Clouds Stocks: Atlassian Fortifies Its PaaS Ecosystem

Atlassian, a strong PaaS player and among our list of the Top 20 Cloud Stocks for 2020, recently reported results of a strong quarter that beat estimates. It also announced the launch of a new venture fund that will further strengthen its ecosystem strategy.

Atlassian’s Financials

First-quarter revenue grew 26% to $459.5 million, ahead of the market’s forecast of $440.5 million. Net loss was $21.6 million, compared with net income of $69.3 million a year ago. Adjusted EPS was $0.30, better than the market’s forecast of $0.27.

By segment, Subscription revenues grew 38% to $278 million and maintenance revenues grew 16% to $127.7 million. Perpetual license revenue declined 11% to $22.1 million. Other revenue which includes revenue from the Atlassian Marketplace increased 15% to $31.7 million. Total billings grew 22% to $483 million, ahead of market estimate of $469 million.

It ended the quarter with 182,717 customers, adding 8,620 net new customers during the quarter, over 95% of which chose its cloud products.

Atlassian ended the quarter with $2.2 billion in cash and cash equivalents, and short-term investments. It recently closed a $1 billion five-year senior unsecured delayed draw term loan and a $500 million five-year senior unsecured revolving credit facility.

For the second quarter, Atlassian expects revenue in the range of $460-$475 million with an adjusted EPS of $0.30 to $0.32. It expects to end the current year with revenues of $1.59-$1.6 billion and an EPS of $1.03-$1.09.

Atlassian’s Shift to Cloud

Atlassian is transitioning to a major shift to cloud. From February 2024, it will be ending support for all its on-premise server products such as Jira Service Desk Server, Bitbucket Server, and Jira Software Server.

From February 2021, customers will not be able to purchase new server products. It has also increased prices of its on-prem products, with a view to discontinue them three years later. 

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Sramana Mitra is the founder of One Million by One Million (1M/1M), a global virtual incubator that aims to help one million entrepreneurs ...

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