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 came 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 previous guidance.
Atlassian benefited from robust cloud and data center growth during the period as more customers turned to artificial intelligence solutions. That contributed to 30% subscription revenue growth over the prior year. Atlassian also said it now expects 26.5% cloud growth and 21.5% data center growth for the fiscal year.
“The momentum we’re seeing across the business reinforces our conviction around investments we are 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 artificial intelligence race alongside megacap technology competitors in recent years. In 2023, the company tapped OpenAI to bring AI capabilities to its Jira and Confluence solutions. Last year, 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 among the reasons the company should “join the upper echelon” of software companies best situated for generative AI.
“1 million [monthly active users] for Atlassian Intelligence all point to a strong 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% since the start of the year.
