FILE PHOTO: The Slack Technologies Inc. logo is seen on a banner outside the New York Stock Exchange (NYSE) during thew company’s IPO in New York, U.S. June 20, 2019. REUTERS/Brendan McDermid
(Reuters) – Slack Technologies Inc (WORK.N) forecast a bigger-than-expected loss for the third quarter on Wednesday, as the workplace messaging and communication platform invests heavily to attract paid customers and organizations in the face of competition from companies like Microsoft Corp (MSFT.O).
Shares of the company tumbled 15% in extended trading.
The company forecast a third-quarter loss of between 9 cents and 8 cents per share. Analysts on average were expecting a loss of 7 cents per share, according to IBES data from Refinitiv.
Slack competes with Microsoft Teams, a free chat add-on for Microsoft Office365 users. Other similar platforms include Google Hangouts, Workplace by Facebook (FB.O) and Cisco Systems Inc’s (CSCO.O) Webex Teams.
Slack went public via a direct listing on June 20, instead of the more popular initial public offering route. Its shares soared nearly 50% in their public trading debut, valuing it at more than $23 billion.
Slack, however, topped second-quarter revenue expectations and posted a smaller-than-expected loss. The company posted revenue of $145 million, beating estimates of $141.3 million, driven by paid customer growth.
Its adjusted loss of 14 cents per share was smaller than the 18 cents analysts had expected.
The company’s total operating expenses in the quarter surged 317.6% to $477.5 million.
Slack, described as an “email killer”, said net loss attributable to common stockholders widened to $359.6 million, or 98 cents per share, in the second quarter ended July 31, from $31.9 million, or 26 cents per share, a year earlier.
Reporting by Arjun Panchadar in Bengaluru; Editing by Maju Samuel