Shares in workplace messaging company Slack have fallen as the company released its first financial report since direct listing on the New York Stock Exchange in June. All figures are in US dollars, and concern the company’s fiscal quarter, which ended July 31.
The outlook comes as Slack faces competition from Microsoft Teams, which currently surpasses Slack’s daily active user count by about 3 million.
In its Q2 fiscal report, Slack projected slower revenue growth for the third quarter, between $154 million and $156 million. This would represent 46 to 48 percent year-over-year growth, which lags behind the 58 percent from Q2 and the 67 percent increase in Q1. Slack also forecast a Q3 loss between $49 million and $47 million, and a per-share loss of 8 cents to 9 cents a share in the current quarter, larger than analysts had predicted at 7 cents per share. After the report was released, Slack’s stock fell by 12 percent in after-hours trading.
“We remain excited about continued traction in growing our customer base, building a network, and becoming a platform,” Slack CEO and co-founder Stewart Butterfield said on a conference call, on Wednesday. “We are also pleased with continued progress toward our growth phase goal of free cash flow positive, which remains a priority.”
Slack’s total revenue came to $145 million and net loss totalled $359.6 million. Some of the net loss was accounted for the company losing about $8 million in revenue after the platform went down for a collective two hours in 92 days, which CFO Allen Shim said was “unusual” on Wednesday’s conference call.
“With our biggest customers, it’s not just hundreds of millions of messages going on and every day, it’s the other little changes, like people going online, offline, creating a new channel, or changing their status,” Butterfield said.
The financial outlook comes as Slack faces a heated rivalry with Microsoft Teams, the tech giant’s communications platform that combines workplace chat, video meetings, file storage, and application integration. In July, Teams had over 13 million daily active users, surpassing Slack’s count by 3 million.
Slack initially went public on June 20, hitting the market at $26 per share, which jumped to $40 per share in the first day. Slack went public through a direct listing instead of an IPO, which has been the route companies like Uber, Alphabet, and Facebook have also taken. Prior to the filing, the company was valued at $7 billion USD.
“We remain focused on expansion within existing customers and growing our large enterprise customer base,” Shim said.
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