Enterprise collaboration company Slack surprised analysis with better than expected revenue in their recent financial results, managing to lose only $0.14 per share on $145 million in revenue, a 58 percent improvement year on year. Analysts had expected a loss of $0.18 per share.
CEO Stewart Butterfield said despite many companies running Office 365 (and therefore have free access to Microsoft Teams), some were still choosing Slack as it was superior.
“Of course, like most of our large enterprise customers, they run on Office 365,” Butterfield said. “They still chose Slack because only Slack was capable of meeting their needs. Increasingly, in regulated industries, we are seeing significant traction because Slack delivers security and compliance with scalability, an open platform and a great user experience.”
Butterfield was, however, less confident about their future growth and their competitive position, predicting a loss of 8 cents to 9 cents in the October quarter. Analysts had estimated a 7-cent loss.
In 2016 when Teams launched Slack said in a full-page newspaper ad “We’re genuinely excited to have some competition.”
Slack has more than 100,000 paid customers but had however already been overtaken by Microsoft Teams, who in July said they had 13 million daily active users, more than Slack’s 10 million users.
In response to the poor outlook, Slack’s share price tumbled 12% in pre-market trading but did recover much of this during the course of the day yesterday, to end only 3.41% down for the day. Overall Slack’s share price is nearly 30% down from its post IPO high of $42.