After beating analyst expectations, Slack hits out at Microsoft again

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Teams vs Slack Adoption

Slack has just announced their 3rd quarter earnings, and have beat analyst expectations with revenue of $168.7 million, $10 million more than analysts expected.

Slack also reported that they now have more than 50 customers paying at least $1 million a year, up from 30 in the same quarter a year earlier.

Announcing the stats, Slack CEO Stewart Butterfield could also not resist taking a dig at Microsoft, noting that 70% of their customers were also Office 365 subscribers, meaning they were choosing to use Slack instead of the bundled Microsoft Teams.

“In general we continue to see tremendous adoption across customers of the Office suite,” Butterfield said. “They choose Slack despite having a bundle alternative” that wraps in Teams, he said.

Butterfield remained preoccupied with the Slack vs Microsoft Teams narrative and continued to hit out at Microsoft’s engagement numbers, saying they were deceptive because merely making a phone call over teams was counted as an engagement when many Teams users were merely Skype for Teams users who would be making calls in any case. Slack has previously said that merely having the client auto-launching was being counted by Microsoft as engagement, a charge Microsoft denies. Microsoft has however said they do count calls over Teams as an engagement opportunity.

“It has nothing to do with what people do use Slack for, why people are switching to Slack, the strength of the platform or any of that,” he said. “I want to just be candid and say we haven’t figured out the right way to message that.”

Butterfield has accused Microsoft of being deliberately deceptive and has threatened an anti-trust complaint. The company’s share price dropped 8.4% on Nov. 19, after Microsoft said Teams had more than 20 million daily active users, much more than the 12 million users Slack reported in October.

Slack’s share price has however recovered 3% in extended trading today, though challenges remain. The company is still loss-making, though narrower than before, and missed on several of its own metrics such as only achieving 105,000 paid customers in its second earnings report as a public company, fewer than the 106,700 analysts expected.

Overall Butterfield, however, said, “It was a great quarter for revenue growth.” Hopefully, the company can sustain some momentum going forward, particularly in the face of intense competition.


More about the topics: microsoft, Microsoft Teams, Slack, Teams