Slack stock price lost 18% of value in post-market trading despite topping revenue and earnings estimates for the second quarter. The selloff is prompted by the second quarter calculated billings that came in at $218.2 million compared to the $226.3 million consensus estimate. The broader tech sector selloff has contributed to the Slack stock price plunge.
Nasdaq index lost 4% of value in Tuesday trading and the tech-heavy index lost 10% of the value from its most recent peak. The trader’s profit-taking strategy supported the selloff.
“The US equity volatility in recent days is a reversal of the market excesses that had built up over summer months,” wrote analysts at Oxford Economics in a note to clients.
Slack’s second-quarter revenue of $215 million grew 48% from the past year period, topping consensus estimate by $6.68 million. The company has added almost 8k new paid customers during the second quarter, bringing total paid customers to 130K. The analysts’ consensus was at 128K.
On top, the company has raised full-year outlook. It now expects full-year revenue in the range of $870-876 million compared to the consensus for $847 million. The forecast for loss per share is in the range of $0.13-0.14 relative to consensus for $0.22 loss.
“Paid Customer growth – which is the single most important driver of the business over the long term – accelerated in Q2, up 30% year-over-year. One of the drivers of this acceleration was Slack Connect, which offers seamless, secure inter-company collaboration that we believe is light years ahead of email,” says Slack CEO Stewart Butterfield.
Slack stock price soared almost 29% year to date before the effect of the latest drop. The shares of slack have already reached the analyst’s price targets. However, strong revenue acceleration is the biggest catalyst for share price performance. It anticipates third-quarter revenue in the range of $222-225 million, up 32-33% year over year.