Cloud Stocks: Atlassian Makes Over $100M In PaaS In 2020

Last week, Atlassian (Nasdaq: TEAM), a leading provider of team collaboration and productivity software, reported its second-quarter results that surpassed estimates. Atlassian has been focusing on becoming a cloud-first company and recently announced a three-year migration path to the cloud for on-premises customers.

Atalssian’s Financials

Second-quarter revenue grew 23% to $501.4 million, ahead of the market’s forecast of $475 million. Adjusted EPS was $0.37, the same as last year and better than the market’s forecast of $0.32.

Net loss was $621.5 million, compared with net income of $124.1 million a year ago. Net loss spiked mainly due to a debt security charge of $539.1 million.

Cash and cash equivalents and short-term investments at the end of Q2 2021 totaled $1.8 billion. Total employee headcount increased by 467 to 5,752 with the majority of the additions in R&D.

By segment, Subscription revenues grew 36% to $310.7 million, driven by cloud products as well as data center offerings. Maintenance revenues grew 12% to $131.3 million. Perpetual license revenue declined 24% to $22.1 million. Other revenues, which includes revenue from marketplace apps, increased 9% to $37.3 million.

Net new customers grew by 11,617 to 194,334 in Q2, driven by cloud products and an improved cloud customer experience. It added 8,620 customers in Q1.

For the third quarter, Atlassian expects revenues of $475-$490 million with an adjusted EPS of $0.20- $0.21. Analysts had estimated earnings of $0.25 per share on revenue of $472 million.

Atlassian’s New Offerings

In November 2020, Atlassian introduced Jira Service Management, which integrates initiatives such as service desk, incident management, real-time-communications, and asset and configuration management into one solution. This doubles its TAM from 45 million software team members to 100 million technical workers including IT teams. These numbers sound very aggressive. I wasn’t aware that there are so many technical workers in the world.

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Disclosure: All investors should make their own assessments based on their own research, informed interpretations and risk appetite. This article expresses my own opinions based on my own ...

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