Tech stock under pressure: Slack Technologies Inc (NYSE: WORK)

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Slack Technologies Inc (NYSE: WORK) stock fell over 2.9% on 5th December, 2019 (as of 10:04 am GMT-5; Source: Google finance) post the third quarter of FY 19 results. WORK in the third quarter of FY 19 has reported the adjusted loss per share of 2 cents, despite the adjusted revenue growth of 60 percent to $168.7 million in the third quarter of FY 19.

The company has seen strong adoption and benefits from allowing the users to use other apps like Salesforce and Google Drive without leaving the platform. Slack grew by about 20% to more than 12 million daily active users in the third quarter. However, net loss attributable to common stockholders has increased to $89.2 million from $47.7 million a year earlier. Net cash used in operations has fallen to $9.1 million, or 5% of total revenue, compared to cash used in operations of $28.4 million, or 27% of total revenue, for the third quarter of fiscal year 2019. WORK generated the Free Cash Flow of $(19.1) million, or 11% of total revenue, compared to $(43.5) million, or 41% of total revenue for the third quarter of fiscal year 2019.

The company now has 821 customers paying more than $100,000 in annual recurring revenue, which is up from 720 in the second quarter. Calculated Billings was $186.1 million, which is an increase of 47% year-over-year. The company has delivered Non-GAAP gross profit of $148.9 million, or 88.3% gross margin, compared to $92.5 million, or 87.5% gross margin, in the third quarter of fiscal year 2019. Non-GAAP operating loss was $18.1 million, or 11% of total revenue, compared to a $39.6 million loss in the third quarter of fiscal year 2019, or 37% of total revenue.

For the fourth quarter, Slack expect revenue to be in the range of $172 million to $174 million, compared to the $172.9 million average analyst estimate, according to analysts surveyed by Refinitiv. But as per the company provided guidance for its bottom line, it reflects that the costs may be higher than expected. Slack said its loss, excluding some items, will be in the range of 6 cents and 7 cents a share, while analysts were projecting a 6-cent loss.

Meanwhile, Chamath Palihapitiya is leaving the board and is being replaced by Michael McNamara.

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