Hot Tech Stock to Watch: Slack Technologies Inc (NYSE: WORK)

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Slack Technologies Inc (NYSE: WORK) stock rose over 1.2% on 4th June, 2021 (as of 11:28:51 UTC-4 · USD; Source: Google finance) as the company posted better than expected results for the first quarter of FY 22. The company has reported a profit of $273.4 million, up 36% year-over-year. Billings in the first quarter came in at $278.6 million, up 35% year-over-year, while operating income adjusted for costs such as stock compensation was $10.8 million, compared to the same quarter last year, Slack had reported an adjusted loss of $16.6 million. There has an increase of paying customers to over 169,000 in the first quarter, up 39% from the same quarter last year, with a 122% net dollar retention rate. Slack reported that it now has 1,285 paid customers with greater than $100,000 in annual recurring revenue and 113 customers pumping more than $1 million a year into the company. In Q1 the company saw a near-record number of Paid Customer additions, a record number of Paid Customers adopting Slack Connect, and approached 1 million active developers on the platform.

Net cash provided by operations has increased to $62.8 million, or 23% of total revenue, compared to cash provided by operations of $8.7 million, or 4% of total revenue, for the first quarter of fiscal year 2021. Free Cash Flow generated has increased to $62.7 million, or 23% of total revenue, compared to $3.7 million, or 2% of total revenue for the first quarter of fiscal year 2021.

WORK in the first quarter of FY 22 has reported the adjusted earnings per share of 8 cents, beating the analysts’ estimates for the adjusted loss per share of 2 cents, according to Zacks Investment Research. The company had reported the adjusted revenue growth of 36 percent to $273.4 million in the first quarter of FY 22, beating the analysts’ estimates for revenue of $272.6 million.

Meanwhile, Slack is being acquired by Salesforce.com in a $27.7 billion deal announced in late 2020. The transaction is expected to close within the next few months. For the April quarter, possibly this is its last public earnings report before it becomes part of Salesforce Inc. as per the acquisition deal announced in December. The current share price is not necessarily a reflection so much of the company’s results than that the company’s share price floats roughly around what Salesforce agreed to pay in its takeover.

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