Slack, which has been billed as a future of work beneficiary amid work from home policies due to the novel coronavirus outbreak, reported fourth quarter results that topped expectations.
The company has held up relatively well along with video conferencing outfit Zoom is seen as a next-gen productivity software player. As more workers are forced to work from home to contain COVID-19 software that enables telecommuting has garnered attention.
Slack reported fourth quarter revenue of $181.9 million, up 49% from a year ago, with a net loss of 16 cents a share. The non-GAAP loss for the fourth quarter of 4 cents a share.
Wall Street was expecting Slack to report fourth quarter revenue of $174.14 million with a non-GAAP loss of 5 cents a share.
Traders' reaction to Slack earnings rhymed with what happened after Zoom reported results. Both shares traded lower after results.
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The company said it had 70 paid customers with annual recurring revenue of more than $1 million. CEO Stewart Butterfield said companies are standardizing on slack and shifting from email to channel-based messaging. Slack ended with 110,000 paid customers and 893 customers spending more than $100,000 annually.
I want to start by acknowledging that we're presenting this information in an environment of pronounced uncertainty. We already see shifts in customer behavior from an increased interest in remote work and how Slack can be helpful in that transformation to the potential for hesitation around purchase decisions. At this time, we don't have a clear idea of the net impact of the macro environment on our business, which is another way of saying that there's more uncertainty than normal in our forecasting. You'll see this reflected in our guidance. Having said that, we have no uncertainty that we are in the right market with the right product at the right time, and we're confident about the opportunities to drive further innovation and growth.
Butterfield added that Slack's big customers also used Microsoft 365 and chose them anyway even though Teams was included. "In the fourth quarter, we closed a number of large deals alongside partners such as Atlassian, Box, Okta and Zoom. We see more value to unlock there on the go-to-market side and also with tighter integrations. In the first half, we plan to launch new integrations with voice and video offerings, including Amazon Chime, Cisco Jabber, Microsoft Teams, RingCentral and Zoom Phone," said Butterfield.
For fiscal 2020, Slack reported revenue of $630.4 million, up 57% from a year ago with a net loss of $1.43 a share. Non-GAAP loss for the year was 28 cents a share.
As for the outlook, Slack projected first quarter revenue of $185 million to $188 million with a non-GAAP net loss of 7 cents a share to 6 cents a share. Wall Street was expecting first quarter sales of $188.37 million with a non-GAAP loss of 7 cents a share.
For fiscal 2021, Slack projected revenue of $842 million to $862 million with a non-GAAP net loss of 21 cents a share to 19 cents a share. Slack said it expects fiscal 2021 billings $970 million to $1 billion, below the $1.02 billion Wall Street was expecting.
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