flow growth guidance” change. It also does not disclose whether the company’s other growth-related targets or spending plans were revised alongside the guidance cut.

For investors following CRM, the near-term takeaway is that Salesforce is choosing to reduce its share count more aggressively while simultaneously warning that cash-flow growth will not be as strong as before. In the software sector, that combination tends to be read through two lenses: how much cash is being absorbed by capital returns and how much investment remains available to support product momentum.

What to watch next is whether Salesforce provides further clarity in upcoming filings and earnings communications, including the updated cash-flow bridge for fiscal 2027, the debt terms used for the $25 billion borrowing, and whether management’s revised guidance indicates a temporary pause in cash-flow growth or a longer shift in capital allocation priorities. Investors will also watch for signs that the buyback influences other metrics, such as operating cash flow conversion and free cash flow after capital expenditures.