Atlassian surges after 30% subscription growth and strong guidance
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The news: Investors reacted to Atlassian's latest quarterly report with two big thumbs up, as the Australian tech giant's stock spiked nearly 20% in after-hours trading moments after earnings were handed down Thursday afternoon (Friday morning AEDT).
The numbers: Atlassian's revenue of USD1.29 billion ($2.08 billion) beat Wall Street expectations. Its subscription revenue, the focus of its strategy in recent years, grew by 30%.
Atlassian reported earnings-per-share of USD0.96 for the quarter ending 31 December, way above the analyst estimate of USD0.62.
The company's guidance for the current quarter is for revenue to grow to up to USD1.353, which was also above expectations.
Subscription revenue, the culmination of Atlassian's push over the past four years to move customers from local servers to cloud-based products, is up 30% year-on-year to USD1.21 billion. The quarter marks the first in which the company, by design of its cloud and data centre push, drew no revenue from server-based products.
Atlassian's stock has been on an upswing over the past six months, growing 53% during that time to USD266.95. The after-hours surge on Thursday lifted the stock to a high of USD332, a level it hasn't been able to touch since January of 2022.
The company's plan to end support for products hosted by on-premise servers was to enable it to more quickly and easily upsell customers by bundling products together. That strategy is paying off, according to chief executive Mike Cannon-Brookes.
What they said: "Our long-term strategy, investments, and hard work are paying off," he wrote in a letter to shareholders.
"This foundation allows us to quickly deliver innovative new products and unique capabilities to our customers' software, IT, and business teams. Customers are recognising this value, and committing further to the Atlassian platform."
The source: Atlassian media release
