Salesforce Co-CEO Keith Block Steps Down -- 3rd Update

Date : 02/26/2020 @ 12:44PM
Source : Dow Jones News
Stock : Salesforce Com Inc (CRM)
Quote : 145.07  -2.48 (-1.68%) @ 9:06PM
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Salesforce Co-CEO Keith Block Steps Down -- 3rd Update

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By Sarah E. Needleman 

Salesforce.com Inc. said Co-Chief Executive Keith Block is stepping down from his role, just 18 months after taking the job, ending for now a brief experiment with dual CEOs and leaving Marc Benioff in charge of the business-software provider.

Mr. Block, a former Oracle Corp. executive, joined Salesforce in 2013 as president and vice chairman. He became co-CEO in 2018 in an unusual setup that paired him with Mr. Benioff, a Salesforce co-founder with an array of outside interests that now include ownership of Time magazine.

Mr. Block had oversight of day-to-day operations while Mr. Benioff led Salesforce's vision and innovation, among other areas.

"Keith is an incredible leader and close friend who has helped position us as a global leader and deeply strengthened our company," Mr. Benioff said on a conference call with analysts.

Mr. Block will serve as an adviser to the CEO.

Salesforce said its revenue more than quadrupled over Mr. Block's time at the company to more than $17 billion in the year ended Jan. 31.

The leadership move, which surprised some Wall Street analysts, came as the company posted stronger-than-expected revenue in the latest quarter and adjusted earnings above analysts' forecasts.

Its shares fell more than 3% in after-hours trading.

Founded in 1999, San Francisco-based Salesforce has evolved to become one of the largest providers of software products for businesses. Though its roots are in customer-relationship management software, Salesforce has bolstered its offerings over the years as enterprises have increased spending to digitize key business tasks.

Salesforce's stock-market capitalization of more than $160 billion is close to rival Oracle despite the company being launched more than 20 years later.

In recent years, Salesforce has been looking to boost revenue through acquisitions. The company's more than $15 billion deal for data analytics provider Tableau Software, which closed last year, was the largest in its history.

Mr. Benioff told analysts Tuesday that the acquisitive company will take a pause from deal-making even as it announced the purchase of cloud-software provider and Salesforce partner Vlocity Inc. Salesforce's venture arm was among investors participating in a $60 million Series C funding round for Vlocity last year. Aside from the Vlocity deal, valued at $1.33 billion net of shares Salesforce already owns, Mr. Benioff said "we don't see some huge opportunity to do a lot more acquisitions right now. It's not something that we're working on."

The executive change at Salesforce came as the company reported swinging to a fourth-quarter loss of $248 million from a profit of $548 million a year earlier.

Excluding items such as stock-based compensation, Salesforce posted a profit of 66 cents a share, which was stronger than Wall Street had expected, but lower than the 70 cents a share generated a year earlier.

Sales in the quarter rose 35% to $4.85 billion, compared with the $4.76 billion that analysts surveyed by FactSet had expected.

Salesforce's closely watched anticipated billings for the coming months from its subscription-based revenue model rose 26% year over year. It previously promised growth of about 21%.

Salesforce also Tuesday named Gavin Patterson, a former chief of BT Group PLC, as president and chief of Salesforce International.

Mr. Patterson was most recently Salesforce's chair of Europe, the Middle East and Africa. The company said he now oversees its largest markets outside the U.S.

The twin-CEO structure has had a mixed record at the small number of companies that have tried it over the years.

Oracle abandoned its dual-CEO structure after the death of Mark Hurd last year, leaving Safra Catz as the database provider's sole chief executive. German rival SAP SE adopted a co-CEO leadership team last year.

A leadership duo at Deutsche Bank AG struggled after a series of financial missteps and regulatory penalties led both co-CEOs to resign in 2015.

Write to Sarah E. Needleman at sarah.needleman@wsj.com

 

(END) Dow Jones Newswires

February 26, 2020 07:29 ET (12:29 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.

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