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Slack Technologies records better than expected revenue in the fiscal third quarter

Michael Harris
  • December 8th, 07:52
  • Last Updated: December 8th, 07:54
  • Slack records $168.7 million revenue in Q3 against the analysts' estimate of $156 million.
  • Loss per share was reported at a much lower 2 cents compared to the analysts' estimate of 8 cents.
  • Sales saw a growth of 60% year-over-year, as per the 2019's Q3 earnings report.
  • CEO Stewart Butterfield says that over 50 of Slack’s customers spend $1 million annually.
  • Slack's performance in the stock market following its direct listing in June has remained downbeat.

The Canadian software company, Slack Technologies, announced its earnings report for the third quarter on Wednesday. Beating analysts’ estimates for revenue and earnings per share, the stock was reported to have gained by 2% in the after-hours trading on Wednesday. The gain was immediately followed by a massive drop of 6% on Thursday morning as concerns regarding future losses started to circulate. As of Friday, however, the company jumped back by around 9% and printed a daily high of $23.

Slack’s Performance In The Stock Market Following Its Direct Listing In June 2019

The year-to-date performance for Slack in the stock market has been largely downbeat. Following its direct listing at $38.62 in June, Slack recorded a low of $20.13 in November. As per the sources, share prices have remained well under the opening level in 2019 so far. The stock closed at $22.50 on Friday while it was reported to have slightly gained to $22.61 in extended trading.

Based on the Refinitiv’s data, analysts were expecting the software company to register $156 million in revenue in the fiscal third quarter. In terms of losses per share, they had estimated 8 cents per share According to Slack’s Q3 earnings report, however, the company beat analysts estimates highlighting $168.7 million in revenue in the third quarter with a much lower, 2 cents per share, of losses.

Sales in the same quarter last year were reported at $105.6 million. In contrast, 2019’s Q3 saw a 60% growth in sales. The report further highlights the company to currently have 821 customers. In the report for the second quarter, the company had announced its total number of customers as 720.

CEO Stewart Butterfield Says That Over 50 Of Slack’s Customers Spend $1 Million Annually

In 2018, CEO Stewart Butterfield had claimed that as many as 30 of Slack’s customers spend over $1 million annually. The number has raised to 50 as per the 2019’s report for the fiscal third quarter.

According to the analysts, Slack can be expected to record a revenue of around $172.9 million in the fiscal fourth quarter. The company itself, however, is expecting $172 to $174 million in revenue in Q4. While analysts have capped the loss per share at 6 cents, the company stated that it may rise to 7 cents in Q4. In a separate announcement, the CEO also declared Chamath Palihapitiya’s departure from the board. Palihapitiya was one of the pioneering investors of Slack. As per the CEO, Michael McNamara will be replacing him on the board.

About the author

Michael Harris
Michael Harris
I began trading in my early 20's at a local company and since then have combined my knowledge and love of content to become a news writer. I am passionate about bringing insightful articles to readers and hope to add some value to your portfolios!

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