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If it's a few pennies for month how are their operating expenses greater than their revenue? Have you even looked at their public filing or are you just making

If it's a few pennies for month how are their operating expenses greater than their revenue? Have you even looked at their public filing or are you just making assumptions?

btown 7y ago
Cost of revenue was $51mm this year for 10mm active users, so $5/user. Per their S-1 https://www.sec.gov/Archives/edgar/data/1764925/000162828019004786/slacks-1.htm#s8d6204acc583485eb9f4e9bf211b5e4a https://www.sec.gov/Archives/edgar/data/1764925/000162828019... : "Cost of revenue consists primarily of expenses related to hosting Slack and providing ongoing customer support for paid customers. These expenses include employee compensation (including stock-based compensation) and other employee-related expenses for customer experience and technical operations staff, payments to outside service providers, third-party hosting costs, payment processing fees, and amortization expense associated with internally-developed and purchased technology. We expect our cost of revenue to continue to increase in absolute dollar amounts as we grow our business and revenue." That amortization could be significant; it's likely that they're not spending $5 in hosting and devops alone. It may not be pennies, but it's way less than the cost of a car.
erikpukinskis 7y ago
Because they’re paying 1000 engineers to shoot for the moon, to justify the next valuation. In a fancy office. To service their order book, they just need a skeleton crew. And the order book should be the bottom line for the bulk of investors.
- icedchai 7y ago
  It looks like sales and marketing is costing more than engineering.
- BubRoss 7y ago
  You say that, but Twitter has many thousands of employees. They could be much more profitable if they weren't paying enormous amounts of money (for what end I have no idea, the site seems to always be getting less reliable and more bloated).
- chrisco255 7y ago
  1000 employees generating close to $1 billion in revenue. That's why software devs make the big bucks: economies of scale.
  - kurthr 7y ago
    Pfftht... only a million $ in revenue per employee? That's hardware level ROI. Software can be a lot more!
    - track_me_now 7y ago
      valve @ $2M per employee was always considered about the best you can do, long term, at scale.

If it's a few pennies for month how are their operating expenses greater than their revenue? Have you even looked at their public filing or are you just making assumptions?

btown 7y ago

Cost of revenue was $51mm this year for 10mm active users, so $5/user. Per their S-1 https://www.sec.gov/Archives/edgar/data/1764925/000162828019004786/slacks-1.htm#s8d6204acc583485eb9f4e9bf211b5e4a https://www.sec.gov/Archives/edgar/data/1764925/000162828019... : "Cost of revenue consists primarily of expenses related to hosting Slack and providing ongoing customer support for paid customers. These expenses include employee compensation (including stock-based compensation) and other employee-related expenses for customer experience and technical operations staff, payments to outside service providers, third-party hosting costs, payment processing fees, and amortization expense associated with internally-developed and purchased technology. We expect our cost of revenue to continue to increase in absolute dollar amounts as we grow our business and revenue." That amortization could be significant; it's likely that they're not spending $5 in hosting and devops alone. It may not be pennies, but it's way less than the cost of a car.

erikpukinskis 7y ago

Because they’re paying 1000 engineers to shoot for the moon, to justify the next valuation. In a fancy office. To service their order book, they just need a skeleton crew. And the order book should be the bottom line for the bulk of investors.

icedchai 7y ago
It looks like sales and marketing is costing more than engineering.
BubRoss 7y ago
You say that, but Twitter has many thousands of employees. They could be much more profitable if they weren't paying enormous amounts of money (for what end I have no idea, the site seems to always be getting less reliable and more bloated).
chrisco255 7y ago
1000 employees generating close to $1 billion in revenue. That's why software devs make the big bucks: economies of scale.
- kurthr 7y ago
  Pfftht... only a million $ in revenue per employee? That's hardware level ROI. Software can be a lot more!
  - track_me_now 7y ago
    valve @ $2M per employee was always considered about the best you can do, long term, at scale.