WORK Q1

Stock was down 15% AH, down 15% or so in regular trading

My initial reactions from the ER was that it looked ok. It’s not a blowout like ZM, and I think that’s what some were expecting (or hoping for)

Shares had run up more than 50% over the past month and gained 24.3% over the past five days

The guidance is not great. They guided to 36-38% revenue for the year. They guided conservatively last ER

they announced the Amazon deal. Not totally sure how that will impact them but here could are a couple notes:

Slack and AWS will strategically partner to help distributed development teams communicate and become more efficient and agile in managing their AWS resources from inside Slack.

Additionally, AWS has agreed to use Slack to simplify the way teams at AWS communicate and work together.

SOME NUMBERS FROM THE ER

132% net dollar retention rate

Revenue increased 49.57% yoy from 134,821 to 201,650. They guided for 39% growth at the top end

CFFO improved yoy from (14,126) to 8,729. Op cash flow margin improved from (10.48%) to 4.3%. But fell sequentially from 5.78%

FCF improved yoy from (34,203) to 3683. That is good. FCF margin is 1.83% compared to (25.37%) last year

Adj GM improved yoy from 86.67% to 88.86%

here’s where they show progress

Adj Op margin improved yoy from (25.05%) to (8.25%). Adj op margin going back 5 quarters is now (8.25%) - (12.71%) - (10.72%) - (38.37%) - (25.05%). not a blowout but improving. they guided for a loss of 38 million at the high end, which would have been (18.84%) and got a loss of 16 million.

Adj net margin improved yoy from (21.26%) to (6.61%). Adj net margin going back 5 quarters is (6.61%) - (11.51%) - (7.26%) - (35.58%) - (21.26%).

Adj eps improved yoy from (0.23) to (0.02). They guided to (0.06) at the high end

My takeway, I think Slack will be a successful product and business … just not sure if it will get there at 40-50%+ revenue growth in the next few quarters. More like 20-30% growth

The adj op and net margins improved yoy and sequentially. But is that a one-time Covid thing? Or will it continue?

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