Market Overview

Slack Fails To Deliver Another COVID-19 Blockbuster

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Unlike Zoom Video Communications Inc (NASDAQ: ZM), Slack Technologies Inc (NYSE: WORK) didn't manage to deliver a blockbuster quarter. By no means was it bad, as the company reported steady revenue growth with usage increasing over the pandemic. Even Amazon (NASDAQ: AMZN) will be offering Slack to its employees. But expectations were quite higher so shares ended up dropping 17% in extended trading on Thursday.

First-quarter earnings report

Reported revenue of $201.7 million resulted in an adjusted loss of 2 cents per share. The company added a record 12,000 paid customers in the quarter. Slack's top competitor, Microsoft's Teams, saw an explosive expansion of 70% in April as it reached more than 75 million daily active users.

For the next quarter, the company's guidance for revenue is $206 million to $209 million with an adjusted loss of 4 cents to 3 cents per share.

AWS investment

Besides Amazon offering Slack to its employees, Slack will adopt Amazon Web Services' Chime video-calling technology to enhance its calling features. Slack amended its initial agreement with AWS where it committed to at least $250 million in a five-year period that ended in 2023. It will now pay least $425 million over a five-year period that ends in April 2025.

Slack didn't board the blockbuster boat but still did well

Revenue growth was 50% which is pretty much the same as the previous quarter. Zoom pulled off a 169% revenue growth, more than doubling guidance and exceeding forecasts. Not to mention the skyrocketing usage of Microsoft Corporation (NASDAQ: MSFT) Microsoft Teams. Slack didn't manage to board that boat. But Zoom's executives have a different way of looking at it. They find it as a great indication that they are not apples-to-apples rivals as the products are not truly competitive with one another. If we exclude the after-hours move, its shares did go up about 70% since the beginning of the year. But can Slack afford not catching up to the popularity of Zoom and Microsoft is a question that subsequent quarters will answer? Yet, many analysts see the pandemic as the point that either makes or breaks such companies whose products benefit from social distancing. If not now, when?

This article is not a press release and is contributed by Ivana Popovic who is a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. Ivana Popovic does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you're interested in becoming an IAM journalist contact: contributors@iamnewswire.com Questions about this release can be sent to ivana@iamnewswire.com

The post Slack Fails to Deliver Another COVID-19 Blockbuster appeared first on IAM Newswire.

 

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