The continued spread of the coronavirus has resulted in companies of all sizes expressing interest in Slack Technologies Inc's (NYSE: WORK) products and services, company CEO Stewart Butterfield said on CNBC Friday morning.
Slack currently has 110,000 customers ranging from small and medium-size businesses to large enterprises along with those in the academic, and non-profit segment, Butterfield said. During the uncertain business environment, it's natural for business owners to be concerned over maintaining operational control as many employees will be working from home for the first time ever. But Slack is up to addressing concerns with "a lot of energy" as there is a company-wide sense it is "our time to help."
"In some sense, Slack was built for this," he said. "Not specifically for remote work but for up-leveling communications."
Why It's Important
Despite what appears to be an obvious benefit to Slack's business, the company disappointed in its first-quarter guidance. Corporate America is both simultaneously cutting back on new spending and showing interest in Slack's products and services. It's "really hard to balance" both of these trends so management's $185 million to $188 million first quarter revenue guidance is shy of expectations of $188.4 million but a range "we feel very confident we can hit."
Butterfield said the company needs to balance these expectations with its own internal projects and management's revenue guidance of $185 million to $188 million is shy of the Street's estimate of $188.4 million but a range "we feel very confident we can hit," he said.
Shawn Cruz, TD Ameritrade's Trader Business Strategy Manager, told Benzinga that companies with the highest revenue growth expectations are particularly worrisome. In Slack's case, the company was built on this "high touch sales model" but now the company can't "get in front of people" to win new customers.
"That's going to impact their ability to grow revenue," Cruz said.
Once the coronavirus-related headwinds subside, Butterfield expects there to be a "lingering effect" which benefits Slack as the way corporate American conducts business is likely to alter.
Slack's stock was down 22% to $16.48 per share Friday afternoon.