According to a recent report, the global enterprise collaboration market is expected to grow from $47.2 billion in 2021 to $85.8 billion by 2026 at a CAGR of over 12%. Atlassian (Nasdaq: TEAM) continues to expand its product offerings to take a bigger share in the market in the face of stiff competition.

Atlassian’s Financials

For the third quarter, revenue grew 30% to $740.5 million, ahead of the market’s forecast of $696.99 million. Net loss was $31.1 million, compared with a net income of $159.8 million a year ago. Non GAAP EPS was $0.47, better than the market’s forecast of $0.32.

By segment, Subscription revenues grew 58.6% to $555.1 million and maintenance revenues fell 9.5% to $120.3 million. Other revenues fell 24.3% to $65.03 million.

For the fourth quarter, Atlassian expects revenues of $710-$725 million and an adjusted income per share of $0.24. The market was looking for revenues of $677.14 million and an EPS of $0.30 for the quarter. It expects Atlassian to end the year with revenues of $2.69 billion and an EPS of $1.57.

Atlassian’s Product Upgrades

Recently, Atlassian announced the launch of Atlassian Analytics, a service that allows customers to create customized, interactive dashboards that provide cross-project and cross-product overviews of workflows. Powered by the Atlassian Data Lake, Analytics will initially have data from Jira Software and Jira Service Management, and will continue to expand across other products over time. Teams will be able to bring in data from Jira Software and prioritize change requests or incidents from Jira Service Management. No-code visualization with Visual SQL provides developers with access to an easier way to explore data and create charts without needing to use SQL. Users will also be able to incorporate data from other business intelligence systems and get a more comprehensive view of their organization.

It also announced the development of Compass, a solution that provides a unified view of the tools and components used by developers, allowing them to collaborate easily on them. Compass’s component catalog visualizes dependencies and puts information such as ownership, documentation, and metrics, next to each component to deliver smoother workflow processes. Each component also has a health scorecard to ensure resiliency, performance, security, and compliance in real time.

These product upgrades have helped Atlassian add to its customer count significantly. It ended the third quarter with a total customer count of 234,575 customers, up by 8,054 net new customers. Like other tech companies, Atlassian also ended up losing their Russia-based customers due to the sanctions levied in the country. It lost 1,800 customers due to these sanctions.

Atlassian faces stiff competition from players like Microsoft (including GitHub), IBM, Google, ServiceNow, salesforce.com, PagerDuty, Gitlab, Zendesk, Asana, Monday.com, and Smartsheet. But Atlassian is managing to hold its ground by operating in three product segments: development operations, IT service management, and team management, enabling it to become a single product with multiple enterprise uses. This is evident in the rising number of customers for Atlassian across Jira Software, Jira Service Management, and Confluence. Atlassian is also investing heavily in research and development. Another thing that makes Atlassian special is its focus on development. The company spent $655 million on R&D expenses in the first two quarters of fiscal 2022, more than double what it spent on sales and marketing. It has one of the highest R&D budgets and lowest S&M budgets as a percentage of revenue when compared to competitors, clearly highlighting its commitment to investment in its products.

Atlassian’s stock is trading at $183.35 with a market capitalization of $46.47 billion. It touched a 52-week high of $483.13 in October last year. It hit a 52-week low of $180.10 this week.