Slack expects its revenue to rise 38% to 39% in fiscal 2021, and for its non-GAAP net loss to narrow. Its total commercial cloud revenue rose 36% to over $50 billion, more than a third of its top line, in fiscal 2020 - led by the growth of Azure, the world's second largest cloud infrastructure platform after Amazon Web Services. ![]() Microsoft also repeatedly highlights the growth of its "commercial cloud" business, which encompasses all its revenue-generating cloud services. The pandemic throttled the growth of Microsoft's Productivity and Business Processes unit as businesses shut down, but the growth of its Intelligent Cloud and More Personal Computing units - which benefited from stay-at-home measures boosting usage of cloud services and sales of PCs and gaming consoles - offset that slowdown. Microsoft splits its business into three core segments: Productivity and Business Processes, which sells productivity software like Office and Dynamics the Intelligent Cloud, which includes its cloud platform Azure and server products and More Personal Computing, which sells its Windows licenses, Xbox games and hardware, and Surface devices. That progress is encouraging, but Slack still expects to remain unprofitable by both measures for the full year. Slack's GAAP net loss in the first half of the year narrowed year over year from $393 million to $150 million, and its non-GAAP loss narrowed from $80 million to $16 million. Slack Connect, a new platform which allows companies to connect to each other on secure channels, also continued to expand. Slack is also gaining ground with larger enterprise customers: Its total number of paid customers with over $100,000 in annual recurring revenue (ARR) grew 37% during the quarter, and its number of paid customers generating over $1 million in ARR jumped 78%. Its total number of paid customers grew 30% year over year to 130,000 in the second quarter, with a net dollar retention rate of 125% - which indicates it's squeezing more revenues from its existing customers. In the first six months of 2021, Slack's revenue rose 49% year over year to $417.5 million, as the shift to remote work throughout the pandemic boosted demand for its services. Slack operates a "freemium" business model in which paid users gain access to unlimited messages, an unlimited number of integrated tools, better security services, and other perks. In other words, Microsoft can easily afford to operate Teams at a loss to push Slack out of the market. ![]() Microsoft's revenue grew 14% to $143 billion in fiscal 2020, which ended on June 30, and its GAAP net income grew 13% to $44.3 billion. On a non-GAAP basis, which excludes stock-based compensation and other one-time expenses, its net loss narrowed slightly from $116 million to $113 million. 30, but its generally accepted accounting principles ( GAAP) net loss widened from $141 million to $571 million. Slack's revenue rose 57% to $630 million in fiscal 2020, which ended on Jan. ![]() Will Microsoft continue to outperform Slack over the next year? David vs. However, the strength of Microsoft's other businesses lifted its stock nearly 50% over the past 12 months against Slack's 5% gain. On its own, Teams doesn't generate significant revenue for Microsoft yet.
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