Slack’s quarterly billing growth slows due to COVID-19 concessions

Slack

Slack’s billing-growth, which is seen as a key indicator of future earnings, slowed in the second quarter and the workplace messaging app owner stated it required only a $11 million hit in the first half because of the coronavirus related concessions.

The company said it offered credits, payment in instalments and charging length of less than a year to help users wave over the economic downturn triggered by the health catastrophe, sending its shares down 18% following the bell.

Slack Technologies had in the preceding quarter signalled weak demand from worst-affected businesses like travel and retail, prompting it to withdraw its full-year billings goal.

In August, growth began to trend at more typical seasonal levels, Chief Financial Officer Allen Shim stated in a call with analysts.

Slack’s quarterly billings rose 25 percent, but it fell short of the 38% increase it posted in the first quarter. Billings are an important metric for growth for a subscription-based platform such as Slack.

Its second-quarter earnings topped expectations by nearly $7 million, but that over-achievement wasn’t reflected in the full-year outlook.

Slack’s annual earnings forecast of $870 million-$876 million has been approximately in line with expectations of $872.3 million.

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Excluding items, the company broke even, compared with analysts’ average estimate of a loss of 3 cents per share, based on IBES information from Refinitiv.

The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Neha Malara in Bengaluru. Editing by Maju Samuel and Arun Koyyur.

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