Investors balk at Slack’s earnings debut on Wall St
Shares of workplace technology giant Slack fell more than 15 per cent in after-hours trading tonight, following the company’s first set of quarterly results published since its markets debut in June.
Slack, which is the creator of its eponymous workplace messaging app, said it had suffered a significant impact on its revenue due to the amount of time its service was disrupted in the second quarter.
The company’s so-called uptime – a measure of how frequently its service is functioning normally – slipped below 99.9 per cent in June and July. It holds a policy of awarding its customers credits for future use when uptime falls below that level.
Slack paid out $8.2m (£6.7m) in credits across the three-month period.
The workplace app additionally forecast a loss of eight to nine cents per share for the upcoming third quarter, higher than analyst estimates of seven cents, leaving investors with cause for concern.
For the most recent quarter, Slack revealed a loss of 14 cents per share, bettering analyst estimates of 18 cents per share according to Refinitiv.
Overall operating losses, which totalled $363.7m, skyrocketed from $33.7m in the same period last year. Slack said this was the result of vesting employees’ holdings in the company and other related costs after its direct listing.
It also beat on revenue, posting $145m in sales compared to estimates of $140.7m.
When the company first went public on the New York Stock Exchange three months ago, its shares surged 49 per cent from an initial listing value of $26 up to $38.62. Its stock has fallen approximately 20 per cent since then, closing yesterday at $31.07.
“Revenue growth was 58 per cent year over year, despite a one-time revenue headwind from credits issued in the quarter related to service level disruption,” said Allen Shim, chief financial officer at Slack.
“We remain focused on expansion within existing customers and growing our large enterprise customer base.”
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