Atlassian co-founders Mike Cannon-Brookes and Scott Farquhar
Atlassian shares soared as much as 12% after the collaboration software maker reported better quarterly sales than analysts had expected while delivering consensus on earnings.
Here’s how the company did it:
- Merits: 27 cents per share, adjusted vs. 27 cents per share as expected by analysts, according to Refinitiv.
- Revenue: $760 million vs. $724 million as expected by analysts, according to Refinitiv.
According to a statement, revenue rose 36% year over year for the quarter ended June 30. The company reported a net loss of $105.5 million, down from a loss of $213.1 million in the same quarter last year. A 14-day outage in April drove up operating costs, the company said.
Atlassian said it had 242,623 customers at the end of the quarter, more than the consensus of 242,300 among analysts polled by StreetAccount.
Scott Farquhar and Mike Cannon-Brookes, Atlassian’s CEOs, offered upbeat comments on the company’s prospects in the current economy in a letter to investors.
“We’ve observed over the years that developers tend to be the last roles companies take back,” they wrote. “We believe this will continue to be true, especially for the overwhelming number of companies undergoing digital transformation. Second, while Atlassian is a relatively small line item in overall IT budgets, despite the fact that our products outweigh their weight in terms of value, Atlassian is probably not there, as customers are trying to cut costs.”
They said customers wouldn’t save money by switching because Atlassian’s products already cost less than the competition. The CEOs reiterated their previous guidance of 50% cloud revenue growth in fiscal years 2023 and 2024.
Atlassian’s quarterly guidance calls for more revenue than analysts had predicted. Management was calling for adjusted net income of 37 to 38 cents a share on sales of $795 to $810 million for the fiscal first quarter. Analysts polled by Refinitiv had expected adjusted earnings per share of 37 cents and revenue of $773.5 million.
The company said it has hired Joe Binz, a former corporate vice president at Microsoft, as its new chief financial officer. Farquhar served as interim chief financial officer following the departure of James Beer, who retired in June after four years.
Atlassian benefited from hiring during the 2008-2009 recession and is now taking a similar approach, Cannon Brookes said in a conference call with analysts. “We believe we have tremendous opportunities ahead of us in all three of our markets,” he said. The statement said Atlassian will “continue to play the offensive” against talent in fiscal 2023.
Regardless of the after-hours move, Atlassian’s shares are down about 40% so far this year, trailing the U.S. S&P 500 stock index, which is down 13% over the same period.
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