What Could Be Salesforce.com’s Revenue Growth Over The Next 3 Years Post Tableau’s Acquisition?

June 14th, 2019 by Trefis Team
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Trefis estimates that the acquisition of Tableau will potentially increase Salesforce.com’s (NYSE:CRM) revenue to more than $24 billion by FY 2022 (ended January 2022). As the acquisition will be completed at the end of Q3 2020 (ended October 2019), we expect a synergy gain of 0.5% of Combined total revenue in FY 2020. We will discuss this below in detail. You can view our interactive dashboard analysis – Can Salesforce.com’s acquisition of Tableau increase its revenues to $24+ Billion in the next three years? In addition, here is more Information Technology Data.

Salesforce.com is the #1 CRM company in the world with regards to market share. It offers Customer Relationship Management (CRM) software which helps companies better manage customer data and information, which, in turn, helps those companies to better serve their customers and increase sales.

Tableau is one of the fastest growing analytics platform providers in the world. Their software products allow a broad population of business users to engage with their data, ask questions, solve problems, and create value.

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Acquisition Deal:

  • On June 10, 2019, Salesforce.com entered into a definitive agreement with Tableau to acquire the company.
  • The deal will be an all stock transaction where each share of Tableau Class A and Class B common stock will be exchanged for 1.103 shares of Salesforce common stock, representing an enterprise value of $15.7 billion (net of cash), based on the trailing 3-day volume weighted average price of Salesforce’s shares as of June 7, 2019. This converts to approximately $170 worth of Salesforce.com’s shares for each share of Tableau.
  • Post the acquisition, Tableau will function as a separate brand of Salesforce. The acquisition of Tableau is expected to be completed during Salesforce’s Q3 2020 (ending October 2019).

 

How has Salesforce.com’s Revenue grown and what is its forecast?

  • Salesforce.com has seen a high revenue growth for the past few years. Revenue has increased from $8.4 billion in FY 2017 to $13.3 billion in FY 2019.
  • We expect the growth to continue at a steady rate of around 19% and reach a revenue of $22.4 billion by FY 2022.

How has Tableau’s Revenue grown and what is its forecast? (Please note that Tableau revenue figures are presented in line with Salesforce.com’s nomenclature of Fiscal years for easy comparison.)

  • Tableau has seen high growth over the years as revenue has increased from $827 million in FY 2017 to $1,155 million in FY 2019.
  • We expect the high growth to stabilize moving forward and revenue to reach $1.6 billion by FY 2022.

What would be Total Revenue of Salesforce.com after adjusting for the Synergy Gain from Tableau’s Acquisition?

  • Trefis estimates the company will have a synergy gain of 0.5% for the first year as the acquisition will complete in the 3rd quarter. Post that we expect a synergy gain of 2.1% and 2.3% in FY 2021 and FY 2022, respectively.
  • This will take Salesforce.com’s revenue to nearly $24.5 billion in FY 2022.

 

 

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