If you are considering becoming a 1M/1M premium member and would like to join our mailing list to receive ongoing information, please sign up here.

Subscribe to our Feed

Cloud Stocks: Slack Beefs up its Portfolio

Posted on Monday, Jul 13th 2020

The COVID-19 crisis has led to a rapid shift to working from home and a surge in the use of digital collaboration tools in the enterprise. Enterprise communication platform Slack (NYSE: WORK) last month reported a strong first quarter that beat estimates.

Slack’s Financials

Slack’s Q1 revenue grew 50% to $201.7 million. Non-GAAP net loss per share was $0.02. Analysts expected loss of $0.06 per share on revenue of $187 million.

During the quarter, Slack added 90,000 net new free and paid organizations, bringing the total to over 750,000. It added 12,000 net new paid customers, bringing the total to over 122,000 paid customers.

The number of paid customers spending over $100,000 annually was up 49% to 963. These include Centers for Medicaid and Medicare services, the UK Ministry of Justice, Harvard University, Virgin Media, CISA, Recruit Holdings, West Japan Railway Company, and Credit Saison.

Slack scored a major win this quarter by signing up Verizon and investment firm Man Group as new Enterprise customers. It won another enterprise-wide agreement with Amazon across all its businesses.

For the second quarter of fiscal year 2021, Slack expects revenue of $206 to $209 million, representing y-o-y growth of 42% to 44%. Non-GAAP net loss per share is expected to be $0.04 to $0.03. Analysts expect net loss of $0.03 on revenue of $208.9 million.

For the full fiscal year 2021, Slack expects total revenue of $855 million to $870 million, representing year-over-year growth of 36% to 38%. Non-GAAP net loss per share is expected to be $0.19 to $0.17.

Slack’s New Offerings

Slack’s top priority for this fiscal year is Shared Channels, which was launched in 2017. Shared Channels provides a secure productive environment for customers to communicate across organizational boundaries. To build on its Shared Channels feature, Slack last month launched Slack Connect, which allows users to send messages to 20 external organizations, both in channels and as direct messages.

Designed to replace email, Slack Connect extends channel-based messaging to everyone that you work with – both inside and outside your organization. Teams can use it to work faster with vendors, strengthen client relationships, provide top-tier enterprise support and manage supply chains. Slack Connect is already being used by over 41,000 customers including Autodesk, Airbnb, Box, Time, and Wayfair.

Slack’s Partnership and Integration Strategy

Integrations and partnerships are the sticky factor for Slack, and it continues to boost this strategy. Slack’s robust partner ecosystem includes GSuite, Salesforce, Workday, Atlassian, Zoom, Box, Dropbox, and Zendesk. It also integrates with leading security and compliance providers such as Okta, McAfee, and Symantec.

Slack recently expanded its strategic partnership with Amazon Web Services, which includes robust integrations between Slack and several AWS services, including AWS Chatbot, AWS Chime, AWS Sandstone, AWS Cloud Formation, and AWS Key Management Services. Slack will also use AWS Chime to support Slack’s native calling capabilities.

Slack platform with its integration and app ecosystem offers a piggyback ride for startups. Slack has over 2,200 apps and integrations across several verticals on its platform. Developers can use its platform to automate workflows and customize Slack apps. Several startups use the Slack platform to drive user engagement and adoption. A CB Insights report counts 115 private venture backed startups that offer integrations with the Slack platform across categories like Analytics, Team Culture, Sales, Finance, and Security.

Slack’s Acquisition Strategy

Last week, Slack acquired corporate directory startup Rimeto for an undisclosed sum. Rimeto was founded in 2016 by ex-Facebook employees Neville Bowers, Maxwell Hayman, and Ted Zagat and bootstrapped for three years before raising funding last year. It raised $10 million from investors including US Venture Partners, Floodgate, Ray Dalio, and Bow Capital at an estimated valuation of $42 million.

With the acquisition, Slack will be able to beef up employee profiles, which currently include just basic information. Rimeto provides details like area of expertise and projects the person is working on. Slack plans to rename the service but Rimeto will operate as a standalone app for non-Slack consumers.

Slack’s main competitor is Microsoft Teams and with this acquisition, Slack will also take on Microsoft’s LinkedIn feature. Slack is reportedly eyeing more acquisitions in the near future. It ended the quarter with over $1.5 billion in cash and marketable securities. 

Slack’s stock is currently trading around $33.84 with a market cap of $19 billion. It hit a 52-week high of $40.07 in June before its earnings report. Its 52-week low was $15.10 in March this year. Slack went public last year at a list price of $38.50 and valuation of $19.5 billion. Slack had raised $1.3 billion from investors including T.Rowe Price, Wellington Management, Dragoneer, General Atlantic, Thrive Capital, Social Capital, GV, Kleiner Perkins Caufield & Byers, Accel, SV Angel, Andreessen Horowitz, DST Global, Horizon Ventures, Index Ventures, IVP, Jeff Weiner, and Slow Ventures.

This segment is a part in the series : Cloud Stocks

. Smartsheet Acquiring Bootstrapped Startups to Drive Growth
. Bootstrapped Unicorn Atlassian is Acquiring Capital Efficient Startups
. Netflix Price Hike Ruffles Competition
. How Will Carbon Black Differentiate?
. ServiceNow Grows Through Addition of Capital-Efficient Startups
. Zendesk and Freshworks Follow Different Acquisition Strategies
. Tableau Grows Through Small Acquisitions
. Open Platform Strategy Stands Intuit in Good Stead
. Will GoDaddy Follow the PaaS Route?
. Adobe Delivers Via PaaS
. A Look at Oracle’s 2018 M&A Activity
. What Apps Will Drive More Traction for Cloudera?
. Slack's App Focus Will Be Key to Post-IPO Success
. IBM Counts on its Cloud and Platform for the Turnaround
. Atlassian Acquires From its PaaS Marketplace
. What Should SAP Acquire to Triple its Value by 2023?
. Expect ServiceNow to Acquire From App Marketplace
. Should Follow a PaaS Strategy?
. How Upwork Can Leverage the Virtual Company Trend
. Qualys Scouting For Acquisitions
. Should SAP Acquire Zendesk or Freshworks?
. HubSpot Counts on its API Strategy
. SurveyMonkey Eyes Acquisitions for Growth
. Workday Wants to Disrupt Cloud Computing Using Machine Learning
. Einstein and Open-Source Platform Lead the Charge for Salesforce
. DocuSign Prepares to Beat Rival Adobe
. Veeva Soars, But Dassault Acquires Medidata for $5.8 Billion
. Tableau Acquisition Signals Massive Analytics Push for Salesforce
. Oracle Joins Hands with Microsoft to Take on Amazon
. GoDaddy is Making Strategic Acquisitions for the Next Level of Growth
. Alteryx Sees Strong Momentum
. Adobe Leveraging Magento and Marketo to Deliver Blockbuster Performance
. Is Slack Overvalued?
. How Will Cloudera Address the Competition?
. Zoom is Not Bothered by Cisco or Microsoft
. Domo Counts on Enterprise Revenue for Growth
. Netflix Plays with Pricing and Games to Attract Subscribers
. CrowdStrike Has a Successful IPO
. Atlassian Crosses the Billion Dollar Revenue Milestone
. ServiceNow Believes Strength Lies in Tie-ups
. Partnerships are the Mantra for BlackLine
. SurveyMonkey Counts on Enterprise Segment for Growth
. HubSpot Soars to a New High
. Intuit Pushes AI to Simplify Tax Filing
. Splunk Sees Strong Cloud Momentum
. Forescout Partners with Big Names
. Smartsheet Tapping into the Government Sector
. Salesforce Continues its Shopping Spree
. Palo Alto Networks Targets the IoT Security Market
. DocuSign Focuses on the Mortgage Sector
. Oracle Brags About Autonomous Database
. Blackbaud Acquires YourCause to Grow Addressable Market
. The Market Expects a Lot More from Adobe
. Anaplan Makes its First Acquisition Post IPO
. Activist Investor Drives Market Interest in Box
. MongoDB's Formula for Success
. Coupa Aims for $1B Revenue
. Dropbox on a Rocky Road
. Medallia Banks on Acquisitions
. IBM Banks on AI
. Time For Skepticism with Netflix
. SAP Riding High on the Cloud
. Amazon's Faster Shipping Hurting its Earnings
. ServiceNow CEO Change Signals Focus on Acquisitions
. Will Google Acquire Fitbit?
. HubSpot Focuses on Its Platform
. BlackLine Partners with Google Cloud
. Rapid7’s Focus on Cloud SIEM Pays Off
. Splunk Bets Big on Data Streaming
. Intuit's QBO Scores Big
. VMware Builds Up With Acquisitions
. Palo Alto Targets $5B Revenue by 2022
. Workday Targeting Procure-to-Pay Cycle
. Will Salesforce Acquire DocuSign?
. Okta Targets Enterprise Customers
. MongoDB Eyeing China With Alibaba Partnership
. Twilio Counts on API Upgrades for Growth
. Adobe Revs up its Experience Platform
. Top 20 for 2020
. Anaplan Sees Expanding Use Cases
. Dropbox Gears Up to Regain Lost Valuation
. Forescout Fails to Deliver
. Enterprise Bet Pays Off for SurveyMonkey
. SAP Bets Big on Experience Management
. Twilio Steps up Investment in 2020 to Preserve Growth Momentum
. Zendesk, Freshworks Focus on Marketplaces and Integrations
. Proofpoint Targets Insider Threats Through Acquisition
. RingCentral's Powerful Partner Strategy Would Augment with PaaS
. Qualys Counts on Google and Microsoft for Growth
. Shopify Soars on Improved Merchant Offerings
. HubSpot Believes in the Importance of PaaS
. BlackLine Remains Focused on SAP Integration
. Recently Public Cloudflare has New Edge
. GoDaddy is on a Shopping Spree
. Intuit Targets Online User Base Through Acquisition
. Should Palo Alto Networks Acquire ZScaler?
. Why Salesforce Buying Vlocity Proves the Growing Importance of PaaS
. Datadog Performing Well Post Recent IPO
. Workday Should Open Up About its PaaS Success
. Anaplan Focuses on API Connectors for its Platform
. Veeva
. Five9 Strengthens its PaaS Focus
. RealPage Brings AI and SaaS to Real Estate
. Splunk Should Open up About its PaaS Metrics
. Okta Benefiting from App Diversity
. Oracle Sees Growth Momentum
. Xero Focuses on a PaaS Strategy
. DocuSign Resilient to COVID-19
. Smartsheet Looking up to Enterprise Customers for Growth
. Paylocity Delivers Solid Results
. Q2 Holdings Expands TAM with Acquisitions
. New Relic Focuses on PaaS
. AppFolio Leverages AI for Product Enhancement
. Will Adobe Open Up About its PaaS Statistics?
. Change Healthcare Pushes APIs
. Dropbox Needs to Share API Metrics
. Upwork Improves Monetization
. MongoDB has Miles to go
. Nutanix Needs to Define a PaaS Strategy
. Cloudera Focuses on Hybrid Cloud
. Atlassian Gears Up for Growth, Unfazed by Covid-19
. Shopify Helps Merchants Pivot to Online Stores
. ServiceNow Steady in Turbulent Seas
. RingCentral Sees Strong Traction
. Twilio Hits 52-Week High Amidst COVID Crisis
. HubSpot Lowers Outlook Amidst Virus Concerns
. Proofpoint Acquiring Even Amidst Crisis
. BlackLine Looks Solid At The Face of Covid-19
. GoDaddy Continues to Acquire
. Qualys Expands Cloud Offerings to Soar to New Highs
. Zendesk Struggling Amidst the Downturn
. Alteryx Bounces Back Despite Low Outlook
. Palo Alto Networks Continues to Acquire
. Workday Extends its PaaS Strategy
. Splunk Rides High on Cloud Initiatives
. Salesforce Partners with Workday to Address the New Normal
. Veeva Scales New Highs
. Is Smartsheet’s Pullback a Buying Opportunity?
. MongoDB Soars Even in the Crisis
. Okta Reiterates Outlook
. Is Anaplan a Prospect for Oracle, SAP?
. Oracle Relies on Autonomous Offerings
. Adobe Shifts its Focus
. Paycom Confident Under Current Conditions
. DocuSign Soars to Record Highs
. Paylocity Acquires Amid Crisis
. Datadog's Integrations and Upgrades Help it Soar
. AppFolio Improves Offerings for Current Conditions
. SurveyMonkey Should Get Into PaaS
. Model N Soars to a Record High
. Appian Focuses on RPA for Growth
. Slack Beefs up its Portfolio
. Coupa Expands into Treasury Services
. CrowdStrike Soars to Record Highs
. Guidewire Expands Cloud Offerings
. Dropbox Should Focus on PaaS
. Talend Expands Data Offering Through Partners
. IBM Expands Cloud Partners
. One Medical Supports COVID-19 Care Digitally
. Microsoft Rides High on Teams and Gaming
. Investors Say Yes to nCino’s IPO
. Nutanix Focuses on Government and Media Verticals
. SAP Rethinks Qualtrics Acquisition
. Tenable Expands Into Industrial Cyber-Security
. ServiceNow Expands Ties with Zoom
. Cloudera Powers its Data Platform with Partnerships
. Atlassian Continues to Acquire from PaaS Ecosystem
. Shopify Soars to an All-Time High
. The PaaS Landscape
. HubSpot Focuses on the Enterprise Segment
. GoDaddy Restructures During COVID
. Akamai's Security Solutions Thriving
. Blackline Needs a PaaS Strategy
. Twilio - A Successful PaaS Story
. Zendesk Invests in the Future
. Qualys Continues to Acquire Indian Startups
. ZoomInfo Lists Despite COVID-19
. Analysis of Alteryx PaaS Strategy
. Fastly Needs to Diversify from TikTok
. Way to Go, Salesforce
. Intuit Continues to Acquire
. VMware Continues Buying Spree
. Analysis of Five9's PaaS Strategy
. Okta Expands Alliances to Attract Enterprises
. Palo Alto Continues to Acquire
. Analysis of Splunk's PaaS Strategy
. BigCommerce Goes Big with IPO
. Analysis of Workday's PaaS Strategy
. Analysis of Anaplan's PaaS Strategy
. Sees Strong Demand
. Analysis of MongoDB's PaaS Strategy
. Analysis of Wix's Platform Strategy
. New Relic Product Upgrades Deliver Growth

Hacker News
() Comments

Featured Videos