The Slack Technologies Inc. logo is seen behind the “Fearless Girl” statue outside the New York Stock Exchange (NYSE) during the company’s IPO in New York, U.S. June 20, 2019.
Brendan McDermid | Reuters
Slack shares fell as much as 17% in extended trading on Thursday after the company reported steady revenue growth during a quarter that brought in more customers as organizations sought to keep communications going with everyone staying remote during the coronavirus pandemic. Still, the company failed to deliver the sort of blowout that video-calling service Zoom did earlier in the week.
Here are the key numbers:
- Earnings: Loss of 2 cents per share, adjusted
- Revenue: $201.7 million
Analysts polled by Refinitiv had expected an adjusted loss of 6 cents per share on $188.1 million in revenue. Comparing analysts’ estimates with results is not necessarily straightforward given the unpredictable effects of the pandemic during the quarter.
As activity in the Slack team communication software increased with offices and schools closing to reduce the spread of coronavirus, the company’s revenue grew 50% in the quarter, which ended on April 30, according to a statement. Revenue growth was 49% in the prior quarter. That’s barely a move from growth of 49% in the previous quarter. On Tuesday Zoom reported 169% revenue growth, exceeding what analysts had expected, and more than doubled its earnings guidance. Slack, meanwhile, called for a full-year adjusted loss that would be 2 cents less than what it had previously predicted.
Slack did not disclose a new daily active user count on Thursday. However, in March CEO Stewart Butterfield posted a series of tweets showing how much Slack usage was picking up. He said that the company’s app had 12.5 million simultaneously connected users on March 25, up from 10 million on March 10.
The company said it added a record 12,000 paid customers in the quarter. In the two prior quarters it added about 5,000 new customers. Slack’s top competitor, Microsoft’s Teams service, has also expanded in recent months.
Slack offered credits to customers impacted by the pandemic, and such headwinds totaled about $7 million in the quarter.
On Thursday Butterfield said that Amazon is offering Slack to all employees, and Slack will adopt Amazon Web Services’ Chime video-calling technology to enhance Slack’s calling features.
For the fiscal second quarter, Slack is forecasting an adjusted loss of 4 cents to 3 cents per share and $206 million to $209 million in revenue. Analysts surveyed by Refinitiv had been expecting 6 cents in adjusted loss per share on $199.8 million in revenue for that period.
For the full 2021 fiscal year Slack is calling for a loss of 19 cents to 17 cents cents per share on an adjusted basis and $855 million to $870 million in revenue. The consensus among analysts surveyed by Refinitiv was an adjusted loss of 20 cents per share and $860.3 million in revenue. Previously Slack had called for an adjusted loss of 21 cents to 19 cents on $842 million to $862 million in revenue.
The company withdrew its guidance for calculated billings, or revenue plus the change in deferred revenue, for the full fiscal year.
Excluding the after-hours move, Slack shares are up about 70% since the beginning of the year.
Executives will discuss the results with analysts on a conference call scheduled for 5 p.m. Eastern time.
This is breaking news. Please check back for updates.
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