Vancouver-founded communications software company Slack has reported its financial results for the first quarter and provided its outlook for the fiscal year ending 2021. All numbers are in USD.
“We see the current crisis accelerating…the transition from email to channel-based messaging platforms.”
Slack’s total revenue reached $201.7 million, an increase of 50 percent year-over-year. The company added a record 12,000 net new paid customers in the quarter, bringing the total to 122,000 paid customers, an increase of 28 percent year over year, amid the widespread shift to remote work during the COVID-19 pandemic.
“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,” said Stewart Butterfield, CEO and co-founder at Slack. “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.”
In the quarter, the company hit another record with over 90,000 net new organizations on either a free or paid subscription plan, bringing the total of organizations on subscription plans to 750,000.
Of the 12,000 net new paid customers, Slack gained 963 paid customers with greater than $100,000 in annual recurring revenue, which is up 49 percent from the same quarter last year. Slack, which went public on the New York Stock Exchange via direct listing last year, did not disclose a new daily active user count.
One of the new Slack customers is tech giant Amazon, which will now have all of its employees to use Slack’s workplace collaboration tools. Slack is also updating its video-calling feature to take advantage of an Amazon web service called Chime as part of the companies’ partnership.
Slack’s calculated billings totalled $206.0 million, an increase of 38 percent year-over-year. Overall, the company saw an operating loss of $16.6 million for the quarter.
On April 21, Slack released the results of a survey it conducted on the shift to remote work during the COVID-19 pandemic. The survey found that an estimated 16 million workers in the United States started working remotely due to COVID-19 as of March 27, however that number is likely now higher.
In Canada, the pandemic has led some companies to consider adopting this new form of work as a permanent measure. Shopify, for example, recently announced the majority of its employees will work remotely even when the pandemic is over.
“We plan to continue to invest, as we see the current crisis accelerating digital transformation and the transition from email to channel-based messaging platforms over the medium term to long term,” said Allen Shim, Slack’s chief financial officer. “At the same time, we will manage the business prudently and with a goal of showing consistent operating leverage and progression toward being free cash flow positive.”
Although the COVID-19 pandemic may have led to an uptick in customers for Slack, the current uncertainty surrounding the global economy was cited as the company’s reason for withdrawing its outlook for calculated billings for the full fiscal year. The company projected revenue to reach between $206 million and $209 million for the following quarter, and revenue between $855 million and $870 million for the full year.
On Friday, Vice reported that Slack recently took down a company blog post explaining how a police department used Slack’s platform to share intelligence. Slack removed the post following global protests against racial inequality and police brutality.
Image source M.G. Siegler via Twitter