Slack (NYSE: WORK) has transformed from a by-product of a gaming company to a popular internal communications platform. The business has been experiencing steady growth, with its shares climbing 38% in the first six months of 2020, particularly as more people are forced to work from home during the global pandemic.
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1. Impressive Growth
At its recent earnings call the communications hub reported a 50% increase in revenue from the same time last year to $201.7 million. Slack’s stellar growth was fuelled by a 28% jump in its paid customer base which now sits at 122,000. It was also revealed that Slack’s paid users are spending around 120 minutes each day on the platform, which is up from 90 minutes the previous quarter.
In the first-quarter, slack had more than 90,000 new organizations join the network on both free and paid plans. On top of this, Amazon (NASDAQ: AMZN) is offering Slack to all of its employees as the communications platform now offers integration with Amazon Web Services’ ‘Chime’ video-calling technology to enhance its capabilities.
Slack is clearly looking for ways to continue improving its platform for its users and gain more traction, particularly now that the workforce has adopted the need for remote employees. The company is showing no signs of slowing down and is expected to post revenue between $206 million and $209 million for its second quarter, meaning year-on-year growth of up to 44%.
2. Slack is challenging its competition
The company’s numbers in comparison to one of its top competitors, Microsoft (NASDAQ: MSFT) are dismal. Microsoft’s Team platform boasts 75 million daily users and is turning a profit, compared to Slack’s 12.5 million daily users. However, Slack has filed an anti-competitive complaint against Microsoft with the European Commission, alleging that Microsoft illegally ties its Microsoft Teams product to Office and is forcing the installation for millions and blocking its removal.
Slack only went public in 2019 and claimed Microsoft created a weak, copycat product. It will now be up to the Commission to look at the complaint and decide if there will be a formal investigation. This shows that Slack is determined to make sure its product is protected against large companies. Only time will tell if Slack will be successful in taking on Microsoft, and could lead to a big pay day for Slack.
3. The end of emails
The idea is to see fewer emails going back and forth between staff and keep all communication within the Slack platform. Over the past four years, the company has been developing a major change for its communications app that will go up against emailing — Slack Connect. It only launched at the end of June 2020 and allows up to 20 organizations to work seamlessly together through apps, chat, and more.
This is one of the biggest announcements and key to the future for the company that has attracted the likes of Nando’s and Deliveroo, while other businesses are using Slack Connect for customer support and even channels for doctors to share their experience in the fight against COVID-19.
Overall, it is clear that people are looking for more efficient ways to communicate and work. Slack is a fresh company that isn’t afraid of taking on some more established names. Despite growing competition, Slack is an innovative pure-play and has been performing well since it went public and has the potential for long-term growth.
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Contributing Writer at MyWallSt
Alsha is a contributing writer to MyWallSt. Alsha’s favorite stock is Shopify because not only does she enjoy a bit of online shopping, but she believes the e-commerce solutions business is going to continue making big gains.