Slack Adds Users, Driven By Pandemic

Along with other virtual communication platforms, the COVID-19 crisis is driving a spike in customer acquisition for Slack.

While its fiscal first quarter isn’t over, the messaging software maker has already added about 9,000 paying customers during the period. That’s according to a series of tweets sent out by Slack cofounder-CEO Stewart Butterfield, this week.

To put that figure in perspective, the publicly traded Slack has about 110,000 paying customers — which together represent more than 12 million users. It has recently been adding closer to 5,000 paying customers on a quarterly basis.

While it was not designed with pandemics in mind, Butterfield believes Slack is perfectly suited for the demands of the current health crisis.

“Slack’s not specifically a ‘work-from-home’ tool; it’s more of a ‘create-organizational-agility’ tool,” Butterfield tweeted on Wednesday. “But an all-at-once transition to remote work creates a lot of demand for organizational agility.”



In terms of broader communication trends, he added: “It felt like the shift from inboxes to [Slack-facilitated] channels, which we believed to be inevitable over five to seven years, just got fast-forwarded by 18 months.”

In addition to adding paid customers, Slack’s existing customers are relying more heavily on the platform, according to Butterfield.

“More new teams are signing up [and more are] upgrading to paid plans,” while average messages sent per day per user is up 20%, he reports.

Despite this rise in demand, Slack recently said it expected lower-than-expected earnings for its fiscal first quarter.

For the quarter ending in April, the company said it was expecting revenue of $185 million to $188 million.

Year-over-year, that would represent revenue growth of 37% to 39%, which isn’t bad, but significantly less than the 49% growth that Slack just posted for its fiscal fourth quarter.

Explaining the slowing growth, Slack said it saw the spread of COVID-19 as a business killer.

“This contagious disease outbreak … has adversely affected workforces, customers, economies and financial markets globally, potentially leading to an economic downturn,” the company warned in a recent filing.

Despite Butterfield’s bullish tweetstorm, this week, he did not revise Slack first-quarter earnings estimates.

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