Slack earnings beat estimates, adds 12,000 net new paid customers in fiscal Q1

- Advertisement -
- Advertisement -
- Advertisement -
- Advertisement -

When great may just not be great enough.

Shares of Slack Technologies fell 13% initially in after-hours trading after the workplace productivity company posted first quarter results. To say expectations in the lead-up to the earnings report were sky-high may be an understatement given the new work from home paradigm that has erupted during the COVID-19 pandemic. Slack’s stock surged 31% in May alone in the hopes of a booming first quarter as the company’s technology has become mission critical to many organizations.

Slack whipped Wall Street earnings estimates and its own guidance on the back of more paying customers and existing customers spending more on the platform.

Here’s how Slack performed in the fiscal first quarter of 2021 versus expectations.

  • Net Sales: $201.7 million vs. estimates for $188.1 million (guidance: $185 to $188 million)
  • Operating Profits: Loss of $16.7 million vs. estimates for a loss of $38.9 million
  • Diluted EPS: Loss per share of 2 cents vs. estimates for a loss of 6 cents (guidance: loss of 6 cents to 7 cents a share)

And this is where Slack’s guidance came in.

  • 2Q Net Sales: $206 to $209 million vs. estimates for $198.6 million
  • 2Q Diluted EPS: Loss per share of 2 cents to 3 cents a share vs. estimates for a loss of 6 cents a share
  • Full Year Net Sales: $855 to $870 million vs. estimates for $856.5 million (prior guidance: $842 to $862 million)
  • Full Year Diluted EPS: Loss of 17 cents to 19 cents a share vs. estimates for a loss of 23 cents a share (prior guidance: loss of 19 to 22 cents a share)

“Q1 was a phenomenal quarter for Slack, with the addition of 12,000 net new Paid Customers and 50% revenue growth year-over-year,” said Slack co-founder and CEO Stewart Butterfield in a 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.”

Bottom line

Then why the knee-jerk sell-off? It may boil down to a few factors, which we plan to get more clarity on during the earnings call this evening at 5 p.m. ET. First, the company’s closely watched calculated billings growth clocked in at 38% year-over-year — cooling from a 47% pace in the first quarter. Paid customers did grow 28% from the prior year to 122,000.

While the growth numbers here are impressive, it’s likely the Street was expecting more in light of the fundamental shift in how we are all working. Dare we say the market was positioned for Slack to record a slight surprise profit in the quarter and more aggressively raise its full-year bottom line outlook? Quite possibly, hence the selloff in the early going.

This article was originally posted on finance.yahoo.com/news/.

Home of Science
Follow me

- Advertisement -

Discover

Sponsor

Latest

Ole Gunnar Solskjaer: I’m so glad he is gone, says Man Utd fanon November 21, 2021 at 3:58 pm

Manchester United fans react to the sacking of manager Ole Gunnar Solskjaer.

What Does IT Consulting With Sabre Corporation Doesn?

Sabre Corporation has been a leader in the business automation and microservices industry for more than ten years. They've been at the forefront of...

FA Cup: A goal and a goal line clearance – Tammy Abraham’s star turn agaimst Barnsleyon February 11, 2021 at 11:42 pm

Chelsea striker Tammy Abraham stars at both ends of the pitch as he scores the winning goal and makes a key goal-line clearance in...

Covid in Scotland: Youngest pupils to return to classroomson February 16, 2021 at 5:08 pm

Pupils in P1 to P3 and pre-school children will go back from 22 February, it has been confirmed.Pupils in P1 to P3 and pre-school...

Amazon and Jeff Bezos Is Extremely Successful!

Amazon and Jeff Bezos Is Extremely Successful!Well, the Amazon corporation and Jeff Bezos might be the most profitable of all businesses in existence...
Home of Science
Follow me