Can Salesforce’s Acquisition of Tableau Reduce Annual Operating Expense In the Next 3 Years?
Trefis estimates that the Tableau acquisition will decrease Salesforce.com‘s (NYSE: CRM) Operating expenses (after adding Tableau) to a total of $155 million over the next 3 years. We will discuss this below in detail. You can view our interactive dashboard analysis – Can Salesforce’s acquisition of Tableau reduce annual Operating Expense by $155 million in the next 3 years? In addition, here is more Information Technology Data.
Trefis estimates that the acquisition will potentially increase Salesforce.com’s 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. For details of Revenue forecast please click here.
Trefis estimates that Salesforce.com’s Gross Profit after acquisition will increase by an additional $1 billion over the estimated Gross Profit of the combined entity as we Expect Gross Margin Gains due to Acquisition will occur. For details of Gross Profit forecast please click here.
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How have Salesforce’s operating expenses trended over recent years?
- Sales and Marketing form the highest among Operating expenses for Salesforce.com (64.3 % to 65.2%) over the last 3 years. It has increased from $3.9 billion in FY 2017 to $6.1 billion in FY 2019.
- Research and Development expenses have increased from $1.2 billion in FY 2017 to $1.9 billion in FY 2019 while General and Administrative expenses have increased from $1 billion in FY 2017 to $1.3 billion in FY 2019.
How have Tableau’s operating expenses trended over recent years?
- Sales and Marketing form the highest among Operating expenses for Tableau (53.9 % to 54.9%) over the last 3 years. It has increased from $476 million in FY 2017 to $593 million in FY 2019.
- Research and Development expenses have increased from $302 million in FY 2017 to $383 million in FY 2019 while General and Administrative expenses have increased from $88 million in FY 2017 to $125 million in FY 2019.
How are the operating expense streams likely to change over the next three years?
Trefis estimates Salesforce will have a gain in Total Operating expenses after the acquisition by 0.1% in FY 2020, 0.4% in FY 2021, and 0.5% in FY 2022 over the current forecast of Total Operating Expenses of both companies together.
Expected gain in Operating Expenses due to acquisition is expected to be more than $155 million over the next 3 years as Tableau combines with Salesforce.com.
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