Delaware (State or other jurisdiction of incorporation or organization) | 001-38926 (Commission File Number) | 26-4400325 (I.R.S. Employer Identification Number) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered |
Class A Common Stock, par value $0.0001 per share | WORK | New York Stock Exchange |
Exhibit Number | Description | |
99.1 |
Date: September 4, 2019 | Slack Technologies, Inc. | |
By: | /s/ Allen Shim | |
Name: | Allen Shim | |
Title: | Chief Financial Officer |
• | Total revenue was $145.0 million, an increase of 58% year-over-year. Revenue was negatively impacted by $8.2 million of credits related to service level disruption in the quarter. |
• | Calculated Billings was $174.8 million an increase of 52% year-over-year. |
• | GAAP gross profit was $113.9 million, or 78.5% gross margin, compared to $80.7 million, or 87.7% gross margin, in the second quarter of fiscal year 2019. Non-GAAP gross profit was $126.3 million, or 87.1% gross margin, compared to $80.7 million, or 87.7% gross margin, in the second quarter of fiscal year 2019. |
• | GAAP operating loss was $363.7 million, or 251% of total revenue, compared to a $33.7 million loss in the second quarter of fiscal year 2019, or 37% of total revenue. GAAP operating loss includes $307.0 million of stock-based compensation and related employer payroll taxes, primarily related to the satisfaction of the performance vesting condition on outstanding RSUs in connection with Slack's direct listing on June 20, 2019. Non-GAAP operating loss was $55.6 million, or 38% of total revenue, compared to a $32.0 million loss in the second quarter of fiscal year 2019, or 35% of total revenue. |
• | GAAP net loss per basic and diluted share was $0.98. Non-GAAP net loss per share was $0.14. |
• | Net cash provided by operations was $0.3 million, or 0% of total revenue, compared to cash provided by operations of $1.5 million, or 2% of total revenue, for the second quarter of fiscal year 2019. Free Cash Flow was $(7.9) million, or 5% of total revenue, compared to $(7.7) million, or 8% of total revenue for the second quarter of fiscal year 2019. |
• | Second Quarter Highlights: |
◦ | Ended the quarter with over 100,000 Paid Customers, up 37% year-over-year. |
◦ | Net dollar retention rate was 136%. |
◦ | The number of Paid Customers greater than $100,000 in annual recurring revenue was 720, up 75% year-over-year. |
• | Total revenue of $154 million to $156 million, representing year-over-year growth of 46% to 48%. |
• | Non-GAAP operating loss of $49 million to $47 million. |
• | Non-GAAP net loss per share of $0.09 to $0.08, assuming weighted average shares outstanding of 544 million. |
• | Total revenue of $603 million to $610 million, representing year-over-year growth of 51% to 52%. |
• | Non-GAAP operating loss of $180 million to $176 million, including approximately $30 million of one-time direct listing related expenses. |
• | Non-GAAP net loss per share of $0.42 to $0.40, assuming weighted average shares outstanding of 399 million. |
• | Calculated Billings of $740 million to $760 million, representing year-over-year growth of 43% to 47%. |
• | Free Cash Flow net burn of $100 million to $110 million, including approximately $30 million of one-time direct listing-related expenses and $21 million of one-time direct listing related cash taxes related to RSU vesting. |
Jesse Hulsing | Karesha McGee |
Investor Relations | Media Relations |
ir@slack.com | pr@slack.com |
Three Months Ended July 31, | Six Months Ended July 31, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Revenue | $ | 144,973 | $ | 92,018 | $ | 279,794 | $ | 172,937 | ||||||||
Cost of revenue | 31,106 | 11,361 | 49,680 | 21,462 | ||||||||||||
Gross profit | 113,867 | 80,657 | 230,114 | 151,475 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 217,769 | 35,182 | 268,872 | 70,592 | ||||||||||||
Sales and marketing | 136,392 | 53,553 | 203,230 | 95,721 | ||||||||||||
General and administrative | 123,356 | 25,608 | 160,100 | 45,176 | ||||||||||||
Total operating expenses | 477,517 | 114,343 | 632,202 | 211,489 | ||||||||||||
Loss from operations | (363,650 | ) | (33,686 | ) | (402,088 | ) | (60,014 | ) | ||||||||
Other income (expense), net | 3,111 | 2,085 | 10,188 | 3,887 | ||||||||||||
Loss before income taxes | (360,539 | ) | (31,601 | ) | (391,900 | ) | (56,127 | ) | ||||||||
Provision (benefit) for income taxes | (923 | ) | 85 | (403 | ) | 435 | ||||||||||
Net loss | (359,616 | ) | (31,686 | ) | (391,497 | ) | (56,562 | ) | ||||||||
Net income (loss) attributable to noncontrolling interest | (54 | ) | 174 | 1,397 | 180 | |||||||||||
Net loss attributable to Slack common stockholders | $ | (359,562 | ) | $ | (31,860 | ) | $ | (392,894 | ) | $ | (56,742 | ) | ||||
Basic and diluted net loss per share: | ||||||||||||||||
Net loss per share attributable to Slack common stockholders, basic and diluted | $ | (0.98 | ) | $ | (0.26 | ) | $ | (1.58 | ) | $ | (0.47 | ) | ||||
Weighted-average shares used in computing net loss per share attributable to Slack common stockholders, basic and diluted | 368,533 | 120,900 | 249,222 | 119,930 |
July 31, 2019 | January 31, 2019 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 498,275 | $ | 180,770 | ||||
Marketable securities | 287,072 | 660,301 | ||||||
Accounts receivable, net | 72,538 | 87,438 | ||||||
Prepaid expenses and other current assets | 60,289 | 54,213 | ||||||
Total current assets | 918,174 | 982,722 | ||||||
Restricted cash | 38,490 | 20,490 | ||||||
Strategic investments | 17,496 | 12,334 | ||||||
Property and equipment, net | 107,513 | 88,359 | ||||||
Intangible assets, net | 13,137 | 15,203 | ||||||
Goodwill | 48,598 | 48,598 | ||||||
Other assets | 32,306 | 31,250 | ||||||
Total assets | $ | 1,175,714 | $ | 1,198,956 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 8,476 | $ | 16,613 | ||||
Accrued compensation and benefits | 65,909 | 46,151 | ||||||
Accrued expenses and other current liabilities | 42,866 | 29,809 | ||||||
Deferred revenue | 285,016 | 239,825 | ||||||
Total current liabilities | 402,267 | 332,398 | ||||||
Deferred revenue, noncurrent | 1,507 | 2,048 | ||||||
Other liabilities | 22,157 | 22,904 | ||||||
Total liabilities | 425,931 | 357,350 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Convertible preferred stock | — | 1,392,101 | ||||||
Common stock | 54 | 13 | ||||||
Additional paid-in-capital | 1,796,988 | 105,633 | ||||||
Accumulated other comprehensive loss | (119 | ) | (498 | ) | ||||
Accumulated deficit | (1,058,457 | ) | (665,563 | ) | ||||
Total Slack Technologies, Inc. stockholders’ equity | 738,466 | 831,686 | ||||||
Noncontrolling interest | 11,317 | 9,920 | ||||||
Total stockholders’ equity | 749,783 | 841,606 | ||||||
Total liabilities and stockholders’ equity | $ | 1,175,714 | $ | 1,198,956 |
Three Months Ended July 31, | Six Months Ended July 31, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net loss | $ | (359,616 | ) | $ | (31,686 | ) | $ | (391,497 | ) | $ | (56,562 | ) | ||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||||||
Depreciation and amortization | 6,781 | 3,848 | 12,657 | 6,663 | ||||||||||||
Loss on disposal of property and equipment | — | 1,875 | — | 2,165 | ||||||||||||
Stock-based compensation | 285,787 | 1,638 | 289,426 | 7,756 | ||||||||||||
Amortization of deferred contract acquisition costs | 1,827 | 637 | 3,290 | 1,090 | ||||||||||||
Net amortization of bond premium on debt securities available for sale | (655 | ) | (431 | ) | (1,736 | ) | (565 | ) | ||||||||
Change in fair value of strategic investments | 141 | (349 | ) | (2,884 | ) | (349 | ) | |||||||||
Other non-cash charges | (396 | ) | 145 | (359 | ) | 298 | ||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||
Accounts receivable | (362 | ) | (6,046 | ) | 15,258 | (6,134 | ) | |||||||||
Prepaid expenses and other assets | (3,699 | ) | (10,463 | ) | (10,161 | ) | (10,848 | ) | ||||||||
Accounts payable | (397 | ) | 3,920 | (1,436 | ) | 5,541 | ||||||||||
Accrued compensation and benefits | 35,056 | 8,156 | 19,758 | 668 | ||||||||||||
Deferred revenue | 29,834 | 22,749 | 44,650 | 43,910 | ||||||||||||
Other current and long-term liabilities | 6,020 | 7,495 | 9,229 | 11,288 | ||||||||||||
Net cash provided by (used in) operating activities | 321 | 1,488 | (13,805 | ) | 4,921 | |||||||||||
Cash flows from investing activities: | ||||||||||||||||
Purchases of marketable securities | (34,646 | ) | (138,073 | ) | (59,553 | ) | (368,049 | ) | ||||||||
Maturities of marketable securities | 118,265 | 137,941 | 268,951 | 347,191 | ||||||||||||
Sales of marketable securities | 166,074 | 6,633 | 166,074 | 6,633 | ||||||||||||
Acquisition of business | — | (2,500 | ) | — | (2,500 | ) | ||||||||||
Acquisition of intangible assets | — | (1,184 | ) | — | (1,184 | ) | ||||||||||
Purchases of property and equipment | (8,192 | ) | (9,210 | ) | (28,269 | ) | (27,612 | ) | ||||||||
Sales of property and equipment | — | — | — | 520 | ||||||||||||
Purchase of strategic investments | (2,370 | ) | (900 | ) | (5,470 | ) | (900 | ) | ||||||||
Proceeds from liquidation of strategic investments | — | 152 | 2,858 | 152 | ||||||||||||
Net cash provided by (used in) investing activities | 239,131 | (7,141 | ) | 344,591 | (45,749 | ) | ||||||||||
Cash flows from financing activities: | ||||||||||||||||
Proceeds from exercise of stock options | 7,890 | 1,089 | 10,275 | 1,862 | ||||||||||||
Payment of contingent consideration for an acquisition | (5,000 | ) | — | (5,000 | ) | — | ||||||||||
Issuance of common stock to third party | — | 6,084 | — | 6,084 | ||||||||||||
Other financing activities | (556 | ) | — | (556 | ) | (15 | ) | |||||||||
Net cash provided by financing activities | 2,334 | 7,173 | 4,719 | 7,931 | ||||||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 241,786 | 1,520 | 335,505 | (32,897 | ) | |||||||||||
Cash, cash equivalents and restricted cash at beginning of period | 294,979 | 103,646 | 201,260 | 138,063 | ||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 536,765 | $ | 105,166 | $ | 536,765 | $ | 105,166 |
Three Months Ended July 31, | Six Months Ended July 31, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Revenue | $ | 144,973 | $ | 92,018 | $ | 279,794 | $ | 172,937 | ||||||||
Add: Total deferred revenue, end of period | 286,523 | 169,363 | 286,523 | 169,363 | ||||||||||||
Less: Total deferred revenue, beginning of period | (256,689 | ) | (146,614 | ) | (241,873 | ) | (125,453 | ) | ||||||||
Calculated Billings | $ | 174,807 | $ | 114,767 | $ | 324,444 | $ | 216,847 |
Three Months Ended July 31, | Six Months Ended July 31, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Net cash provided by (used in) operating activities | $ | 321 | $ | 1,488 | $ | (13,805 | ) | $ | 4,921 | |||||||
Purchases of property and equipment | (8,192 | ) | (9,210 | ) | (28,269 | ) | (27,612 | ) | ||||||||
Free Cash Flow | $ | (7,871 | ) | $ | (7,722 | ) | $ | (42,074 | ) | $ | (22,691 | ) |
Three Months Ended July 31, | Six Months Ended July 31, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Reconciliation of gross profit: | ||||||||||||||||
GAAP gross profit | $ | 113,867 | $ | 80,657 | $ | 230,114 | $ | 151,475 | ||||||||
Add: Stock-based compensation and related employer payroll taxes | 11,845 | 58 | 11,891 | 661 | ||||||||||||
Add: Amortization of acquired intangible assets | 559 | 19 | 1,117 | 19 | ||||||||||||
Non-GAAP gross profit | $ | 126,271 | $ | 80,734 | $ | 243,122 | $ | 152,155 | ||||||||
Reconciliation of operating expenses: | ||||||||||||||||
GAAP research and development | $ | 217,769 | $ | 35,182 | $ | 268,872 | $ | 70,592 | ||||||||
Less: Stock-based compensation and related employer payroll taxes | (163,035 | ) | (944 | ) | (164,670 | ) | (4,339 | ) | ||||||||
Less: Amortization of acquired intangible assets | (149 | ) | — | (299 | ) | — | ||||||||||
Non-GAAP research and development | $ | 54,585 | $ | 34,238 | $ | 103,903 | $ | 66,253 | ||||||||
GAAP sales and marketing | $ | 136,392 | $ | 53,553 | $ | 203,230 | $ | 95,721 | ||||||||
Less: Stock-based compensation and related employer payroll taxes | (69,321 | ) | (248 | ) | (69,703 | ) | (1,452 | ) | ||||||||
Less: Amortization of acquired intangible assets | (325 | ) | (54 | ) | (650 | ) | (54 | ) | ||||||||
Non-GAAP sales and marketing | $ | 66,746 | $ | 53,251 | $ | 132,877 | $ | 94,215 | ||||||||
GAAP general and administrative | $ | 123,356 | $ | 25,608 | $ | 160,100 | $ | 45,176 | ||||||||
Less: Stock-based compensation and related employer payroll taxes | (62,797 | ) | (388 | ) | (64,373 | ) | (1,304 | ) | ||||||||
Non-GAAP general and administrative | $ | 60,559 | $ | 25,220 | $ | 95,727 | $ | 43,872 | ||||||||
Reconciliation of loss from operations: | ||||||||||||||||
GAAP operating loss | $ | (363,650 | ) | $ | (33,686 | ) | $ | (402,088 | ) | $ | (60,014 | ) | ||||
Add: Stock-based compensation and related employer payroll taxes | 306,998 | 1,638 | 310,637 | 7,756 | ||||||||||||
Add: Amortization of acquired intangible assets | 1,033 | 73 | 2,066 | 73 | ||||||||||||
Non-GAAP operating loss | $ | (55,619 | ) | $ | (31,975 | ) | $ | (89,385 | ) | $ | (52,185 | ) | ||||
Reconciliation of net loss and net loss per share: | ||||||||||||||||
Net loss attributable to Slack common stockholders | $ | (359,562 | ) | $ | (31,860 | ) | $ | (392,894 | ) | $ | (56,742 | ) | ||||
Add: Stock-based compensation and related employer payroll taxes | 306,998 | 1,638 | 310,637 | 7,756 | ||||||||||||
Add: Amortization of acquired intangible assets | 1,033 | 73 | 2,066 | 73 | ||||||||||||
Non-GAAP net loss | $ | (51,531 | ) | $ | (30,149 | ) | $ | (80,191 | ) | $ | (48,913 | ) | ||||
GAAP net loss per share | $ | (0.98 | ) | $ | (0.26 | ) | $ | (1.58 | ) | $ | (0.47 | ) | ||||
Add: Stock-based compensation and related employer payroll taxes | 0.84 | 0.01 | 1.25 | 0.06 | ||||||||||||
Add: Amortization of acquired intangible assets | — | — | 0.01 | — | ||||||||||||
Non-GAAP net loss per share | $ | (0.14 | ) | $ | (0.25 | ) | $ | (0.32 | ) | $ | (0.41 | ) | ||||
Weighted-average common shares outstanding, basic and diluted | 368,533 | 120,900 | 249,222 | 119,930 |