Michael Cannon-Brookes, co-CEO, Atlassian
Scott Mlyn | CNBC
Atlassian shares rose as much as 10% in extended trading on Thursday after the collaboration software provider reported earnings in the second fiscal quarter that topped estimates and raised its forecast for subscription revenue .
Here’s what the company did:
- Earnings: 50 cents per share, adjusted, compared to 39 cents as analysts expected, according to Refinitiv.
- Revenue: $ 688.5 million, compared to $ 641.3 million as analysts expected, according to Refinitiv.
Earnings rose 37% in the quarter, which ended Dec. 31, Atlassian said in a letter to shareholders. The company narrowed its net loss to $ 77.5 million from $ 621.5 million last quarter.
For the full fiscal year, Atlassian said subscription revenue will increase by approximately 50%, from the previous growth projection in the mid-40s range. Subscriptions represent 86% of total revenue. Atlassian reported $ 975.5 million in deferred revenue, above the StreetAccount consensus of $ 971.0 million.
Atlassian is raising the prices of its data center and server products next month. The increases are from 10% to 25% and will not affect customers who use Atlassian’s cloud offerings, the company said.
While Atlassian exceeded expectations for its key financial metrics, the company ended the quarter with 226,521 customers, less than StreetAccount’s estimate of 237,100.
The trend of people leaving workplaces identified as good resignation has not played out at Atlassian, Scott Farquhar, a co-founder and co-CEO of the company, said in a conference call with analysts. However, he said, “we have seen some minor increases in compensation.”
Also on Thursday, Atlassian said it acquired virtual agent start-up Percept.ai, “boosting our investments in automation and machine learning.”
Excluding the jump after hours, Atlassian shares have fallen about 23% since the beginning of the year, while the S&P 500 index has fallen around 9%. Atlassian has been caught in a broad round from fast-growing cloud-software stocks because interest rate concerns are driving investors to assets deemed less risky.
However, both ServiceNow and Qualtrics appeared on Thursday after beating estimates on their quarterly results. Investors will look at earnings reports from a group of cloud companies in the coming weeks as an early indicator of how well businesses are doing as the economic and financial environment changes.
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