Atlassian (TEAM) Q1 2023

Scott Farquhar, co-founder and co-CEO of software company Atlassian, speaks during a Jobs and Skills Summit in Parliament on September 1, 2022 in Canberra, Australia. The Australian Government is bringing together political, business, trade union and community leaders in Parliament to address issues facing the Australian economy and workforce as inflation and interest rates continue to rise.

Martin Olman | Getty Images

Atlassian Shares fell 22% on Thursday after the collaboration software maker reported earnings below analysts’ expectations and issued a disappointing outlook.

Here’s how the company did it:

  • Earnings: 36 cents per share, adjusted, versus 38 cents per share as expected, according to Refinitiv.
  • Revenue: $807.4 million, versus $806.4 million as expected, according to Refinitiv.

Revenue grew 31% year-over-year in the quarter that ended September 30, according to a statement. Net loss narrowed to $13.7 million from $411.2 million a year ago, thanks to a mark-to-market accounting adjustment on strategic investments.

For the second fiscal quarter, Atlassian forecasts revenue of $835-855 million, below Refinitiv consensus of $879.2 million. The forecast assumes that current macroeconomic conditions persist through the remainder of fiscal 2023.

Scott Farquhar, co-founder and co-CEO of Atlassian, told analysts the company was feeling the impact of a volatile global economy. The rate at which free users of Atlassian’s software convert to paid offerings is slowing, as is the increase in paid users among existing customers, slowing the pace of hiring.

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Atlassian added 6,550 customers, bringing the total to 249,173. Analysts polled by StreetAccount expected 250,700.

Farquhar said Atlassian will slow its own workforce growth going forward.

The company’s competitive position against rivals hasn’t changed, said Cameron Deatsch, Atlassian’s chief revenue officer.

Prior to the after-hours plunge, Atlassian shares had fallen 54% for the year, compared to a 20% decline for the S&P 500.

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