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Tuesday, November 24, 2020

Slack tops analysts’ estimates for earnings and revenue in the fiscal Q2.

  • Slack tops analysts’ estimates for earnings and revenue in the second quarter.
  • It’s quarterly revenue still came in about 50% lower on a year over year basis.
  • Slack gives stronger than expected financial guidance for the third quarter.

Slack Technologies Inc. (NYSE: WORK) published its quarterly financial results on Tuesday after the bell that came in stronger than what the analysts had anticipated. On the back of robust performance, the company also gave hawkish financial guidance for the full year.  

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Shares of the company tanked roughly 20% in after-hours trading on Tuesday. Slack is now about 3.5% up year to date in the stock market. At the time of writing, it has a market cap of £12.77 billion. Confused about choosing a reliable stockbroker to trade online? Here’s a comparison of a top few to make selection easier for you.

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Slack’s Q2 financial results versus analysts’ estimates

According to Refinitiv, experts had forecast the company to print £161.54 million in revenue in the second quarter. For loss per share, they had estimated 2.32 pence. In its report on Tuesday, Slack topped both estimates posting a higher £166.79 million in revenue in Q2. On the earnings front, the company boasted to have broken even in the recent quarter.

At £56.40 million, the software company said that its net loss in the second quarter was significantly lower than £278 million in the same quarter last year. Its revenue on an annualised basis was still reported about 50% down on Tuesday. Slack reported quarterly growth of 49% in the first quarter.

The company attributed its stronger than expected performance to the Coronavirus pandemic that fuelled demand for online tools as companies resorted to work from home arrangements. In October, Slack had boasted 12 million daily active users; a figure that the American multinational didn’t update in its earnings report on Tuesday.

CEO Stewart Butterfield, however, revealed a 30% year over year increase in the company’s paying customers to 130 thousand, as of the end of Q2. FactSet consensus for Slack’s paying customers in the second quarter stood at a lower 128 thousand. Slack announced major security updates in August.

Slack’s financial guidance for the full year

For the fiscal third quarter, Slack now forecasts up to 4.64 pence a share of adjusted loss. It expects its revenue to fall in the range of £171.51 million to £173.82 million. Analysts, on the other hand, anticipate 3.86 pence of adjusted loss per share for Slack in Q3 on £172.82 million of revenue.

For the full year, the San Francisco-based company says it is likely to see up to 10.82 pence of adjusted loss per share, and will generate £672.12 million to £676.75 million of revenue. Experts are betting on 12.36 pence a share of adjusted loss per share for Slack in fiscal 2021 on £673.90 million of revenue.

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