Slack IPO: Only 15% of customers are paid

If you’re a highly anticipated tech company and not filing to go public currently, what are you even doing?

In the past few weeks we’ve seen so many companies begin the process of IPO-ing it’s difficult to keep track. Both Lyft and Uber have done so, as has Pinterest, as well as Zoom. And now Slack, which filed its S-1 Friday morning (conveniently the same time as Uber), is being added to the mix. The company plans to be listed on the New York Stock Exchange with the symbol “SK.”

Slack has historically been very tight-lipped about its numbers and growth, so this is a rare look under the engine. While the enterprise collaboration software company does bring in a good amount of revenue–$400.6 million in 2019; $220.5 million in 2018–it’s still not turning a profit. In 2018, Slack reported a net lost of $140 million, and brought it down to $138.9 in 2019.

In its “risk factors” section the company admitted, “We have a history of net losses, we anticipate increasing operating expenses in the future, and we may not be able to achieve and, if achieved, maintain profitability.” It added that its current success is due to rapid growth, which could easily be curbed down the line.

In the S-1, Slack also revealed some user numbers. Slack says it has more than 600,000 organizations (accounts with more than three individual users) using the platform”, and in 2019, it recorded 88,000 “Paid Customers,” including more than 65 companies in the Fortune 100. It describes those accounts as organizations with three or more paid users. Additionally, the company says it has 575 paid customers paying more than $100,000. For comparison, it says it had 59,000 paid customers in 2018 and 298 organizations that paid more than $100,000.

These numbers do show growth for paid subscriptions. Yet compared to Slack’s overall user base, 88,575 isn’t a huge amount of paid users; it’s only 14.8% of the total. Of course, we should keep in mind that both customers and organizations represent groups of people–some organizations have hundreds of users–so the numbers aren’t representative of each user. On that count, Slack says it has more than 10 million daily active users.

As time goes on, we’ll get a better sense for how it will fare on the public market. And hopefully we’ll get some more context about its growth and plans for becoming profitable.