(Reuters) – Slack Technologies Inc (WORK.N) beat Wall Street estimates for quarterly revenue and profit as it signed on larger companies to its workplace communication platform, sending its shares up nearly 3% in trading after the bell.
The company competes directly with Microsoft Corp’s (MSFT.O) workplace messaging platform, Teams, which grew more than 50% to roughly 20 million daily active users in the September quarter.
In the latest quarter ended Oct. 31, Slack grew by about 20% to more than 12 million daily active users.
“It may take some time for Slack to shake off the ‘Microsoft overhang’, but this is a step in the right direction to dispute that narrative with investors,” said Rishi Jaluria from research firm DA Davidson & Co.
The company has seen strong adoption and benefits from allowing users to use other apps like Salesforce and Google Drive without leaving the platform, he added.
Slack added more than 105,000 paid users during the quarter.
It went public in June opting for a direct listing, instead of an initial public offering, at an offering price of $26 per share. Its shares soared nearly 50% on debut, taking its valuation past $23 billion.
The company forecast fourth-quarter loss between 6 cents and 7 cents per share. Analysts on average were expecting a loss of 6 cents per share, according to IBES data from Refinitiv.
It forecast current-quarter revenue between $172 million and $174 million, compared with analysts’ estimates of 172.9 million.
Slack’s revenue jumped nearly 60% to $168.7 million in the third quarter ended Oct.31, above analysts’ average estimates of $156.0 million, according to IBES data by Refinitiv.
The company’s total operating expenses soared 68.4% to $142.9 million during the quarter.
However, net loss attributable to common stockholders widened to $89.2 million from $47.7 million a year earlier.
Excluding items, the company reported a loss of 2 cents per share, compared with analysts’ estimates of a loss of 8 cents per share.
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