There has never been a better time for Slack Technologies (WORK) collaboration software, but the stock has been a disappointment for early investors. It has trailed the S&P 500 since it went public a little more than a year ago. 

WORK Chart

Stock prices from April 26, 2019, to June 10, 2020. WORK data by YCharts

The messaging platform turned in a stellar quarter fueled by accelerated remote work arrangements, bolstering the bull argument. But ardent bears point to a premium-priced stock and a company that's fighting a reigning digital-office king, Microsoft, which is gaining traction with its popular Teams product. 

Let's look at the most recent results, what investors can be excited about for the future, and discuss whether this tech stock is a buy today.

Slack is growing by every measure 

The messaging platform turned in an impressive quarter. A record 90,000 new customers (both free and paid) joined, eclipsing the number of new customer adds for the entire previous year. Paid customers grew 28% year over year to 122,000, and large customers with over $100,000 in annual contract value now make up 49% of the top line.

Paid customer growth of 37% year over year drove a solid 50% increase in the top line over last year. The revenue growth result is a slight uptick from the previous quarter's 49% growth, but overall growth is gradually slowing as the company gets bigger. This quarter's result is the second-lowest year-over-year growth number the company has posted in the last 10 quarters. But even so, it beat guidance by $15 million to reach a record $202 million in quarterly revenue. This growth helped operational cash flow land in positive territory for the second quarter in a row and provided the first free-cash-flow-positive quarter since going public.

Platform usage numbers have skyrocketed. Active minutes per day usage increased 41% over the previous quarter to over 120 minutes. Average hours connected per day are now in the double digits. The number of customers using shared channels -- channels set up between two or more paying customers -- has doubled over the past three quarters to more than 41,000. Additionally, net dollar retention remains strong at 136% for the quarter.

Woman using mobile device with symbols overlaid for email, global internet, and other applications.

Image source: Getty Images.

Lastly, Slack announced a sweet strategic partnership with Amazon and its Web Services (AWS) segment that makes AWS the preferred cloud platform for Slack and offers many other benefits. The partnership gives Slack credibility as an enterprise-grade solution to better compete against its larger and more established rival. As a bonus, Amazon has become a customer, adopting the messaging platform across its enterprise.

But management knows that one quarter doesn't make a trend. They are looking to take advantage of heightened interest in digital transformation.

Capitalizing on the moment

Increased engagement due to remote work situations has given legitimacy to Slack's platform. Customers are now seeing the benefits of the app's ability to not only replace email, but also to integrate with over 2,200 software apps. Slack is the hub of the digital office.

What's exciting for investors is that management is prepared to invest heavily in the current work-from-home trend to capture customers. CEO Stewart Butterfield indicated that he's seeing "a generational shift ... [in] how the world works ... " and the "secular trends are very clear in our view. So we'll continue to invest."

CFO Allen Shim further emphasized the gravity of what's happening in the marketplace: 

So in terms of what we do with that money [raised through a recent offering], it's because we see an opportunity here, an unprecedented once in a lifetime opportunity here to really lean into where this category is now becoming much larger and much more important, much more relevant here. And that's an opportunity that we have a responsibility to really invest into as well as [how] we see our customers.

Slack is investing in three priorities for the coming year: enterprise growth, accelerating the small- and medium-business self-service model, and growing its shared channels feature. These key initiatives could help accelerate adoption over the coming year and keep Slack relevant in its fight against its deep-pocketed competitor.

So where does that leave investors?

Investing in the future of the digital office

Organizations are hungry for tools that help remote employees be more productive and collaborative. They also want workers to feel more engaged with the larger organization. Slack checks all these boxes, and does so way better than the 50-year-old email technology it's working to replace. Investors should be excited about solid growth, increasing user engagement, and management's commitment to capitalizing on the current tailwinds. Even with its recent post-earnings pullback, it carries a lofty price-to-sales ratio of 26.

But this company's got a lot going for it. If you don't mind taking a little risk on a scrappy upstart with an exceptional product and a solid management team that isn't scared of its heavyweight competitor, this stock is a buy. Even so, with the pivotal year ahead, investors may want to buy in thirds or wait several quarters to see how management performs on its growth priorities before jumping in.

Regardless, the long-term opportunity to replace email with a cloud-based remote-enabled collaboration tool is huge--big enough for both Slack and Microsoft.