Shares of Slack Technologies Inc. (NYSE: WORK), maker of the popular workplace chat app, plunged as much as 16% on Wednesday after the company issued its first earnings report as a public company, briefly dropping below the reference price from its direct listing.
The company sustained a loss of 14 cents per share, excluding certain items, vs. 18 cents per share as expected by analysts. Revenue came in at $145 million, vs. $140.7 million as expected by analysts
Despite beating expectations on the top and bottom lines, shares of Slack fell sharply due to weak guidance and concerns over the company’s ability to compete with Microsoft’s competing chat product, Teams.
Slack said its revenue grew 58% year over year in the second quarter of the 2020 fiscal year, which ended on July 31. The company said it expects third-quarter revenue of $154 million to $156 million and a non-GAAP operating loss of $49 million to $47 million.
Slack debuted on the New York Stock Exchange in June through a direct listing, following the path taken by Spotify (NYSE: SPOT) last year. A few days before its listing, Slack forecast second-quarter revenue of $139 million to $141 million, representing growth of about 52%.
The company’s main competitor is Microsoft (NASDAQ:MSFT), which includes the Teams work chat app in Office 365 business subscriptions. In July, Microsoft released statistics suggesting that Teams is more widely used than Slack. On Wednesday Slack did not provide updated user statistics
Shares dived $4.52, or 14.6%, in early Thursday morning trading to $26.48
