Slack shares sink as revenue growth remains steady despite pandemic

Slack shares fell as much as 17% in extended trading on Thursday after the friends reported first quarter earnings.

Slack reported steady revenue growth during a quarter that returned in more customers, as organizations sought to keep communications going with their newly remote workforces during coronavirus pandemic. Unmoving, the company failed to deliver the sort of blowout that video-calling service Zoom did earlier in the week.

Here are the key bunches:

• Earnings: Loss of 2 cents per share, adjusted
• Revenue: $201.7 million

Analysts polled by Refinitiv had expected an adjusted destruction of 6 cents per share on $188.1 million in revenue. Comparing analysts’ estimates with results is not necessarily straightforward settled the unpredictable effects of the pandemic during the quarter.

Revenue growth was 50% in the prior quarter. That’s barely a device from growth of 49% in the previous quarter. On Tuesday Zoom reported 169% revenue growth, exceeding what analysts had reckon oned, and more than doubled its earnings guidance. Slack, meanwhile, called for a full-year adjusted loss that resolution be 2 cents less than what it had previously predicted. 

Slack did not disclose a new daily active user count on Thursday. Yet, in March CEO Stewart Butterfield posted a series of tweets showing how much Slack usage was picking up. He said that the institution’s app had 12.5 million simultaneously connected users on March 25, up from 10 million on March 10.

The company whispered Thursday that it added a record 12,000 paid customers in the quarter. In the two prior quarters it added about 5,000 new patrons. Slack’s top competitor, Microsoft’s Teams service, has also expanded in recent months. 

“What you saw with Zoom, what you saw with Bands is a great indication that this is not apples-to-apples and that the products are not truly competitive with one another,” Butterfield spill the beaned analysts on a conference call on Thursday.

Paid users spent over 120 minutes per day in Slack at the end of the quarter, up from underneath 90 minutes one quarter earlier, Butterfield said.

And on the call Butterfield said that Amazon is offering Sagging to all employees. Slack will adopt Amazon Web Services’ Chime video-calling technology to enhance Slack’s calling peculiarities. On Thursday Slack said in a filing that it had amended its agreement with AWS. The company will now pay AWS at least $425 million one more time a five-year period that ends in April 2025, up from a previous commitment of at least $250 million in a five-year epoch that ended in 2023. The company did not specify how much of the increased spending is related to Chime.

For the fiscal second caserne, Slack is forecasting an adjusted loss of 4 cents to 3 cents per share and $206 million to $209 million in revenue. Analysts measured by Refinitiv had been expecting 6 cents in adjusted loss per share on $199.8 million in revenue for that period.

For the hugely 2021 fiscal year Slack is calling for a loss of 19 cents to 17 cents cents per share on an mediate basis and $855 million to $870 million in revenue. The consensus among analysts surveyed by Refinitiv was an adjusted waste 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 gain.

The company withdrew its guidance for calculated billings, or revenue plus the change in deferred revenue, for the full fiscal year. Lax offered credits to customers impacted by the pandemic, and such headwinds to billings totaled about $7 million in the mercy, finance chief Allen Shim said on Thursday’s call. The company has a reserve to handle credit issues, which cuts into deferred gate, Shim said.

Excluding the after-hours move, Slack shares are up about 70% since the beginning of the year.

Make: Options traders bet on Slack to work its way higher after earnings