Atlassian Stock Surges 19% After Strong Earnings Beat

Sydney, Australia — Atlassian Corp. shares surged 19% on Friday after the software company reported fiscal second-quarter earnings and revenue that exceeded Wall Street expectations, driven by robust cloud and data center growth. The stock traded near a 52-week high and marked its best single-day performance since July 2021.

Adjusted earnings for the quarter ending December 2023 came in at 96 cents per share, surpassing the 76 cents per share projected by analysts polled by LSEG. Revenue reached $1.29 billion, beating the $1.24 billion estimate. For the third quarter, Atlassian anticipates revenue of $1.35 billion, above the $1.31 billion LSEG estimate.

The company attributed its strong performance to a 30% year-over-year increase in subscription revenue, fueled by growing demand for artificial intelligence solutions and cloud-based services. Atlassian 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,” said Joe Binz, Atlassian’s finance chief, in an earnings release.

Analysts also highlighted the company’s outperformance. “Atlassian delivered solid fiscal second-quarter results as cloud revenue grew 30% year-over-year, well ahead of consensus expectations of 26%,” said Arjun Bhatia, an analyst at William Blair. “Drivers of upside include better-than-expected paid seat expansion, migrations, and marginally better cross-sell.”

Founded in Sydney in 2002, Atlassian specializes in project management and collaborative software for software developers and IT teams. The company is transitioning to a cloud-computing business model, phasing out sales of on-premise software used in corporate data centers.

Atlassian stock has gained nearly 10% since the start of the year. For the March quarter, the company forecasts revenue between $1.345 billion and $1.353 billion, with cloud growth expected to reach 24%.