Atlassian shares jumped more than 20% on Friday after the software company topped Wall Street’s expectations for the fiscal third quarter, reporting strong growth in cloud and data center revenue.
Here’s how the company fared compared to LSEG’s ratings:
- Earnings per share: $1.75 adjusted vs. $1.32 expected
- Net worth: $1.79 billion versus $1.69 billion expected
Atlassian stock has been among the hardest hit by the “SaaS-pocalypse” this year, with shares down more than 45% year to date.
The phrase refers to the sale of technology stocks following the release of software built on artificial intelligence models from companies such as OpenAI and Anthropic. Software managers responded that important business metrics are not deteriorating.
In March, Atlassian laid off about 10% of its workforce, or about 1,600 jobs, saying the move would allow it to “continue to fund investments in AI and business acquisitions, while strengthening our financial profile.”
Atlassian CEO Mike Cannon-Brookes told CNBC on Thursday that the company saw “tremendous strength” in its business during the quarter and that concerns plaguing the broader software sector may be overstated.
“We’re seeing the job numbers get stronger in areas that people are worried about, so I’m not sure that those fears will play out,” Cannon-Brookes said in an interview with CNBC’s “Closing Bell: Overtime.” “They certainly don’t play by Atlassian’s numbers, in terms of how our customers continue to expand the use of our software as a strategic partner in their business.”
Atlassian’s revenue grew 32% year-over-year in the quarter, which ended March 31. Cloud was a bright spot in the report, with revenue jumping 29% year-over-year to $1.13 billion. Analysts had expected $1.08 billion in cloud sales, according to FactSet.
Data center revenue came in at $561 million, beating expectations of $515 million.
The company raised its full-year guidance for cloud and data center revenue growth, forecasting 26.5% and 21.5% respectively.
BTIG analysts said in a research note Friday that Atlassian’s Teamwork Collection product, an integrated set of applications, “stands out as a key growth engine” as customers evolve to secure more AI credits. The firm has a buy rating on Atlassian’s stock.
“While it will take a lot of time and work to fully understand the threat of AI disruption, this print shows that TEAM is turning that threat into a distinct competitive edge by incorporating the unique context of the Team Performance Graph,” BTIG analysts wrote. “We expect this significant momentum to drive the follow-through beyond the +25% AH move.”
Atlassian posted a net loss of $98.39 million, a loss of 38 cents per share, widening from last year, when it reported a net loss of $70.81 million, a loss of 27 cents per share.
CNBC’s Jordan Novet contributed to this article.
Year-to-date stock chart for Atlassian.
