Investors hammer Atlassian over missed results and weak outlook

Investors hammered shares of Atlassian Corp. PLC after-hours trading after the Australian software company missed its earnings forecast and gave a weaker-than-expected outlook by analysts.

For its fiscal quarter ended Sept. 30, Atlassian reported net income of $92.5 million, or 36 cents per diluted share, compared with $94.4 million, or 37 cents in the same quarter a year ago. Revenue rose 31% to $807.4 million. Analysts had was waiting earnings per share of 38 cents on revenue of $806.4 million.

Atlassian added 6,550 new customers during the quarter, its 10th quarter of customer growth, bringing its total number of customers to 249,173. However, the total number was below the expected 250,700 customers. Slowing growth was a recurring theme throughout Atlassian’s strategy. letter to shareholderswith co-founders and co-CEOs Mike Cannon-Brookes and Scott Farquhar warning that Atlassian is not immune to the broader macro market.

The two said Atlassian continued to see a slower rate of free usage of its software converted to paid plans and began to see a slower rate of growth in paid seats from existing customers as companies slow their pace. hiring.

Highlights of the quarter include the launch of Atlassian Together, a unique new subscription to its work management products Trello, Confluence, Atlas and Jira Work Management. The subscription service includes Access, an enterprise-grade identity and access solution that connects Atlassian products to third-party vendors.

The company also has launched the Atlas, a new teamwork directory designed to help organizations ensure alignment across teams, apps, and work, no matter what tools their teams use. A new partnership with Accenture PLC would also help companies adopt agile ways of working.

Although still headquartered in Australia, Atlassian changed its headquarters from the UK to the US during the quarter, resulting in its transition to new accounting standards. The move is said to increase access to a wider set of investors and provide more flexibility in accessing capital.

For its fiscal 2023 second quarter ending Dec. 31, Atlassian forecasts revenue of $835 million to $855 million. Analysts expected $879.2 million. The outlook also comes with a disclaimer that it is based on current macroeconomic conditions that do not change. Given the deteriorating global outlookit’s unlikely.

After plunging more than 25% late in the session, Atlassian stock stabilized somewhat and fell nearly 23%.

Photo: Atlassian

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