I believe die to slack reporting flat guidance right after Zm reported the best Q ever is one reason and the other is the 40% run up just prior for the 25% drop after earnings.
From the call:
“We are fortunate that Slack enables remote work. Due, in part, to this, growth in the first quarter accelerated and was above our expectations. We’ve also continued to see stronger-than-normal, top-of-funnel activity in April and May. However, there are potential headwinds to our business.
We estimate that about a quarter of our business is derived from companies with less than 100 employees. Within this SMB base, we saw churn trend a bit higher than historical norms in March and April, albeit off a low base. When I look at the breakdown by industry, our customer distribution is highly diversified. However, some of our customers have been impacted by COVID-19.
We estimate that less than 20% of our business is derived from the most directly impacted industries, such as travel, hospitality, commercial real estate, ridesharing and retail. In the enterprise segment, some sales cycles have accelerated due to work from home, but others have slowed, particularly in impacted industries. Our pipeline remains very healthy. But on balance, there’s less visibility into how IT spending will trend for the remainder of the year, particularly if the economic effects of the COVID-19 pandemic persist or worsen.
As mentioned previously, we also plan to accommodate certain distressed customers during the crisis via the use of flexible contract structures and billing terms. While this is less of a revenue impact, it directly impacts calculated billings and free cash flow. When we guided for the full year in early March, we accounted for some of these headwinds. Thus far, in the first half, the tailwinds have outweighed the headwinds.
However, we believe that macroeconomic uncertainty is significantly greater today than it was then. Taking into account the puts and takes of the above, we continue to drive visibility to guide to quarterly and full-year revenue but are withdrawing our calculated billings guidance.”
I think they’re sand bagging.
I love the 97% increase in RPO and I believe the new Channels product is not yet in the price. I bought a 5% position when it fell after earnings.
Jason