BREAKING NEWS

Slack forecast disappoints as competition weighs, shares drop

Slack forecast disappoints as competition weighs, shares drop
FILE PHOTO: The Slack Technologies Inc. logo is seen on a banner outside the New York Stock Exchange (NYSE) during the company's direct listing in New York, U.S. June 20, 2019. REUTERS/Brendan McDermid -
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Brendan McDermid(Reuters)
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(Reuters) – Slack Technologies Inc <WORK.N> forecast disappointing current-quarter revenue and profit on Wednesday as its messaging platform wrestles with stiff competition.

Shares of the company, often described as an “email killer” were down nearly 2% in trading after the bell.

Slack competes directly with Microsoft Corp’s <MSFT.O> workplace messaging platform, Teams, which had more than 20 million daily active users as of November.

Slack said it had over 105,000 paid users at the end of the third quarter.

The company went public in June through a direct listing, bypassing the rigors of an initial public offering, at an offering price of $26 per share. Its shares soared nearly 50% on debut, taking its valuation past $23 billion (£17.93 billion).

The company forecast fourth-quarter loss between 6 cents and 7 cents per share. Analysts on average were expecting a loss of 6 cents per share, according to IBES data from Refinitiv.

It forecast current-quarter revenue between $172 million and $174 million, compared with analysts’ estimates of 172.9 million.

The company’s revenue jumped nearly 60% to $168.7 million in the second quarter ended Oct.31, above analysts’ average estimates of $156.0 million, according to IBES data by Refinitiv.

The company’s total operating expenses in the quarter soared 68.4% to $142.9 million.

However, net loss attributable to common stockholders widened to $89.2 million from $47.7 million a year earlier.

Excluding items, the company reported a loss of 2 cents per share, compared with analysts’ estimates of a loss of 8 cents per share.

(Reporting by Neha Malara in Bengaluru; Editing by Shailesh Kuber)

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