Mike Cannon-Brookes, co-founder of software company Atlassian Corp., in Sydney, Australia, Dec. 6, 2023.
Lisa Maree Williams | Bloomberg | Getty Images
Atlassian shares popped 14.9% after the software company blew past Wall Street’s fiscal second-quarter earnings and guidance expectations.
The stock hit a fresh 52-week high and closed at its highest level since April 2022. It was also the stock’s best day since November.
Adjusted earnings got here in at 96 cents per share, ahead of the 76 cents per share projected by analysts polled by LSEG. Atlassian reported revenues of $1.29 billion, versus the $1.24 billion estimate.
For the third quarter, Atlassian said it anticipates $1.35 billion in revenue, above the $1.31 billion LSEG estimate and former guidance.
Atlassian benefited from robust cloud and data center growth in the course of the period as more customers turned to artificial intelligence solutions. That contributed to 30% subscription revenue growth over the prior yr. Atlassian also said it now expects 26.5% cloud growth and 21.5% data center growth for the fiscal yr.
“The momentum we’re seeing across the business reinforces our conviction around investments we’re making in our key strategic priorities of serving enterprise customers, AI, and the System of Work to deliver durable, long-term growth,” finance chief Joe Binz said in an earnings release.
The Australian company, known for organization software tool Trello, has made a push into the synthetic intelligence race alongside megacap technology competitors in recent times. In 2023, the corporate tapped OpenAI to bring AI capabilities to its Jira and Confluence solutions. Last yr, Atlassian debuted its Rovo AI assistant.
Morgan Stanley’s Keith Weiss cited back-to-back solid quarters and 25 times year-over-year growth in Atlassian Intelligence amongst the explanations the corporate should “join the upper echelon” of software firms best situated for generative AI.
“1 million [monthly active users] for Atlassian Intelligence all point to a powerful yield against investments in a unified Cloud platform ‘infused with AI’ and an improving enterprise motion. While the valuation gap narrows [after hours], we still see upside in TEAM,” he wrote in a Friday note.
Shares have gained 25% because the start of the yr.
