Slack's service went down for about 2 hours last quarter — and it cost $8 million in sales

Richard Drew/Associated PressSlack CEO Stewart Butterfield.

  • Slack missed out on $US8 million in revenue last quarter after its work communications platform went down for about two hours over the course of 92 days.
  • The collaboration software group awarded $US8.2 million worth of credits to users after it only managed 99.9% service uptime – short of its 99.99% commitment.
  • “Those policies are outrageously customer-centric,” CEO Steward Butterfield said on the group’s earnings call.
  • Watch Slack trade live.

Slack missed out on $US8 million in revenue last quarter after its work communications platform went down for about two hours over the course of 92 days.

The collaboration software group, which went public in June, awarded $US8.2 million worth of credits to users after it only managed 99.9% service uptime in the three months to July 31 – short of its 99.99% commitment.

“Service-level disruption of this magnitude is unusual for us,” finance chief Allen Shim said on Slack’s earnings call this week.

Slack’s revenue jumped 58% to $US145 million last quarter. Without the credit payouts, it would have increased by 66%, Shim said. Coupled with soaring research and marketing costs and a sharp increase in overheads, Slack’s pre-tax losses mushroomed more than 10-fold to about $US364 million.

The group proactively awarded credits to all customers, regardless of whether they requested them or were affected by the outages, CEO Stewart Butterfield said on the call. “Those policies are outrageously customer-centric,” he added.

Unsurprisingly, Slack has now tempered the “exceptionally generous” policy to reduce the risk of large hits to revenue in the future, Shim said.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.