These are the slides about Slack's spending, sales and customer growth that the CFO is betting its IPO on

Becky PetersonMay 14, 2019, 01:51 IST

Slack

In a presentation to Wall Street on Monday, Slack's chief financial officer promised continued growth and a total market opportunity of $28 billion for the office communication company, which is set to go public in the upcoming weeks.
In the presentation, CFO Allen Shim showed statistics on Slack's continued growth and customer acquisition.
Slack also gave guidance for its first quarter of fiscal 2020, which it intends to report on June 10.
Slack said it expects revenue between $133.8 million and $134.8 million, up 66% at the midpoint from its $80.9 million in revenue in the same period last year.
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Wall Street analysts who gathered Monday for Slack's investor day presentation were promised continued hypergrowth and a total market opportunity worth $28 billion for the office communication company.

Slack is set to IPO in the upcoming weeks through a direct listing, a unique public offering process where the company doesn't raise any money or sell any shares, though other shareholders like investors and employees can sell their own stakes in the company.

How Slack is valued in its IPO will be determined down the road. Slack's last private round valued the company at $7.1 billion, though the company disclosed in its filing that its most recent private transactions have valued the company upwards of $13.7 billion.

"This has the potential to be one of the most important software categories," Slack Chief Financial Officer Allen Shim told analysts during the presentation, where he spoke alongside CEO Stewart Butterfield and Slack's newly hired chief product officer, Tamar Yehoshua, as well as other top executives.

Slack also shared new financial guidance for its first quarter of fiscal 2020, which the company will officially report on June 10.

In a company filing, Slack said it expects revenue between $133.8 million and $134.8 million, up 66% at the midpoint from its $80.9 million in revenue in the same period last year.

Slack said it also expects to see losses from operations between $38.4 million and $39.4 million, up from $26.3 million in losses during th same period last year.

Here are the slides Slack showed Wall Street.

See These are the slides about Slack's spending, sales and customer growth that the CFO is betting its IPO on >>

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These are the slides about Slack's spending, sales and customer growth that the CFO is betting its IPO on

Slack's Sales & Marketing expenses have declined relative to its revenue, while its gross margin has stayed flat.

Research & Development costs have also declined relative to Slack's revenue.

Slack's General and Administrative expenses have fluctuated annually relative to its revenue.

Slack's customer retention is high, and today its revenue is made up primarily from paid customers who have been with Slack for multiple years.

Slack's growth has slowed since 2018, though it still saw 82% revenue growth from 2018 to 2019.

The end of the year is a boon to Slack, mostly because of purchasing cycles at large companies.

A key to Slack's growth: It's rapidly gaining new paid customers.

Slack will report its Q1 2020 earnings on June 10. It expects to report revenue between $133.8 million and $134.8 million for the quarter.

In the long run, Slack aims to have a free cash flow margin of 30%, though today it's in the red.

The key to Slack's longterm success: Maximizing its opportunity.