Slack shares plunge over 17% after earnings report that suggests the remote work boom hasn't boosted it as much as Wall Street hoped
Slackshares plunged up to over 17% after the company reported earnings showed that it may not have benefited as much from the remote work boom as Wall Street expected.
- Slack's revenue in the quarter showed 50 percent growth from a from a year prior, barely above the 49 percent growth year-over-year that it saw in the previous two quarters.
- Analysts say they expected Slack to see much more of a material impact to its results due to the remote work boom.
Slack shares dropped up to over 17% after-hours Thursday as the company reported earnings that beat estimates but showed that it may not have benefited as much from the coronavirus-related remote work boom as Wall Street expected.
Slack reported revenue of $201.7 million, which was above analyst expectations of $187 million. However, that represents only 50% growth from a year prior, barely above the 49% growth year-over-year that it saw in the previous two quarters.
Analysts say it wasn't the blowout quarter they expected given how much Slack seemed to have benefitted from the world moving to remote work during the the quarter. Zoom, another company that has benefitted from the remote work boom, reported 169% revenue growth in its earnings on Tuesday and doubled its revenue guidance for the year.
"If Slack didn't grow exponentially during this period when will they?" said Dan Newman, an analyst at Futurum Research.
Rishi Jaluria, at D.A. Davidson agreed: "Stock has more than doubled since mid-March," he said, "While there's no doubt in my mind they're benefiting from WFH, it wasn't the blowout quarter that maybe others expected."
Slack said it added 12,000 new paid customers in the quarter, which is more than double what it added in the previous two quarters. Earlier in the quarter CEO Stewart Butterfield said Slack had added more new paid customers halfway through the quarter as it had in the previous quarter.
It did not give an updated daily active user number, but said Slack has over 750,000 "organizations" on a free or paid subscription plan, which is an increase from 660,000 at the end of the previous quarter. Microsoft Teams, which is widely seen as Slack's biggest competitor has also grown in the last quarter, saying it reached 75 million daily active users in April.
Here's what Slack reported:
- Revenue: $201.7 million. Analysts were expecting $187 million.
- Net loss per share (adjusted): $0.02. Wall Street was looking for a $0.06 loss per share.
- Revenue (next quarter): $206 million to $209 million estimated. Analysts had predicted $198.6 million.
- Net loss per share (adjusted, next quarter): $0.04 to $0.03 estimated. Wall Street was forecasting $0.06.
- Paid customers: 122,000 paid customers, up 28% year-over-year.
Slack also withdrew guidance for calculated billings — a metric to project revenue growth — for the year.
- Kawasaki Ninja ZX-6R vs Honda CBR650R – the 650cc sports bike drag
- Mehbooba put under 'house arrest' ahead of SC verdict on Article 370
- Srinagar freezes at minus 4.8, season's lowest so far
- New Fund Offers explained – Should you bite the bullet or stick to the tried and tested?
- Bullish domestic markets push up Rupee to 83.37/USD