Slack Reports Q3 Earnings Beat

Slack Technologies Inc (NYSE:WORK) shares continue to fall despite reporting a third-quarter earnings beat on Wednesday.

Adjusted earnings came in at a loss of 2 cents per share, beating estimates by 6 cents. Sales came in at $168.7 million, beating estimates by $12.68 million.

The company issued strong 2020 guidance, but fourth-quarter earnings guidance was relatively weak.

"Shared channels went into general availability in mid-September after an extensive beta period. Since then the rate of adoption has accelerated," said CEO Stewart Butterfield.

"Revenue growth was 60% year-over-year, driven by strong growth upmarket," said CFO Allen Shim. "We ended the quarter with 821 Paid Customers greater than $100,000 in annual recurring revenue, which is up 67% year-over-year. We also exceeded 50 Paid Customers with greater than $1 million in annual recurring revenue for the first time, an indication that large enterprises are increasingly standardizing on Slack as their primary collaboration platform."

Highlights

Ended the quarter with over 105,000 paid customers, up 30% year-over-year
Calculated billings increased 47% year-over-year
Net dollar retention rate was 134%

Slack's stock traded lower by 4% in Wednesday's after-hours session after closing the regular session at $21.66 per share. The stock IPO'd on June 20 at $38.50 per share.

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