Slack reports strong Q3, raises full year outlook

The company said it added 101 paid customers with over $100,000 in annual recurring revenue.
Written by Natalie Gagliordi, Contributor

Slack on Wednesday delivered strong third quarter financial results and raised its guidance for the fiscal year.

The workplace collaboration player reported a second-quarter net loss of $87.7 million, or 16 cents per share. On a non-GAAP basis, Slack posted a net loss of 2 cents per share on revenue of $168.7 million. Wall Street was expecting a non-GAAP net loss of 8 cents per share on revenue of $156 million. 

In terms of guidance, Slack expects fourth-quarter revenue in the range of $172 million to $174 million, with a net loss per share between 7 cents and 6 cents. Analysts expect Slack to deliver revenue of $172.0 million with a non-GAAP EPS loss of 6 cents. 

For the year, Slack is expecting a loss from 32 cents to 31 cents with revenue between $621 million to $623 million -- up from its previous forecast for between $603 million to $610 million. Analysts were expecting a full-year loss of 40 cents on revenue of $608.9 million. Shares of Slack were down about 2% after hours.

Elsewhere on the balance sheet, Slack said it ended the quarter with over 105,000 paid customers, up 30% year-over-year, with 821 of those paid customers bringing Slack annual recurring revenue greater than $100,000. Slack also said customers with greater than $1 million in annual recurring revenue exceeded 50 for the first time. 

"Shared channels went into general availability in mid-September after an extensive beta period. Since then the rate of adoption has accelerated," said Slack CEO Stewart Butterfield. "This is our most exciting product release in collaboration since we first launched Slack."

In October, Slack revealed that it now has 12 million daily active users (DAUs) on its platform, and also suggested that its user base is more engaged than those on its biggest rival Microsoft Teams. Among its paid customers, Slack said users spend more than 9 hours a day connected to its service, including spending around 90 minutes per day actively using the platform.

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