Slack (WORK) earnings Q1 2021

Slack shares fell as much as 17% in extended trading on Thursday after the company reported first quarter earnings.

Slack reported steady revenue growth during a quarter that brought in more customers, as organizations sought to keep communications going with their newly remote workforces during coronavirus pandemic. Still, the company failed to deliver the sort of blowout that video-calling service Zoom did earlier in the week.

Here are the key numbers:

• Earnings: Loss of 2 cents per share, adjusted
• Revenue: $201.7 million

Analysts polled by Refinitiv had expected an adjusted loss of 6 cents per share on $188.1 million in revenue. Comparing analysts’ estimates with results is not necessarily straightforward given the unpredictable effects of the pandemic during the quarter.

Revenue growth was 50% in the prior quarter. That’s barely a move from growth of 49% in the previous quarter. On Tuesday Zoom reported 169% revenue growth, exceeding what analysts had expected, and more than doubled its earnings guidance. Slack, meanwhile, called for a full-year adjusted loss that would be 2 cents less than what it had previously predicted. 

Slack did not disclose a new daily active user count on Thursday. However, in March CEO Stewart Butterfield posted a series of tweets showing how much Slack usage was picking up. He said that the company’s app had 12.5 million simultaneously connected users on March 25, up from 10 million on March 10.

The company said Thursday that it added a record 12,000 paid customers in the quarter. In the two prior quarters it added about 5,000 new customers. Slack’s top competitor, Microsoft’s Teams service, has also expanded in recent months. 

“What you saw with Zoom, what you saw with Teams is a great indication that this is not apples-to-apples and that the products are not truly competitive with one another,” Butterfield told analysts on a conference call on Thursday.

Paid users spent over 120 minutes per day in Slack at the end of the quarter, up from below 90 minutes one quarter earlier, Butterfield said.

And on the call Butterfield said that Amazon is offering Slack to all employees. Slack will adopt Amazon Web Services’ Chime video-calling technology to enhance Slack’s calling features. On Thursday Slack said in a filing that it had amended its agreement with AWS. The company will now pay AWS at least $425 million over a five-year period that ends in April 2025, up from a previous commitment of at least $250 million in a five-year period that ended in 2023. The company did not specify how much of the increased spending is related to Chime.

For the fiscal second quarter, Slack is forecasting an adjusted loss of 4 cents to 3 cents per share and $206 million to $209 million in revenue. Analysts surveyed by Refinitiv had been…