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The company posted Q1 EPS of $0.65, $0.11 better than the analyst estimate of $0.54, while revenue for the quarter came in at $978 million, up 21% YoY and above the consensus estimate of $965.7 million.
The company’s quarterly subscription revenue of $852 million rose by 31% year-over-year.
Despite the top and bottom-line beat, Atlassian shares are down more than 10% ahead of the open on Friday, trading at around $162.90 per share.
“We started off the year with solid execution, delivering quarterly revenue of $978 million, up 21% year-over-year, driven by subscription revenue growth of 31% year-over-year,” said Scott Farquhar, Atlassian’s co-founder and co-CEO.
Looking ahead, Atlassian sees Q2 2024 revenue from $1.01 billion to $1.03 billion, versus the consensus of $1.02 billion.
Following the report, analysts at Bernstein said TEAM’s cloud growth is slowly re-accelerating.
“Atlassian’s FQ1’24 (September ’23 quarter end) was met with a resounding ‘thud’ as we saw a rapid sell-off — dropping >10% in the aftermarket. At first blush this could seem quite surprising: not only did the company’s closely watched cloud revenue growth beat the top end of their guidance and consensus,” said the analysts.
Speculating on the reason for the share price decline, the analysts noted that while next quarter’s growth expectation was raised, “the full-year expectation was held flat at 25-30%, implying downside risk has not dissipated, and the company has limited confidence in their trajectory from here.”
“Net new customers came in only modestly below last quarter, which was one of the worst since COVID,” they wrote. “Furthermore, the company re-iterated that the cloud migration is continuing slowly, with some portion of companies that will not complete before the February 2024 end date.”
