Slack Shares Fall Hard After Spotless Earnings Report

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Slack  (WORK) - Get Report shares fell hard after reporting better-than-expected enraging and guidance. The stock had run up substantially into the earnings print

The stock fell 16% to $31.7 a share in postmarket trading. 

Management said the work-from-home environment spurred by the pandemic catalyzed faster-than-expected user adoption of the workplace messaging platform. The company also implies it is focused on driving profitable growth, as it looks to continue improving on operating leverage, driving free cash flow soon. 

Here were the earnings results against Wall Street estimates: 

  • Revenue: $201M v. $188.5M (+50% year-over-year) 
  • Earnings Per Share: -$0.02 v. -$0.06 (improvement over 2019) 

"Q1 was a phenomenal quarter for Slack, with the addition of 12,000 net new Paid Customers and 50% revenue growth year-over-year,” said CEO and Co-Founder Stewart Butterfield. "We believe the long-term impact the three months and counting of working from home will have on the way we work is of generational magnitude. This will continue to catalyze adoption for the new category of channel-based messaging platforms we created and for which we are still the only enterprise-grade offering.”

For the full year, management guided well, as it expects revenue of $863 million at the midpoint against analysts forecast of $862 million. Loss per share is expected at 18 cents against estimates of 20 cents. Free cash flow is expected at $10 million at the midpoint and break-even on the optimistic end. 

The stock rose 16.5% into earnings in the past week and 60% for the year before the post-market action Thursday. 

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