Atlassian Corporation PLC TEAM shares are falling after issuing weak 2020 earnings guidance.

First-quarter adjusted earnings came in at 28 cents per share, beating estimates by 4 cents. Sales came in at $363.4 million, beating estimates by $11.6 million.

The company issued strong second-quarter earnings and sales guidance, but 2020 earnings guidance was short of consensus estimates.

"We're out of the blocks in good form in fiscal 2020," said Mike Cannon-Brookes, Atlassian's co-founder and co-CEO. "We updated Atlassian's Cloud platform in a big way with new Free and Premium editions. Our disruptive model continues to win new customers, both large and small, and these new editions offer them more choice and capabilities."

Atlassian also announced the acquisition of Code Barrel.

"We are also excited to announce that Atlassian has acquired Code Barrel, the creator of Automation for Jira," said Scott Farquhar, Atlassian's co-founder, and co-CEO. "Automation for Jira is already used by thousands of organizations to help them reduce repetitive work and unleash the potential of their teams. This acquisition is an important step as we continue to enhance our cloud products."

Q1 Highlights:

• Revenues were up 36% year-over-year
• Quarterly cash flow from operations was $76.2 million
• 7,060 net new customers were added

Atlassian shares traded down 3% in after-hours trading. The stock closed at $122.48 per share.