Quarterly Report (10-q)

Date : 12/04/2019 @ 10:18PM
Source : Edgar (US Regulatory)
Stock : Slack Technologies Inc (WORK)
Quote : 20.59  0.0 (0.00%) @ 11:42AM
Pre-Market
Last Trade
Last $ 19.96 ▼ -0.63 (-3.06%)

Quarterly Report (10-q)

false--01-31Q3202000017649250002899000002591000000P12MP12MP12MP12MP12M300000P6M 0001764925 2019-02-01 2019-10-31 0001764925 us-gaap:CommonClassBMember 2019-11-15 0001764925 us-gaap:CommonClassAMember 2019-11-15 0001764925 2019-01-31 0001764925 2019-10-31 0001764925 2019-08-01 2019-10-31 0001764925 2018-08-01 2018-10-31 0001764925 2018-02-01 2018-10-31 0001764925 us-gaap:AdditionalPaidInCapitalMember 2018-05-01 2018-07-31 0001764925 2018-02-01 2018-04-30 0001764925 us-gaap:PreferredStockMember 2018-04-30 0001764925 us-gaap:CommonStockMember 2018-02-01 2018-04-30 0001764925 2018-05-01 2018-07-31 0001764925 work:SeriesH1PreferredStockMember 2018-08-01 2018-10-31 0001764925 us-gaap:AdditionalPaidInCapitalMember 2018-02-01 2018-04-30 0001764925 us-gaap:AdditionalPaidInCapitalMember 2018-08-01 2018-10-31 0001764925 us-gaap:NoncontrollingInterestMember 2018-07-31 0001764925 us-gaap:CommonStockMember 2018-10-31 0001764925 us-gaap:PreferredStockMember 2018-01-31 0001764925 us-gaap:CommonStockMember 2018-08-01 2018-10-31 0001764925 us-gaap:NoncontrollingInterestMember 2018-02-01 2018-04-30 0001764925 us-gaap:AdditionalPaidInCapitalMember 2018-10-31 0001764925 us-gaap:CommonStockMember 2018-01-31 0001764925 us-gaap:SeriesHPreferredStockMember us-gaap:PreferredStockMember 2018-08-01 2018-10-31 0001764925 us-gaap:RetainedEarningsMember 2018-01-31 0001764925 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-08-01 2018-10-31 0001764925 us-gaap:NoncontrollingInterestMember 2018-10-31 0001764925 us-gaap:NoncontrollingInterestMember 2018-05-01 2018-07-31 0001764925 us-gaap:NoncontrollingInterestMember 2018-01-31 0001764925 us-gaap:NoncontrollingInterestMember 2018-04-30 0001764925 us-gaap:AdditionalPaidInCapitalMember 2018-04-30 0001764925 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-04-30 0001764925 us-gaap:RestrictedStockMember us-gaap:CommonStockMember 2018-05-01 2018-07-31 0001764925 us-gaap:CommonStockMember 2018-07-31 0001764925 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-07-31 0001764925 us-gaap:RetainedEarningsMember 2018-02-01 2018-04-30 0001764925 us-gaap:RetainedEarningsMember 2018-07-31 0001764925 us-gaap:PreferredStockMember 2018-07-31 0001764925 2018-04-30 0001764925 us-gaap:RestrictedStockMember us-gaap:CommonStockMember 2018-02-01 2018-04-30 0001764925 us-gaap:CommonStockMember 2018-04-30 0001764925 us-gaap:PreferredStockMember 2018-10-31 0001764925 us-gaap:RetainedEarningsMember 2018-10-31 0001764925 us-gaap:NoncontrollingInterestMember 2018-08-01 2018-10-31 0001764925 2018-10-31 0001764925 us-gaap:RetainedEarningsMember 2018-08-01 2018-10-31 0001764925 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-31 0001764925 us-gaap:AdditionalPaidInCapitalMember 2018-07-31 0001764925 us-gaap:AdditionalPaidInCapitalMember 2018-01-31 0001764925 work:SeriesH1PreferredStockMember us-gaap:PreferredStockMember 2018-08-01 2018-10-31 0001764925 us-gaap:RetainedEarningsMember 2018-05-01 2018-07-31 0001764925 us-gaap:RetainedEarningsMember 2018-04-30 0001764925 2018-01-31 0001764925 us-gaap:CommonStockMember 2018-05-01 2018-07-31 0001764925 us-gaap:SeriesHPreferredStockMember 2018-08-01 2018-10-31 0001764925 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-02-01 2018-04-30 0001764925 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-05-01 2018-07-31 0001764925 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-10-31 0001764925 2018-07-31 0001764925 us-gaap:AdditionalPaidInCapitalMember 2019-02-01 2019-04-30 0001764925 2019-07-31 0001764925 us-gaap:RestrictedStockUnitsRSUMember us-gaap:AdditionalPaidInCapitalMember 2019-08-01 2019-10-31 0001764925 us-gaap:AdditionalPaidInCapitalMember 2019-05-01 2019-07-31 0001764925 us-gaap:RestrictedStockUnitsRSUMember us-gaap:CommonStockMember 2019-05-01 2019-07-31 0001764925 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-04-30 0001764925 us-gaap:RetainedEarningsMember 2019-10-31 0001764925 us-gaap:CommonStockMember 2019-07-31 0001764925 us-gaap:PreferredStockMember 2019-07-31 0001764925 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-10-31 0001764925 2019-05-01 2019-07-31 0001764925 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-31 0001764925 us-gaap:AdditionalPaidInCapitalMember 2019-04-30 0001764925 us-gaap:CommonStockMember 2019-10-31 0001764925 us-gaap:RestrictedStockUnitsRSUMember us-gaap:AdditionalPaidInCapitalMember 2019-05-01 2019-07-31 0001764925 us-gaap:RetainedEarningsMember 2019-02-01 2019-04-30 0001764925 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-05-01 2019-07-31 0001764925 us-gaap:RestrictedStockUnitsRSUMember us-gaap:CommonStockMember 2019-08-01 2019-10-31 0001764925 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-07-31 0001764925 us-gaap:RestrictedStockUnitsRSUMember 2019-05-01 2019-07-31 0001764925 us-gaap:NoncontrollingInterestMember 2019-02-01 2019-04-30 0001764925 us-gaap:CommonStockMember 2019-02-01 2019-04-30 0001764925 us-gaap:NoncontrollingInterestMember 2019-08-01 2019-10-31 0001764925 us-gaap:CommonStockMember 2019-04-30 0001764925 2019-02-01 2019-04-30 0001764925 us-gaap:PreferredStockMember 2019-05-01 2019-07-31 0001764925 us-gaap:AdditionalPaidInCapitalMember 2019-08-01 2019-10-31 0001764925 us-gaap:PreferredStockMember 2019-01-31 0001764925 us-gaap:PreferredStockMember 2019-04-30 0001764925 us-gaap:RestrictedStockUnitsRSUMember 2019-08-01 2019-10-31 0001764925 us-gaap:RetainedEarningsMember 2019-07-31 0001764925 us-gaap:CommonStockMember 2019-01-31 0001764925 us-gaap:CommonStockMember 2019-05-01 2019-07-31 0001764925 us-gaap:NoncontrollingInterestMember 2019-07-31 0001764925 us-gaap:RetainedEarningsMember 2019-04-30 0001764925 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-08-01 2019-10-31 0001764925 us-gaap:PreferredStockMember 2019-10-31 0001764925 us-gaap:NoncontrollingInterestMember 2019-05-01 2019-07-31 0001764925 us-gaap:RetainedEarningsMember 2019-01-31 0001764925 us-gaap:NoncontrollingInterestMember 2019-10-31 0001764925 us-gaap:CommonStockMember 2019-08-01 2019-10-31 0001764925 us-gaap:RetainedEarningsMember 2019-08-01 2019-10-31 0001764925 us-gaap:NoncontrollingInterestMember 2019-01-31 0001764925 us-gaap:AdditionalPaidInCapitalMember 2019-01-31 0001764925 us-gaap:NoncontrollingInterestMember 2019-04-30 0001764925 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-02-01 2019-04-30 0001764925 us-gaap:RetainedEarningsMember 2019-05-01 2019-07-31 0001764925 2019-04-30 0001764925 us-gaap:RestrictedStockMember us-gaap:CommonStockMember 2019-02-01 2019-04-30 0001764925 us-gaap:AdditionalPaidInCapitalMember 2019-10-31 0001764925 us-gaap:AdditionalPaidInCapitalMember 2019-07-31 0001764925 work:DirectListingMember 2019-08-01 2019-10-31 0001764925 work:DirectListingMember 2019-02-01 2019-10-31 0001764925 2019-11-01 2019-10-31 0001764925 2023-11-01 2019-10-31 0001764925 2022-11-01 2019-10-31 0001764925 2020-11-01 2019-10-31 0001764925 2021-11-01 2019-10-31 0001764925 us-gaap:NonUsMember 2019-02-01 2019-10-31 0001764925 country:US 2018-08-01 2018-10-31 0001764925 country:US 2019-02-01 2019-10-31 0001764925 us-gaap:NonUsMember 2018-08-01 2018-10-31 0001764925 country:US 2018-02-01 2018-10-31 0001764925 us-gaap:NonUsMember 2018-02-01 2018-10-31 0001764925 us-gaap:NonUsMember 2019-08-01 2019-10-31 0001764925 country:US 2019-08-01 2019-10-31 0001764925 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateBondSecuritiesMember 2019-10-31 0001764925 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-10-31 0001764925 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2019-10-31 0001764925 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-10-31 0001764925 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-10-31 0001764925 us-gaap:CommercialPaperMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-10-31 0001764925 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateBondSecuritiesMember 2019-10-31 0001764925 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-10-31 0001764925 us-gaap:CommercialPaperMember us-gaap:FairValueMeasurementsRecurringMember 2019-10-31 0001764925 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentDebtSecuritiesMember 2019-10-31 0001764925 us-gaap:MoneyMarketFundsMember us-gaap:FairValueMeasurementsRecurringMember 2019-10-31 0001764925 us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignGovernmentDebtSecuritiesMember 2019-10-31 0001764925 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignGovernmentDebtSecuritiesMember 2019-10-31 0001764925 us-gaap:FairValueMeasurementsRecurringMember 2019-10-31 0001764925 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2019-10-31 0001764925 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember 2019-10-31 0001764925 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateBondSecuritiesMember 2019-10-31 0001764925 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignGovernmentDebtSecuritiesMember 2019-10-31 0001764925 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember 2019-10-31 0001764925 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-10-31 0001764925 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-10-31 0001764925 us-gaap:CommercialPaperMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-10-31 0001764925 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentDebtSecuritiesMember 2019-10-31 0001764925 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember 2019-10-31 0001764925 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2019-10-31 0001764925 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentDebtSecuritiesMember 2019-10-31 0001764925 us-gaap:CommercialPaperMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-10-31 0001764925 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignGovernmentDebtSecuritiesMember 2019-10-31 0001764925 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2019-10-31 0001764925 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentDebtSecuritiesMember 2019-10-31 0001764925 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember 2019-10-31 0001764925 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateBondSecuritiesMember 2019-10-31 0001764925 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2019-01-31 0001764925 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-01-31 0001764925 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignGovernmentDebtSecuritiesMember 2019-01-31 0001764925 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-01-31 0001764925 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-01-31 0001764925 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-01-31 0001764925 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentDebtSecuritiesMember 2019-01-31 0001764925 us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignGovernmentDebtSecuritiesMember 2019-01-31 0001764925 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentDebtSecuritiesMember 2019-01-31 0001764925 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2019-01-31 0001764925 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateBondSecuritiesMember 2019-01-31 0001764925 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember 2019-01-31 0001764925 us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentDebtSecuritiesMember 2019-01-31 0001764925 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2019-01-31 0001764925 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateBondSecuritiesMember 2019-01-31 0001764925 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateBondSecuritiesMember 2019-01-31 0001764925 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentDebtSecuritiesMember 2019-01-31 0001764925 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignGovernmentDebtSecuritiesMember 2019-01-31 0001764925 us-gaap:FairValueMeasurementsRecurringMember 2019-01-31 0001764925 us-gaap:MoneyMarketFundsMember us-gaap:FairValueMeasurementsRecurringMember 2019-01-31 0001764925 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2019-01-31 0001764925 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:ForeignGovernmentDebtSecuritiesMember 2019-01-31 0001764925 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-01-31 0001764925 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember 2019-01-31 0001764925 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-01-31 0001764925 us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember 2019-01-31 0001764925 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CorporateBondSecuritiesMember 2019-01-31 0001764925 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember 2019-01-31 0001764925 srt:WeightedAverageMember work:AssembledWorkforceMember 2019-02-01 2019-10-31 0001764925 work:AssembledWorkforceMember 2019-10-31 0001764925 srt:WeightedAverageMember us-gaap:DevelopedTechnologyRightsMember 2019-02-01 2019-10-31 0001764925 us-gaap:CustomerRelationshipsMember 2019-10-31 0001764925 us-gaap:DevelopedTechnologyRightsMember 2019-10-31 0001764925 srt:WeightedAverageMember us-gaap:CustomerRelationshipsMember 2019-02-01 2019-10-31 0001764925 us-gaap:CorporateBondSecuritiesMember 2019-01-31 0001764925 us-gaap:ForeignGovernmentDebtSecuritiesMember 2019-01-31 0001764925 us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember 2019-01-31 0001764925 us-gaap:CashMember 2019-01-31 0001764925 work:CashMoneyMarketFundsAndCommercialPaperMember 2019-01-31 0001764925 us-gaap:MoneyMarketFundsMember 2019-01-31 0001764925 us-gaap:USGovernmentDebtSecuritiesMember 2019-01-31 0001764925 us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2019-01-31 0001764925 us-gaap:DevelopedTechnologyRightsMember 2018-02-01 2019-01-31 0001764925 us-gaap:DevelopedTechnologyRightsMember 2019-01-31 0001764925 work:AssembledWorkforceMember 2019-01-31 0001764925 us-gaap:CustomerRelationshipsMember 2019-01-31 0001764925 work:AssembledWorkforceMember 2018-02-01 2019-01-31 0001764925 us-gaap:CustomerRelationshipsMember 2018-02-01 2019-01-31 0001764925 country:US us-gaap:PropertyPlantAndEquipmentMember us-gaap:GeographicConcentrationRiskMember 2019-02-01 2019-10-31 0001764925 country:US us-gaap:PropertyPlantAndEquipmentMember us-gaap:GeographicConcentrationRiskMember 2018-02-01 2019-01-31 0001764925 us-gaap:FurnitureAndFixturesMember 2019-10-31 0001764925 us-gaap:ComputerEquipmentMember 2019-10-31 0001764925 us-gaap:LeaseholdImprovementsMember 2019-01-31 0001764925 us-gaap:ConstructionInProgressMember 2019-10-31 0001764925 us-gaap:FurnitureAndFixturesMember 2019-01-31 0001764925 us-gaap:SoftwareDevelopmentMember 2019-10-31 0001764925 us-gaap:ComputerEquipmentMember 2019-01-31 0001764925 us-gaap:SoftwareDevelopmentMember 2019-01-31 0001764925 us-gaap:ConstructionInProgressMember 2019-01-31 0001764925 us-gaap:LeaseholdImprovementsMember 2019-10-31 0001764925 us-gaap:ForeignGovernmentDebtSecuritiesMember 2019-10-31 0001764925 us-gaap:USGovernmentAgenciesDebtSecuritiesMember 2019-10-31 0001764925 work:CashMoneyMarketFundsAndCommercialPaperMember 2019-10-31 0001764925 us-gaap:MoneyMarketFundsMember 2019-10-31 0001764925 us-gaap:USGovernmentDebtSecuritiesMember 2019-10-31 0001764925 us-gaap:CorporateBondSecuritiesMember 2019-10-31 0001764925 us-gaap:CommercialPaperMember 2019-10-31 0001764925 us-gaap:CommercialPaperNotIncludedWithCashAndCashEquivalentsMember 2019-10-31 0001764925 us-gaap:CashMember 2019-10-31 0001764925 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember us-gaap:PrimeRateMember 2019-05-30 2019-05-30 0001764925 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2019-10-31 0001764925 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2019-05-30 0001764925 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2019-05-30 2019-05-30 0001764925 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-05-30 2019-05-30 0001764925 work:SanFranciscoOfficeFacilityMember us-gaap:BuildingMember 2019-10-31 0001764925 work:HostingCommitmentsMember 2018-04-01 2018-04-30 0001764925 work:HostingCommitmentsMember 2019-10-31 0001764925 2019-09-01 2019-09-30 0001764925 work:SanFranciscoOfficeFacilityMember work:RestrictedCashNoncurrentMember 2019-03-31 0001764925 work:SanFranciscoOfficeFacilityMember us-gaap:BuildingMember 2019-03-01 2019-03-31 0001764925 us-gaap:RestrictedStockMember 2019-02-01 2019-10-31 0001764925 us-gaap:RestrictedStockMember 2019-01-31 0001764925 us-gaap:RestrictedStockMember 2019-10-31 0001764925 us-gaap:RestrictedStockUnitsRSUMember 2019-02-01 2019-10-31 0001764925 us-gaap:RestrictedStockUnitsRSUMember 2019-01-31 0001764925 us-gaap:RestrictedStockUnitsRSUMember 2019-10-31 0001764925 us-gaap:ConvertiblePreferredStockMember 2019-06-06 2019-06-06 0001764925 us-gaap:CommonClassBMember 2019-10-31 0001764925 us-gaap:EmployeeStockMember work:A2019EmployeeStockPurchasePlanMember us-gaap:CommonClassAMember 2019-06-06 2019-06-06 0001764925 us-gaap:CommonClassBMember 2019-06-07 0001764925 work:A2019StockOptionAndIncentivePlanMember us-gaap:CommonClassAMember 2019-06-07 0001764925 us-gaap:EmployeeStockMember work:A2019EmployeeStockPurchasePlanMember us-gaap:CommonClassAMember 2019-10-31 0001764925 us-gaap:CommonClassAMember 2019-08-01 2019-10-31 0001764925 us-gaap:EmployeeStockOptionMember 2019-02-01 2019-10-31 0001764925 us-gaap:CommonClassAMember 2019-10-31 0001764925 work:A2019StockOptionAndIncentivePlanMember us-gaap:CommonClassAMember 2019-02-01 2019-10-31 0001764925 us-gaap:EmployeeStockMember work:A2019EmployeeStockPurchasePlanMember us-gaap:CommonClassAMember 2019-02-01 2019-10-31 0001764925 us-gaap:CommonClassAMember 2019-06-07 0001764925 us-gaap:RestrictedStockUnitsRSUMember 2019-06-20 2019-06-20 0001764925 us-gaap:EmployeeStockMember work:A2019EmployeeStockPurchasePlanMember us-gaap:CommonClassAMember 2019-06-06 0001764925 2018-02-01 2019-01-31 0001764925 us-gaap:GeneralAndAdministrativeExpenseMember 2019-02-01 2019-10-31 0001764925 us-gaap:CostOfSalesMember 2019-02-01 2019-10-31 0001764925 us-gaap:GeneralAndAdministrativeExpenseMember 2018-08-01 2018-10-31 0001764925 us-gaap:SellingAndMarketingExpenseMember 2019-02-01 2019-10-31 0001764925 us-gaap:SellingAndMarketingExpenseMember 2018-08-01 2018-10-31 0001764925 us-gaap:ResearchAndDevelopmentExpenseMember 2019-08-01 2019-10-31 0001764925 us-gaap:ResearchAndDevelopmentExpenseMember 2019-02-01 2019-10-31 0001764925 us-gaap:CostOfSalesMember 2018-02-01 2018-10-31 0001764925 us-gaap:ResearchAndDevelopmentExpenseMember 2018-02-01 2018-10-31 0001764925 us-gaap:SellingAndMarketingExpenseMember 2019-08-01 2019-10-31 0001764925 us-gaap:GeneralAndAdministrativeExpenseMember 2019-08-01 2019-10-31 0001764925 us-gaap:CostOfSalesMember 2018-08-01 2018-10-31 0001764925 us-gaap:SellingAndMarketingExpenseMember 2018-02-01 2018-10-31 0001764925 us-gaap:CostOfSalesMember 2019-08-01 2019-10-31 0001764925 us-gaap:GeneralAndAdministrativeExpenseMember 2018-02-01 2018-10-31 0001764925 us-gaap:ResearchAndDevelopmentExpenseMember 2018-08-01 2018-10-31 0001764925 us-gaap:CommonClassAMember 2019-02-01 2019-10-31 0001764925 us-gaap:EmployeeStockMember 2019-02-01 2019-10-31 0001764925 us-gaap:ConvertiblePreferredStockMember 2019-06-07 2019-06-07 0001764925 us-gaap:EmployeeStockMember 2019-02-01 2019-10-31 0001764925 us-gaap:ConvertiblePreferredStockMember 2018-02-01 2018-10-31 0001764925 us-gaap:RestrictedStockUnitsRSUMember 2018-02-01 2018-10-31 0001764925 us-gaap:ConvertiblePreferredStockMember 2019-02-01 2019-10-31 0001764925 us-gaap:EmployeeStockOptionMember 2018-02-01 2018-10-31 0001764925 work:SharebasedPaymentArrangementUnvestedEarlyExercisedOptionMember 2019-02-01 2019-10-31 0001764925 us-gaap:RestrictedStockUnitsRSUMember 2019-02-01 2019-10-31 0001764925 work:SharebasedPaymentArrangementUnvestedEarlyExercisedOptionMember 2018-02-01 2018-10-31 0001764925 us-gaap:EmployeeStockMember 2018-02-01 2018-10-31 0001764925 us-gaap:RestrictedStockMember 2019-02-01 2019-10-31 0001764925 us-gaap:RestrictedStockMember 2018-02-01 2018-10-31 0001764925 us-gaap:EmployeeStockOptionMember 2019-02-01 2019-10-31 xbrli:pure iso4217:USD xbrli:shares iso4217:USD work:lawsuit xbrli:shares work:vote work:plan
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
Form 10-Q
 

(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 2019
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from       to
Commission file number: 001-38926
 
Slack Technologies, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware
26-4400325
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
500 Howard Street
San Francisco, California 94105
(Address of principle executive offices including zip code)

(415) 630-7943
(Registrant’s telephone number, including area code)
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Class A Common Stock, $0.0001 par value per share
WORK
The New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes or No.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes or No.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
 
 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes or  No
There were 291,362,103 shares of the registrant’s Class A common stock outstanding and 259,018,136 shares of the registrant’s Class B common stock outstanding as of November 15, 2019.
 




TABLE OF CONTENTS
 
 
 
 
Page
 
 
 
 
 
 
3
 
 
 
3
 
 
 
4
 
 
 
5
 
 
 
6
 
 
 
8
 
 
 
9
 
 
21
 
 
33
 
 
34
 
 
 
 
 
 
35
 
 
35
 
 
70
 
 
 
71




NOTE ABOUT FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, which are statements that involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “shall,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
our future financial performance, including our revenue, cost of revenue, and operating expenses;
our ability to maintain the security and availability of Slack;
our ability to increase the number of organizations on Slack and paid customers;
our ability to grow or maintain our Net Dollar Retention Rate;
our ability to achieve widespread adoption;
our ability to effectively manage our growth and future expenses;
our ability to maintain our network of partners;
our ability to enhance Slack to respond to new technologies and requirements of organizations on Slack;
our estimated market opportunity;
the future benefits to be derived from new third-party applications and integrations;
our ability to maintain, protect, and enhance our intellectual property;
our ability to comply with modified or new laws and regulations applying to our business;
the attraction and retention of qualified employees and key personnel;
our anticipated investments in sales and marketing and research and development;
the sufficiency of our cash, cash equivalents, and investments to meet our liquidity needs;
our ability to successfully defend litigation brought against us; and
the increased expenses associated with being a public company.
We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.
You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.
The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.

1




_________________

Unless the context requires otherwise, we are referring to Slack Technologies, Inc. together with its subsidiaries when we use the terms the “Company,” “we,” “our,” or “us.”


2



PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SLACK TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 
As of
 
October 31, 2019
 
January 31, 2019
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
476,474

 
$
180,770

Marketable securities
297,632

 
660,301

Accounts receivable, net
84,977

 
87,438

Prepaid expenses and other current assets
58,811

 
54,213

Total current assets
917,894

 
982,722

Restricted cash
38,490

 
20,490

Strategic investments
24,215

 
12,334

Property and equipment, net
109,806

 
88,359

Intangible assets, net
12,104

 
15,203

Goodwill
48,598

 
48,598

Other assets
33,745

 
31,250

Total assets
$
1,184,852

 
$
1,198,956

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
11,159

 
$
16,613

Accrued compensation and benefits
47,029

 
46,151

Accrued expenses and other current liabilities
44,641

 
29,809

Deferred revenue
302,690

 
239,825

Total current liabilities
405,519

 
332,398

Deferred revenue, noncurrent
1,234

 
2,048

Other liabilities
30,868

 
22,904

Total liabilities
437,621

 
357,350

Commitments and contingencies (Note 6)


 


Stockholders’ equity:
 
 
 
Convertible preferred stock

 
1,392,101

Common stock
55

 
13

Additional paid-in-capital
1,879,601

 
105,633

Accumulated other comprehensive loss
13

 
(498
)
Accumulated deficit
(1,147,618
)
 
(665,563
)
Total Slack Technologies, Inc. stockholders’ equity
732,051

 
831,686

Noncontrolling interest
15,180

 
9,920

Total stockholders’ equity
747,231

 
841,606

Total liabilities and stockholders’ equity
$
1,184,852

 
$
1,198,956

See accompanying notes to condensed consolidated financial statements.

3



SLACK TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
 
Three Months Ended October 31,
 
Nine Months Ended October 31,
 
2019
 
2018
 
2019
 
2018
Revenue
$
168,725

 
$
105,648

 
$
448,519

 
$
278,585

Cost of revenue
23,140

 
13,540

 
72,820

 
35,002

Gross profit
145,585

 
92,108

 
375,699

 
243,583

Operating expenses:
 
 
 
 
 
 
 
Research and development
94,853

 
40,990

 
363,725

 
111,582

Sales and marketing
96,210

 
67,687

 
299,440

 
163,408

General and administrative
49,524

 
34,185

 
209,624

 
79,361

Total operating expenses
240,587

 
142,862

 
872,789

 
354,351

Loss from operations
(95,002
)
 
(50,754
)
 
(497,090
)
 
(110,768
)
Other income (expense), net
7,135

 
3,376

 
17,323

 
7,263

Loss before income taxes
(87,867
)
 
(47,378
)
 
(479,767
)
 
(103,505
)
Provision (benefit) for income taxes
(101
)
 
318

 
(504
)
 
753

Net loss
(87,766
)
 
(47,696
)
 
(479,263
)
 
(104,258
)
Net income (loss) attributable to noncontrolling interest
1,395

 
(24
)
 
2,792

 
156

Net loss attributable to Slack
$
(89,161
)
 
$
(47,672
)
 
$
(482,055
)
 
$
(104,414
)
Basic and diluted net loss per share:
 
 
 
 
 
 
 
Net loss per share attributable to Slack common stockholders, basic and diluted
$
(0.16
)
 
$
(0.39
)
 
$
(1.38
)
 
$
(0.86
)
Weighted-average shares used in computing net loss per share attributable to Slack common stockholders, basic and diluted
544,057

 
122,880

 
348,580

 
120,924

See accompanying notes to condensed consolidated financial statements.

4



SLACK TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
(Unaudited)
 
Three Months Ended October 31,
 
Nine Months Ended October 31,
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
Net loss
$
(87,766
)
 
$
(47,696
)
 
$
(479,263
)
 
$
(104,258
)
Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
Change in unrealized income or loss on marketable securities
132

 
(246
)
 
511

 
(465
)
Other comprehensive income (loss), net of tax
132

 
(246
)
 
511

 
(465
)
Comprehensive loss
(87,634
)
 
(47,942
)
 
(478,752
)
 
(104,723
)
Comprehensive income (loss) attributable to noncontrolling interest
1,395

 
(24
)
 
2,792

 
156

Comprehensive loss attributable to Slack
$
(89,029
)
 
$
(47,918
)
 
$
(481,544
)
 
$
(104,879
)
See accompanying notes to condensed consolidated financial statements.

5



SLACK TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)
 
Convertible Preferred Stock
 
Common Stock
 
Additional Paid-In-Capital
 
Accumulated Other Comprehensive Income (Loss)
 
Accumulated Deficit
 
Noncontrolling Interest
 
 Total Stockholders' Equity
 
Shares
 
Amount
 
Shares
 
Amount
 
 
 
 
 
Balance at January 31, 2019
373,372

 
$
1,392,101

 
127,573

 
$
13

 
$
105,633

 
$
(498
)
 
$
(665,563
)
 
$
9,920

 
$
841,606

Exercise of stock options

 

 
2,694

 

 
2,907

 

 

 

 
2,907

Vesting of early exercised stock options

 

 

 

 
88

 

 

 

 
88

Issuance of restricted stock awards (RSAs)

 

 
505

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 
420

 

 

 
420

Stock-based compensation

 

 

 

 
3,639

 

 

 

 
3,639

Net income (loss)

 

 

 

 

 

 
(33,332
)
 
1,451

 
(31,881
)
Balance at April 30, 2019
373,372

 
1,392,101

 
130,772

 
13

 
112,267

 
(78
)
 
(698,895
)
 
11,371

 
816,779

Exercise of stock options

 

 
8,046

 
1

 
6,804

 

 

 

 
6,805

Vesting of early exercised stock options

 

 

 

 
69

 

 

 

 
69

Cancellation of restricted stock awards (RSAs)

 

 
(10
)
 

 

 

 

 

 

Repurchase of early exercised stock options

 

 
(2
)
 

 

 

 

 

 

Conversion of convertible preferred stock to common stock in connection with direct listing
(373,372
)
 
(1,392,101
)
 
373,372

 
37

 
1,392,064

 

 

 

 

Issuance of common stock upon settlement of restricted stock units (RSUs)

 

 
30,388

 
3

 
(3
)
 

 

 

 

Other comprehensive loss

 

 

 

 

 
(41
)
 

 

 
(41
)
Stock-based compensation

 

 

 

 
285,787

 

 

 

 
285,787

Net loss

 

 

 

 

 

 
(359,562
)
 
(54
)
 
(359,616
)
Balance at July 31, 2019

 

 
542,566

 
54

 
1,796,988

 
(119
)
 
(1,058,457
)
 
11,317

 
749,783

Exercise of stock options

 

 
896

 

 
1,345

 

 

 

 
1,345

Vesting of early exercised stock options

 

 

 

 
57

 

 

 

 
57

Issuance of common stock upon settlement of restricted stock units (RSUs)

 

 
5,217

 
1

 
(1
)
 

 

 

 

Issuance of common stock for employee share purchase plan

 

 
336

 

 
7,351

 

 

 

 
7,351

Capital contributions from noncontrolling interest holders

 

 

 

 

 

 

 
3,840

 
3,840

Distributions to noncontrolling interest holders

 

 

 

 

 

 

 
(1,372
)
 
(1,372
)
Other comprehensive income

 

 

 

 

 
132

 

 

 
132

Stock-based compensation

 

 

 

 
73,861

 

 

 

 
73,861

Net income (loss)

 

 

 

 

 

 
(89,161
)
 
1,395

 
(87,766
)
Balance at October 31, 2019

 
$

 
549,015

 
$
55

 
$
1,879,601

 
$
13

 
$
(1,147,618
)
 
$
15,180

 
$
747,231


6



 
Convertible Preferred Stock
 
Common Stock
 
Additional Paid-In-Capital
 
Accumulated Other Comprehensive Income (Loss)
 
Accumulated Deficit
 
Noncontrolling Interest
 
 Total Stockholders' Equity
 
Shares
 
Amount
 
Shares
 
Amount
 
 
 
 
 
Balance at January 31, 2018
337,483

 
$
965,221

 
119,735

 
$
12

 
$
71,885

 
$
(1,089
)
 
$
(524,880
)
 
$
8,139

 
$
519,288

Exercise of stock options

 

 
1,163

 

 
832

 

 

 

 
832

Vesting of early exercised stock options

 

 

 

 
101

 

 

 

 
101

Cancellation of restricted stock awards (RSAs)

 

 
(19
)
 

 

 

 

 

 

Repurchase of early exercised stock options

 

 
(103
)
 

 

 

 

 

 

Other comprehensive loss

 

 

 

 

 
(516
)
 

 

 
(516
)
Stock-based compensation

 

 

 

 
6,118

 

 

 

 
6,118

Net income (loss)

 

 

 

 

 

 
(24,882
)
 
6

 
(24,876
)
Balance at April 30, 2018
337,483

 
965,221

 
120,776

 
12

 
78,936

 
(1,605
)
 
(549,762
)
 
8,145

 
500,947

Exercise of stock options

 

 
1,466

 

 
1,077

 

 

 

 
1,077

Vesting of early exercised stock options

 

 

 

 
93

 

 

 

 
93

Issuance of restricted stock awards (RSAs)

 

 
119

 

 

 

 

 

 

Issuance of Class A common stock to a third party

 

 
900

 

 
6,084

 

 

 

 
6,084

Other comprehensive income

 

 

 

 

 
297

 

 

 
297

Stock-based compensation

 

 

 

 
1,638

 

 

 

 
1,638

Net income (loss)

 

 

 

 

 

 
(31,860
)
 
174

 
(31,686
)
Balance at July 31, 2018
337,483

 
965,221

 
123,261

 
12

 
87,828

 
(1,308
)
 
(581,622
)
 
8,319

 
478,450

Exercise of stock options

 

 
923

 

 
771

 

 

 

 
771

Vesting of early exercised stock options

 

 

 

 
90

 

 

 

 
90

Issuance of Series H preferred stock, net of issuance cost
33,470

 
398,082

 

 

 

 

 

 

 
398,082

Issuance of Series H-1 preferred stock
2,419

 
28,798

 

 

 

 

 

 

 
28,798

Issuance of restricted stock awards (RSAs)

 

 
1,721

 

 

 

 

 

 

Repurchase of early exercised stock options

 

 
(14
)
 

 

 

 

 

 

Other comprehensive loss

 

 

 

 

 
(246
)
 

 

 
(246
)
Stock-based compensation

 

 

 

 
10,515

 

 

 

 
10,515

Net loss

 

 

 

 

 

 
(47,672
)
 
(24
)
 
(47,696
)
Balance at October 31, 2018
373,372

 
$
1,392,101

 
125,891

 
$
12

 
$
99,204

 
$
(1,554
)
 
$
(629,294
)
 
$
8,295

 
$
868,764

See accompanying notes to condensed consolidated financial statements.

7



SLACK TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
Nine Months Ended October 31,
 
2019
 
2018
Cash flows from operating activities:
 
 
 
Net loss
$
(479,263
)
 
$
(104,258
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
Depreciation and amortization
20,419

 
11,227

Loss on disposal of property and equipment

 
2,165

Stock-based compensation
363,287

 
18,271

Amortization of deferred contract acquisition costs
5,522

 
1,965

Net amortization of bond premium on debt securities available for sale
(2,077
)
 
(1,589
)
Change in fair value of strategic investments
(5,791
)
 
(287
)
Other non-cash charges
(742
)
 
500

Changes in operating assets and liabilities:

 
 
Accounts receivable
2,920

 
(12,315
)
Prepaid expenses and other assets
(12,049
)
 
(38,053
)
Accounts payable
1,005

 
9,251

Accrued compensation and benefits
879

 
7,488

Deferred revenue
62,051

 
64,719

Other current and long-term liabilities
20,935

 
17,462

Net cash used in operating activities
(22,904
)
 
(23,454
)
Cash flows from investing activities:
 
 
 
Purchases of marketable securities
(202,895
)
 
(734,778
)
Maturities of marketable securities
402,255

 
479,291

Sales of marketable securities
166,074

 
11,271

Acquisitions of businesses, net of cash acquired

 
(45,313
)
Acquisition of intangible assets

 
(2,382
)
Purchases of property and equipment
(38,276
)
 
(42,704
)
Sales of property and equipment

 
762

Capitalized software development costs

 
(415
)
Purchase of strategic investments
(9,283
)
 
(1,610
)
Proceeds from liquidation of strategic investments
2,858

 
190

Net cash provided by (used in) investing activities
320,733

 
(335,688
)
Cash flows from financing activities:
 
 
 
Proceeds from exercise of stock options
11,612

 
2,637

Payment of contingent consideration for an acquisition
(5,000
)
 

Issuance of common stock for employee stock purchase plan
7,351

 

Net proceeds from issuance of convertible preferred stock

 
426,880

Capital contributions from noncontrolling interest holders
3,840

 

Distributions to noncontrolling interest holders
(1,372
)
 

Issuance of common stock to third party

 
6,084

Other financing activities
(556
)
 
(47
)
Net cash provided by financing activities
15,875

 
435,554

Net increase in cash, cash equivalents and restricted cash
313,704

 
76,412

Cash, cash equivalents and restricted cash at beginning of period
201,260

 
138,063

Cash, cash equivalents and restricted cash at end of period
$
514,964

 
$
214,475

 
 
 
 
Supplemental disclosure of cash flow information:
 
 
 
Cash paid for income taxes
$
1,157

 
$
298

Non-cash investing and financing activities:
 
 
 
Increase in purchases of property and equipment included in liabilities
$
491

 
$
770

Vesting of early exercised stock options
$
214

 
$
194

Unrealized short-term gain on marketable securities
$
686

 
$
219

See accompanying notes to condensed consolidated financial statements.

8



SLACK TECHNOLOGIES, INC.
Notes to Condensed Consolidated Financial Statements
Note 1.    Description of Business and Summary of Significant Accounting Policies
Business
Slack Technologies, Inc. (the “Company” or “Slack”) operates a business technology software platform that brings together people, applications, and data and sells its offering under a software-as-a-service model. The Company was incorporated in Delaware in 2009 as Tiny Speck, Inc. In 2014, the Company changed its name to Slack Technologies, Inc. and publicly launched its current offering. The Company is headquartered in San Francisco, California.
Fiscal Year
The Company’s fiscal year ends on January 31. References to fiscal year 2020, for example, refer to the fiscal year ended January 31, 2020.
Direct Listing
On June 20, 2019, the Company completed a direct listing of its Class A common stock (the “Direct Listing”) on the New York Stock Exchange (“NYSE”). The Company incurred nonrecurring fees related to financial advisory service, audit, and legal expenses in connection with the Direct Listing and recorded $0 and $30.4 million in general and administrative expense for the three and nine months ended October 31, 2019, respectively. Prior to the Direct Listing, all shares of outstanding convertible preferred stock were converted into an equivalent number of shares of Class B common stock.
Basis of Presentation and Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”), regarding interim financial reporting. The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The condensed consolidated financial statements include 100% of the accounts of wholly owned and majority-owned subsidiaries and the ownership interest of minority investors is recorded as noncontrolling interest.
The unaudited condensed consolidated balance sheet as of January 31, 2019 included herein was derived from the audited financial statements as of that date, but does not include all disclosures, including certain notes required by U.S. GAAP on an annual reporting basis. In management's opinion, the unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the balance sheets, statements of comprehensive loss, statements of stockholders’ equity, and statements of cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full fiscal year or any future period.
These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s final prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended, on June 20, 2019, and as amended by the prospectus supplement dated September 5, 2019 (the “Prospectus”).
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. These estimates are based on information available as of the date of the condensed consolidated financial statements. On a regular basis, management evaluates these estimates and assumptions; however, actual results could materially differ from these estimates.
The Company’s most significant estimates and judgments involve revenue recognition, stock-based compensation including the estimation of fair value of common stock, valuation of strategic investments, valuation of acquired goodwill and intangibles from acquisitions, period of benefit for deferred costs, and uncertain tax positions.
Summary of Significant Accounting Policies
The Company’s significant accounting policies are discussed in “Index to Consolidated Financial Statements–Note 1.

9



Description of Business and Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements in its Prospectus. There have been no significant changes to these policies during the three months ended October 31, 2019.
Recently Issued Accounting Standards Not Yet Adopted
In February 2016, the FASB issued ASU No. 2016-02 (Topic 842), Leases, which supersedes the guidance in topic ASC 840, Leases. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The Company will be required to recognize and measure leases existing at, or entered into after, the beginning of the earliest comparative period presented using a modified retrospective approach, with certain practical expedients available. For public companies, Topic 842 is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. The Company has elected to use the extended transition period that allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies under the Jumpstart Our Business Startups Act. For as long as the Company remains an “emerging growth company,” the new guidance is effective for annual reporting periods beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020, and is required to be applied using a modified retrospective approach. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this standard and currently believes the most significant impact upon adoption will be the recognition of material right-of-use assets and lease liabilities on its condensed consolidated balance sheets associated with operating leases. The Company does not believe this standard will have a material impact on its condensed consolidated statements of operations.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments, which requires an entity to utilize a new impairment model known as the current expected credit loss (“CECL”) model to estimate its lifetime “expected credit loss” and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The CECL model is expected to result in more timely recognition of credit losses. This guidance also requires new disclosures for financial assets measured at amortized cost, loans and available-for-sale debt securities. ASU No. 2016-13 is effective for public companies for annual periods beginning after December 15, 2019, including interim periods within those fiscal years. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. The Company is currently evaluating the impact of the adoption of this standard on its condensed consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement, which modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. This standard is effective for all entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company does not believe this standard will have a material impact on its condensed consolidated financial statements.
In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the accounting for implementation costs incurred in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software under ASC 350-40, in order to determine which costs to capitalize and recognize as an asset and which costs to expense. ASU No. 2018-15 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2019, and can be applied either prospectively to implementation costs incurred after the date of adoption or retrospectively to all arrangements. The Company does not believe this standard will have a material impact on its condensed consolidated financial statements.
Note 2.    Revenue and Contract Costs
Contract Balances
Contract liabilities consist of deferred revenue. The Company recognized $116.0 million and $66.9 million during the three

10



months ended October 31, 2019 and 2018, respectively, that was included in deferred revenue balances at the beginning of the respective periods. The Company recognized $195.7 million and $103.0 million during the nine months ended October 31, 2019 and 2018, respectively, that was included in deferred revenue balances at the beginning of the respective periods.
Contract Costs, Net
Sales commissions earned by the Company’s sales force are capitalized as deferred costs within prepaid expenses and other current assets and other assets in the accompanying condensed consolidated balance sheets. Deferred commissions, net, included in prepaid expenses and other current assets were $9.6 million and $5.3 million as of October 31, 2019 and January 31, 2019, respectively. Deferred commissions, net, included in other assets were $19.2 million and $11.9 million as of October 31, 2019 and January 31, 2019, respectively.
Amortized costs are included in sales and marketing expense in the accompanying condensed consolidated statements of operations and were $2.2 million and $0.9 million for the three months ended October 31, 2019 and 2018, respectively, and $5.5 million and $2.0 million for the nine months ended October 31, 2019 and 2018, respectively. There was no impairment loss in relation to the deferred costs for any period presented.
Remaining Performance Obligation
As of October 31, 2019, future estimated revenue related to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period was $279.3 million, of which 55%, 36%, 7%, 1%, and 1% is expected to be recognized in the twelve months ending October 31, 2020, 2021, 2022, 2023, and 2024, respectively.
The Company applies the practical expedient in paragraph 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one year or less, which applies primarily to its monthly and annual subscription contracts.
Disaggregation of Revenue
The following table shows the Company’s revenue by geographic areas, as determined based on the billing address of its customers (in thousands):
 
Three Months Ended October 31,
 
Nine Months Ended October 31,
 
2019
 
2018
 
2019
 
2018
United States
$
105,775

 
$
67,345

 
$
280,838

 
$
177,923

International
62,950

 
38,303

 
167,681

 
100,662

Total
$
168,725

 
$
105,648

 
$
448,519

 
$
278,585


No individual foreign country contributed in excess of 10% of revenue for the three months or nine months ended October 31, 2019 and 2018.
Note 3.    Fair Value Measurements
The Company’s money market funds and sweep account are classified within Level 1 of the fair value hierarchy because they are valued using quoted prices in active markets. The Company’s commercial paper, U.S. agency and government securities, international government securities, certificates of deposit, and corporate bonds are classified within Level 2 of the fair value hierarchy because they have been valued using inputs other than quoted prices in active markets that are observable directly or indirectly. The Company’s strategic investments in privately held companies are classified within Level 3 of the fair value hierarchy because they have been valued using unobservable inputs for which the Company has been required to develop its own assumptions. Realized and unrealized gains and losses relating to the strategic investments are recorded in other income (expense), net in the accompanying condensed consolidated statements of operations.

11



The following table provides the financial instruments measured at fair value on a recurring basis, within the fair value hierarchy (in thousands):
As of October 31, 2019
 
Level 1
 
Level 2
 
Level 3
 
Total
Cash equivalents:
 
 
 
 
 
 
 
 
Money market funds
 
$
327,471

 
$

 
$

 
$
327,471

Commercial paper
 

 
88,814

 

 
88,814

Total cash equivalents
 
$
327,471

 
$
88,814

 
$

 
$
416,285

Marketable securities:
 
 
 
 
 
 
 
 
Commercial paper
 
$

 
$
37,369

 
$

 
$
37,369

U.S. agency securities
 

 
13,995

 

 
13,995

U.S. government securities
 

 
110,008

 

 
110,008

International government securities
 

 
20,327

 

 
20,327

Corporate bonds
 

 
115,933

 

 
115,933

Total marketable securities
 
$

 
$
297,632

 
$

 
$
297,632

Noncurrent assets:
 
 
 
 
 
 
 
 
Strategic investments
 
$

 
$

 
$
24,215

 
$
24,215

As of January 31, 2019
 
Level 1
 
Level 2
 
Level 3
 
Total
Cash equivalents:
 
 
 
 
 
 
 
 
Money market funds
 
$
118,737

 
$

 
$

 
$
118,737

Total cash equivalents
 
$
118,737

 
$

 
$

 
$
118,737

Marketable securities:
 
 
 
 
 
 
 
 
Commercial paper
 
$

 
$
17,462

 
$

 
$
17,462

U.S. agency securities
 

 
44,879

 

 
44,879

U.S. government securities
 

 
370,574

 

 
370,574

International government securities
 

 
36,734

 

 
36,734

Corporate bonds
 

 
190,652

 

 
190,652

Total marketable securities
 
$

 
$
660,301

 
$

 
$
660,301

Noncurrent assets:
 
 
 
 
 
 
 
 
Strategic investments
 
$

 
$

 
$
12,334

 
$
12,334


The following table presents additional information about Level 3 assets measured at fair value on a recurring basis (in thousands):
 
Three Months Ended October 31,
 
Nine Months Ended October 31,
 
2019
 
2018
 
2019
 
2018
Balance at beginning of period
$
17,496

 
$
8,738

 
$
12,334

 
$
7,623

Purchases
3,813

 
710

 
9,283

 
1,610

Proceeds from liquidation

 
(37
)
 
(3,193
)
 
(171
)
Realized gains (losses)
(466
)
 
(363
)
 
2,227

 
(429
)
Unrealized gains relating to investments still held at reporting date
3,372

 
301

 
3,564

 
716

Balance at end of period
$
24,215

 
$
9,349

 
$
24,215

 
$
9,349



12



Note 4.    Balance Sheet Components
Cash, Cash Equivalents, and Marketable Securities
The following tables summarize the amortized cost, unrealized gains and losses, and estimated fair value of cash, cash equivalents, and marketable securities consisting of the following (in thousands):
As of October 31, 2019
 
Amortized
cost
 
Unrealized
gains
 
Unrealized
losses
 
Fair value
Cash and cash equivalents:
 
 
 
 
 
 
 
 
Cash
 
$
60,189

 
$

 
$

 
$
60,189

Money market funds
 
327,471

 

 

 
327,471

Commercial paper
 
88,819

 
5

 
(10
)
 
88,814

Total cash and cash equivalents
 
476,479

 
5

 
(10
)
 
476,474

Marketable securities:
 
 
 
 
 
 
 
 
Commercial paper
 
$
37,365

 
$
7

 
$
(3
)
 
$
37,369

U.S. agency securities
 
13,981

 
19

 
(6
)
 
13,994

U.S. government securities
 
109,777

 
231

 

 
110,008

International government securities
 
20,313

 
15

 

 
20,328

Corporate bonds
 
115,807

 
138

 
(12
)
 
115,933

Total marketable securities
 
297,243

 
410

 
(21
)
 
297,632

Total cash, cash equivalents and marketable securities
 
$
773,722

 
$
415

 
$
(31
)
 
$
774,106

As of January 31, 2019
 
Amortized
cost
 
Unrealized
gains
 
Unrealized
losses
 
Fair value
Cash and cash equivalents:
 
 
 
 
 
 
 
 
Cash
 
$
62,033

 
$

 
$

 
$
62,033

Money market funds
 
118,737

 

 

 
118,737

Total cash and cash equivalents
 
180,770

 

 

 
180,770

Marketable securities:
 
 
 
 
 
 
 
 
Commercial paper
 
17,461

 
1

 

 
17,462

U.S. agency securities
 
44,886

 
7

 
(14
)
 
44,879

U.S. government securities
 
370,498

 
143

 
(67
)
 
370,574

International government securities
 
36,810

 

 
(76
)
 
36,734

Corporate bonds
 
190,944

 

 
(292
)
 
190,652

Total marketable securities
 
660,599

 
151

 
(449
)
 
660,301

Total cash, cash equivalents and marketable securities
 
$
841,369

 
$
151

 
$
(449
)
 
$
841,071


The Company periodically evaluates its investments for other-than-temporary declines in fair value. The unrealized losses on the available-for-sale securities were primarily due to unfavorable changes in interest rates subsequent to the initial purchase of these securities. Gross unrealized losses of the Company’s available-for-sale securities that have been in a continuous unrealized loss position for twelve months or longer were immaterial as of October 31, 2019 and January 31, 2019. The Company expects to recover the full carrying value of its available-for-sale securities in an unrealized loss position as it does not intend or anticipate a need to sell these securities prior to recovering the associated unrealized losses. As a result, the Company does not consider any portion of the unrealized losses as of October 31, 2019 or January 31, 2019 to represent an other-than temporary impairment or credit losses.

13



The following table classifies marketable securities by contractual maturities (in thousands):
 
As of
 
October 31, 2019
 
January 31, 2019
Due in one year
$
242,512

 
$
506,297

Due in one to two years
55,120

 
154,004

Total
$
297,632

 
$
660,301


Property and Equipment, Net
The following is a summary of the Company’s property and equipment by category (in thousands):
 
As of
 
October 31, 2019
 
January 31, 2019
Leasehold improvements
$
92,917

 
$
86,258

Furniture and fixtures
26,229

 
19,693

Capitalized internal-use software costs
4,241

 
4,241

Computer equipment
3,093

 
2,222

Construction in progress
19,331

 
6,076

Property and equipment, gross
145,811

 
118,490

Less: accumulated depreciation and amortization
(36,005
)
 
(30,131
)
Property and equipment, net
$
109,806

 
$
88,359


As of October 31, 2019 and January 31, 2019, property and equipment, net attributed to United States were 83% and 87%, respectively, of total property and equipment, net. There was no individual foreign country with an excess of 10% of total property and equipment, net as of October 31, 2019 or January 31, 2019.
Depreciation and amortization expense was $6.7 million and $3.9 million for the three months ended October 31, 2019 and 2018, respectively. Depreciation and amortization expense was $17.3 million and $10.5 million for the nine months ended October 31, 2019 and 2018, respectively.
Intangible Assets, Net
Intangible assets consist of the following (in thousands):
October 31, 2019
 
Weighted-average
remaining
amortization period
 
Gross carrying
amount
 
Accumulated
amortization
 
Net carrying
amount
Customer relationships
 
5.7 years
 
$
9,100

 
$
1,679

 
$
7,421

Developed technology
 
1.8 years
 
8,527

 
4,418

 
4,109

Assembled workforce
 
1.0 year
 
1,198

 
624

 
574

Total
 
 
 
$
18,825

 
$
6,721

 
$
12,104

January 31, 2019
 
Weighted-average
remaining
amortization period
 
Gross carrying
amount
 
Accumulated
amortization
 
Net carrying
amount
Customer relationships
 
6.5 years
 
$
9,100

 
$
704

 
$
8,396

Developed technology
 
2.6 years
 
8,527

 
2,743

 
5,784

Assembled workforce
 
1.7 years
 
1,198

 
175

 
1,023

Total
 
 
 
$
18,825

 
$
3,622

 
$
15,203


Amortization expense of intangible assets was $1.0 million and $0.7 million for the three months ended October 31, 2019 and 2018, respectively. Amortization expense of intangible assets was $3.1 million and $0.8 million for the nine months ended October 31, 2019 and 2018, respectively.

14



As of October 31, 2019, expected amortization expense relating to intangible assets for each of the next five fiscal years and thereafter is as follows (in thousands):
Year ending January 31,
 
2020 (3 months remaining)
$
1,033

2021
3,957

2022
2,618

2023
1,300

2024
1,300

Thereafter
1,896

Total
$
12,104


Note 5.    Revolving Credit Facility
On May 30, 2019, the Company entered into a $215.0 million revolving credit and guaranty agreement with a syndicate of financial institutions. The revolving credit facility has an accordion option, which, if exercised, would allow the Company to increase the aggregate commitments by up to the greater of $200.0 million and 100% of the consolidated adjusted EBITDA of the Company and its subsidiaries, plus an unlimited amount subject to satisfaction of certain leverage ratio based compliance tests after giving effect to the exercise, in each case subject to obtaining additional lender commitments and satisfying certain conditions. Pursuant to the terms of the revolving credit facility, the Company may issue letters of credit under the revolving credit facility, which reduce the total amount available for borrowing under such facility. The revolving credit facility terminates on May 30, 2024.
Interest on borrowings under the revolving credit facility accrues at a variable rate tied to the prime rate or the LIBOR, plus the applicable margin, at the Company’s election. The margin is 0.25% in the case of prime rate loans and 1.25% in the case of LIBOR loans. Interest is payable quarterly in arrears. Pursuant to the terms of the revolving credit facility, the Company is required to pay an annual commitment fee that accrues at a rate of 0.10% per annum on the unused portion of the borrowing commitments under the revolving credit facility. In addition, the Company is required to pay a fee in connection with letters of credit issued and outstanding under the revolving credit facility that accrues at a rate of 1.25% per annum on the amount to be drawn under such letters of credit outstanding. There is an additional fronting fee of 0.125% per annum multiplied by the aggregate face amount of issued and outstanding letters of credit.
The revolving credit facility contains customary conditions to borrowing, events of default, and covenants, including covenants that restrict the Company’s and its subsidiaries’ ability to, among other things, incur additional indebtedness, create or incur liens, merge or consolidate with other companies, sell substantially all of the Company’s assets, liquidate or dissolve, make distributions to the Company’s equity holders or its subsidiaries’ equity interests, pay dividends, make redemptions and repurchases of stock, or engage in transactions with affiliates. In addition, the revolving credit facility contains financial covenants, including a minimum liquidity balance and a minimum revenue amount. The Company has been in compliance with all covenants under the revolving credit facility since it entered into the revolving credit and guaranty agreement on May 30, 2019.
As of October 31, 2019, the Company had no amounts or letters of credit issued and outstanding under the revolving credit facility. The Company’s total available borrowing capacity under the revolving credit facility was $215.0 million as of October 31, 2019.
Note 6.    Commitments and Contingencies
Lease Commitments
The Company has entered into various noncancelable operating leases for its facilities expiring between fiscal years 2020 and 2031. Certain operating leases contain provisions under which monthly rent escalates over time. When lease agreements contain escalating rent clauses or free rent periods, the Company recognizes rent expense on a straight-line basis over the term of the lease.
In March 2019, the Company entered into a noncancelable operating lease for an office facility in San Francisco, California. In connection with entering into the lease agreement, the Company made a security deposit of $18.0 million in the form of a standby letter of credit, which is included in restricted cash as of October 31, 2019. The lease term is from March 2019 through June 2030, with future minimum lease payments of $165.8 million. The Company is entitled to receive tenant improvement

15



reimbursements not to exceed $25.4 million. In September 2019, the Company entered into an amendment that would provide an additional free rent period in the event the Company’s access to certain floors is delayed.
Rent expense, net of sublease income, was $9.3 million and $7.6 million for the three months ended October 31, 2019 and 2018, respectively. Rent expense, net of sublease income, was $26.3 million and $19.6 million for the nine months ended October 31, 2019 and 2018, respectively.
Future minimum lease payments under noncancelable operating leases that have initial terms in excess of one year as of October 31, 2019 are as follows (in thousands):
Year ending January 31,
 
2020 (3 months remaining)
$
8,758

2021
33,284

2022
40,804

2023
41,126

2024
40,506

Thereafter
231,750

Total
$
396,228


Hosting Commitments
In April 2018, the Company executed an amendment to its existing agreement with Amazon Web Services (“AWS”). The amended agreement was effective as of May 1, 2018 and continues through July 31, 2023. The Company has minimum annual commitments of $50.0 million each year of the agreement term for a total minimum commitment of $250.0 million. As of October 31, 2019, the Company had a remaining minimum payment obligation of $175.0 million to AWS through July 31, 2023.
Legal Matters
The Company records a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company also discloses material contingencies when it believes a loss is not probable but reasonably possible. Accounting for contingencies requires the Company to use judgment related to both the likelihood of a loss and the estimate of the amount or range of loss. The outcomes of the Company’s legal proceedings are inherently unpredictable and subject to significant uncertainties. For some matters for which a material loss is reasonably possible, an estimate of the amount of loss or range of losses is not possible, nor is the Company able to estimate the loss or range of losses that could potentially result from the application of non-monetary remedies. Many legal and tax contingencies can take years to be resolved. Until the final resolution of legal matters, all amounts of loss or range of losses are estimates only. The final losses the Company incurs may differ materially from these estimates.
Beginning in September 2019, seven purported class action lawsuits were filed against the Company, its directors, certain of its officers, and certain investment funds associated with certain of its directors, each alleging violations of securities laws in connection with the Company’s registration statement on Form S-1 filed with the SEC. The Company believes these lawsuits are without merit and intends to vigorously defend them. Based on the preliminary nature of the proceedings in these cases, the outcome of these matters remains uncertain.
In addition, the Company is involved from time to time in various claims and legal actions arising in the ordinary course of business. While it is not feasible to predict or determine the ultimate outcome of these matters, the Company believes that none of these ordinary course legal proceedings will have a material adverse effect on its condensed consolidated financial statements.
Indemnification Agreements
In the ordinary course of business, the Company provides indemnifications of varying scope and terms to customers, business partners, vendors, lessors, investors, directors, officers, employees, and other parties with respect to certain matters. Indemnification may include losses from the Company’s breach of such agreements, intellectual property infringement claims made by third parties, and other liabilities relating to or arising from Slack, or the Company’s acts or omissions. These indemnifications may survive termination of the underlying agreement and the maximum potential amount of future indemnification payments may not be subject to a cap. It is not possible to determine the maximum potential loss under these indemnifications due to the Company’s limited history of prior indemnification claims and the unique facts and circumstances involved in each particular indemnification. The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnifications as of October 31, 2019. As of October 31, 2019 and January 31, 2019, no material amounts were accrued.

16




Note 7.    Stockholders Equity
Common Stock
On June 7, 2019, the Company amended and restated its certificate of incorporation to authorize 5,000,000,000 shares of Class A common stock and 700,000,000 shares of Class B common stock. Holders of Class A common stock and Class B common stock are entitled to dividends on a pro rata basis, when, as, and if declared by the Company’s board of directors, subject to preferences that may apply to any shares of preferred stock outstanding at the time. Holders of Class A common stock are entitled to one vote per share, and holders of Class B common stock are entitled to ten votes per share. Upon a liquidation, dissolution or winding-up of the Company, any distribution of proceeds to common stockholders will be made on a pro rata basis to the holders of Class A common stock, Class B common stock and any participating preferred stock outstanding at that time, subject to prior satisfaction of all outstanding debt and liabilities and the preferential rights of and the payment of liquidation preferences, if any, on any outstanding shares of preferred stock. Shares of Class B common stock will automatically convert into shares of Class A common stock upon a sale or transfer (other than with respect to certain estate planning and other transfers). All shares of Class B common stock outstanding in June 2029 will automatically convert into shares of Class A common stock. Class A common stock and Class B common stock is not redeemable at the option of the holder. As of October 31, 2019, 289.9 million