Stewart Butterfield, CEO of work collaboration tool Slack, has given social media an inside look at last week’s fourth-quarter earnings call through a string of updates on Twitter.
The 40-odd posts – published simultaneously in what is known as a tweetstorm – catalogue Butterfield’s thoughts and actions over the last two weeks as he led his company through the growing spread of Covid-19.
Slack has seen user levels soar since the outbreak of coronavirus, which has forced millions around the world to switch to remote working. But the company’s results, released on March 12, disappointed investors with a slowdown in revenue growth and weak guidance for the first quarter, causing the share price to fall 20 percent in after-hours trading.
The tweets, which follow a chronological timeline, initially focus on Slack’s reaction to the growing number of coronavirus cases in the US and elsewhere. As concern over the virus grew, Butterfield says Slack decided to bring in travel restrictions and cancel a major sales event for 800 staff.
He notes how one customer – a major investment firm – signed up for Slack across the board just before battening down the hatches due to coronavirus.
I get an email from the CTO of one of the world's biggest asset managers telling me (a) they’re signing the contract to go wall-to-wall on Slack and (b) this was one of the last big purchases before tightening up due to coronavirus concerns. First time I'd seen that in the wild.
— Stewart Butterfield (@stewart) March 26, 2020
Later, the focus of the thread turns to the upcoming earnings call. Four days before the announcement, the Slack team headed for New York.
We regroup, revise the script and adjust guidance as the CEO/CFO/IR/Comms crew heads to NYC. Driver from the airport tells me business is down by half, he’s behind on rent and his brother just got laid off from his hotel job, along with 50% of the staff. Darkening clouds.
— Stewart Butterfield (@stewart) March 26, 2020
The day before earnings, Butterfield prepped for the call and subsequent media appearances. He praises his team’s ‘off-the-wall’ practice questions. He also reveals how a late-night chat between senior management, the general counsel and IR led to a last-minute change to the guidance.
Just after 10pm, the CFO, GC & VP IR and I are discussing. Inside of an hour we go from “the last 24 hours of activity does not warrant any further conservatism” to “we need to adjust guidance one more time.” In the next 24 hours we would be asked about this dozens of times.
— Stewart Butterfield (@stewart) March 26, 2020
In the tweets, Butterfield includes a message he sent to all staff on the day of the earnings call. It begins with a joke: he says when he took over the company, the previous CEO handed him a sealed envelope that said: ‘Only open in the event you have to do an earnings call in a market that has dropped 25 percent in the last week.’
The staff message reminded employees that ‘people get scared’ during market shocks but that the company was doing vital work to help people through the Covid-19 outbreak. ‘Every thing we’re doing matters,’ he wrote.
A couple of tweets in particular focus on the difficulty of guiding the market amid such huge uncertainty.
We want to be “reasonable” and “prudent” and earn the trust of analysts and investors over time by being honest and straightforward.
— Stewart Butterfield (@stewart) March 26, 2020
But we literally have no idea what is going to happen and neither does anyone else, really. The error bars on any prediction will be miles wide.
Butterfield’s posts highlight the difficult decisions facing thousands of companies as they approach their next results announcement. A survey by PwC conducted on March 11, the day before Slack’s earnings call, finds 44 percent of CFOs considering adjusting guidance as a result of Covid-19.
While the earnings call saw the stock fall, the tweetstorm led to a pop. Included in the posts were updated metrics on Slack’s users that showed a sharp rise in paying customers during March. Given the market-moving nature of the tweets, Slack also posted a press release containing the data to its IR website.
Twitter accounts are common among tech CEOs, but the platform is less popular for corporate chiefs across all industries. Just over half (54 percent) of Fortune 500 CEOs have a social media presence of some kind, according to a study last year by digital consultancy Influential Executive. The most-used platform among the CEOs is LinkedIn (50 percent have a profile), followed by Twitter (14 percent), finds the research.
Read Butterfield’s full thread of tweets on his Twitter profile.
