Slack earnings: Shares plunge 22% on widening loss

Slack Technologies Inc. shares plummeted 22% in after-hours trading Thursday after the digital-collaboration platform reported a widening loss during its fourth-quarter results.

Slack WORK, -9.61%reported a loss of $89.1 million in the quarter, or 16 cents a share, compared with a loss of $34.6 million, or 29 cents a share, in the year-ago fourth quarter.

Revenue grew 49% to $181.9 million from $122 million a year ago.

Analysts surveyed by FactSet had expected a loss of 20 cents a share on sales of $174.2 million.

While losses mounted, other data offered hints of a surge in telecommuting following edicts or recommendations from major employers such as Apple Inc. AAPL, -9.88% , Microsoft Corp. MSFT, -9.48% , Alphabet Inc.’s GOOGL, -8.20%GOOG, -8.27% Google, Amazon.com Inc. AMZN, -7.92% and Salesforce.com Inc. CRM, -9.04% for tens of thousands of their employees to work from home.

Slack said 70 customers spent more than $1 million annually on its product, compared with 39 in the year -ago quarter.

See also: Coronavirus has prompted these tech companies to ask employees to work from home

Last week, Zoom Video Communications Inc. ZM, -0.75% offered first-quarter revenue guidance of between $199 million and $201 million, exceeding FactSet’s projection of $185.6 million, and fiscal 2021 revenue between $905 million and $915 million, topping the $869.5 million forecast by FactSet.

Its growth in great part is being fueled as more people flock to its remote-work tools like videoconferencing as the virus continues to spread.

See also: Zoom shares tumble despite solid results

“In the last 30 days alone, average daily downloads are up 90% versus the prior 30-day period, with greater user engagement as evidenced by a 17% increase in user session per day and a 3% increase in average session length,” Bernstein analyst Zane Chrane wrote in a note to clients in early March.

Shares of Slack, which went public June 20, 2019, are down 5% since then. The broader S&P 500 index SPX, -9.51% is down 11.7% in the past year.