Slack today announced that revenues in the most recent quarter exploded 50 percent year-over-year to $201.7 million as it added a record 12,000 net new paid customers. But the results disappointed investors, who sent Slack’s stock tumbling 17 percent.
“[It] was a phenomenal quarter for Slack, with the addition of 12,000 net new paid customers and 50 percent revenue growth year-over-year,” said Slack CEO and co-founder Stewart Butterfield said in a prepared statement. “We believe the long-term impact the three months and counting of working from home will have on the way we work is of generational magnitude. This will continue to catalyze adoption for the new category of channel-based messaging platforms we created and for which we are still the only enterprise-grade offering.”
Slack doesn’t turn a profit, but the results disappointed Wall Street because that growth, while heady, was consistent with its pre-COVID growth, and it expected bigger new customer numbers. So instead of experiencing unusually high growth, as market darling Zoom recently did, Slack instead delivered steady growth.
Slack is also tripping up in the face of aggressive competition from Microsoft Teams, which surged past Slack months ago. Butterfield has complained that Microsoft is “obsessed” with killing Slack, but if anything, Butterfield is the one who seems obsessed with his competition.