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(Reuters) — Salesforce on Thursday forecast full-year profit that was below market expectations, sending shares of the online software company down 3.9% in extended trading.

Salesforce’s latest and biggest acquisition of workspace messaging company Slack in a $27.7 billion deal in December is seen as expensive by Wall Street analysts, even though there are long-term benefits.

“Weak FY22 EPS guidance suggests margin expansion is likely to be muted, even adjusting for the acquisition of Slack,” Needham & Co analyst Scott Berg said.

The largest provider of customer relationship management software forecast full-year adjusted earnings per share of between $3.39 and $3.41, below estimates of $3.49 per share.

While emerging virus strains pose a new hurdle to business spending, Salesforce is also facing stiff competition from Microsoft, which is ramping up its cloud-based offerings.

Revenue in the quarter ended January 31 rose to $5.82 billion from $4.85 billion a year earlier, driven by increased demand for its cloud-based software.

Analysts on average expected revenue to be $5.68 billion, according to IBES data from Refinitiv.

The company raised its fiscal 2022 revenue forecast slightly to between $25.65 billion and $25.75 billion, above analysts’ average estimate of $25.42 billion.

Excluding items, the company earned $1.04 per share, beating estimates of 75 cents.

(Reporting by Chavi Mehta in Bengaluru, editing by Arun Koyyur.)

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