What To Watch In Slack Earnings Report

Slack Technologies (WORK) is scheduled to report results of its fourth fiscal quarter after the market close on Thursday, March 4. What to watch for:

1. PRELIMINARY RESULTS: On February 25, Slack reported preliminary Q4 revenue of $250.6M, which compares to analyst estimates of $239.41M. The company also reported preliminary 2021 revenue of $902.6M, which compares to analyst estimates of $886.64M. Slack also announced calculated billings of $359.9M for the quarter and $1.04B for the year. The company also reported 156,000 total paid customers, up 42% year-over-year, with over 1,180 paid customers with greater than $100,000 in annual recurring revenue and over 106 paid customers with greater than $1M in annual recurring revenue.

2. PAID CUSTOMERS: Slack reported that it ended Q3 with over 142,000 paid customers, up 35% year-over-year, with 1,080 paid customers with annual recurring revenue over $100,000. The company also reported its net dollar retention rate was 123%. “We had a phenomenal quarter, headlined by continued acceleration in new paid customer growth, with 12,000 net paid customer additions, up 140% from the same quarter last year,” said Stewart Butterfield, CEO, and co-Founder, at the time. “The accelerating growth is partly driven by increased awareness and demand due to the work from home environment, but we believe the larger portion comes from continued product momentum which shows up in the new user experience and, especially, from Slack Connect driving viral growth.”

3. SALESFORCE ACQUISITION: Salesforce (CRM) and Slack announced in December that they entered into a definitive agreement under which Salesforce will acquire Slack. Under the terms of the agreement, Slack shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each Slack share, representing an enterprise value of approximately $27.7B based on the closing price of Salesforce's common stock on November 30. The boards of each of Salesforce and Slack have approved the transaction and the Slack board recommends that Slack stockholders approve the transaction and adopt the merger agreement. The transaction is anticipated to close in the second quarter of Salesforce's fiscal year 2022.

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