Increasing loss, falling stock price, Slack Myth is about to burst?

@agape35 Sep 06, 2019 23153 views slack saas microsoft

Slack released its second-quarter earnings report for the 2020 fiscal year. The data showed that its revenue grew year-on-year and its losses increased year-on-year. Specifically, revenue was $145 million, a year-on-year increase of 58%. The loss attributable to ordinary shareholders was US$360 million, an increase of 12.5% ​​year-on-year. Slack, a well-known mobile office software, surged 49% on its first day of listing this year. However, affected by this financial report, its share price plummeted 13.71% as of September 5th.

Two major problems in front of Slack

One big problem is competition from rivals such as Microsoft. Although Slack is developing rapidly, compared with giants such as Microsoft and Amazon, there are still many shortcomings, especially under Microsoft's free offensive. Declined. Another big problem is the cost. From the financial report, we can see that Slack's cost is rising rapidly, which may continue to drag down its revenue performance.

However, Slack also has its own advantages. On the one hand, through application integration, Slack's office ability is not weaker than Microsoft, and even better in some aspects. On the other hand, the SaaS industry is booming in recent years, and the market space is large. Even if faced with competition from rivals such as Microsoft, there is still much room for development before the market is saturated. Not only foreign countries, domestic nail applications, WeChat, Feishu and other mobile office applications have been developing rapidly in recent years. The US Stock Research Institute will continue to pay attention to the development trend of this industry at home and abroad.

Revenue growth slows down, and catching paying users gets harder

Look at the revenue. In the second quarter of Slack 2020, revenue was $145 million, a 58% increase from the $92 million in the same period last year. Slack has three modes: free, paid, and value-added. The subscription fee for enterprise users is the main source of income. In the second quarter, due to the growth of corporate paying users and the expansion of market size, Slack's revenue showed a rapid growth.

Loss keeps expanding

In the second quarter of the Slack 2020 fiscal year, the loss attributable to ordinary shareholders was $356 million, compared with a loss of $3.2 in the same period last year, an increase of 12.5%. At the same time, gross profit increased and gross profit margin decreased. Slack's second-quarter gross profit was $113.9 million, with a gross margin of 78.5% compared to a gross profit of $80.7 million for the same period last year and a gross margin of 87.7%. The main reason for the loss is the rapid growth of costs, we will analyze the cost of Slack in detail later.

Paying users keeps increasing

As of the second quarter, the company had more than 100,000 paying customers, a year-on-year increase of 37%. The number of paying customers with annual recurring income of more than 100,000 US dollars was 720, a year-on-year increase of 75%. The rapid growth of paying users has become the key to their revenue growth, but the resulting costs have dragged down earnings performance. In the past, Slack relied heavily on word of mouth in marketing, but in order to compete with Microsoft, it paid a lot of marketing costs. Although it promoted the growth of users, it led to a continuous increase in losses.

Competitions from Teams Microsoft, etc.

Although Slack has many opponents, the most worrying thing is Microsoft's Teams application. The application scenarios of the two are almost the same, and the competition is the most intense. At present, Microsoft has the upper hand with its development over the years, but Slack has developed rapidly. Some analysts even believe that the duopoly mode may emerge in the future. This is inconsistent with the findings of many organizations. And together. However, it is worth noting that due to Microsoft's competition, the cost of Slack is rising rapidly, which may become a big problem for his future development.

SaaS market keeps growing sharply

Integrated applications expand the ecological scope, and the SaaS market develops rapidly The biggest difference between Slack and Microsoft is that the Slack business model is simple. Microsoft has extensive experience in the office field and many products, but it is also a major drawback. Slack can work with other office service providers to share the market through applications, but Microsoft must pay more attention to the marketing of its own products. Therefore, Slack has a greater ecological advantage in the application. And although the two are in a competitive situation, the SaaS industry is still in a period of vigorous development. The competition between the two is not a struggle between life and death, which will give Slack a certain development space.

Currently on the foreign track are mainly Microsoft, Slack, Amazon and Facebook. However, although the market is large, it is not easy to survive, and the pressure from the giants is still very large.


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