Salesforce Co-CEO Steps Down -- WSJ
February 26 2020 - 2:02AM
Dow Jones News
Business-software provider says results swung to a net loss in
latest quarter
By Sarah E. Needleman
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (February 26, 2020).
Salesforce.com Inc. said its 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 a wide 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 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 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.
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 increased 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 02:47 ET (07:47 GMT)
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