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Home / Business / Slack stocks fall 15% after the first earnings report since publication

Slack stocks fall 15% after the first earnings report since publication



Shares of Slack ( WORK ) plunged 15% in afternoon trading Wednesday following the company's first revenue report as a public company. The stock decline even came as Slack increased its outlook for the year.

The company's sales growth has slowed, a trend it expects to continue. Slack reported revenue of $ 145 million for the quarter, up 58% from the same period the year before. This was slower than 67% growth during the first three months of the financial year. The company now estimates total revenue for the year to increase by 51% to 52%, a significant decline from last year when revenues grew 82%.

Revenues in the recently completed quarter would have been even higher if not for long service disruptions. Slack said Wednesday that the results were hurt by $ 8.2 million in credit from service disruptions during the quarter.
Slack, a work notification app used by companies such as IBM ( IBM ) Lift ( LIFT ) and CNN, debuted Wall Street in June after opting to list its existing shares directly on a stock exchange instead of going through a traditional public offering.

Like many of its engineers, Slack's revenue is growing, but the company is still unprofitable. The company had a net loss of $ 0.1

4 per share in the July quarter, better than Wall Street analysts had expected. But Slack also said it now expects to lose between $ 0.40 and $ 0.42 per share for the year, worse than analysts had estimated.

CFO Allen Shim said in a conversation with analysts on Wednesday that the annual loss was partly due to an increase in sales and marketing expenses. The company plans to spend more than 50% of its sales and marketing revenues in the coming quarters as it works to win over several large, paying corporate customers, which it relies on for revenue.

Slack now has more than 720 business customers who pay more than $ 100,000 each year for the service, up 75% from the previous year.

Slack shares ended Wednesday up 8% ahead of the earnings report.


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