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UPDATE 3-Salesforce cuts forecast on lower IT spending, forex hit

(Rewrites, adds management and analyst comments)

By Leroy Leo

Aug 24 (Reuters) - Salesforce Inc on Wednesday cut its annual revenue and profit forecasts over "measured" spending from clients and a hit from a stronger dollar, sending its shares down 7% in extended trading.

Salesforce also announced stock repurchase of up to $10 billion, its first-ever buyback, while warning of challenges in North America and major European markets for some of its products.

The company's tempered expectations mark a significant change in its stance from May, when it had shrugged off any material impact from uncertain macroeconomic environment on its profit.

"We see customers becoming more measured in the way they buy. Sales cycles can get stretched ... we started seeing this in July," Chairman and Co-Chief Executive Officer Marc Benioff said in a conference call.

Analysts had warned that macroeconomic factors such as inflation and slowing U.S. growth could hurt spending from small- and medium-sized businesses that use Salesforce products for managing customer relationships.

Cloud software companies with significant operations outside of the United States, including Microsoft Corp, Accenture Plc and IBM Corp, have all tempered their forecasts due to a stronger dollar.

The San Francisco, California-based company cut its revenue forecast to between $30.90 billion and $31.00 billion, below estimates of $31.73 billion as per IBES data from Refinitiv.

It also lowered the adjusted profit forecast to $4.71-$4.73.

CFRA analyst John Freeman said he expects the company's large size to help it withstand the hit from lower client spending, adding that the stock repurchase plan was unlikely to significantly impact shares, given no clarity on timeline and the exact quantum of the buyback.

Salesforce second-quarter results topped Wall Street expectations, with adjusted profit of $1.19 per share coming 17 cents higher than estimates, and revenue at $7.72 billion slightly ahead of estimates of $7.70 billion. (Reporting by Leroy Leo and Akash Sriram in Bengaluru; Editing by Vinay Dwivedi)