Slack's Customer Growth Accelerates During the Pandemic

Salesforce has announced that it is acquiring Slack Technologies, the company behind the popular workplace communication tool of the same name, for $27.7 billion. Slack had a market capitalization of $25 billion Tuesday after its shares jumped on the news of the possible acquisition last week.

As hundreds of millions of people shifted to working from home in face of the COVID-19 pandemic, demand for workplace communication tools soared over the past few months. Having been a pioneer in the nascent field of cloud-based workplace communication, Slack was always one of the companies likely to profit from the disruptions caused by the coronavirus, and according to the company’s latest earnings report its customer growth did in fact accelerate during the crisis.

As the following chart shows, Slack had 142,000 paying customers by the end of the quarter ending Oct 31. That’s up from 110,000 at the end of January, meaning that the company is on track to nearly double the number of new customers it gained in the current fiscal year compared with the prior one. Slack defines paid customers as organizations with at least three users on a paid subscription plan, and it also registered strong growth among its larger customers. While customer growth amounted to 35 percent year-over-year overall, the number of organizations spending over $100,000 annually was up 32 percent over last year’s October quarter.

Slack’s revenue amounted to $234.5 million in the past quarter, marking a 39-percent increase over the same period last year. The company has yet to become profitable though, with losses amounting to $65.7 million for the three months ending October 31.