3 Things to Watch When Slack Reports Earnings on Tuesday

3 Things to Watch When Slack Reports Earnings on Tuesday

Slack reports its latest earnings next week, and investors are hoping for a positive surprise from the work-chat app. 

Shares of Slack  (WORK) – Get Report have underperformed since its first quarter financial release, falling about 25% since its Q1 report in June. For the second quarter, analysts are expecting a non-GAAP loss of 3 cents per share on revenue of $209.1 million. 

Here are a few key themes to watch when Slack reports its latest results on Tuesday, Sept. 8 after the bell. 

Billings Growth

As with most SaaS businesses, Slack’s billings — contracts that haven’t yet been recognized as revenue — are a key indicator of where revenue is headed. Writing in a recent note, Barclays analysts noted potential upside in Slack’s billings results in Q2. 

Wall Street expects roughly 33% growth in billings to $236 million, and $1 billion for the full year. But according to Barclays, those estimates may prove “conservative and will continue to be revised up as Slack reports better than expected numbers.”

Microsoft Threat

Some of Slack’s underperformance last quarter was likely tied to the ever-present threat of Microsoft  (MSFT) – Get Report, which rolled out a slew of new updates to Teams over the past few months. But engagement has been higher on Slack, according to Barclays, and that bodes well for Q2.

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