Amazon and Slack are deepening their relationship with a new technology-sharing deal.
Under a deal announced on Thursday, all Amazon (AMZN) - Get Amazon.com, Inc. Report employees will use Slack's work messaging suite. And Slack plans to revamp its video-calling feature using an AWS voice connector service called Chime.
Shares of Slack (WORK) - Get Slack Technologies, Inc. Class A Report were down 16% in after hours trading after the company reported better-than-expected sales results, but pulled its billings guidance for the full fiscal year.
The two companies have had a relationship for awhile. Slack is built on AWS infrastructure and in 2018 it inked a 5-year, $250 million deal to use a variety of AWS services. The new partnership could help both firms better compete with Microsoft (MSFT) - Get Microsoft Corporation Report, which competes with Slack through its own enterprise communication suite, namely Teams.
In a recent interview with The Verge, Slack CEO Stewart Butterfield said that Microsoft is "unhealthily preoccupied" with Slack, and suggested that Microsoft's Teams more closely competes with Zoom (ZM) - Get Zoom Video Communications, Inc. Class A Report, not Slack.
Using Amazon's Chime, Slack plans to enable video calling on mobile devices and add other features, such as transcriptions, according the CNBC.
For the quarter ending April 30, Slack reported revenue of $201.7 million, up 50% year over year, and a non-GAAP loss per share of 2 cents.
However, the company withdrew its fiscal 2021 guidance for calculated billings -- a metric often viewed as a bellwether for future revenue -- citing "ongoing uncertainties surrounding the COVID-19 pandemic."
Heading into earnings, shares of Slack were up 64% year to date.