Last week, International Business Machines Corporation (IBM) (NYSE: IBM) announced that it pick Slack Technologies (NYSE: WORK) to power its chat communications company-wide, that being more than 350,000 users for the app and making this deal Slack's biggest costumer to date. This was a big win for Slack, who has been sparring in a loosing war with Microsoft's (NASDAQ: MSFT) Teams offering for some time. For comparison: Microsoft's service reported 20 million users in 2019, which is a league above Slack's 12 million in the same year.
The news of IBM signing on Slack did not come as a shock though, for the company had be testing the chat platform as far back as 2014. In 2019, Slack reported that IBM accounted for 165,000 of the platforms users.
In Slack's SEC filings on the manner, the document noted that "IBM has been Slack's largest customer for several years and has expanded its usage of Slack over that time." The company, however, did not update its financial guidance for the fourth quarter.
"Going wall to wall in IBM--its basically the maximum scale there is, so we now know that Slack will work for literally the largest organization in the world," Slack CEO Stewart Butterfield stated in an interview with Business Insider.
A jump to more than 300,000 users from 165,000 is a big difference for the relationship between the companies, but neither have disclosed whether all of IBM's employees are using the paid version of Slack or if the reported number is a mix of free and paid users.
The Company
Slack is a technology company that offers a platform that connects coworkers, using the tagline 'where work happens.' The company states that its product is a "hub for collaboration where people can effectively work together, access critical applications and services, and find important information to do their best work. People around the world use Slack to connect their teams, unify their systems and drive their business forward."
Slack offers customers a sliding subscription scale ranging from free for small teams to paid options for extra large businesses like IBM that require higher security and larger scale networks.
Slack's company users include Amazon (NASDAQ: AMZN), Salesforce (NYSE: CRM), Shopify (NYSE: SHOP) and Target (NYSE: TGT) to name a few.
The Stock
Slack's stock is still under a year old, with the company going public without an IPO on April 26, 2019. The stock, under the ticker WORK, started trading on June 20, 2019 on the New York Stock Exchange. Since its debut, the stock has stagnated between $20-$30 per share, with its historic high being its first day record of $42.
Despite the low volatility of the stock, the company beat consensus estimates for its recent third quarter earnings and increased its total revenue by 60%. The company ended that quarter with over 105,000 paid users, which was a year-to-year increase of 30%.
The company's outlook for its fourth quarter is a total revenue of $172 million to $174 million and a total revenue for the fiscal year ending January 31, 2020 of $621 million to $623 million.
Slack will announce its financial results for both those estimates on March 12, 2020 following market close.