Slack stock is down 12% after its first-ever earnings as a public company, in which it posted a big loss - including $8 million in credits to customers after outages
- Slack announced its first-ever earnings on Wednesday, and its stock slid 12% in after-hours trading.
- The good news: Slack's revenue grew 58% from this time last year, up to $145 million.
- The less-good news: It posted a net loss of $359.6 million, and projects wider-than-expected losses for the next quarter, too.
- Slack also revealed that it spent $8.2 million of credits related to service-level disruption this past quarter - in other words, credits given to customers who were affected by outages of its chat service.
- Slack CEO and co-founder Stewart Butterfield says the company is investing in monitoring for these types of outages.
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The collaboration and messaging app Slack saw its stock slide 12% after it announced its first-ever earnings as a public company on Wednesday.
It share price plunged to $26 after the bell - the same as the price at which Slack originally priced its shares when it went public in June. That may be partially due to the fact that Slack is now projecting losses per share for the next quarter of $0.09 to $0.08, a little bit higher than the $0.07 loss per share projected by Wall Street.
Its revenue this quarter grew 58% from this time last year, up to $145 million. However, it posted a net loss of $359.6 million, including $8.2 million of credits it spent related to service-level disruption this quarter - in other words, credits given to customers to make up for outages and other interruptions to its service.
In July, Slack was down for about an hour, impacting its business customers around the world.
Slack CEO and cofounder Stewart Butterfield said on the earnings call that the company has been investing in monitoring for these types of outages. He said that while Slack's technology may seem simple from the outside, there's a lot of complexity under the hood that makes the task trickier.
"The bottom line is, there are investments on an ongoing basis," Stewart said. "With our biggest customers, it's not just hundreds of millions of messages going on and everyday, it's the other little changes, like people going online, offline, creating a new channel, or changing their status."
Here's what Slack reported:
- Revenue: $145 million. Analysts were expecting $140.72 million.
- Net loss per share: $0.14. Wall Street was looking for $0.18.
- Revenue (next quarter): $154 million to $156 million. Analysts had predicted $153.19 million.
- Net loss per share (next quarter): $0.09 to $0.08. Wall Street was forecasting $0.07.
Slack ended the quarter with over 100,000 paid customers, rising 37% year-over-year.