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Slack Technologies Inc. easily beat earnings expectations for its first quarter since going public, but its guidance for the next quarter and full year came in lighter than expected, causing its stock to plunge more than 13% in after-hours trading.

Update: Shares were down only 4% in Thursday trading, on a day when the overall market was rising about 1.5%.

The workplace collaboration software company reported a second-quarter loss before certain costs such as stock compensation of 14 cents per share on revenue of $145 million. Wall Street had forecast a wider loss of 18 cents per share on revenue of $140.7 million.

That was a good start but investor’s enthusiasm for Slack waned quickly on lower-than-expected guidance. The company said it’s expecting a third quarter loss of between 8 and 9 cents per share on revenue of $154 million to $156 million. Analysts had forecast a loss of 7 cents on revenue of $153 million.

Guidance for the full year also came up light. Slack said it’s expecting a loss of 40 to 42 cents on revenue of $603 million to $610 million. Analysts were expecting a full-year loss of 40 cents per share on $601 million in revenue.

“A reduction in outlook is not something shareholders hope for in a recent IPO, especially when the company in question appears to be looking at future quarters in the red,” said Charles King of Pund-IT Inc. “As Slack, and many other businesses in the past have learned, the margin for error becomes much finer after a company becomes a public entity.”

Slack made its debut on the New York Stock exchange in June via a direct listing. Its biggest competitor is Microsoft Corp., which offers the Teams work chat app through its Office 365 suite.

In July Microsoft claimed it was winning the battle against Slack, releasing statistics that show Teams is the more popular service, with 13 million daily active users. Slack last claimed it had 10 million daily active users in January, but hasn’t updated that count since — and it didn’t do so today either.

One thing Slack did say today, however, is that it ended the quarter just gone with more than 100,000 paid customers, up 37% from a year ago. It added that 720 of those customers had signed contracts worth more than $100,000 in annual revenue.

“Slack helps enterprises to achieve what ultimately matters, namely enterprise acceleration and faster and more agile processes,” said Holger Mueller, an analyst with Constellation Research Inc. “Meeting people where they do work is a new enterprise software usage paradigm that appeals for many processes. As long as Slack can grow in the 50% range, it has the necessary escape velocity to stay ahead of the chasing pack off traditional enterprise productivity tool vendors.”

Slack’s revenue also took an $8.2 million hit because of credits it doled out to customers following two service disruptions in the last quarter. The company offers credits for future use to its customers whenever its uptime falls below 99.9%.

Slack Chief Executive Officer Stewart Butterfield promised investors during a conference call the company was working hard to eliminate such disruptions. “This is a big area of investment,” Butterfield said. “We’ve made some great hires on the infrastructure side.”

Photo: Slack