01—Abstract
Summary
Summary of the 8-K filed March 20, 2018. Cited figures are marked; the original filing is the authoritative source.
Salesforce, Inc. (CRM) filed an 8-K on March 20, 2018, to announce a significant event: the entry into an Agreement and Plan of Merger to acquire MuleSoft, Inc. This strategic acquisition is expected to bolster Salesforce's integration capabilities and expand its platform.
In conjunction with this announcement, Salesforce has revised its long-term revenue target for the fiscal year ending January 31, 2022, increasing it by $1 billiona to a new range of $21 billion to $23 billion. The company also provided insights into the expected impact on its near-term profitability targets. Salesforce anticipates a reduction in its non-GAAP operating margin improvement target for fiscal year 2019 due to the acquisition.
While previously guiding for a 125-150 basis point improvement, the company now aims to maintain or modestly improve its non-GAAP operating margin for FY2019 compared to FY2018. Additionally, Salesforce indicated upcoming guidance updates to reflect the adoption of new accounting standards (ASC 606 and ASC 340-40) and the integration of MuleSoft.
02—Key points
Key Highlights
- Salesforce announced its agreement to acquire MuleSoft, Inc., a key player in the integration and API space.
- The acquisition is expected to increase Salesforce's long-term revenue target for FY2022 by $1 billion, raising it to $21-$23 billion.
- Salesforce's non-GAAP operating margin improvement target for FY2019 will be reduced due to the MuleSoft acquisition.
- The company now aims to maintain or modestly improve its non-GAAP operating margin in FY2019.
- Upcoming guidance updates for Q1 and full-year FY2019 will account for new accounting standards (ASC 606 and ASC 340-40).
- Further guidance updates, incorporating the MuleSoft acquisition and new accounting standards, will be provided in the Q1 FY2019 earnings call and post-closing of the acquisition.
03—Questions
Frequently Asked Questions
What is the primary purpose of this 8-K filing?
This 8-K filing primarily serves to announce Salesforce's entry into an Agreement and Plan of Merger to acquire MuleSoft, Inc. It also provides updated financial targets and guidance related to this acquisition and the adoption of new accounting standards.
How does the acquisition of MuleSoft affect Salesforce's future revenue targets?
The acquisition of MuleSoft is expected to increase Salesforce's long-term revenue target range for the fiscal year ending January 31, 2022, by $1 billion, from $20-$22 billion to $21-$23 billion.
What is the expected impact of the MuleSoft acquisition on Salesforce's operating margin?
Salesforce anticipates that the acquisition will reduce its non-GAAP operating margin improvement target for the fiscal year ending January 31, 2019. The company's goal is now to maintain or modestly improve its non-GAAP operating margin for FY2019 compared to FY2018.
When will Salesforce provide updated financial guidance, and what will it include?
Salesforce expects to update its guidance for the first quarter and full year of FY2019 (excluding the MuleSoft acquisition) to reflect the adoption of ASC 606 and ASC 340-40 by April 3, 2018. Further updates, including the impact of the MuleSoft acquisition and new accounting standards, will be provided during the Q1 FY2019 earnings call (expected around April 30, 2018) and after the completion of purchase accounting for the acquisition.
04—Continue