$work thread: doing research as its a big option play tues. fell hard last q:
A) it ran over 30% into the print & reported after $zm with unrealistic expectations
B) pulled calculated billings guide due to helping its customers
C) net retention stayed flat vs expanding at 132%

Rebuts:
A)This q $work hasn’t run at all as its lost all its recent gains & At $29 is 30% lower than it was heading into the print from last q. In fact 28 was its low this entire q so at 29 seems like it can rise if it beats. rsi at 43 is also low so not overbought at all

B) pulled billings guide due to macro uncertainty & supporting their affected customers with discounts/payment terms however things have gone better than expected in economy so would expect less of an impact going forward or at least better visibility so they can guide again

C) $work signed 12k new paid & 90k free customers last q which was more in one q than all last yr combined. Due to land & expand model this didnt allow them to expand with those customers & the addition of so many new weighed down net retention % so it was flat at 132%

However this sets up well going forward as I expect last q to be the peak of new customer adds for the yr so net retention % should naturally go higher from here next couple q’s as they expand in those customers

Pipeline: 750k total customers of which 122k are paid. Basically only 16% of customers pay for slack. While this is a low worrisome number it also means huge oppty to convert free into paid in just the current customers who already use the product.

While above always been true this pandemic & full remote work has made tools like slack more a priority & im not sure the free version will be good enough to use due to its limitation of your teams last 10k messages only. I expect the 16% to rise substantially moving forward.

Amazon partnership: last q they signed all of amazon as potential users. Now most of amzn 800k+ employees are warehouse fulfillment so would not use slack however aws alone has 25k+ employees & has rolled out slack this q. I expect expansion in amazon to be a nice driver

Enterprise: $work only has 969 customers with ARR over 100k which makes up 49% of their rev. In fact 20% of their biz is smb which is under pressure. This however means that theres plenty of room to grow enterprise biz and any large expansion/sign ups can materially affect the q

A hesitation i have with $work is like $pd they have a large exposure to smb however it seems like they already took the hit for this last q and set appropriately low expectations. Street has rev increasing 44% this q & just 33% next q. For comparison last q was 50% rev growth

So how can $work increase vs decrease rev growth when msft is “killing them” & not letting new customers even try them out by bundling teams? Answer is shared channels. Two months ago slack came out with ability to have up to 20 organizations on one shared channel.

On last call they said those that are part of a shared channel are 400% more likely to send an invite to others to use slack. CEO said he, cfo, & cmo are on large shared channels with 17 of their saas counterparts. This flywheel effect could just be starting & be best marketing

For transparency i own $31 call for sept 18. stock is massively underowned/hated due to msft competition however imo these are the stories that can rerate as ppl scramble to get exposure. I could be wrong & perhaps a q early but I expect $work to be great investment for long term

Perhaps the best fundamental reason for $work to do well is that given their symbol they report after labor day