Slack Shares Drop After Q1 Earnings Report Despite Beat on Top and Bottom Line

Despite reporting a revenue beat and EPS beat this week, shares of Slack still fell after-hours on Thursday after the company reported its first quarter results.

The online chat tool company had posted $273M and an EPS of 8 cents, topping expected revenue of $265M and an expected loss per share of 1 cent.

The company had also reported total paid accounts of 169,000 compared to the 155,852 that were expected.

“In Q1 we saw a near-record number of Paid Customer additions, a record number of Paid Customers adopting Slack Connect, and approached 1 million active developers on our platform,” Slack CEO and co-founder Stewart Butterfield said in a statement.

This may be the company’s last quarterly report as an independent company as Salesforce is expected to close its $27.7 billion acquisition of Slack in the next coming months.
The deal was announced this past December.

Yahoo’s Dan Howley wrote, “A beat on revenue as well as earnings per share, adjusted earnings per share. Revenue was $273 million versus $265 million expected. Earnings per share, we have $0.08 versus an expected loss of $0.01 per share. And the big deal we want to talk about is the number of users who signed up. Now we’re looking at 36% up year-over-year on that revenue. New paid customers, 13,000.”

He added, “Now one of the big deals that we’ve been looking at is why they haven’t seen the revenue increase or the user increase over the years that something like Zoom has. I don’t think these numbers are going to have people very satisfied. 30% year-over-year versus 100 and something percent year-over-year that we saw out of Zoom. They haven’t done that throughout the entire pandemic.”

“And obviously, this is likely their last quarter as an independent company, as Salesforce comes in to scoop them up with that acquisition, which is expected to close later in the second quarter for Salesforce,” Howley further remarked.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.