Slack Earnings Beat Expectations, Disappoint Wall Street

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.

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Conversation 3 comments

  • Vladimir Carli

    Premium Member
    04 June, 2020 - 5:51 pm

    <p>I wonder what future Slack has. There are several free alternatives that work exactly in the same way. The conference call options don't work well at all. It costs as a Microsoft 365 subscription, it's a very difficult expense to justify for any business</p>

    • Pungkuss

      05 June, 2020 - 9:24 am

      <blockquote>"Exactly in the same way".</blockquote><blockquote><a href="#544818"><em>In reply to Vladimir:</em></a></blockquote><p><br></p>

  • jimchamplin

    Premium Member
    09 June, 2020 - 11:58 am

    <p>Welcome to Wall Street. Reality has no place here. Only in these hallowed walls of madness and unhinged greed can exceeding expectations somehow be a failure.</p>

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