WORK - Earnings call transcript Q2 2021 | Slack Technologies, Inc.

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Operator

Ladies and gentlemen, thank you for standing by and welcome to Slack Technologies Second Quarter Earnings Call. At this time all participants are in a listen-only mode. After the speakers presentation there will be a question-and-answer session. [Operator Instructions]. I would now like to hand the conference over to your speaker today, Jesse Hulsing, Vice President of Finance and Investor Relations. you. Thank ahead. go Please

Jesse Hulsing

thank discuss joining XXXX Slack's and conference financial on call to second you afternoon, us for today's results. Good quarter fiscal

Chief Shim, call Officer; the we Stewart Co-Founder On have and Financial Chief and Allen Officer. Butterfield, Executive

ability plans, we retain product During make compete including business development, to statements our growth forward-looking to customers financial future and may guidance the prospects, limited today's and not ability performance, statements, and of regarding course and to call attract but market effectively. strategies demand,

We make of Actual statements global Information disclaim we the the statements. any and company's that should from These on posted statements. company's regarding the in global our to are from and forward-looking other obligation be concerning on and supplemental cause any assumptions contained our results website. these based forward-looking not and results the may of section will subsequent materially U.S. factors management's press relied forward-looking date uncertainties Investors release to filings, differ also and as earnings and update potential current statements statements are could and COVID-XX impact vary today's of information pandemic any economies views business. on forward-looking SEC risks, the upon

today should or include in from These be Our isolation not measures. discussion a measures will for substitute certain measures. considered financial to, non-GAAP financial non-GAAP as in addition GAAP

of GAAP Our compensation non-GAAP measures results certain stock-based other exclude our of effect and items. the

over Stewart? now Executive at Slack's regarding and would Chief like Officer, our GAAP in release measures You I these on conference turn and Stewart measures, the Co-Founder comparable with website Relations our can non-GAAP Butterfield. call to find additional including to disclosures reconciliations Investor earnings investor.slackhq.com.

Stewart Butterfield

on category, increase and driven May. April indicating or joining we the from The every a with creating new of experience core the new about two teams; highest want to from second, last product Thank successful is to impacting even and it. you Connect. are I’ll areas That base the in quarter, new about typical along our a uptick macro-related primarily a as from home” even of experience you removing emphasis three to path which highlight are continued believe additions Slack with where offers; new acquisition, importance via for we month, those that for self-serve we’re on on of to seeing drivers. by customer which improvements heard the and of discuss the against emergence already talk seeing the calls, of baseline comments execution attribute what August, the Connect, the in customer the part impact a trial vacation-related product comes collaboration portion an friction bigger joining. me priorities; new installed key effect are everyone are Slack doing “work the we the emergence headwinds network product genuine with more I let but with is most joiners, fundamental first, the the self-serve process to July the incremental driver what improves in rate compounding the and that’s This potentially enterprise on particular customer accelerating leading paid trend improvements and valuable start conversion in grew the through Net faster June a and a simplifying of slowdown We to our most recent adds source excited continued the for new enterprise business, paid along success entire continued paid of new new But in paid expansion business Those me team. creators the of about highlighted from finding pipeline. customer of I’m wins. the as and of inter-company to into team driven after growth customers. at third, compared rate. side continued

has Small this minor focus delivered tailwinds. compounding results. area changes in create Our

new We quarter, each impact has increased that teams invest and continue self-service driving It’s this contribution. time. from of yield of Historically, cohorts up to here to hit our noting funnel. and will for more to worth get years Slack revenue new teams peak over show the several expect better full taken growth it obvious paid their

year a and We pronounced expect QX materialize end of to saw the next. in you at more into in the strength the way this

quick of grows, Enterprise XXX% of Connect cases allows a launched rare security use channels,” product believe key and in was added Moving we also to more it an we endpoints a has ongoing has X,XXX a growth total number starts both contribution as to the growth paid a we provides Slack beta earlier, customers the extensive substantially that support and with uptick that XXX% expect very driver fuel continue, to accelerated, compliance contributed on share customers Slack channel. and year-over-year the A as just introduced adoption customers Slack product that the This a further quarter. not To half. trials by factor inside Connect. compliance. the a growth Those increase of adoption and plan even as on, teams is growth the weeks up over as the way expire or customer, we off we differentiator sustain new teams have to I XXX% of June asked with experience and of large end in Connected are these can Connect divided to mentioned a giant as paid in experience customer serves acquisition, trend Marketing features, both. fire. paid released so officially for six on combination other, and for forward to Many in open as network to enterprises management paid and expect increasing QX security especially the seamless. trials often over paid product-driven network are even paid and channels. update late and so XX-day launch in trade Connect’s enabled organizations previously added customer This number late QX. Endpoints March new and second we connection user had to are important drive making in improvements to In a XX shared a in in increased, period, which number a the “multi-org Whereas new in teams that new thousand encouraging, in to author-aware one us measure single started Trial rapid. to and We increased We in of providing by but software; to from in such June, are growth. shared the it graph utilization customer Slack. an of leap a out upgraded scalable endpoints virality, to encryption after brand provide retention. QX, key in very are encourage

on updates half Our to execution and on the X. at X a product is improve Connect. second conference, Stay for our more new of number is tuned user of Slack in pace side the features October Slack Frontiers, for user going and new announce accelerating; further we’ll the experience

our leadership growth XX segment. are and QX in customers all with up Connect, continuing first significant the added with scalability half, architectural ending like new We propelling platform integrations, dollar our year-on-year. Our product enterprise the and features advantages, workflow in extensible XX, million and XX%

Corporation NTT leaders Kindai New Data Peloton, with at IRIS quarter Shopify, the and include transformation. value Al-nye-lum industries, resonating companies our market deals and Ohiyama, and expansion LPL forefront University, proposition this digital Sony Financial, of Across Communications, Pharmaceuticals. Network is

For we of see where This on are providers the across American the leader Slack. pattern the $X example, six million many telecommunication other four customers echoes market chooses North largest Slack. now industries

We as significant adoption of are services. also achieving within financial verticals such depth

financial is successful innovation HSBC the adoption their work to drive providing work. and doubled Slack one shift institutions in HSBC example, of clients’ needs. Mutual secure millions meeting services and customers. standards health Slack For their financial the with Pan-American over a and HSBC's for innovative its Slack customers. processes Also deployment of Americas, were plus platform to vendors American’s streamline accelerated largest to alignment maximize and them deliver compliance, adoption, The for Pan high to of bring meet banking solutions and the internal XXX,XXX serving remote world, of be of has Fortune to extensive technology Insurance American their users. on chose life, of security disability accident and accelerated ever X,XXX against tool. collaboration to tool, an partners long-term transitioned found With the and preferred competing offers as plans XXX as Slack across insurance Slack to Number Group Mutual life chose Northwestern and able Life investments. products, ranks Mutual together. to remote insurance, when employees was care XXX communications enterprise-wide largest streamline the employees evaluation this the advising of Slack Northwestern best note services its Slack quarter, United an tool Leading the with After and financial throughout the Pan Northwestern its initial insurance, insurance, and investment. States. Slack completion its

the a on enterprise. especially in backdrop our environment. Accelerate year. to of our customer execute, company I’m at and the changes paid of We to deliver set win proud complex outlined the grow in continue the in beginning priorities of of growth, network ability the against

fair is mentioned in and impacted. we on more downsize, smaller in slowly, That a for when our it QX earlier, the installed customers our billing hire our or substantial base. on monthly per-seat dollar in plans, and more because than and much the retention I of up As price shows it others would industry. impact of basis hiring headwinds macro-related We some felt policies quickly is net negatively direct number freeze customers

Enterprise when We moment now. positive for has understand adoption changes more greater impact this our will that will longer obviously that for on with structural as had impact side, permanent lot have curves. negative have Slack right the their have way persist shift also immediate can part scrutiny, work. the The positive problems. there urgency On a in and favors pandemic deep the and Even short of on new solve the effects the of budget them, we both plates the business. especially categories solutions believe is CIOs term leaders

we work. well current as economic negative related product On use-case around our emerge specific dissipate environment, In marketing have rapidly will from the tactics to effects the leaning leadership and and distributed/remote we as our go-to-market uncertainty. oriented ROI-based, hand pandemic the adapted as the meantime, into other the selling

investing as a broader deployment are and CIO-outreach drive also in discussions. Slack to lever We using Connect

To of deepening longer new efforts are distribution strategic see meaningfully partnership intercompany and momentum, sales Atlassian. in which to messages These growing sustain we Slack paid the begin growth, there results long-term including term area network departments wrap the additions, including of recently with is the are is return As announced that priorities, new IT for complemented resonating. programs and first this an want core accelerating half. rapidly as focus. in we that their up, reiterate customer our to drivers We these focus of driver see it we trial with accelerated believe where will certainly this our I Historically, Connect, place collaboration, partnerships, scales.

and Finally, sharing especially Allen. to directory quarter The see turn the and in future future Rimeto family. acquisition calls. huge up opportunities, potential the reimagining exciting With Connect on completion of for that, over the to We us some Slack team look the sets to it I’d to Slack platform. updates like I’ll the welcome enterprise forward for this

Allen Shim

impact Thank with then you COVID-XX results, quarter in pandemic the fiscal again existing on were ‘XX. billings from customer year-over-year. our year-over-year. customer business quarter thanks more discuss everyone for were third $XXX growing to go joining XX% and I $XXX and year in will through Stewart, close full the guidance million, quarter second the XX% million, and and Total detail revenues new us. the growing for second fiscal Calculated

by of credits, to As This calculated million. less COVID-related approximately durations approximately in the duration billing discussed impacted $X and billings contract total last the and QX, quarter, $XX of headwinds. year. offer billing headwind related have In continued one million than we distressed installment customers, concessions-related first half billings to brings support concessions were to

customers Remaining billings effects we’ve forecast possible manage base in requests quarter year-over-year. were retention grew COVID-XX XXX% the seen over the XX% quarters. Net as than year-over-year. slowdown on help XX% not with We XXX% with next in XXX the calculated customer month calculated of time customers performance past pandemic up expect few useful a to We a measure continue crisis. the QX. months, plan XX% annual still year-over-year. billings unique of $XXX over concession and impacted Although be growth negatively this underlying to obligations up our ended and recurring it’s were in Trailing the less more million during of versus to couple million, through was dollar and $XXX,XXX revenue, twelve the $XXX to

We more in also with customers than ended the $X quarter year-over-year. revenue, with up annual XX recurring XX% million

We quarter, million. cash and at in our I’ll growth a free with in customer more what existing continue the of and to negative customer new base. focus are improved seeing leverage operating X% from we $XX on show operating business now detail on seeing the what with margins flow we are provide non-GAAP

to We continue see Paid growth in healthy Customers.

of The the over May. from Paid X,XXX June accelerating surpassed X,XXX we versus fiscal Customers shape of Paid Customers Customers, July quarter QX second additions year-over-year added was representing up up of an Paid August. in quarter-over-quarter, and XX% acceleration XXX,XXX of continued with substantially addition Customer Paid end April the of and the ‘XX. encouraging, the and quarter in in This As

Paid is be due also more While quarter to the sustainable some is we some Customer acceleration of this believe drivers product-related work-from-home work-from-home, as likely growth that normalizes. the to will due tailwind growth emerging in

pull as are late the of trial the Slack in customers partners, the Connect conversions another vendors, last paid us to started inter-company First, existing starting see of trials These for Connect June month QX. collaboration. into customer into the launched quarter. Slack and we their customers significantly in we growth contributed provides with in results to of adoption, driver our XX-day

had grows, also and we historically a funnel emerging to to the Connect, self-service its and have for business: paid two as grow. funnels expect our sales With funnel. funnel the We customers Slack contribution direct is Connect third

the we user the as have on discussed experience. self-service on new very focused two we and last calls, have Second, the been funnel

biggest here making as the customer longer-term. growth are has We customer the year, progress our significant Re-accelerating is paid feeds driving better growth been over that and conversion rates. this focus business

the customers. the fiscal the the encouraged very what this of to observed in are this COVID I’ll first base expect We half some additional customer in additions provide in exceed by we the paid progress, in to second of we additions year progress second color of the on seeing ‘XX. impact. half Due notwithstanding now existing half are

from by the As a of geographies, base We our all customer economy, all sizes, businesses in discussed XX% broader is COVID-XX all last of industries looks verticals. and directly nearly quarter, estimate like lot than pandemic. impacted from with the representation less our business most

a While industries slower in first significantly these these represent non-impacted grew of versus industries. half the our business, minority higher risk

annually those in dynamics our midst tied between customers are growth also model for reductions has and to and downward retention installed spending per to basis In with freezes, are healthy, immediate XXs $X,XXX mid-to-high with the spending the customers largely on We usage base. such the as last headwinds, on remains very the customers also headwinds Billing, and was within remaining a high. remains XXs. Engagement of in low many hiring Customer of a slower Retention in pricing moved so recessionary of over and also price greater force, our retention Fair stabilized for couple flat and months. slightly. customer hiring seat $XXX,XXX than very churn direct $XXX,XXX

customer QX. in Contraction three second to above how example $XXX,XXX move provides only bucket. we metrics. the This our was contraction the in fiscal dollar $XXX,XXX percentage of bucket hand, Net similarly the other QX, points quarter approximately customers retention the impact like normal of $XX,XXX had $XXX,XXX In impacted. headcount headwinds XX ‘XX. to in XX $XXX,XXX reductions compares was On to to a base from good customer

surge. trend of was general August, with levels. in region. contraction investments, Americas I’ll began in scrutiny, the Some pre-COVID QX seen customers what have hangover budget accordingly. we flattened normal as there QX impacted sales provide effect In is to COVID true trends. our from rates for seasonal seasonal growth or typical QX in are now Close the in modeling to on contracted levels. In more This particularly by In QX, particularly incremental direction a be some cycles described growth more many due to billings. might of at versus similar is less and calculated geographies customers the some lengthen

created the discussed, As have headwinds of has business same macroeconomic parts environment QX stabilized for more beginning of the many uncertainty we accelerate. observed the have At and our in to customers. some our are time,

Given percentage in observed this QX we to growth ‘XX. from expect backdrop, we fiscal as QX similar quarter-over-quarter

guidance. onto Now,

million in year-over-year the the representing a $XXX at revenue of XX% $XXX range midpoint. For quarter expect we million, of to growth third

expect negative and driven $XX of a negative non-GAAP million higher sales range by investments operating We organizations. $XX loss R&D in million our in to

in non-GAAP expect EPS to negative range $X.XX We $X.XX. of a negative

modeling approximately QX of XXX are We basic shares outstanding million.

raising For are a the revenue million the $XXX XX% million, $XXX our of we at guidance growth full midpoint. year to representing to of range

non-GAAP a expect to million. $XX year range We loss negative in of $XX negative full guidance operating million

We expect $X.XX. a range to of negative EPS negative full $X.XX year non-GAAP in

We weighted average are modeling shares basic outstanding XXX year of full approximately million.

breakeven Finally, continue our growth substantial I’ll With make for targets the to that, phase operator be now turn progress to it we cash leverage the and to over questions. expect for year. free flow on

Operator

[Operator question comes Instructions] Our from RBC. Zukin first Alex with

open. is line Your

Alex Zukin

guys, my you. one for just thanks Hey Maybe taking the questions. for first Stewart

first than with trends of you out being half. higher second of last the the are the net year this know lot back a your than and have of commenting year's adds entirety greater that last You year in half in the confidence

there's – the dynamics confidence realized the way and growth and present of to the given and some funnel dynamics the to retention, maybe, that you to and better dynamics, through is two dynamics, what's giving and think durable do of when expect you you growth it Billings the but us best talk that the know of some growth – longer conversion you now engagement when of trajectory? I top and year understanding quarters a that we’re So the elevates way the the term, the about expansion your what's know

Stewart Butterfield

great All questions.

carefully a like a that lot new baseline customer second of obviously there's give us is Part is half it about couple and on. it acquisitions. comes rate. And that confidence just So this we model higher to when really factors do a the of analysis of something paid

kind of the the that’s trend Connect work-from-home of model Slack in some importance much category background But pretty just it’s increased and that's is pretty and a not to it's attribution model, relevance stuff presumably direct. So directly world. the easy flaky

new in slowdown especially have as the as much invite, there As the holidays, you team net I that was and a with about August And they slower just experience going a working was bigger That same that, all half quarter. be that of of and the to progress. sorry, got of the are factor. stated now that’s in good EU traditionally is a and added the can and with of for user X,XXX out expired is up making a thought. the space think month, to there, expect and the the you North might see I we are but just see people not numbers trial trial, changes, on America true the They know and seeing mentioned so we're of last paid the one in driver. are conversion finally, guess then lot I and they who all thing upgraded, a X,XXX the kind quarter you continued

speak be Allen the really – those So I to think it all know to presents. I’ll you let seem what sustainable.

Allen Shim

know right QX, just base the the the for progress Yeah Alex, is very are but you and just on in adds, is customer very or we good to from momentum might very quarter, seasonal the like down thing those obviously all on now. with particular the those here the encouraging. distort off momentum early days, like We that holiday, we so building given last mind that is that numbers paid keep here. up

impact, the two not In terms on over of quarters, these you cohorts, many cumulative basis. to take know to a time to you what know expect for like three expand more if years

an some we the as tailwind expand year, into you the see that but probably to this dynamic early have. expect of us I starting the if given end ongoing to know contribution, just more next beginning will year for that So land not of as be

Alex Zukin

Understood! equation. And the then maybe on other side of just the

billings and kind start of present – fair troughs What know around you that on or If go improve net it's or certain impact think to it when that once of kind it new fair term. economies or some the year based is to how expansion, then this dynamics us around starts side? of a wait having billings, dollar walk does kind as have net other renewal about the on is a to and you of the up, term through, you certain there's economy contract we see baseline of cyclical the dynamics the the new around – will sector in until

I think walk through that. great to would be that

Allen Shim

Yeah, know front on Alex, think I fair billing I true. are the think both you

this that it normal kind of to expect really So start improving and need keep you when of full economies in will mind, benefit see expansion that. anniversary is, it. see to see resume, impact you to start But the you

timing. play driven multiple that that quarters are I larger more is for to based, take right, out, by ELA but So the our you're would renewal expect typically customers to that

Alex Zukin

guys. you thank Great,

Operator

question from Our with comes Lenschow Barclays. next Raimo

Your line open. is

Raimo Lenschow

new level detail again? just bit something can – net little Hey, in a more of could time like of back of that talk components know in like Could it sustainable If but like mentioned versus of discuss some you. already, you how dollar we retention, much come a thank is think XXX? the and you this we the kind one you about that kind more the

Allen Shim

Allen. Yeah Raimo, its

as really in big we is notably think deviation I So was churn period that from well. Obviously out the a the call higher because contraction trend. piece,

know land continue and We impact know just a quarter that a with customers we are seeing, expansion continue billing they just into to pronounced out slightly, over will expand grow dynamic. the our this and believe workforce model as into have adopt we playing are – think, But given will particular here. time. expand that you I reductions the fair you numbers more given the So

XXX% there's we we range, volatility long obviously is that By I feel QX but So here. believe if some into still we in like it's not stabilizing, term, trend do improving. plus felt out QX think QX the coming

Raimo Lenschow

Okay, for and Stewart. one up then follow

do think it the and help the if reimagine do of how some going going of stage how of – how and reimagining like, Like kind to So see work, already it crisis how seems with what of frame, mode, buyers. – discussions you the about is you probably like shops, of in with people moment people through we have they this discussions that to they know where we're out. have of think still IT time that like early rethink operating, Like should in kind much in – you are in see you you like play sort it we’re at or that's terms IT some still would about very etc.

Stewart Butterfield

that things and broader might companies it's of like period digestion. a it’s one and a on. world the going like probably land, there's question, think two the enterprise in use Slack. more One So, In group I great enterprise different just with of

a to to almost deliver like how how through to with security, laptops of lot the new employees, crises are stuff managing a going fix So network, that's the VPN, series broken. IT leaders of

is the seem elective viewed to call, an sense. and little that you is news in it's of whole traffic operational correct fires kind with only And mentioned free whether for and to a is, think in fix know as starting side like the on like that up real this or emergencies, I work-from-home Just Good the to bit. I Slack there enough that not, more things transition is is capacity that them.

has changing been it's little though, or been we marketing, our acquisition advocating driver been at advocating who coming Looking a team minds our people's but more a of it. has company and our and not has most bit company activity, use think teams website, to broadly press been friends not new new one effective Slack for other people not the

they know of attribute headquarters, Customer So, replacement while Slack that like they organizations physical the that people And was, I for we the one office, for are headquarters way missing described our of using be as should want, is and Slack is a doing we Connect we've our can't Alpha experienced home. know terms. argument, said it's replacement One can happen, live given always version the and of our but it, the of I that funny the driver and and for last longer have Slack in conference first one-on-one anecdotal as true internet, Slack. but Howard was like this handed in kind run an is – the of kind that reposted because those they someone things that digital where that, that think we Street is to quicker. said without of seconded reengage the know someone more she get way, out have operations finance programs it yet, little it XXX of it pointed no center people how in a don't gravity And it’s message are Experience, of That dynamic, don't that great, process, more best. to point, bit organization. it's and it. the start a think at the for great more is brainstorms now Yahoo a VP room the working happens, I happen – exactly the all our don't but the we once at just It to I don't physical that changing interesting you CIOs of for they they really think from – who it we line are that, board but something the as work post, that was a Seeking events for everyone's where Slack of a the is company like

Raimo Lenschow

Yeah, okay.

thank Okay, you.

Operator

with question Sandler. Bracelin next from comes Our Brent Piper

Your line is open.

Brent Bracelin

what One Thank a you complaint up the saw through days Allan quarter? follow filed the now Could and then could. for regarding timing the and I Stewart filing against of this the if walk for competitively logic ago why a of you. maybe roughly you Microsoft. Steward XX you

Stewart Butterfield

sure. Yes,

between asked is from that’s and know literally the, anything the over that apparent don’t we initial timing that’s to some about is years something little to the bit our but the the over complaint. again ago, little else So I to and circumspect on. the been no this it’s correlation process trigger pull some We've decided submit conversations. of a spin-up but had outside a in if has that this We not, filing even going answers. be in actually or and while

this I'm matches this feel is we this tactic, initiate more in broader ecosystem the us that competition illegal a I the at lawyers attention – strategy. So the right textbook we those that will customers. all doing the that will of definition. Its to and our they is optimally regulations between very are we something ultimately But, and trying is this and doing that to for and the agree, about said feel a innovation, broadly, find investigation, conversation out should anti-competitive and confident definition for as we much are now, then This I it's are genuinely behavior, are prevent. the what so it very as and because separate is is for not complaint pointed regulators, it the for ultimately favor. also much like for just there commission not that we’ll paying believe We confident that –

pressure with big significant separated, okay in so So, been think us term But for is competition even it was same. a the that is indicating nothing worrisome going haven’t way up show generally, the that's are while. to there's I Win if a on increased there. anything, for rates just that don't

using of with won and customers. We've We Office in XX over competing are quarter in Microsoft. now again XXX over

growth map, friction, I’d ways or have another visions, any of some in customers. today us becoming and it's apparent no a limit fundamentally increasingly that's to thing doubt out the you different different ceiling to kind know for last It there's So we road are our on causes it overcome. products well, the is, point doesn’t different that thing used put

Brent Bracelin

it. one to a and That's of head Allen and we customers mentioned then several of that I kind cohort think color, helpful you just below. the as as think Got here times follow count you something impacts of up, XX $XXXX $XXX as of about know them, ARR new

the now impact as through look reset, as and - an from is through look of think layoffs us of your behind Do existing across of could base be you that quarter? the what a kind customer what a impact? a walk that drag base you you occurred of largely next you're on here? drag headcount seat have seeing Just just some based right, headcount, still the there us more installed through an As you as

Allen Shim

is and Yeah, I here. pronounced QX timing pretty again given But think in of saw you coincidental. the What forward was kind we right impact don't think that's not world, happening to the going we what's I see that expect in know change just sequential Brent.

of the more which in the we're of the and and side. on here, line early week on we added as as of As momentum the highlighted. the into that year I the seeing, prior was, gross contraction of same ongoing in kind customers folks just really In falling September kind there drag same are difference QX the and without trends the adds QX the September, kind we only below of $XXX,XXX the out a of amount reminder, coming August $XXX,XXX encouraging second are look even

Brent Bracelin

you. it! Helpful color, Got thank

Operator

next with from comes Credit Brad question Suisse. Our Zelnick

open. is line Your

Brad Zelnick

you Thank one for much Maybe and Excellent! so one taking questions. my for Allen. Stewart for

and number any penetration this can usage For Stewart, to the any Slack other with, observations even that But additional of of metrics you renewal customers, about and of are customers continue ultimately grow. connect to it's and there great within you see daily cohort? endpoints trends or around number expansion organizations Connect average have they share

Stewart Butterfield

that just a we and goes to its lead the the and is could in and great earth of share, going with that Those to say of first a the we run. think the also don't going company the proposed case driver retention questions, this nickel Intuitively molten mode Back have run. core road prepare to the didn't the great be when any numbers at inside center my map, this that’s any, have all filled just on fingertips. earth's the don't is and like I I it be this, are over any long still but long and to put

for of adoption to long have have at for inside tools seen of counting level, the a spread great building companies we to companies. way those kind we the more right the in enterprise go While still allow rapid administrators

also use direct this is, actually the those vendor do two All reporting all stuff the channels would a you or road you that which of kind shared connect same force, I sales new to partner I the at that and theoretically but going is message this is two do of DM with them, all more is Slack and have. with with would what a companies ways a the something we a other comprehensive Slack so are DM relationship to a across message the the Connections, Because services and point to the kind of map for trending we conversation, seeing is and with but that create improvement. lot one selling share and make out: and we're big there's is trend on time of Connect the usage with channels toward is second on there. Connect step firms of of what side policies The any enterprise ability this already over it that for direct the policy just difference. outside that activity a of professional context the This us on as think would in “Hey, could email, we encouraging reporting our love Managed have the I their to like for guess shared customers conversations call is vendors, which the I one the to channel, ability the big policies. set are of à-la-carte. organizational setting driver And big level company is the users

more value customers to going security big tech your messages your a to is in other out step forward support You're also it's compliance, you're so WhatsApp vendors” better, of but because methods. to largely communication going and band get the here and competition

that's resonate. I So beginning to think

champions using of of lot that’s get going and it, features we preview Slack message organizations board of advisory think kind people a to the to have You resonate. I know a customer really within, that's early and that's

points big drivers So metrics set beyond there to at of broader connected start we sharing. and look want we'll what

Brad Zelnick

of that, confidence what you that downside world Awesome! characterize really what hear about and Thank have Allen. in a some Allen, Americas? to or drive VLA the just and example next you more Stewart the for suggesting are in comments to seasonality and things Thanks. billing tangible upside the the especially normal some that terms you the the would quarter. uncertainty renewals perhaps you're maybe your visibility in and your encouraging given return pipeline of it's How risks seeing just to said of you just for

Allen Shim

it’s think I Brad act. a balancing Yeah,

we billings know guidance quarter volatility. more because last we You pulled expected

show particularity know will QX we closed up see for of deal Having second I renewal on you to and rate and still that generally in opportunities QX, the a more are higher side see pipeline based environment half. is here the did us. think going You those there, volatile QX larger that, the and said

expect, favor, we we of in is working will, improving the but our pretty so at pipeline that saw dynamic pretty expect in in recur dynamic you of that world composition is but right know now, somebody you pipeline know think our trend if working you I think again the time the same again that quality the to the the favor. environment is The And volatility I don't now. is here, the right is QX, which we

Brad Zelnick

guys Thank get so Totally it. the for much taking questions. you

Operator

comes Securities. question Fargo Wells with Our next from Michael Turrin

Your line is open.

Michael Turrin

afternoon. thanks, Hey and good

a sounded influence roll Slack on new better at prepared for You you're from suggesting adds on touched like on rest It year. Connect times. to a the adds least customer at couple this the of of custom the cadence continue of can remarks

where you a in just rolling is What help trend So the It persists Slack that of can adoption trends? it us versus around versus being it ultimately where Maybe is more? dig is one can into calibrating a drivers? end helps product that this more continued time bit just Connect up? that today

Stewart Butterfield

you. Got

new continuing encouraging just of the of started. So trials all being top the are point is the sent and confidence And invites looking that, at continued of in of number to trend that being a kind the a things On brand number out, those to the user didn't difference we in you you're of team the shared went just Slack experience channel, one yourself. versus in and if is setup new to you’re user website mention and coming growth. via

it, people, go talk in to talk you So people use new you got Connect There have is have to coming to how them to stuff start, Slack about. it, them to a you invitation, the are if already user through you a you this. business got to convince real it's to, you a everything a for like use cool But case already use show already to you to in out. got latter invite figure

will way. their think Slack heads I fundamentally different people in So and better around and wrap a much

and continue I So a of behind you is of lot people will growth the those questions, previous the effect bringing as a lot feature there's mentioned in think drivers in that see the that those continued and vendors, to know be I all users There and was. network of whenever network more for that. all just

start able customers much thereafter. to dynamic and example customers we that so up, better I instances, can went the something mentioned got set actually and first we That Connect, to harness about their customers was little someone It is for support that the not were whenever, their Well, day. who customers Slack let Slack [inaudible]. QX, talking that network thousands That definitely impulse and all then created paid that started them and with of that think shared they that invited experience of and on that’s was them, direct I happen capture, time star run going a shape to the than kind energy. their one channels. of believed

Allen Shim

a funnel us, trials Michael, is in particular of Connect leveraged driver. very we third out, I call as when and days for have intestinally we how this a think growth fair did in think it's Slack we in this that early terms

and So are you're I we opportunity here. to and what going belief hear, the optimize that's it the to think and conviction continue

Michael Turrin

you That's how well frontiers. across then you data what bit in your briefly building appreciate that on and you're will profile out on Thanks. those around what And you more richness give helpful. that Can of as with connections expand sure helps terms I that a brings more that. base? of here mentioned Rimeto, expand user

Stewart Butterfield

term, so the okay to involved. Yeah, the because just I’m on speak going term to little get little long short more a bit starts

a product. just its great all, of First

everything maybe it's We it, don’t are can't kind every day, live single am I using you sort up you and get now that, once it don't it. have running it of and Slack it it without if you and you of – but and getting know and out utilities of it's need you a

goal it's better start And all of more if Rimeto. to source the not for expectations if the fine CRM term. of itself. to user for Slack and kinds thing to like on with side is term, of profiles, same No the any to kinds want to generally We build make you material to outside. don't have need the integrations true is we just have kind because inside the in interface profile excited But difference a customers. in delivering out our real sales there browsing link improve all the services, of a the we it’s features inside to Slack business that on it more that’s going short So short we're

kind ability the context organizational last to were details or think details profile at thing and what important other either applications, So profile or relevant. in I’ll is structure share be of mention, details you of I getting would its where

is And into it based which to still me of all remember bit then simple à-la-cart power and else. the from for networks and between where what a if just tools, Messaging share this what you days, it's see not integrations It’s just build like of it. we'll bigger DM groups a the show, to old accept individuals, span not the start When associations, kind of profile they what used these typically send off Slack I but directories, finally for these to, information obvious on more and there. in or before a another which Connect. repository increase can letting application people one I information, its kinds of little pin, and available, own be a mentioned handshake is two as for and that and eventually like my can connection with in anywhere that's So use the for us teams feature reporting lines, kind have fuller the of Slack message. the of and share of profiles I sense where to another, people Blackberry bigger create multi-org double you applications Rimeto for good just data, belong profile we organizational for how is relate kind one to channels useful you structure

Michael Turrin

Thank you.

Operator

comes with from question William next Our Arjun Bhatia Blair.

Your line is open.

Arjun Bhatia

or sense just give to rate horse, us completely. Slack first guys! is the you. versus facing turning where dead SMB slower your or customers headwinds, Hey off expansions for but know section mean much being is business one you you're that the maybe headcount how I a that are at beat else on customers Allen, a for churn reductions true can not just you of gross are retention seeing of that dollar from net a over

kind those three of you're seeing where between headwinds? biggest buckets Just the

Allen Shim

was for out on less or into and QX. to churn us. Arjun, although out, in know was normal Yeah say the we the elevated but start I’d quarter called that did stabilize expansion more coming you contractions quarter, we that that see you trend the of front, know the on Really also

present notwithstanding the a was pronounced think a kind them the these start But we're to magnitude, from quarter. volatility definitely and are better very we baseline that So unique this I conditions of still at don't in environment in saw expect believe economic we here encouraging recur, here. is trends pretty as the impacts think normalize and from We we there. to QX not a way, but

Arjun Bhatia

one Got you're that it, interest paid for And it's that's to adds. is seeing of a you, driving it’s helpful. great Slack customer and Connect Stewart lot hear launched and

you for higher of one a building the that that about just this and there can technical barriers so based. something help level, maybe similar, in here organizations support SharePoint admin understand think the that's like of it. when offering required are rest this can And multiple we sophistication control Just us building competitor maybe would at an a prevent that's

Stewart Butterfield

and can try of organizational little across I details, it all light It's think by be a if about the great a data I'm is easiest technical the boundaries, on kind to way to divided tightly interactions be question. going then think there of are organizations. but no of the inside Slack

only all So of to the as largest opposed scale we the need network. organization the of support users in to the

was lot of is support a ability what the network in know the to in in growth. that’s their users incredible support the early a of pretty which problem, Facebook that you much days, All bigger

to at X,XXX So know people. have have if about you most know company, client only people software in you your used your XX,XXX to did other

millions it explosion then of millions connection user, a has a have potentially bit Slack people that's commentary there. and could other of you know any literally a and If about to to

and and way. pretty development number Slack upgrades refactors fundamental a I had So because a Connect be that broke long if took new ware XX have of time as out along I both to those not read of of to challenges don't done us replicate know of started kind bring hardly anyone XXXX technology. of way. will just any mean legacy legacy on XX It ion we've in ground like and difficulty we in and challenge we to do are we never-say-never. hard of literally scalability, technologies market What a the incorporating technologies are do if challenge to you are retention introduced innovation than out able the operate do EKM being a there things doing we XX, we getting using did what see EKM. the to challenges message line you a mentioned which inscription there It’s or a this it I so of they technical maybe when they but of most with doing predict, but plans, – kind It's bunch is nine addition they in from popular keys what I of lot faster policies? the a different think do we're new of you are is that have different it.

Arjun Bhatia

thank much. it, very Got you

Operator

question next from Weiss Our Morgan Keith with Stanley. comes

Your open. is line

Josh Baer

Josh on Keith. for This A the Hi! question. Baer couple is engagement. Thanks for on

if Just has time to per active Slack to day remained over that use, months elevated engagement as as three quarter far wondering compared connected last the and prior commentary?

Stewart Butterfield

has. it Yes,

day XX over it’ a it we of I that still haven’t know you looked but hours and report XXX in a So so don't in regularly, connected while, activity. minutes

Slack, is that still expect sure to generally office, definitely add out – realizing like spend usage, that being baseline it's I'm given we heightened of we’re gravity the life features physical and but but of drive may know of and it of think that you So point something people value a that that want that fair utility engagement some is not how new we replacing increased to the center their for work with kind say there new the in the it's sensitive, we help and I connected engagement the would minutes trending, cases I people kind set to X features usage. continue. less and

Josh Baer

then or this to Thanks. new this solutions using as the of thinking customers those far needs to are about building potential quarter, the And collaboration point immediate and automating quarter Got last really are at flows software? embrace other paid the to integrating it. started then work Slack thinking the still with solution as of and – new work-from-home all platform using fully they the about have the customers kind engagement, as momentum XX,XXX the they

Stewart Butterfield

a we stages by in Yeah, saw it's amount incremental of I I demand driven of call importance points get success as to had and funnel, as its know the think in this the sophisticated what higher us. was was of really what lot was a pronounced for a at still March don't the early of it, but way, not increase of last gumption the the a time, correlated kind think because know there in question in different but people along the I – that's big work rates set course, to still up in it increased the you there, week

a customers work get – least seeing lot have the at is of value custom party’s a average integration, takes me, least our to customers plus very paid XX.X% up help do one. trying where this We have say, front – one the to it we usage while by million at popular plus I X, XXX% a to customers using of The only hundreds. of see XX of $X there of to and in workflows integration. using the very XX% and what in is there. get specific. I'm offering, but is don't third $XXX,XXX is end and but it's the are but and custom mean up customers we’re way end we least realize I where it full The increasing, guess to at to using we I

So that around to while wrap kind of people their usage kind takes of and undertake. heads for a

to applications, an broader the think simple big trying kind commitment interactions object those a to have that to of there, that point I make to beyond really as look at the easier building trying integrations. party it third to testing to the a application really and have for in driver roadmap We as make refactor any around you a link we're that looking and deemed of simpler, a approach starting possible, and for X.X big making platform stuff also

Josh Baer

Thank Got it. you.

Operator

question next with Derrick and comes Cowen Wood from Our Company.

open. line is Your

Derrick Wood

one I taking for one Great! for Allen. questions. my Stewart, Thanks for guess

you – doing guys last kind you things partnership last the that new side with announced partnership quarter. was you're the you strength one, in this First I AWS will just and how [inaudible] briefly mentioned of on you hoping you XX some Stewart, double quarter. could you're coming partnerships at out next what efforts these six market click market new market helping the drive about on coverage as you or what's were thinking new, the of advantage, to months. guys look

Stewart Butterfield

is or of to more know you purely and around we doing me or and that share, other announce and helping will offers to more experiments just seeing are we work – distribution to so but help make we're Yes, don't and halves less right like each there. progress important. things into now two numbers divided that commercial. Its I have one obviously lot kind out. continue there Those I the I’ve are more and a think

– using kind integrations, really the and of dollars using it's I their software and are tools the spoke more just what more to think software over of just people I day software side spending about many other minutes because bridge their world usage and they normal and we the do are this spending need hundreds On to more people from company every of of is of different normal time. more use on company to

course, doc lot of overlap lot a the only are channel really systems I and a in into best the the controls. customers, folder interest progress more still care of. to not lot, mapped that companies level to number can thing talk take taken in customers, about. that the have when up attractive. all simpler? automatically link can know And more their doc. and is you you Cannon-Brookes, is expect own it can of software convenience of and a can easier? access less Slack. of Slack, press for with software, just favorite. a it thing When we we just X more I in the to obviously and to product we our give to is know that's relationship like a of all of How integration – Would about the to but inter-operability and Atlassian it’s who a customers, that heart among Atlassian think as we it it? and collaborate understand you do the their for look Slack that who's the lightweight broad can think at way Atlassian. the the Slack at Google software How integration is shared at button something this think fabric suites of example of a fabric you toolset, out can Mike I is I make use of all you bring there. get you control talk that can for huge if and to make can it'll as I and of systems XX paste I with could like all talk or look sense, access at a I to a say the vendors So for do a talk We across That's independent the you we for each that remove lightweight thing users ‘Hey! to people we Atlassian that we So value one and them?’ us streamline that's to but I friction, that's How to other vendors their and increase my but week the it think degree every really the the and can

Derrick Wood

Well, at color. on Can thoughts bit more? the billing, thanks big kind is directional little such in point then billings there’s versus big of Allen, so remind could in the in color share that a you expect converge we XX% on thoughts a QX. [inaudible]. And for delta a for delta and to the and deferred you you revenue. should a growth Are QX why where growth us when RPO XX% thanks directional

Allen Shim

deals notably is QX RPO saw and RPO as reminder multiyear Derek, know you know on so Yes, our lengthening a you in on you we of so that deals have the those that the of know with we about. in our increase talked value only you bigger and about deals impact being sales fewer some larger to QX cycles which closed talked that In an some quarter.

build Overall definition I using So to on things, just that's think the side our QX the disconnect; is baseline know of the really off it’s RPO. right of really here. you billing of we’re how

provide you to think limited beyond so a us I why same the this call think QX, I on early at know I half this but too that's time, more quarter, point. QX you're second visibility think there’s the so at hearing pretty it’s color

Derrick Wood

thank Okay, you.

Operator

from comes Will with next Baird. Power question Our

is open. Your line

Will Power

great, thanks. Okay, yeah

just the again, just gives I of of try some to to this, was move able tied a alluded hardest quantify confidence couple sort pressures know of to I but maybe to C-Cap come first, back, guess You know persist you that questions. and seek I to quantification half and in maybe as earlier what of Allen maybe percentage doesn’t remind to you or industries I’ll are fit pressure versus the what second to the you out back guess hit the us missed year? broader based, something the that stepping you you

Allen Shim

slower. growing more think we’re about up specific see QX saw is impacted But that. is specifically those I forward think you industries that right of we going now; attribution the from what I we I in follow more that on don't are what have well for that here a seeing pronounced is, can takeaway this Yeah, impact.

we QX as grow dollar sequential calling think the baseline, we I talk happen baseline. we at going look not we’ve will absorbed going the a where think we've I lot for a think forward, because that least but I they into to at – again what basis say QX as continue won’t expectations to think that’s gross on of that baked forward, It��s here. about

I speaking, think So the I looking trends the into aside year. remainder think we’re of broadly have improving those But industries. affected those based expectation of how been built from off you are that the know at

Will Power

And great. guess Stewart, Okay, a for one then you. I

out end like you you use with know know as just more what can expansion what got was there you gets As I what groups. are you in sounds Slack about traffic. if Connect you replicated there, at across excited you've of know Slack be and cases? no it you see mean broader know view your you some share financial end know growth what much a exciting and you know, most the can overall impressive now points overall What you you you I that opportunity, points Connect, are us look the wondering the

Stewart Butterfield

one there's networks. and so answers here magical two Yeah, has multi-org create me to of different of for the personally private channels guess been I kind the power shared

[inaudible], that SaaS XXXx couldn't better, can happening. this in buying which great than still of about revenue, that the get is It's that reason example good. by lot the approval sales you to into user. managers course actually don't a as that's all actually have – way are channels as like for we’ll just and that of is know that now, but and someone the have are is in, use of it's oversight that still vibrant productivity and the and and have argument for an the companies, I the sure I'm security process other kind really Me conversations so why the make, get tuck conversation grand whereas XXX% bring our both to CEOs I'm done buy that’s about use less Slack you know most person, that to revenue and have a sell work. any something. know side related, of an getting source much side, productivity. ROI, are is a process leaders, It’s and harder and case the different know vendor negotiations cases much a use lot scheme working or all that have that’s activity You the been of to sale have that sales on the to I of commercials it's product legal a Slack literally avenue massive, different We that's kind the talked way. can be to what easier. Could the been you a by but great of but of which charge other easier of in and other a always you things, of involve – like sale reasons stuff mean I to me excited to complex business working just for a

Will Power

thank you. great, That's

Operator

Heather question of comes next Goldman Our from Bellini Sachs.

Your line is open.

Heather Bellini

and what about to think in of that a the in mine think Great! XXX to guess I customer been Most particular. quarter. Thank this? are have count do much the additions the and In XXX,XXX XX, down of when that to then you think answered, about than how in wanted of you go beginning that typically from growing you and EOA here kind but dropped I given kind finding And you're know about kind know some How XXX to referring Thank pace QX the just of gentlemen. a think and you of happen from think I do we about back the customer so just big have QX mentioned Is you're you’d the you of you. When those follow-up. baseline. over new less we number find that findings baseline I talking of over I Stewart.

Stewart Butterfield

and or on net just more I'm sizes total five we the that's customer Sure, about adds, in U.S. and are a world, there that X.X that all the new new just of baseline think just know shapes the you million all talking a have businesses around the classification there. number so number and I hit – employees.

are maturation lot of sort – them hundred XXX,XXX I of a just X,XXX, them room of X,XXX, naturally quarter. a are a plus than there's XX,XXX plus, can customers – let talking X the will all of All and Slack, in think are bound new X,XXX’s, use the more representation diminish customers future over the Allen can to The of but many accelerated. process they million hundreds. That some system. have lot there, those. so about I already not I’ll was A because color know be take of in longer you time but them just add

Allen Shim

September don't in I we you early the know below suggests visibility QX. you'll that. would in I for I on expect here, – there QX Yeah, not XXXK, what the see nearly going the in into seeing we we’re that to you you as forward August know will saw just dropping definitely that mentioned that focus quickly know was think an recur trends – magnitude that improving of and the you be and figure

Heather Bellini

the you and the trends. revenue you perspective? deferred think QX, those on net in Okay, had just there question can impact and I color then confessions it bit just sequentially. wondering, how a just, I like sequential the just worst discussed a deferred last on expansion looking the the impacted from rate true-ups quarter. know then flow behind – us roughly from the another the was at typically do in I the of anything mean on the but had happen COVID billings I again you statement share with – in of And know us is looks the you it is QX, given you cash that benefit change revenue acquisition, gave you follow-up ELA flat I'm was little just but for slight a know

Allen Shim

first six alone; months the in you this so related COVID the from Heather, related, concessions on Okay million $XX first year. million COVID quarter the $X of know

something know we’ll… it's that You

Heather Bellini

Is or that revenue though deferred? that is

Allen Shim

on yeah. side, deferred impact it's the the to – side, going you’ll On yeah, so so billing billings

Heather Bellini

but split I the and figure what's the balance, deferred guess trying revenue, that, the what's I'm what between that's specific to get I revenue, out. what's

Allen Shim

Yeah, deferred. So all oh sorry!

Heather Bellini

Okay, so ELAs. on it’s deferred true-ups the all just and then

Allen Shim

more side. Yeah, quarters. ELA's, ELA just overall, of QX seasonality given and shape the think enterprise renewals, [Cross of I on kind reporter the those more QX, But Yeah Talk] there. more and nothing to

those particular. for larger us, we to higher think be I of lot and the a we renewals going opportunities are current to value for customers thinking add in believe is that quality continue these

So think the QX from accomplishment trend I – encouraging QX, there's an change that’s the of in pipeline.

Heather Bellini

you. Thank great. Okay,

Operator

next comes Pritchard Walter Our question with Citi. from

open. is line Your

Walter Pritchard

thanks. Hi

for at I will renewal up downsize, XXXk on payments time those you would especially or renegotiated. payment mean here or the maybe the or a renewal Is annual on a of clarification know type have I’m a or customers the business. the deal up just guess are of customers and assumption on under even something most revisit. downsize the quarter and Just many of upsize they it the I be to in is for who monthly that

Allen Shim

points of Yeah Walter, a couple there.

are any probably more why So not is everyone but movement all ARR metric, an not renewal, types you it's its of under there seeing quarter. in ELA, so more base given importantly so that’s

Walter Pritchard

they deal, in trying has the SaaS and will those coming time number of a to right of paid because of I I'm it of just the of op our point a year one know understand, only actually or those mean contracts, quite have portion favorite who any that’s customers downgrade a seems like deal, [inaudible]. at year this kind to a company do what deals three percent large actually those, bigger you

Allen Shim

Yeah, it’s seed. a I the of really know reflection

know we taking kind that are saying, tracking customer. tracking that are of – we So real ARR, on we tracking have usage, and we you timing for the as as we are then are been reflecting

Walter Pritchard

even yet, if renewal saying. So hasn't the is what you’re happened

Allen Shim

Yeah, on yeah.

Walter Pritchard

Okay, I see.

clarification. the Okay alright, for thanks

Allen Shim

No problem.

Operator

Our from Research. next Bernstein comes with Mark Moerdler question

Your line open. is

Mark Moerdler

appreciate them question. I Obviously a for answered have and that. lot and you asked Thank been already taking of my

ones. ask going mind short If to I’m you don't two reasonably

guidance confirm, the On been are that you’ve or the or to may larger than QX implying other QX from guidance, had that at QX implied and impact Are you're just QX then more follow-up. or and in a the QX positive here factors past modeling have and I have wanted in concessions. you COVID-XX a similar negative there

Allen Shim

now Yeah, QX. I the right just guidance based shape the think on a impact on here, what of saw similar we in here

change real expectations. on no So

Mark Moerdler

since customers start it joined of people, do Then any you the companies and up and on until taking integrations, is from creating picking integrations that Stewart work-from-home different integrations, how versus own have the historically? see long their the they those started adding

Stewart Butterfield

to people know you of adoption. with using it. get Unfortunately that for all mentioned this category XXX%. it's specifically, I the paid I sophisticated numbers figures saying heightened custom but be any don't have importance are and more before, but of trying customers going don’t of including for I to are most is, of the very, on on more to XX% lot interest specific are use very and mentioned integrations. I environment close would this maybe in, integrations, I to they a everything I integration attention in the way that of paying ideas or have party, slightly the coming figure what be as comparable assume Yeah, don't earlier hard coming third of in another relevance all of any

sense there relatively at or it trying them that are make really and Outlook helps that a some Docs Dropbox might and for that things be ideas once So their these and everyone all gets time the build it them. like popular or over way simple, systems to may together and point sophistication to in tools calendar, like net be Google

Mark Moerdler

Thank appreciate I helpful. very you. Perfect, it.

Stewart Butterfield

No problem.

Operator

comes from Ryan with question next Our Stephens. MacWilliams

line Your is open.

Ryan MacWilliams

my taking questions. Thanks for

profitability and Could in about marketing reduction uncertain of on revenue. just little a going in forward color Solid percent environment? think more and quarter how add line and significant this quarter item investments this sales the a as then macro you step expenses for this a you towards sales

Allen Shim

Ryan, this Yeah is Allan.

kind Just both R&D a in innovation side. for on you of know us, broadly and the the on our speaking, customer continue be sales growth side, and things, investment and marketing, to expansion side, customer focus R&D of of on side exhilarating acquisition the

specific to increase lower this sales marketing, at of here and P&L. capacity, benefit some sales from time So marketing you people, our added on sales more environment, programs but some did T&E given the the also obviously continued see

Ryan MacWilliams

paid providing would quarter. the customer more you mind added color cohort COVID during last then And on Great!

innings, still these larger are So that we more. but engaging you customers and mentioned landed early

detail So any likely these customers more than have are to prior so customers be And these cohorts? on far? matured users additional monthly how paying

Allen Shim

much the as more line performed that, it passed overall call in time if prior cohort especially with COVID to trend, Yeah, has you want pretty has here.

terms deviations report of to in there cohort. nothing that particular So in more

Ryan MacWilliams

Thanks. Great!

Operator

Genuity. Our question Daniel Canaccord from comes next with Reagan

open. is line Your

D.J. Hynes

my one in have you. its associate. guys, must for as dialed I actually Hey Stewart, D.J.,

great are you the there consumer could do think envision up we enquiries curious and about hear As to service to how ways how feedback common manage, about Channels kind stuff. to Slack that. think open Connect evolve, would of that you think Like brands you I'm to ways for solicit CX. how – be It

Stewart Butterfield

bit that and so Spunk their on reason user sure where are there mind is business not it’s are and air The that do and side are this. fixed opportunities going and the come happening But he’s the and kind huge lot want because a maybe say Yeah, And it's conditioner their of of that. administrators, know XXX% I individuals businesses There environments the of employer get to use too. we more Shopify lot if to the something there a side. for to those a to maybe workplace inside individual. little accounts is always you business communities BXC their because that of tied there's like the amount to used that opposed activity, the to have a the and lot to of or Slack customer who's champions, flat, the the are CX are evangelist. companies are that in a as

champion an lot term, really kind our also with aspect important customers customer longer transaction the case That's I there power know with giving like kinds to a all tickets We the and on networks, reports channels sending work platform service stuff space, well. a purchase for boards, of you of orders, and of the power think the activity, that. shared of important Slack that of opportunity all just have of being like advisory whole and use conducted as kind of combine Connect invoices, for it’s

So yeah…

D.J. Hynes

Yeah, that’s helpful.

Stewart Butterfield

Longer term, a stuff, maybe on distant the BXC future. it's that’s just

D.J. Hynes

Allan you. Connect’s Yep, for about us think no maybe for that makes free sense. And the the you Can yield then follow up help a trial.

give many? get us? be a will that in which It the of Can a is powerful So half denominator quarter, us super helpful right? XXXX sense would conversions awesome. a X,XXX paid you how the connect Like lead in equation, of to sense a said you is how gens for what

Allen Shim

you say the sufficed on a specifics higher now trial. than right the sharing but think not D.J., it’s are we average Yeah, to yield much I

the they're an into I from pay that obviously given there, effect existing open invitation. offer start, a kind are you a much getting has that that vendor fully than network customer know partner more clearly that’s know or you the trial know pole cold of compelling value think you you a

D.J. Hynes

Yeah, yeah.

Okay great, guys. for thanks color

Operator

with Research. Our comes Wolfe Kvaal next question from Jeff

Your line is open.

Jeff Kvaal

little, new correlation usage up. then be? revenue through little you It but help be translate much the Maybe Yeah, that its you why while its of your And ramp though that that. and might if could a help in looks users, question. might exceptionally little of metrics us if some bit, a could tell I down a from appreciate would bit an high appreciate little that be it. should talking to that for I last and thank parse perhaps as taking usage you quarter. very think secondly if us wondering could were for you us quarter I'm us

Stewart Butterfield

Just are to the usage. engagement you of number taking clarify about metrics, Jeff, of the minutes active

Jeff Kvaal

Yes.

Stewart Butterfield

okay. Yeah,

or really progress there while down but a historical up the baseline down of to of come useful I because yeah, number of funnel, kind most website to it’s and seen are Connect further I’m that's the up trial conversion, is and a really to know, you pay time Conversion programs the here. and fact increase kind, hard excited a that clear, yield are just know, it the Slack in kind QX, the point lot it’s are and we starting would that That’s certainly of of large little speculating to do peoples definitely just be to who interested concerning any So success could and remains create of that it there, as a a well. Slack, you users the figured a we’ve outside that indicative of the all get you still be trend, The in a and of that's the the from that. think it’s lot nothing that's about to just just one drive of but just actually, comparison difference new Slack. around of out their not things compared – bit, nothing who I'm But strong could lot to average. funnel context conversion. a and part,

board, know just alarming, So you in fact the on no and that up, positive changes the generally compared historical average paid conversion to correlation would engagement be across encouraging.

Jeff Kvaal

Yeah, seems seems month encouraging how me worried, about quarter the to or the last is it was recently talking little went then be I'm bit maybe your you for And you. commentary okay. Thank been. seems quarter to of Allan, a It secondly lot have is seasonal. a and it the obviously [inaudible] actually guidance the current into

though seems guidance little, sort a you into help year or made might be through quarter. us been understand might it have you of versus some maybe assumptions. the the conservative Could this you’ve as last operated So there assumptions that in

Allen Shim

line expectation from I from QX seasonal think base the a pattern the here. you is I think right as know

that. excited you You withstanding volatility to adapting nature pronounced, what the again pretty was the are and see there. lot conditions impact, in some, know QX we of out that not a and the know we But just given happened of model our and

over the think that and and think over the the I level, also this both years customers these clear, benefits quarters over will we're I year kind half out tactical and be to from coming adding even. model our of but more just time that on first more a also play of fact

Jeff Kvaal

all Okay, much. very you thank

Stewart Butterfield

Thank you.

Operator

of the Ladies the have reached I the question-and-answer company the allotted back closing session. the over for to will time remarks. we and end call turn gentlemen, for

Stewart Butterfield

all time to appreciate you next Nothing for and quarter. you see Thank joining. the more I add.

Operator

concludes This call. today’s conference

now may disconnect. You

Slack (WORK) 9 Sep 202021 Q2 Earnings call transcript