atlassian Shares rose more than 29% on Friday after the company reported strong cloud growth and data center revenue, beating Wall Street expectations for its fiscal third quarter.
Here’s how LSEG’s estimates compare to the company’s performance.
Earnings per share: $1.75 adjusted vs. $1.32 expected Sales: $1.79 billion vs. $1.69 billion expected
Atlassian stock has been hit hardest by the SaaS apocalypse this year, with shares down more than 45% year-to-date.
The phrase refers to the decline in technology stocks after companies like OpenAI and Anthropic released software built on artificial intelligence models. Software executives responded by saying core business metrics had not deteriorated.
Atlassian laid off about 10% of its workforce, or about 1,600 people, in March, saying the move “will enable us to self-fund further investments in AI and enterprise sales while strengthening our financial profile.”
Atlassian CEO Mike Cannon-Brooks told CNBC on Thursday that the company saw “incredible strength” in its business in the quarter, and that concerns plaguing the broader software sector may be overstated.
“I don’t know if those concerns will materialize because the employment numbers continue to be strong in areas that people have been concerned about,” Cannon-Brooks said in an interview on CNBC’s “Closing Bell: Overtime.” “We certainly can’t match Atlassian’s numbers in terms of how our customers continue to expand their use of our software as a strategic partner for their business.”
Atlassian’s revenue for the quarter ended March 31 increased 32% year over year. Cloud was a bright spot in the report, with revenue up 29% year over year to $1.13 billion. Analysts had expected cloud revenue to be $1.08 billion, according to FactSet.
Data center revenue came in at $561 million, blowing away expectations of $515 million.
The company raised its full-year forecast for cloud and data center revenue growth to 26.5% and 21.5%, respectively.
BTIG analysts said in a research note on Friday that Atlassian’s Teamwork Collection product, a bundled set of applications, “stands out as a key growth engine” as customers upgrade to secure more AI credits. The company rates Atlassian stock a “buy.”
“While the risk of AI disruption will take more time and execution to fully reveal, this print shows that TEAM is turning that threat into a clear competitive advantage by leveraging the unique context of the teamwork graph,” BTIG analysts wrote. “We expect this underlying momentum to drive follow-through beyond the +25% AH move.”
Atlassian posted a net loss of $98.39 million, or a loss of 38 cents per share, widening from a year ago, when it reported a net loss of $70.81 million, or a loss of 27 cents per share.
CNBC’s Jordan Novet contributed to this article.
Atlassian’s year-to-date stock price chart.
