Atlassian shares surge 18% after smashing earnings expectations in latest quarter – News

Shares in Atlassian Corp. were up over 18% in late trading today after the Australian collaboration software company smashed expectations on earnings and delivered a solid beat on revenue in its fiscal 2025 second quarter.

For the quarter that ended on Dec. 31, Atlassian reported adjusted earnings per share of 96 cents, up from 73 cents per share in the second quarter of fiscal year 2024, on revenue of $1.286.5 million, up 21% year-over-year.

The American equivalent of an Australian company hitting a six in cricket would be a home run in baseball, but whatever the equivalent, Atlassian’s 96 cents per share meets the criteria, as it came in well ahead of the 62 cents per share expected by analysts. The company’s revenue figure was also ahead of an expected $1.23 billion.

On an adjusted basis, Atlassian reported an operating income of $335.1 million in the quarter, up from $250.6 million in the second quarter of fiscal year 2024. The company’s operating margin was 26%, up from 24%. Net income was $189.5 million, up from $189.5 million in the second quarter of the previous year and cash flow from operations was $351.9 million.

Customer growth remained strong in the quarter, with Atlassian reporting 49,449 customers generating more than $10,000 in cloud annualized recurring revenue as of the end of the quarter, up 15% year-over-year.

The company’s recent business highlights include significant advancements in cloud scalability, strategic partnerships and customer growth. Atlassian announced the general availability of support for up to 150,000 users on a single site for Confluence Cloud, tripling its previous capacity. The expansion allows for smoother migrations from data center to cloud, fosters broader adoption across organizations and enhances collaboration between technical and business teams.

Atlassian also expanded its strategic partnership with Amazon Web Services Inc. through a multi-year collaboration agreement. The expanded partnership will give customers access to edge cloud-enabled services, including generative artificial intelligence, backed by strong security, privacy and compliance standards. Additionally, the two companies will also establish a “Cloud Center of Excellence” that aims to simplify complex enterprise migrations and enhance cloud expertise among solutions partners.

“The Atlassian System of Work is resonating with enterprises all over the globe, as business leaders increasingly turn to the Atlassian platform to help teams across their organization collaborate on the opportunities and challenges they face,” Mike Cannon-Brookes, chief executive officer and co-founder of Atlassian, said in the company’s earnings release. “By infusing AI throughout our world-class cloud platform, we’re empowering all teams to accelerate collaboration and unlock organizational knowledge, further enabling them to unleash their full potential.”

For its fiscal third quarter, Atlassian forecasts total revenue in the range of $1.345 billion to $1.35 billion, driven by cloud revenue growth of 23.5% year-over-year. For its full fiscal year, the company expects revenue growth year-over-year in the range of 18.5% to 19%.

Photo: Atlassian