- As stocks regularly do post-earnings, they react strongly on headline numbers without considering the underlying fundamentals.
- Slack sold off heavily due to billings growth slowdown. Nevertheless, management advised against billings as a useful metric during the pandemic.
- Instead, as my own early 2020 Slack thesis had called, Slack Connect has added a third funnel of (paid) customer growth via network effects.
- In combination with the introduction of free trials, Slack is converting paid customers at a record pace, and more sustainably than the short-term COVID-19 spike.
- While Zoom investors for example are faced with the question of how much growth will slow down, Slack can look forward to large new cohorts of customers expanding over time.
For further details see:
Slack: Ignore Sell-Off, Growth Actually Accelerating